A New Vision of the Commons

This section focuses on a new and emerging vision of the Global Commons. What is happening and where they are going.

Chapters

  • Strengthen the Commons Now: Silke Helfrich is a leading commons activist in Europe.  In 2008 and 2009 Helfrich worked in conjunction with the Heinrich Boll Foundation in Berlin to convene discussion groups with leading European advocates of the commons.  This manifesto is the result.  It was originally written in German.
  • Viral SpiralOpen source software, creative commons licensing, and a growing digital knowledge commons are creating a lively and innovative set of business possibilities.  This chapter from David Bollier's Viral Spiral provides an excellent overview of key trends.
  • People Sharing Resources: In this seminal article from Kosmos Journalin the Autumn of 2009, economist, author, and policy advisor James Quilligan introduces important concepts related to the future of the commons including co-governance, co-production, social charters, and commons trusts.  This and the following article require careful study.
  • The Commons of Mind, Life and Matter: Quilligan extends his basic thesis in this Kosmos article published in May 2010.  He is offering a new framework for both commerce and public policy--what he calls a metalogue on the global commons.  This is a landmark article in the commons literature.

Strengthen the Commons Now

“Commons are institutional spaces in which we are free.”
Yochai Benkler

 

How the crisis reveals the fabric of our commons

Over the last two hundred years, the explosion of knowledge, technology, and productivity has enabled an unprecedented increase of private wealth. This has improved our quality of life in numerous ways. At the same time, however, we have permitted the depletion of resources and the dwindling of societal wealth. This is brought to our attention by current, interrelated crises in finance, the economy, nutrition, energy, and in the fundamental ecological systems of life. These crises are sharpening our awareness of the existence and importance of the commons. Natural commons are necessary for our survival, while social commons ensure social cohesion, and cultural commons enable us to evolve as individuals. It is imperative that we focus our personal creativity, talents, and enthusiasm on protecting and increasing our social wealth and natural commons. This will require a change in some basic structures of politics, economics, and society. 

More social prosperity instead of more gross domestic product! When the economic growth curve drops and the GDP sinks, it seems threatening to us. Yet appearances deceive. The GDP merely maps production figures and monetary flows without regard for their ecological or social value; such numbers do not measure the things we truly need to live, – they may simply count their destruction. Social prosperity cannot be measured through such means. A reduction in the GDP does not necessarily signal a reduction in the real wealth of a society. Recognizing this fact widens our perspective and opens doors for new types of solutions. 

The commons can help us overcome the crisis, but it requires systematic advocacy. This is our contribution to give the commons a voice. 

 

What are the commons and why are they are significant?

Commons are diverse. They are the fundamental building blocks and pre-condition of our life and social wealth. They include knowledge and water, seeds and software, cultural
works and the atmosphere. Commons are not just “things,” however. They are living, dynamic systems of life. They form the social fabric of a free society.

Commons do not belong to anyone individually nor do they belong to no one. Different communities, from the family to global society, always create, maintain, cultivate, and redefine commons. When this does not happen, commons dwindle away – and in the process, our personal and social security diminishes. Commons ensure that people can live and evolve. The diversity of the commons helps secure our future.


Commons are the foundation of every economic activity. Thus, they must also be the result of what we do. We have to constantly revitalize our commons, because everything we produce relies upon the knowledge we inherit, the natural resources that the Earth gives us, and cooperation with our fellow citizens. The activity known as “the economy” is embedded in our social fabric. Depletion of resources, failures in education, needless barriers to creativity, and weak social bonds compromise the generativity of the whole. Without vital commons, production is impossible. Without commons, companies cannot earn money. 

Commons are often destroyed and thus driven from our consciousness. One reason that commons are threatened is because many individuals claim a limitless right to use things. But where fair usage rights to water and seeds are curtailed by economic calculation or through governmental policies, where resource exploitation destroys our natural inheritance, where breach upon breach is inflicted on public spaces, where patenting software limits creativity and impedes economic progress, where reliable networks are lacking, there dependency and uncertainty will increase. 

 

There‘s something new afoot – a movement to reclaim the commons! 

There is a movement that reminds us of what is worth keeping. A movement that seeks to reclaim what belongs to us, that affirms human dignity and creates something new. This movement to build and protect the commons is expanding the horizon of what is possible. 

