CONFLICT or COMPATIBILITY of VISIONS?

 

CAPITALISM 3.0 vs? AMERICA 3.0

 

by Peter Bearse

27 years ago, Thomas Sowell published an insightful book, CONFLICT of VISIONS.[i] My reading of two far more recent books, subjects of this review, brought Sowell's analysis back to mind.[ii] The superficial “3.0” similarity in their titles suggests compatibility but the two books differ greatly. There is a conflict of visions. If some coherence and resonance between them is not both imaginable and achievable, then capitalism, America and American capitalism are all in for serious trouble. For after all, as Sowell wrote: “conflicts of visions dominate history....Visions set the agenda for both thought and action.”[iii]

 

In both books, “3.0” stands for the most advanced stage of economic development. It also designates the (thusfar) most advanced stage of the “operating system” of our and others' economy. This is as far as their similarity goes, for what “advanced stage” means differs greatly between the two, as follows:

 

u    Peter Barnes' book [hereafter designated “PB”] – A stage not yet achieved but sorely needed if we are to maintain economic growth that is both adequate and sustainable; also, a stage that is not attainable without a significant change in our society's operating system. Barnes writes:

 

“The essence of it is to fix capitalism's operating system by adding a commons sector to balance the corporate sector...Capitalism 3.0 won't come on a disk...It must be built in the real world, asset by asset and commons by commons.”[iv]

 

u    Bennett & Lotus' book [hereafter designated “B&L”] –A stage still “emergent”but already realized as one both qualitatively and quantitatively different from “America 2.0”. The latter was an industrial age characterized by bigness in all major dimensions, as in large-scale industrial plant, big business corporations and other institutions, enormous bureaucracies and THE ORGANIZATION MAN – often described as “Big Government, Big Business, and Big Labor.” “America 3.0”, by contrast, represents transformation into a new, substantially smaller-scale world of entrepreneurship and small business enterprise with a renewed focus on individualism, self-determination and decentralization-- described as a “ more individualistic, more voluntarist, antibureaucratic culture.”[v]

 

The contrast is sharpened when we focus on the “commons” – a concept fundamental to PB but recognized only within B&L's chapter on “Defense and Foreign Policy.” Even there, it's use is questionable. The “commons” is too easily misconstrued or misused. PB defines the commons as:

 

           “all the gifts we inherit or create together....These diverse gifts are like a river with three                   tributaries: nature, community and culture.” [PB italics][vi]

 

B&L do not define the commons except, perhaps, by reference to:

 

           “the freedom of the global commons of air, sea and space...a shift to a global commons strategy...in our defense and foreign policy.”[vii]

 

In theory, “air, sea and space” are key components of the commons-as-nature as seen by PB. The classic “Tragedy of the Commons”, however, derives from the gap between theory and reality. A commons, and the real values that it represents, is made real by the rules governing access and usage. PB's overriding concern is that these rules provide a basis for sustainability of the commons. His “operating system” is a core of values grounded in mutual caring and sharing, not only for the commons-as-resource – a traditional emphasis – but for commons-as-a shared habitat. His view is close to Lovelock's concept of the earth as an organism, earth as “Gaia”.[viii]

 

The operating system that serves to define B&L's notion of commons implicitly, however, also serves explicitly to vitiate it. Why? – Because, in the case of the seas-as-commons, “freedom” is to be enforced by the warships of the U.S. and its allies. Thus, the rules of B&L's “commons,” what-ever they may be, are to be enforced by threats of violence, not rule of law. Use of the commons is not open to all who follow the rules but only to the U.S. and its allies. There is no mention of the “global commons”, including the high seas, as defined in international law, or to UN statements that “a commons is owned by all members in a community and is beyond the jurisdiction of any one nation.”[ix]

 

Thus, the B&L approach to the commons is tantamount to misuse of the commons concept coupled with effective use of it via enforcement of national spheres of influence. B&L present their concept as a contribution to peace but the dangers of international conflict demonstrate otherwise. Note, for example, growing conflict over China's flexing of its new maritime muscles in international waters that are not part of any commons but overlapping with the international waters of other nations (e.g., Japan, Thailand).

