America is in the midst of an interesting debate: what should be privatized, and what should be common property. Proposals for an "Ownership Society" seem to intend to privatize risk and reward, suggesting that the community has little responsibility other than charity for those who fall behind or are inherently disadvantaged.

And yet when that which should be common property is totally privatized, most people are the losers.

Georgists believe that the economic value of the gifts of nature and the social surplus should not be private property, but are our common birthright and therefore their economic value should be collected and used for common purposes. On the flip side, Georgists hold that what the individual produces — once he has compensated the rest of us for the bits of nature he has claimed as his own — is rightly his private property.

And common property is different from government property, a distinction that may not come easily to all readers.

Dan Sullivan: Are you a Real Libertarian, or a ROYAL Libertarian?

The distinction between common property and state property is lost on royal libertarians. Common property is that to which we all have inalienable rights. State property is that which the state actually owns, and can dispose of as it sees fit. For example, a public right of way is literally a right of way. Under principles of common law, nobody, not even the king, could close a traveled road and make it private property. A state maintenance truck, on the other hand, is state property, which can be sold if it no longer suits state purposes.

The earth, therefore, and all things therein, are the general property of all mankind, from the immediate gift of the Creator. --William Blackstone

It is a royal libertarian notion, and not a classical liberal ideal, to treat land as state property, for if land did not rightfully belong to the state, how could the state have granted it to favored citizens?

Classical liberals, not royal libertarians, are the ones who deny the state's right to appropriate the earth and allocate it to privileged individuals on favored terms. Classical liberals also who hold the key to abolishing taxation, by suggesting that the community (not the state) charge a user fee to landholders based on the value of the land.... Read the whole piece

Charles B. Fillebrown: A Catechism of Natural Taxation, from Principles of Natural Taxation (1917)

Q5. What is meant by equal right to land?
A. The right of access upon equal terms -- preference to be secured only upon payment of a premium that will extinguish the equal rights of all other men.

Q6. What is meant by a joint or common right to land?
A. A joint or common right to the rent of land -- a right such as heirs-at-law have to share the income of or rent of an estate. ... read the whole article

Peter Barnes: Capitalism 3.0 — Chapter 1: Time to Upgrade (pages 3-14)

Assets in the commons are meant to be preserved regardless of their return to capital. Just as we receive them as shared gifts, so we have a duty to pass them on in at least the same condition as we received them. If we can add to their value, so much the better, but at a minimum we must not degrade them, and we certainly have no right to destroy them.

Besides the commons, I use a few similar-sounding terms that should be clarified here as well.

• By common wealth I mean the monetary and nonmonetary value of all the assets in the commons. Like stockholders’ equity in a corporation, it may increase or decrease from year to year depending on how well the commons is managed.
• By common property I mean a class of human-made rights that lies somewhere between private property and state property. Like private property, common property arises when the state recognizes it. Unlike private property, it’s inclusive rather than exclusive — it strives to share ownership as widely, rather than as narrowly, as possible.
• By the commons sector I mean an organized sector of our economy. It embraces some of the gifts we inherit together, but not all. In effect, it’s a subset of the given commons that we consciously organize according to commons principles. It’s small at the moment, but the point of this book is that we should enlarge it. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 2: A Short History of Capitalism (pages 15-32)

In the beginning, the commons was everywhere. Humans and other animals roamed around it, hunting and gathering. Like other species, we had territories, but these were tribal, not individual.

About ten thousand years ago, human agriculture and permanent settlements arose, and with them came private property. Rulers granted ownership of land to heads of families (usually males). Often, military conquerors distributed land to their lieutenants. Titles could then be passed to heirs — typically, oldest sons got everything.

In Europe, Roman law codified many of these practices. Despite the growth in private property, much land in Europe remained part of the commons. In Roman times, bodies of water, shorelines, wildlife, and air were explicitly classified as res communes, resources available to all. During the Middle Ages, kings and feudal lords often claimed title to rivers, forests, and wild animals, only to have such claims periodically rebuked. The Magna Carta, which King John of England was forced to sign in 1215, established forests and fisheries as res communes. Given that forests were sources of game, firewood, building materials, medicinal herbs, and grazing for livestock, this was no small shift. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 3: The Limits of Government (pages 33-48)

The notion that government should protect the commons goes back a long way. Sometimes this duty is considered so basic it’s taken for granted. At other times, it’s given a name: the public trust. Several states actually put this duty in writing. Pennsylvania’s constitution, for example, declares: “Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.” Note that in this constitutional dictum, serving as trustee of natural resources isn’t an option for the state, it’s an affirmative duty. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 4: The Limits of Privatization (pages 49-63)

Propertize, But Don’t Privatize

Simply turning the commons over to corporations, without compensation or further ado, is like putting the fox in charge of the henhouse. There’s no guarantee the corporations will preserve the asset, much less share its benefits widely. We’re asked to believe that corporate owners will do the right things, either because it’s in their self-interest or because they’re socially responsible, but historical evidence and the inner logic of corporations suggest otherwise.