Commons are being rediscovered and defended. People all over the world are defending themselves against attacks on the web of life that sustains them – against dams and mining projects that destroy life and land. Against a wasteful economy that fuels climate change. Against efforts to turn education and health into profit-oriented thinking. Against the re-engineering of our genetic heritage and overzealous restrictions on access to knowledge and culture. The commoners seek only to reclaim that which belongs to them, whether they are communities struggling to win back control over water utilities, indigenous communities seeking to protect its land in the Amazon Basin, or the worldwide movements for climate justice and an open internet. 

Commons are newly created and built upon. Countless people are creating new things for all and meaningful social and physical spaces for themselves. They invest energy in community
gardens, carry out sustainable and ecological agriculture, and design intergenerational living and working spaces. They produce free software and free knowledge, and create films, music, and images to be shared. Thus emerges a treasure of free culture available to all. It is maintained and enhanced by many, and it has become as indispensable as Wikipedia. Taken together, scientists and activists, citizens and politicians are developing a robust and innovative commons sphere – everywhere. 

Commons are maintained and cultivated. People are fostering neighborhood institutions, looking after playgrounds, running citizen foundations, and creating and sharing stories, culture, and our collective memories. They are engaging themselves, personally and directly, with the common wealth and are pushing the state to carry out its duties to protect the commons. For that they gain something in return, because to live in a culture of commons means both giving and taking. This culture establishes rights and duties equally. The commitment to our common wealth is borne from the awareness that the current economic model endangers our livelihoods – and fails to satisfy us at deeper levels. This commitment corresponds to the wish for creativity and inspiration. It is fueled by our self-directed passions, desire for social conviviality, and a sensitivity and mutual recognition of each other. It‘s all about a simple idea: the need to learn from each other and to create excellent things for their own sake. 

Commons inspire and connect. To take them into account requires a fundamentally different approach in perception and action. Commons are based on communities that set their own rules and cultivate their skills and values. Based on these always-evolving, conflict-ridden processes, communities integrate themselves into the bigger picture. In a culture of commons, inclusion is more important than exclusion,cooperation more important than competition, autonomy more important than control. Rejecting the monopolization of information, wealth, and power gives rise to diversity again and again. Nature appears as a common wealth that must be carefully stewarded, and not an ever-available property to be exploited. 

To live in a culture of the commons means to assume shared, long-term responsibility rather than the pursuit of an ethics of dominance. A culture of the commons honors fairness over unilateral benefit optimization, and interdependence rather than extreme individualism. 

The commons helps us confront one of the major social justice issues of our time: no one may extract more from the commons than what he gives back to the commons. This applies to market players as well as the state. Whoever replenishes and expands the commons, rather than just drawing from them, deserves social recognition and praise. In the interest of this and future generations, market players, the state, and each individual must align their behavior and thinking with the commons. This must become a fundamental element in any calculation of economic,political, or personal success. 

 

Neither no man‘s land nor boundless property 

The commons is not only about the legal forms of ownership. What matters most is whether and how community-based rights to the commons are enforced and secured. „Property entails obligations. Its use shall also serve the public good“ (Article 14 Paragraph 2, German Constitution). This limitation, anchored in the basic law, designates the boundaries of the availability of common pool resources to individuals. This principle helps us recognize that each single use has implications for resources that belong to us all. With my phone I transmit my message through the finite electromagnetic spectrum. My car pollutes our shared air. My work may contain a novel thought, but I also depend upon the commons of culture and knowledge to inform it. The usage rights of fellow commoners are the stop signs for individual usage rights. 

Absolute and exclusive private property rights in the commons therefore cannot be allowed. This principle applies regardless of whether the things are of a tangible or intangible nature, or whether they are associated with natural, cultural, or social spheres. In order to avoid overuse and under-utilization – the dramatic plundering of fish or the “orphaning” of creative works, for example – any form of property (itself a creation of the state) has to now, more than ever, be measured by two conditions: Each use must ensure that the common pool resources are not destroyed or over-consumed. No one may be excluded who is entitled to access and use the shared resource or who depends on it for basic needs. Access and usage rights must therefore be designed to assure that the commons can be preserved, maintained, and further developed. These are the principles of fair participation and sustainability.