 

As for air-as-commons, neither the U.S.A. nor B&L recognize the resources of sky and atmosphere as commons' resources requiring governance. Here lies a major difference with PB. And space? Outer space is recognized as a commons by B&L but it is not discussed in PB. 125 countries have either signed or ratified the UN's Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies. Here, too, however, the devil lies in the details, many as yet unspecified, as to “operating system” rules, their management and governance. Dangers of conflicts of interest, public, private and international, are already apparent, for example, as both private and public organizations look to prospect for rare metals and minerals on the moon and other planets of our solar system, and as the amount of “space junk” accumulates.   

 

PB is focused upon the commons; the purview of B&L is much broader, covering American history, family and other social issues, politics and government. This difference in scope, however, is more apparent than real. Implementation of PB's innovative approach to commons issues would have broad implications that touch many aspects of American society, politics and government. The major innovation lies in PB's adaptation and broad application of the legal institution of a trust. A global “Sky Trust,” says he, should govern the sky-as-commons. In a way similar to the “cap 'n trade” mechanism that failed to pass Congress two years ago, the Sky Trust would market licenses to discharge carbon compounds into the atmosphere that would be tied to achievement of a cap on the accumulation of CO2 and other greenhouse gases in the atmosphere. That cap would be steadily reduced, raising the value and price of licenses and thus providing an incentive to reduce emissions.

 

PB also advocates an American Permanent Fund [APF] and a Children's Opportunity Trust [COT] and shows how both could be established to work. The APF is inspired by the Alaska Permanent Fund, which has been paying dividends to residents of Alaska for years based on the State of Alaska's ownership of oil resources. PB advocates a corporate contribution to the APF of 1% of corporate shares for 10 years:

       “This would be our price, not just for using a regulated stock exchange, but also for all the other privileges...that we currently bestow on private corporations for free.”[x]

 

The keyword in the quote is “price.” For what PB's approach amounts to is a great example of perfecting the market by bringing social costs into it that are now outside of the market. How can a market work if major costs of production are not counted in the prices of what is produced? It can't, at least not in the long-run. But isn't the market economy, supposed to be a sound, fundamentallinchpin of our socio-economic system with long-run, historic survival value? Yes, but it can't be so if caters only to short-term gratifications. Ironically, therefore, PB's reforms would insure the survivability of our private market-based capitalism. It would do so by overcoming what PB calls the “pathologies of capitalism” in two major ways, by:

 

i.         Privatizing social costs rather than, as now, by socializing private costs, and by...

ii.       Institutionalizing the commons as both a complement and countervailing force to large, multi-national corporations.

 

PB's innovative adaptation of the trust concept to problems diverse, fundamental and global in scope, moreover, crosscuts the categories of issues featured in B&L. In so doing, it helps us to both:

 

1.      Come to grips with and integrate two typesusually thought to be conflicting – the individual vis a vis the group, or individualism vs. collaboration; and

2.      Better deal with the larger context of B&L issues and propositions which, if not dealt with aggressively and appropriately, would sink B&L's vision and tank our republic.

 

Take the last first. What are the “larger”contextural matters affecting virtually all the headline “issues”? They are primarily the lack of historical perspective, global warming and climate change [GW/CC] and three “pathologies” of capitalism; specifically “it devours nature, widens inequality and fails to make us happier...”[xi] PB's “Short History of Capitalism” (Chapter 2) notes that “Some Americans saw our commons as the soil from which to build a nation of educated small proprietors.”[xii] This vision inspired a raft of important legislation such as the Land Ordinance of 1785, the Homestead Act, the Morrill Land Grant College Act, the Reclamation Act and the creation of national parks and other wilderness area. Family-sized plots were allocated to settlers. Schools were financed to educate them. It is terribly ironic, and could turn out to be tragically so, that this historical vision is the core of “America 3.0,” and yet, these essential, contextural/historical perspectives are lacking from B&L.