Nevertheless, it’s possible to propertize a natural inheritance without privatizing it, and in the next chapter I’ll show how this can work. The basic idea is to turn pieces of the commons into common property rather than corporate property. This would let us charge corporations higher (and truer) prices for using the commons, while sharing the benefits of those higher prices broadly. And it would ensure that the quantity of usage rights sold — which is to say, the level of pollution allowed — is set with the interests of future generations foremost in mind. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 5: Reinventing the Commons (pages 65-78)

There’s nothing about property rights, however, that requires them to be concentrated in profit-maximizing hands. You could, for example, set up a trust to own a forest, or certain forest rights, on behalf of future generations. These property rights would talk as loudly as shares of Pacific Lumber stock, but their purpose would be very different: to preserve the forest rather than to exploit it. If the Lorax had owned some of these rights, Dr. Seuss’s tale (and Pacific Lumber’s) would have ended more happily.

Imagine a whole set of property rights like this. Let’s call them, generically, common property rights. If such property rights didn’t exist, there’d be a strong case for inventing them. Fortunately, they do exist in a variety of forms — for example, land or easements held in perpetual trust, as by the Nature Conservancy, and corporate assets managed on behalf of a broad community, as by the Alaska Permanent Fund.

Some forms of common property include individual shares — again, the Alaska Permanent Fund is an example. These individual shares, however, differ from shares in private corporations. They’re not securities you can trade in a market; rather, they depend on your membership in the community. If you emigrate or die, you lose your share. Conversely, when you’re born into the community, your share is a birthright.

I recognize that, for some, turning common wealth into any kind of property is a sacrilege. As Chief Seattle of the Suquamish tribe put it, “How can you buy or sell the sky, the warmth of the land?” I empathize deeply with this sentiment. However, I’ve come to believe that it’s more disrespectful of the sky to pollute it without limit or payment than to turn it into common property held in trust for future generations. Hence, I favor propertization, but not privatization. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 7: Universal Birthrights (pages 101-116)

Dividends from Common Assets

A cushion of reliable income is a wonderful thing. It can be saved for rainy days or used to pursue happiness on sunny days. It can encourage people to take risks, care for friends and relatives, or volunteer for community service. For low-income families, it can pay for basic necessities.

Conversely, the absence of reliable income is a terrible thing. It heightens anxiety and fear. It diminishes our ability to cope with crises and transitions. It traps many families on the knife’s edge of poverty, and makes it harder for the poor to rise.

So why don’t we, as Monopoly does, pay everyone some regular income — not through redistribution of income, but through predistribution of common property? One state — Alaska — already does this. As noted earlier, the Alaska Permanent Fund uses revenue from state oil leases to invest in stocks, bonds, and similar assets, and from those investments pays yearly dividends to every resident. Alaska’s model can be extended to any state or nation, whether or not they have oil. We could, for instance, have an American Permanent Fund that pays equal dividends to long-term residents of all 50 states. The reason is, we jointly own many valuable assets.

Recall our discussion about common property trusts. These trusts could crank down pollution and earn money from selling ever-scarcer pollution permits. The scarcer the permits get, the higher their prices would go. Less pollution would equal more revenue. Over time, trillions of dollars could flow into an American Permanent Fund.

What could we do with that common income? In Alaska the deal with oil revenue is 75 percent to government and 25 percent to citizens. For an American Permanent Fund, I’d favor a 50/50 split, because paying dividends to citizens is so important. Also, when scarce ecosystems are priced above zero, the cost of living will go up and people will need compensation; this wasn’t, and isn’t, the case in Alaska. I’d also favor earmarking the government’s dollars for specific public goods, rather than tossing them into the general treasury. This not only ensures identifiable public benefits; it also creates constituencies who’ll defend the revenue sharing system.

Waste absorption isn’t the only common resource an American Permanent Fund could tap. Consider also, the substantial contribution society makes to stock market values. As noted earlier, private corporations can inflate their value dramatically by selling shares on a regulated stock exchange. The extra value derives from the enlarged market of investors who can now buy the corporation’s shares. Given a total stock market valuation of about $15 trillion, this socially created liquidity premium is worth roughly $5 trillion.

At the moment, this $5 trillion gift flows mostly to the 5 percent of the population that own more than half the private wealth. But if we wanted to, we could spread it around. We could do that by charging corporations for using the public trading system, just as investment bankers do. (For those of you who haven’t been involved in a public stock offering, investment bankers are like fancy doormen to a free palace. While the public charges almost nothing to use the capital markets, investment bankers exact hefty fees.)

The public’s fee could be in cash or stock. Let’s say we required publicly traded companies to deposit 1 percent of their shares each year in the American Permanent Fund for ten years — reaching a total of 10 percent of their shares. This would be our price not just for using a regulated stock exchange, but also for all the other privileges (limited liability, perpetual life, copyrights and patents, and so on) that we currently bestow on private corporations for free.

In due time, the American Permanent Fund would have a diversified portfolio worth several trillion dollars. Like its Alaskan counterpart, it would pay equal yearly dividends to everyone. As the stock market rose and fell, so would everyone’s dividend checks. A rising tide would lift all boats. America would truly be an “ownership society.” ... read the whole chapter