David Bollier

Every so often I am invited to write a piece that in effect answers the question, “Why the commons?”  I invariably find new answers to that question each time that I re-engage with it.  My latest attempt is an essay, “Commoning as a Transformative Social Paradigm,” which I wrote for the Next System Project as part of its series of proposals for systemic alternatives. 

For those of you have been following the commons for a while, my essay will have a lot of familiar material.  But I also came to some new realizations about language and the commons, and why the special discourse about commoning and enclosures is so important. I won’t reproduce the entire essay – you can find it here as a pdf download or as a webpage at the Next System Project – but below I excerpt the opening paragraphs; the section on the discourse of the commons; and the conclusion.

Introduction

In facing up to the many profound crises of our time, we face a conundrum that has no easy resolution: how are we to imagine and build a radically different system while living within the constraints of an incumbent system that aggressively resists transformational change? Our challenge is not just articulating attractive alternatives, but identifying credible strategies for actualizing them.

I believe the commons—at once a paradigm, a discourse, an ethic, and a set of social practices—holds great promise in transcending this conundrum. More than a political philosophy or policy agenda, the commons is an active, living process. It is less a noun than a verb because it is primarily about the social practices of commoning—acts of mutual support, conflict, negotiation, communication and experimentation that are needed to create systems to manage shared resources. This process blends production (self provisioning), governance, culture, and personal interests into one integrated system.

This essay provides a brisk overview of the commons, commoning, and their great potential in helping build a new society. I will explain the theory of change that animates many commoners, especially as they attempt to tame capitalist markets, become stewards of natural systems, and mutualize the benefits of shared resources. The following pages describe a commons-based critique of the neoliberal economy and polity; a vision of how the commons can bring about a more ecologically sustainable, humane society; the major economic and political changes that commoners seek; and the principal means for pursuing them.

Finally, I will look speculatively at some implications of a commons-centric society for the market/state alliance that now constitutes “the system.” How would a world of commons provisioning and governance change the polity? How could it address the interconnected pathologies of relentless economic growth, concentrated corporate power, consumerism, unsustainable debt, and cascading ecological destruction?

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The Alaska Permanent Fund has been an inspiration to many of us because it provides a mechanism, the “stakeholder trust,” to ensure that everyone benefits from common assets, especially natural resources such as water, minerals, forests and the atmosphere. 

In Alaska the Fund, operating as an independent, state-chartered trust, holds an equity stake in oil on state lands and therefore reaps a royalty on a portion of the oil extracted.  This is deposited in a massive trust fund, worth more than $52 billion, which kicks off revenues in the form of “dividends” for every resident of the state, including children.  The sums usually amount to $1,000 to $2,000 per year.   

Peter Barnes in his 2006 book Capitalism 3.0 suggested a number of ways in which the permanent fund idea could be applied to other common assets that are now plundered for private gain, such as forests, the atmosphere, the copyright and patent systems, and the financial regulatory apparatus.  The State of Vermont has entertained the idea of establishing permanent funds for some of its common assets, but the idea has not moved there. (See the 2008 report, "Valuing Common Assets for Public Finance in Vermont.”)

I was therefore thrilled to learn recently about a fascinating version of the permanent fund that the Supreme Court of India has mandated for the state of Goa.  In the course of public-interest litigation, it was discovered that, over the course of an eight-year period, the Goan government had allowed private mining companies to cart away 95% of the value of minerals on public lands, or about US$8.5 billion. This sum is twice the total state revenues for those eight years, or about$5,800 (Rs.3.7 lakhs) for each man, woman and child in Goa. In addition, private mining companies had caused all sorts of environmental destruction.