 

Besides achieving a better understanding of American history, one way of avoiding the tragic implications of the gap between PB and B&L is indicated by the earlier, first gap noted under “1.” and the need to “Come to grips...” with it. The seeming gap between the individual and any larger group based on shared values is completely artificial and, ultimately, destructive. As we learned from Ernest Hemingway, “No man is an island.” Yet, American exceptionalism lives on. We are the only nation on earth grounded on a vision of individualism: That we can create a society in which each individual has equal opportunity to realize his or her unique potential.

 

Yet, the key question remains: How? The key, as PB understandsbut B&L seems not to, is realization that freedom isn't free – that individualism requires the power of a larger group or community to survive and prosper. It's ironically worthy of note, therefore, that two of the most individualistic political organizations – the Libertarian Party and the Republican Liberty Caucus – clearly recognize that individuals need to be politically organized to fight for freedom. Or, as they emphasize: “The price of liberty is eternal vigilance.” Along with B&L, both favor decentralization and a smaller, Constitutionally limited federal government. Yet both deny the science backing GW/CC without realizing that, by refusing to engage the issue, they increase the odds that the size and power of a central government would eventuallyneed to be brought to bear to limit the destructive impacts of GW/CC.

 

The key to How? – to conjoin individualism with the need to address urgent, crosscutting, big scope; indeed, increasingly global issues – is addressed adequately and meaningfully by PB but not by B&L. The latter in their Chapter 8, “The Domestic Policy of an Individualistic Society,” give first priority to one big issue, our huge federal deficit, by recommending a correspondingly large “Big Haircut...done through a mixture of reduction in entitlements, renegotiation of debts, and...unilateral rescheduling...” (of debt). Their main suggestion on the revenue side of the federal government, however, – elimination of the income tax and its substitution by a consumption tax -- falls short of the financial requirements of resolving our looming public financial crisis.

  

Clearly, our parlous situation calls for institutional innovation, not just re-jiger-ing of debts and taxes. Here is where PB excels over B&L. His adaptation of the trust form and ways of perfecting the marketdo not call for enlargement of an already too large central government. With respect to the nurture of individualism, moreover, establishment of aCOT fed by large corporate “1%”subscriptions would fundamentally address issues ofintergenerational poverty and the inequality of opportunity that vitiate American Exceptionalism as stated earlier.

 

Perhaps this major difference between the books owes something to a difference between their major authors. It's interesting to note that Barnes and Bennett are both entrepreneurs. Both have been founders of successful private enterprises. Yet, Barnes is more the social entrepreneur – one who sees the need for social-institutionalinnovation. Bennett was founder of two private space transportation companies. Barnes was a founder of a social-capital organization, Working Assets. He views space as a commons; Bennett, as a space for privatization.

 

And yet PB suffers from its own limitation. Barnes has not fully thought through the issue of the governance of trusts to be run by an elite set of trustees. Without spelling out ways that their governance can be made more democratic, he might be labeled another son of the Progressive Movement. Recall that this was a primarily elitist undertaking from the late 19^th toearly 20^th centuries. Progressivism was a reaction to the troublesome waves of American populism of the mid-to-late 19^th century. If PB's trusts were to be taken over by the 1% and/or a meritocratic elite, then it is arguable that undemocratic institutional innovation would satisfactorily resolve the contradictions we seem to face: between individualism and political community, and between capitalism and social needs.

 

           PETER BEARSE, Ph.D., author of “1% + 99% = 100%: How “We the People” can occupy politics, change Congress and renew the American Dream” and two other books on the theme of “We the People: A Conservative Populism”.  June 6, 2014