economics

What does it mean to live without money?  Is it possible?  And how does it change one’s outlook on life and human relationships?  I stumbled across a wonderful book, The Man Who Quit Money (Riverhead Books, 2012), the story of Daniel Suelo, who, in the style of Henry David Thoreau, decided to live deliberately, and with clear purpose, by giving up money.  I’m a bit of a late-comer to Suelo’s story, which captured a lot of attention in late 2009 following a profile in Details magazine.

Suelo made the radical decision that he would not earn, receive or spend any money – his attempt to live life more directly and honestly.  In the book, journalist Mark Sundeen’s describes the journey that Suelo has taken over the past ten years in leading an active, productive, socially satisfying life without markets.  Just as anthropologists have often searched for the “savage child” raised by animals rather than humans (in order to assess the role of nurture vs. nature), Suelo, now 52, is that rare real-life example of what it means to live voluntarily outside of the market order without becoming a recluse.  Here is a real human being, not an abstraction, who does not want to be an employee, consumer or investor.

For shelter, Suelo has lived in a dozen of more caves in the canyons near Arches National Park, near Moab, Utah.  He forages for food from the desert – cactus pods, yucca seeds, wildflower and the like – and engages in dumpster-diving for food and clothing.  Born Daniel Shellabarger, he took the name “Suelo,” Spanish for “soil,” and decided to have the smallest possible ecological footprint as possible.

To outside appearances, Suelo could easily be seen as yet another homeless or mentally ill person without friends or family.  But despite maintaining a minimalist household comprised of discarded items, Suelo is no monastic or hermit.  He has many friends in town.  He sometimes house-sits and accepts meals from friends.  He volunteers for various community projects.  He wanders the Utah desert and meditates.  While his life is fairly impoverished by conventional standards, Suelo considers it a happy existence. 

Naturally, the reader wants to know how and why a person would choose to live this way.  Some explanations arise from the Christian fundamentalist upbringing that Suelo fled, before discovering that he was gay as well.  It would be easy to stereotype this story as one about a man on the run from himself.  But as the author Mark Sundeen makes clear, Suelo is brutally honest about himself and his search for authenticity – which is why this book raises some fascinating issues about what it means to live without money. 

By training Stefan Meretz is a German engineer and computer scientist, but he is also a deep theorist of the commons who has written often about commons-based peer production and the development of a free society beyond market and state.  Over the past several years I have learned a lot from Stefan's application of free software-inspired thinking to the commons.    

Below, I have posted his wonderful essay, “The Structural Communality of the Commons,” which appears in The Wealth of the Commons:  A World Beyond Market and State (Levellers Press).  Stefan lives in Berlin and blogs at www.keimform.de. 

This essay, like the rest of The Wealth of the Commons, is published under a Creative Commons Attribution-ShareAlike 3.0 license.  In coming weeks, I plan to post additional essays from our anthology.  All of them will all be available at www.wealthofthecommons.org starting in April.

The commons are as varied as life itself, and yet everyone involved with them shares common convictions. If we wish to understand these convictions, we must realize what commons mean in a practical sense, what their function is and always has been. That in turn includes that we concern ourselves with people. After all, commons or common goods are precisely not merely “goods,” but a social practice that generates, uses and preserves common resources and products. In other words, it is about the practice of commons, or commoning, and therefore also about us. The debate about the commons is also a debate about images of humanity. So let us take a step back and begin with the general question about living conditions.

Living conditions do not simply exist; instead, human beings actively produce them. In so doing, every generation stand on the shoulders of its forebears. Creating something new and handing down to future generations that which had been created before – and if possible, improved – has been part of human activity since time immemorial. The historical forms in which this occurred, however, have been transformed fundamentally, particularly since the transition to capitalism and a market economy. Although markets have existed for millennia, their function was not as central as they have become in contemporary capitalism, where they set the tone. They determine the rules of global trade. They organize interactions between producers and consumers across the world. Some observers believe they can recognize practices of the commons even in markets. After all, they say, markets are also about using resources jointly, and according to rules that enable markets to function in as unrestricted and unmanipulated ways as possible. However, markets are not commons, and it is worth understanding why.