What is public or publicly funded must remain publicly accessible. Public research, for example, must be available to everyone. There is no overwhelming reason to grant publishers and pharmaceutical corporations excessive and exclusive copyrights and patents over publicly funded research. Legislatures, at the behest of business, have nevertheless done so, making scientific journals inaccessible and vital medicines overly expensive. Alternatives arise from the commons movement. This is demonstrated by numerous projects for fairer licensing and alternative incentive models in science and culture. 

The commons helps us reconceptualize the prevailing concept of property rights. The exploitation of our commons has grave drawbacks for the majority of people living today and tomorrow. This is demonstrated by climate change and the exhaustion of many natural resources, as well as by the financial sector whose private profit motives have become, to the detriment of the commoners, ends in themselves. Our shared quality of life is also limited by knowledge that is excessively commercialized and made artificially scarce. In this manner, our cultural heritage becomes an inventory of lifeless commodities and advertising dominates our public spaces. 

Commons are the basis of life in a double sense. Without natural commons, there’s no survival. Without cultural commons, no human development. Everyone is directly affected by the issues raised here. Even businesses need commons in order to earn money now and in the future. We all need commons to survive and thrive. This is a key principle, and it establishes why commoners‘ usage rights should always be given a higher priority than corporations‘ property rights. Here the state has a duty to protect the commons, a duty which it cannot abandon. However, this does not mean that the state is necessarily the best steward for the commoners‘ interests. The challenge is for the commoners themselves to develop complementary institutions and organizational forms, as well as innovative access and usage rules, to protect the commons. The commoners must create their own commons sector, beyond the realm of market and state, to serve the public good in their own distinctive manner. 

 

For a society in which the commons may thrive 

Just as commons and people are different, so are the organizational forms of user communities. We encounter these forms everywhere and with many faces: as self-organizing groups, civil organizations, private agencies or networks, as cooperatives or custodial organizations, as small neighborhood communities or the international Free Software movement. The rules and ethics of each commons arise from the needs and processes of the commoners directly involved. Whoever is directly connected to a commons must participate in the debate and implementation of its rules. 

Agents of the commons do not have one but many centers. We need them locally, regionally, and globally. Conflicts can be resolved directly in well-arranged communities and their commons. But the global commons is an almost insolvable challenge, because where does the “world community“ really come together and define itself as such? How should it agree upon the sustainable usage of its shared resources? The more complex the system, the more important it is that there is an institutional and transparent framework for the careful management of the commons. When the state achieves this and protects the commons, government action will be supported by society.

Commons need more than just rules. We must realize that rules require the art of proper application. Commons are driven by a specific ethos, as well as by the desire to acquire and transfer a myriad of skills. Our society therefore needs to honor the special skills and values that enable the commons to work well. A culture of the commons publicly recognizes any initiative or project that enhances the commons, and it provides active financial and institutional support to enhance the commons sector. 

Conflicts are part of the diversity and constant reproduction of the commons. In addition to the rule of law, commons in the future will require innovative institutional structures, conciliation and mediation bodies, networks, and interdisciplinary stewards for the commons. These institutions will be constructed again and again from the areas of needs and conflict. Each has a common goal: to raise a strong voice to preserve the commons! 

Awareness of the commons means being conscious of our living conditions and exploring on all levels how much productivity and wealth we create directly from the commons. It requires a fundamental shift in thinking about the foundations of society. It means using, sharing, and multiplying our common wealth in a free and self-determined way. This challenge requires a lot of work, but it is also a great source of personal satisfaction and enrichment.

Our society needs a great debate and a worldwide movement for the commons. Now!

 

 

AUTHOR

The thesis paper was developed in collective authorship in the context of the Interdisciplinary political salons of the Heinrich Boll Foundation‘s "Time for commons" 2008/2009.
SOURCE
  Silke Helfrich: http://creativecommons.org/licenses/by-sa/3.0/(retrieved on 16/09/2010)

 


 

Viral Spiral - the New Open Business Models

Sections:


The commons and the market can be great partners if each shows respect for the other and ingenuity in working together. Entrepreneur John Buckman concedes that his Internet record label, Magnatune, amounts to “building a business model on top of chaos.”1 That is to say,he makes money by honoring open networks and people’s natural social inclinations. The company rejects the proprietary muscle games used by its mainstream rivals, and instead holds itself to an ethical standard that verges on the sanctimonious: “We are not evil.”In the music industry these days, a straight shooter apparently has to be that blunt.

