economics

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.

While a great many commons seek to develop alternatives to conventional businesses – and even to bypass markets altogether – the struggle to democratize capital should not be lost in the shuffle. Popular ownership of capital assets and business enterprises is still a great strategy for building the commons and advancing the public good. Fortunately, there's a growing enthusiasm for this approach.

One of the most eloquent advocates for socially friendly forms of capital ownership – the French call it the “social economy” – is Gar Alperovitz, a historian and political economist at the University of Maryland and a founder of the Democracy Collaborative.  Alperovitz's 2005 book, America Beyond Capitalism, was recently re-issued, presumably because it speaks to the political moment. How can we make economic progress when banks and large corporations are simply looking out for themselves? How can we reduce wealth inequality when government is captured by corporations and the affluent?

Alperovitz showcases the history and great potential of co-ops, worker-owned companies, and urban land trusts. He notes the constructive role that is played by municipal utilities, state-owned banks and state-chartered trusts such as the Alaska Permanent Fund. There are also dozens of cases in which states use their investment dollars to help communities, use government procurement to help worker-owned businesses, and provide venture capital to startups.

As we begin a new year, I thought it might be fun – and possibly useful – to try to identify where commons activism might make some breakthroughs in 2012. I won't venture specific predictions, which can easily miss the mark. But I do think we can usefully talk about areas of “quickening innovation” for the commons. Here's my list, along with brief explanations and speculations:

Digital and complementary currencies. As conventional national currencies crater and as digital networking technologies become more sophisticated, new sorts of commons-based currencies are emerging to fill the void. There is quite a bit of innovation going on in this space. Some new currencies are locally based; others are digital systems that can function globally. The rise of Bitcoin is only a hint of what may be coming down the pike. (See the terrific New Yorker profile of Bitcoin on October 10, 2011.) I am particularly fascinated by the Ven, a new international digital currency that is backed by real assets (about which I will blog shortly). In the meantime, a good way to acquaint yourself with the possibilities of alternative currencies is the book, Creating Wealth: Growing Local Economies With Local Currencies, by Gwendolyn Hallsmith and Bernard Lietaer.

Crowdsourcing as a source of capital formation. I see two trends that appear destined to converge: one is the growing use of cooperatives, community land trusts, worker-ownership and social enterprises to democratize wealth and empower communities; and the second is the expansion of crowdsourcing as a way to raise capital for specific projects if not companies.

The first topic, the democratization of capital, has received renewed attention thanks to the re-publication of Gar Alperovitz's book, America Beyond Capitalism (Democracy Collaborative Press). The second topic, crowdsourcing as a new means to capitalize projeccts (and not simply elicit donations or group suggestions), has received less attention, perhaps because any successful equity crowdsourcing project will need to comply with securities law. Still, the efficiencies of equity crowdsourcing are irresistible – and its synergies with traditional forms of democratizing capital are obvious. This may be wishful thinking on my part, but I expect to see some developments here in the coming year. (Here's a great P2P Foundation overview of existing crowdsourcing projects.)

Anthropologist David Graeber could not have timed his new book better. Debt: The First 5,000 Years is a sweeping historical survey of the social meaning of debt – or more precisely, the relationship between debtors and creditors. While many people regard this as a straight-forward moral matter – “everyone needs to pay the debts they owe” – Graeber invokes dozens of instances throughout world history to show how this relationship is highly complicated -- and essentially political.

Debt is not really a freely entered into contract between equals. It is a time-delayed market exchange in which the debtor agrees to be subordinate to the creditor for the duration of the loan. Upon full repayment of the debt, the debtor suddenly becomes an equal to the creditor again.

The subordination of debtors is not only morally fraught, as evidenced by synonyms for the word debt such as “sin” and “guilt.”  Debt is also (indeed, primarily) a political subordination. The creditor has the whip hand – and debtors are vulnerable to all sorts of contempt, abuse and punishment. In Roman times, a creditor could seize a debtor's wives and children as collateral, and make them personal slaves, if the debtor failed to repay a loan.  

My commons colleague in Germany, Silke Helfrich, has pulled together a succinct, persuasive account of how the commons helps us get beyond the relentless growth imperatives of the contemporary economy.  She presented her ideas two weeks ago at the Attac Congress, “Beyond Growth,” in Berlin.  (A German version of her talk, “Commons Beyond Growth,” is available here.) 

Below is Silke’s penetrating analysis about how the commons can help cultivate practical new models of provisioning without the pathologies of compulsive, unsustainable growth:

Summary

• Commons reduce money-induced growth because they make us more independent of money. The more we produce commons, the less we or the state has to pay for goods.
• Commons reduce population-induced growth because they are associated with a multiplicity of sufficiency strategies which create prosperity by sharing.
• Commons escape the growth compulsion, because all those things that are produced as commons, do not have to be made artificially scarce. And there is no incentive for artificial scarcity because commons are not produced as goods to be exchanged but they foster and maintain social relationships, satisfy needs and solve problems. Directly.

Thus far the vision of the future – but we have not got there yet. In the here and now a lot more must be thought through, discussed and fought for. Therefore, in what follows I will briefly give my reasoning.

I’ve always been uncomfortable using the words “developing” and “developed” when talking about countries.  At a certain intuitive level I felt that that very axis of valuation was wrong.  Should the United States be considered the apotheosis of “development” – an obvious ideal of human progress and satisfaction that the rest of the world should emulate? 

In light of the many unsustainable ecological and social pathologies that the neoliberal market order has spawned, that seems presumptuous, if not ridiculous.  Similarly, to call India or Brazil or Costa Rica a “developing” country is to imply that they are lagging behind the “developed” nations even though their cultures may be far healthier and happier than ours. 

So how did the whole discourse of “development” and its theory of value get going in the first place, and evolve into the international ideal of human aspiration?  I just had a crash course on that topic by reading a fantastic book, The History of Development:  From Western Origins to Global Faith, by Gilbert Rist, a Swiss scholar of development.  The book first appeared in French in 1996, and was translated into English only in 2008; the latest edition, the third, by Zed Books, came out in 2010.