Although markets are products of human action, their production is also controlled by markets, not by human action. It is no coincidence that markets are spoken of as if they were active subjects. We can read about what the markets are “doing” every day in the business pages. Markets decide, prefer and punish. They are nervous, lose trust or react cautiously. Our actions take place under the direction of the markets, not the other way around. Even a brief look at the rules mentioned above makes that clear. Rules issued by governments first recognize the basic principles of markets, but these rules function only as “add-ons” that are supposed to guide the effects of the markets in one direction or the other.

One direction may mean restricting the effects of the market so as to attain specific social goals. Viewed in this light, the supposedly alternative concept of a centrally planned economy turns out to be nothing more than a radical variant of guiding markets. The other direction can mean designing rules so that market mechanisms can flourish, in the hope that everyone is better off in the end if individuals pursue their own material self-interest. The various schools of economic thought reflect the different directions. They all take for granted the assumption that markets work, and that what matters is optimizing how they work. A common feature is that none of these standard schools of thought question markets themselves. That is why markets are at times described as “second nature” (Fisahn 2010) – a manifestation of nature and its laws that cannot be called into question, but only applied.

Last October, a group of seventeen commons activists from throughout Asia – India, China, the Philippines, Indonesia, New Zealand and other countries – met in Bangkok to have a wide-ranging discussion about the future of the commons, especially in fighting neoliberal economics and policy.  The primary goal was to discuss economics and the commons from an on-the-ground perspective, and to help identify promising avenues for future research, writing and political action.

This was the second of three “Deep Dive” workshops that the Commons Strategies Group co-hosted with the Heinrich Böll Foundation in the fall of 2012.  (The others were in Mexico City and Pointoise, France, near Paris.  Here is the report from the European Deep Dive, and here is my previous blog post on it.)  A big thanks to Jost Pachaly and his staff at the Böll Foundation in Bangkok for hosting this event!

Because there were so many interesting insights that flowed from those discussions, I have decided to excerpt below some of the more interesting portions of the report that I prepared following the workshop.  If you wish to read the full report – a 15-page pdf document – you can download it here. 

Nature as a system of abundance.  Roberto Verzola, an economist and agricultural activist in the Philippines, opened with a presentation about the inherent abundance of nature – an abundance that market capitalism systematically attempts to negate and control.  He compares natural abundance to the “miracle of the loaves” parable in the New Testament of the Bible, in which living things seem to miraculously multiply.  Verzola calls this ecological sector of production the “living sector,” which must be seen as qualitatively different from the industrial sector, which by contrast “creates things from dead matter.” 

Was Mancur Olson wrong?  That is the question posed by an essayist at an unlikely website, the American Enterprise Institute.  You wouldn’t think that a conservative American think tank would wish to entertain this possibility because Olson’s The Logic of Collective Action has been a revered touchstone for free-market champions since its publication in 1965.  It's been rivaled only by similar arguments that Garrett Hardin made in his famous “tragedy of the commons" parable three years later.

Both Olson and Hardin proposed memorable theories for why it is difficult for groups of people to undertake collective action.  But recently, on the AEI website, Brookings Institution scholar Jonathan Rauch seriously considers the possibility that Olson’s analysis is wrong, or at least has been rendered weak by history.  The occasion for this reflection is the publication of a new book, Strength in Numbers:  The Political Power of Weak Interests, by Gunnar Trumbull, a Harvard business professor.

First, a quick review of Olson, who in the 1960s was an economist at the University of Maryland.  Olson pointed to the great effort that it takes to organize people with diffuse interests.  It’s hard for them to find each other, come together, and then organize themselves to advance their collective interests.  The “logic of collective action,” as Olson put it, is that individuals are so fragmented and diverse that it is difficult for their collective interests to be represented in the public policymaking.  That’s why it’s so darn hard for citizens to prevail against corporate lobbies, who tend to have the advantage in securing government favors, subsidies, legal entitlements, etc. 