Magnatune is a four-person enterprise based in Berkeley, California, that since 2003 has been pioneering a new open business model for identifying and distributing high-quality new music. It does not lock up the music with anticopying technology or digital rights management. It does not exploit its artists with coercive, unfair contracts. It does not harass its customers for making unauthorized copies. Internet users can in fact listen to all of Magnatune’s music for free (not just music snippets) via online streaming.2 Buckman, a former software programmer turned entrepreneur in his thirties, previously founded and ran Lyris Technologies, an e-mail list management company that he sold in 2005. In deciding to start Magnatune, he took note of the obvious realities that the music industry has tried to ignore: radio is boring, CDs cost too much, record labels exploit their artists, file sharing is not going to go away, people love to share music, and listening to music on the Internet is too much work. “I thought,why not make a record label that has a clue?” said Buckman.

Well before the band Radiohead released its In Rainbows album with a “pay what you want”experiment,Magnatune was inviting its customers to choose the amount they would be willing to pay, from $5 to $18, for any of Magnatune’s 547 albums. Buckman explains that the arrangement signals a respect for customers who, after all, have lots of free music choices. It also gives them a chance to express their appreciation for artists, who receive 50 percent of the sales price. “It turns out that people are quite generous and they pay on average about $8.40, and they really don’t get anything more for paying more other than feeling like they’re doing the right thing,” said Buckman.4 About 20 percent pay more than $12.5 “The reality is today nobody really needs to pay for music at all,” he acknowledges. “If you choose to hit the ‘buy’ button at Magnatune then you’re one of the people who has decided to actually pay for music. Shouldn’t we reflect that honest behavior back and say,well, if you’re one of the honest people how much do you want to pay?”6 The set-your-own-price approach is part of Magnatune’s larger strategy of building the business by cultivating open, interactive relationships with its customers and artists. “If you set up a trusting world,” explains Buckman, “you can be rewarded.” Magnatune’s business model embraces the openness of the Internet and makes it a virtue, rather than treating it as a bothersome liability that must be elaborately suppressed. All of Magnatune’s music is released as MP3 files, with no digital rights management, under a CC Attribution-NonCommercial-ShareAlike license.This means that customers can legally make their own remixes and covers of songs, and take samples, so long as the uses are noncommercial and carry the same CC license. Magnatune also invites customers to give free downloads of purchased music to three friends. Podcasters have free access to the entire Magnatune catalog.


By using a CC license,Magnatune saves a bundle by not having to oversee complex terms and conditions for usage of music. Nor does it have to maintain a DRM system and police the behavior of its customers, both of which squander a key marketing asset: consumer goodwill. Instead, the music circulates freely and, in so doing, expands public awareness of Magnatune’s 244 artists. Two-thirds of Magnatune’s revenues comes from licensing its music to films, ads, television, and shops.Like so many open business models, it has carved out a mid-tier niche between “expensive and proprietary” and “cheap and crummy.” Most mainstream music licensing involves either expensive,highly lawyered deals with record labels or insipid stock music from royalty-free CDs. Magnatune’s innovation is to offer high-quality music in multiple genres at flatrate licenses for sixteen different usage scenarios. The deals can be easily consummated via the Web; artists share in half the proceeds. No accounting flimflam.To date, Magnatune has licensed its music to more than one thousand indie films and many commercials. Magnatune is a small, fledgling enterprise in the $4 billion music industry. It does not have all the answers, and it may be sideswiped by bigger players at some point. But Magnatune is lean, nimble, profitable, and growing. It has shown how innovative business models can flourish in the open environment of the Internet. Unlike its bloated, besieged competitors, Magnatune is willing to listen closely to its customers, artists, and licensing clients. It is fair-minded and straightforward; it wants to share the wealth and let the music flow.


Open Networks Spur New Business Models

Openness does not come intuitively to many businesses. Competitive advantage has long been associated with exclusive control and secrecy. But as the Internet’s power expands, conventional businesses are feeling pressures to rethink their “closed” business models. A new breed of “open businesses” is demonstrating that a reliance on open-source software, open content, and an ethic of transparency in dealings with all corporate stakeholders can be tremendously competitive.

