Peter Barnes, an old colleague of mine who writes about the commons from an economic perspective, recently published an essay about “common wealth trusts” as a structure to be used in transitioning to a new economy. The essay, on the Great Transition Initiative website, recapitulates and extends an idea that Barnes has written about in the past – how to use stakeholder trusts to manage common assets (minerals, forests, electromagnetic spectrum, groundwater, etc.) while providing dividends to all citizens who are also co-owners of those assets.
Barnes argues that common wealth trusts “address the two greatest flaws in contemporary capitalism—its relentless destruction of nature and widening of inequality—while still keeping the benefits that markets provide.” Trusts can work because they can provide clear (collective) property rights and formal management systems around resources that are invisible to markets and in many instances threatened with privatization. He writes:
…..Markets currently do not acknowledge such wealth or recognize its value, much less its common ownership. Because of this enormous market failure, private businesses take, use, or pollute common wealth without limit, generally without paying its rightful owners for the privilege. By so doing, private businesses and their narrow group of owners capture much of the value added by common wealth, exacerbating inequality. If businesses had to pay for the use of common wealth, these things would not happen, or at least would happen much less. What are now unpriced externalities or straight-out thefts would become costs for businesses that could generate income for everyone.
“Organizing common wealth so that markets respect its co-inheritors and co-beneficiaries requires the creation of common wealth trusts, legally accountable to future generations,” Barnes argues. “These trusts would have authority to limit usage of threatened ecosystems, charge for the use of public resources, and pay per capita dividends. Designing and creating a suite of such trusts would counterbalance profit-seeking activity, slow the destruction of nature, and reduce inequality.”