What would “degrowth” look like and why is it needed?  At the Degrowth conference in Montreal in May, Josh Farley, an ecological economist at the Gund Institute in Vermont, gave a brisk overview of the problems with our current debt-driven growth economy -- and the feasible alternatives -- in a seventeen-minute video.  Farley and eight other co-authors give a more detailed critique in a paper that they presented, “Monetary and Fiscal Policies for a Finite Planet."

Normally, I prefer to read a paper than to watch a video summary.  But in this case, Farley is so compelling that I found it a pleasure to watch him deconstruct the conceptual errors of mainstream economic thinking and GDP.  One fact that he cited really jumped out at me -- in 1969 U.S. per capita consumption as measured by GDP was only half of current levels -- and yet Americans were just as happy if not happier than they are now.  Indeed, since 1969, there have been many declining metrics of health and happiness, such as greater obesity, infant mortality, etc. 

For those dead-enders who insist that economic growth is a prerequisite to solving any of our social problems, it’s worth pausing on this fact -- that Americans were in fact once healthier and happier despite consuming at half of contemporary rates.  This proves that it is not utopian to think that we could lower our consumption and still be happy.  It’s an historical fact!

Farley would like to conduct a more systematic study of how we might return to such a society.  He calls his proposed research project “QOL 350,” which stands for the quality of life (QOL) that could be sustained at energy consumption levels not exceeding atmospheric concentrations of 350 ppm of carbon – the level that scientists say is needed to prevent climate change.  A vital element of any QOL 350 vision, Farley says in his video, is to ensure greater fairness in economic distribution and to create institutions that encourage cooperative action.

Boosting economic growth is such a central element of modern political culture that few people truly consider whether it is ecologically sustainable.  It's not, as the twin specters of Peak Oil and climate change are demonstrating.  We desperately need some serious thinking about how to move from the “growth paradigm” as the default goal of our economy to an economy that structurally requires less energy and material throughput.  One term that has come to describe this vision is “degrowth.”  In fact, a major international conference on “Degrowth, Ecological Sustainability and Social Equity” will be held in Venice, Italy, on September 19-23. 

As part of that ongoing conversation, Austrians Andreas Exner and Christian Lauk recently published a thoughtful essay in Solutions magazine on “Social Innovations for Economic Degrowth.”  The piece focuses on how the Solidarity Economy and the global information commons offer a template for moving to a no-growth economy -- that is, an economy that uses less energy and material while increasing personal leisure and well-being. 

Exner and Lauk consider the models pioneered by the Solidarity Economy in Brazil in the late 1990s when that country “was hit by an economic crisis caused by the liberalization of capital markets.”  As bankruptcies and unemployment rose, poor people joined together with trade unions, universities and others to create cooperatives and other enterprises to meet people’s needs.  But the innovations were not just business models but social habits and practices that let people work together to meet basic needs without the relentless imperative to grow and chew up the natural environment.

It’s unlikely that we are ever going to get a book as rigorous and comprehensive in its treatment of infrastructure as a commons than Professor Brett Frischmann’s recently published Infrastructure: The Social Value of Shared Resources (Oxford University Press). This book is a landmark in the study of the social value of infrastructure, a theme that is generally overlooked or marginalized.

Who among us gives much thought to the economics and policy structures that govern the Internet, telecommunications, water systems, roads and highways or the electric power grid?  These resources hover in the background, nearly invisible, until they break down.  Then people start to contemplate the wide-ranging social, economic and civic benefits of safe bridges and reliable, efficient water systems. And if we're lucky, prudent policies are enacted.

Infrastructure tends to be neglected because it is generally very complex, technologically and financially.  Its value extends well into the future and so it’s easy to ignores its benefits.  And since the benefits also tend to be diffused among the general public, there is often no single individual constituency to rally behind infrastructure except those who directly profit from it.