Open businesses understand the Great Value Shift discussed in chapter 5—that working through open networks and commons is likely to generate greater consumer attention, engagement, and loyalty—and thus sales—and may outperform a more exclusive regime of control.Working on an open network is also the best way for a company to get smarter faster, and to stay alert to changing market conditions. It bears noting that business models are not an either/or choice—that is, all open or all closed. There is a continuum of choices, as we will see below. Sometimes there are heated strategic and moral debates about what level of openness to adopt, yet the general trend in business today is clear: toward openness. Even as broadcast networks decry the posting of copyrighted television programs on YouTube, they clearly welcome the ratings spikes that ensue. Wireless telephony is fragmented among many
proprietary systems, but pressures are now growing to make them compete on an open platform.7 European regulators are calling for “open document format”standards to prevent Microsoft from abusing its proprietary standards in its Office suite of software. There are even calls for open standards for avatars in virtual worlds like Second Life, The Lounge, and Entropia Universe, so that our digital alter egos can glide from one virtual community to another.

Why this inexorable trend toward openness? Because on open networks, excessive control can be counterproductive. The overall value that can be created through interoperability is usually greater than the value that any single player may reap from maintaining its own “walled network.”9 For a company to reap value from interoperability, however, it must be willing to compete on an open platform and it must be willing to share technical standards, infrastructure, or content with others. Once this occurs, proprietary gains come from competing to find more sophisticated ways to add value in the production chain, rather than fighting to monopolize basic resources. Advantage also accrues to the company that develops trusting relationships with a community of customers.

Free software was one of the earliest demonstrations of the power of online commons as a way to create value. In his classic 1997 essay “The Cathedral and the Bazaar,” hacker Eric S. Raymond provided a seminal analysis explaining how open networks make software development more cost-effective and innovative than software developed by a single firm.10 A wide-open “bazaar” such as the global Linux community can construct a more versatile operating system than one designed by a closed “cathedral” such as Microsoft. “With enough eyes, all bugs are shallow,” Raymond famously declared. Yochai Benkler gave a more formal economic reckoning of the value proposition of open networks in his pioneering 2002 essay “Coase’s Penguin, or, Linux and the Nature of the Firm.”11 The title is a puckish commentary on how GNU/Linux, whose mascot is a penguin, poses an empirical challenge to economist Ronald Coase’s celebrated “transaction cost” theory of the firm. In 1937, Coase stated that the economic rationale for forming a business enterprise is its ability to assert clear property rights and
manage employees and production more efficiently than contracting out to the marketplace.

What is remarkable about peer production on open networks, said Benkler, is that it undercuts the economic rationale for the firm; commons-based peer production can perform certain tasks more efficiently than a corporation. Those tasks must be modular and divisible into small components and capable of being efficiently integrated, Benkler stipulated. The larger point is that value is created on open networks in very different ways than in conventional markets. Asserting proprietary control on network platforms may prevent huge numbers of people from giving your work (free) social visibility, contributing new value to it, or remixing it. “The only thing worse than being sampled on the Internet,” said Siva Vaidhyanathan, with apologies to Oscar Wilde, “is not being sampled on the Internet.”


The New York Times’s experience with its paid subscription service, TimesSelect, offers a great example. The Times once charged about fifty dollars a year for online access to its premier columnists and news archives. Despite attracting more than 227,000 subscribers and generating about $10 million a year in revenue, the Times discontinued the service in 2007.12 A Times executive explained that lost subscription revenues would be more than offset by advertising to a much larger online readership with free access. The Financial Times and the Economist have dropped their paywalls, and the Wall Street Journal in effect has done so by allowing free access via search engines and link sites. From some leading citadels of capitalism, a rough consensus had emerged: exclusivity can decrease the value of online content. While enormous value can be created on open networks, it can take different forms, notes David P. Reed, who studies information architectures.