Rahul Basu, an Indian activist who brought the Goa Iron Ore Permanent Fund to my attention, noted that “since minerals are a part of the commons, i.e., owned by all of us, this loss is effectivelya per-head tax. Everyone loses equally, and a few get richer.  This is not trickle-down, it is gush-up. This is a highly regressive redistribution of wealth.”  Basu also noted that government privatization of common assets violates principles of equality, and thus runs contrary to Article 17 of the Universal Declaration of Human Rights.  “We have found similar issues in iron ore, coal, oil & natural gas elsewhere in India,” writes Basu.  “As royalty rates are usually set by trying to attract investment into the sector, countries race to the bottom.”

Large companies have long sought to boost profits by converting their employees into “independent contractors,” allowing them to avoid paying benefits.  The rise of the “gig economy” – exemplified by digital platforms such as Uber and Airbnb – has only accelerated this trend.  Business leaders like to celebrate the free agent, free market economy as liberating -- the apex of American individualism and entrepreneurialism.  But the self-employed are more likely to experience a big loss of income, security and collegiality.  There is a reason that this cohort is called “the precariat.”

A new report by Co-operatives UK called “Not Alone:  Trade Union and Co-operative Solutions for Self-Employed Workers” offers a thoughtful, rigorous overview of this neglected sector of the economy.  Although it focuses on the UK, its findings easily apply internationally, particularly for co-operative and union-based solutions. 

The author of the report, Pat Conaty, notes that “self-employment is at a record level” in the UK – some 15% of the workforce – and rising.  While some self-employed workers choose this status, a huge number are forced into through layoffs and job restructuring, with all the downward mobility and loss of security implied by them. 

Few politicians or economists are honestly addressing the implications.  They assume that technological innovation will simply create a new wave of jobs to replace the ones being eliminated, same as it ever was.

The sad truth is that investors and companies benefit greatly from degrading full-time jobs into piecemeal, task-based projects tackled by a growing pool of precarious workers.  This situation is only going to become more desperate as artificial intelligence, automation, driverless vehicles and platform economics offshore and de-skill conventional jobs if they don't permanently destroy them.  

Although it is widely assumed that governments are the source of all new money – through “printing it” – the so-called private sector is the source of most new money put into circulation.  In one of the most successful enclosures of the commons in our time, commercial finance institutions have captured the power to create most new money through their discretionary lending.  This power has become so normalized and pervasive that hardly anyone acknowledges the startling fact that commercial lending accounts for more than 95% of “new money” created.  Government has in effect surrendered its enormous power to use its money-creating authority for the public good.

Perhaps the leading champion for reforming the current money system is Mary Mellor, emeritus professor at Northumbria University in the UK and author of the recently published, eye-opening book Debt or Democracy:  Public Money for Sustainability and Social Justice (Pluto Press, 2015, distributed in the US by University of Chicago Press Books). 

Mellor recently published an oped piece in The Independent, the British newspaper, that summarizes some of the key themes in her book. Her essay focuses on the “myth of handbag economics” – the idea that government budgets are comparable to household budgets.  This distorts our understanding of how the money supply works, says Mellor, and inexorably leads governments to adopt fiscal austerity policies. 

The critical political question that is rarely asked, said Mellor at a policy workshop last September, is: Who controls the creation and circulation of money?

She notes that the government, as the sovereign, has the authority to issue new money – an ancient authority known as seignorage.  But in practice, governments have surrendered this authority to the commercial banking sector, whose lending creates nearly all of the money in circulation as debt. 

Banks create money out of thin air by issuing new loans.  They need not have those specific sums of money on hand, in a vault. They need have only a small fraction of reserves of the total sum lent, as required by “reserve banking” standards. In this way, bank lending quite literally introduces new supplies of money into the economy based on strictly private, commercial standards – i.e., banks' assessments of borrowers’ ability to repay the debt with interest.

Mellor believes that we need to recover the power of public currency to meet public needs.   By “public currency,” she means “the generally recognized and authorized public currency created through a public money circuit that originates in central banks and government spending.”  Privately created currency is money designated as public currency that is issued through the banking sector as loans.  It is the fact that bankers are creating the public currency when they make loans that makes the state liable to honor that money when banks go into crisis.