Not surprisingly, lots of private interests have made great fortunes by privatizing public infrastructure.  Since deregulation in the 1990s, the broadcasting industry has enjoyed exclusive control over our airwaves with no meaningful public interest obligations – an enclosure worth hundreds of billions of dollars.  The atmosphere is used as a free waste dump by polluters.  Multinational bottlers continually prowl the globe in search of free or cheap groundwater supplies while other attempt to privatize municipal water systems.

To judge from James B. Quilligan's recent series of talks in London, Brits are more receptive to, and interested in, the idea of a commons-based economy than ever.  Below, James reflects on his many encounters and dialogues over the course of two weeks.  --DB

Twelve seminars in twelve days? Each on a different topic?

Imagine the angst I felt last winter when organizers in London approached me to make this demanding array of presentations on consecutive days.

They explained that each of the sponsoring groups had a unique perspective on the commons, ranging from economics, business, politics, democracy, culture and technology to land reform, private property, trusteeship, interest rates, systems theory and spirituality.

Once I’d grasped the constellation of issues, I welcomed the challenge of integrating them with the commons. It sounded like real fun.  After extensive preparations, the Quilligan Seminars were held from May 7 - 18 at various locations in London. (For reference, my talking points on all the sessions are included here.)

It is rare for economists and other champions of the marketplace to step outside of their worldview and see it as an ideological value-system.  How refreshing, then, to see the Wall Street Journal run a favorable review of Harvard political philosopher Michael Sandel’s new book, What Money Can’t Buy:  The Moral Limit of Markets.  The review, by Jonathan V. Last of the conservative Weekly Standard, notes that economistic thinking has exploded over the past generation, superimposing market criteria on countless aspects of personal and social life. 

In 1988, only three stadiums had the names of corporate overlords.  Now more than 100 companies have bought “naming rights” to stadiums.  I was shocked to learn that “brand extension” has even reached the level of requiring the announcers for the Arizona Diamondbacks to call home runs “Bank One Boomers.”  The degradation of a venerated national pastime shows how very deeply the tendrils of market thinking have penetrated.

This is only the beginning.  List writes:

"Today you can purchase your way out of waiting in line for rides at many amusement parks. There are express lanes that allow us to buy our way out of traffic. Many schools now 'incentivize' performance, paying students if they read books or do well in school; some schools now sell ads on children's report cards. Cities routinely sell advertising space on public property, ranging from parks and municipal buildings to police cars. In each of these cases, long-held ideas about inherent worth and common ownership have been displaced by the simple morality of the market. There are, Mr. Sandel notes, practical concerns with this shift, affecting matters such as equality: 'The more money can buy, the more affluence (or the lack of it) matters." But the higher concerns are philosophical and spiritual, about how we ought to value what he calls sweetly "the good things in life.'"

On the Al Jazeera website, Michel Bauwens of the P2P Foundation has a terrific big-picture assessment of the impressive growth of the sharing economy and peer production, and its serious long-term implications for capitalism.   

He starts by explaining how commons-based peer production is rapidly expanding.  It is no longer confined to the familiar, robust worlds of free software, wikis, the blogosphere, and social networking in cyberspace.  Peer production has moved on to various physical realms.  It can be seen in such innovations as open source manufacturing, which has produced Wikispeed, a 100 mpg car built by a team of volunteers in just three months, and Arduino, the open-source electronics prototyping platform.  It can also be seen in various crowdsourcing and social lending platforms, such as Kickstarter (which I recently learned channeled more money to artists in 2011 than the U.S. National Endowment for the Arts).

Peer production has also spawned a whole new sector of “collaborative consumption.”  This consists of organized forms of swapping and bartering, car-sharing, CouchSurfing and other lifestyle practices and innovative markets based on sharing.  The point in most cases is to reduce one’s dependence on the market and live a more social, convivial life.  The goal is not acquisition and ownership, but access and use.