One of the most powerful types of network value is what Reed calls “Group-Forming Networks,” or GFNs—or what Benkler might call commons-based peer production and I would
call, less precisely, the commons. Reed talks about “scale-driven value shifts” that occur as a network grows in size. Greater value is mcreated as a network moves from a broadcast model (where “content is king”) to peer production (where transactions dominate) and finally, to a group-forming network or commons (where jointly constructed value is produced and shared). It is unclear, as a theoretical matter, how to characterize the size and behavior of various “value networks” on the Web today. For simplicity’s stake—and because Web platforms are evolving so rapidly— I refer to two general value propositions, Web 2.0 and the commons. Web 2.0 is about creating new types of value through participation in distributed open networks; the commons is a subset of Web 2.0 that describes fairly distinct, self-governed communities that focus on their own interests, which usually do not involve moneymaking. The rise of Web 2.0 platforms and the commons clearly has some serious implications for business strategy and organization. Just consider how Craigslist is displacing millions of dollars of classified newspaper ads; how open-access journals are threatening the economic base of commercial academic journals; and how usergenerated content is competing with network television. At the same time, activities that once occurred through informal social means (finding a date, organizing a gathering, obtaining word-ofmouth recommendations) are increasingly becoming commercial endeavors on the Web. Especially when the commons has strong mechanisms to preserve its value-creating capacity, such as the GPL,
open networks are helping to convert more market activity into commons-based activity, or at least shifting the boundary between commodity markets and proprietary, high-value-added markets. As this dynamic proceeds, the social and the commercial are blurring more than ever before. Many “value chains” that have long sustained conventional businesses are being disrupted. As described in chapter 5, more efficient types of distributed media are disrupting the production/distribution chain that sustains Centralized Media. The Long Tail lets online
consumers “pull” niche products that they want rather than enduring a relentless marketing “push” of products they don’t want. Commons-based peer production is a nonmarket version of the Long Tail: dispersed communities of people with niche interests can find one another, form social communities, bypass the market, and collaborate to create the niche resources that they want. The question facing many businesses is how to develop stable, long-term business models that can coexist with productive commons, if not leverage them for market gain. Their goal is to find ingenious ways to “monetize” the social relationships of online communities (by selling targeted advertising, personal data, niche products, etc.). Open businesses aim to do this in a respectful, public-spirited way; other, more traditional firms may have fewer scruples because, for them, “it’s all about the money.” But here’s the rub: a company can go only so far in monetizing the value-generating capacities of a commons without enclosing it or enraging the commoners.A company may consider itself shrewd for acquiring the copyrights for user-generated content, for example, or for blocking user access to third-party widgets that it disapproves of.  But participants in Web 2.0 communities will protest or simply leave if a corporate host starts to dictate obnoxious policies. A company can try to run its Web 2.0 platform as a feudal fiefdom, but it risks inciting users to revolt and start their own (nonmarket)
online communities, reinventing themselves as commoners. Although there is an implicit social ethic to Web 2.0 platforms,none is necessarily “free” in the Stallman sense of “freedom.”

Unfortunately, there is no clear consensus about how exactly to define an “open business.” Accordingly, assessments of their social, political, or economic virtue can be slippery. Some analysts such as Henry Chesbrough regard a business as “open” if it relaxes or modifies its intellectual property controls, or changes its organizational practices, as a way to reap value from open networks.16 Others believe that an open business should use open-source software, and support the copying and sharing of works through CC or other open-content licenses. Sometimes the idea of open business is yoked to a vaguely defined notion of “social responsibility.” It is not always clear whether this ethic is a moral gloss or a structural feature, but in general open businesses strive to practice a more open, accountable, and socially enlightened vision of commerce.

One champion of this vision is OpenBusiness,a Web site jointly created by Creative Commons UK in partnership with CC Brazil and the FGV Law School in Rio de Janeiro, Brazil. The mission of OpenBusiness is to “analyze and explain models by which people can share their knowledge and creativity with others whilst at the same time enjoying the more traditional incentives of profit, individual success and societal advancement.”17 By its lights, an open business is commons-friendly if it is committed to “transparency,” “sustainable systems,” and to putting “the health and welfare of people above everything else.” An open business also tries to generate as many “positive externalities” as possible—knowledge, social relationships, revenues—which it is willing to share with its stakeholders.


It is perhaps best to approach open businesses as an eclectic social phenomenon in search of a theory. As it has been said about Wikipedia, “It works in practice, but not in theory.”18 It is risky to overtheorize phenomena that are still fluid and emerging. Still, specific examples of open business can help us understand some basic principles of open networks,and how some businesses are using CC licenses to build innovative sorts of enterprises. Share the Wealth, Grow a Commercial Ecosystem The idea that a company can make money by giving away something for free seems so counterintuitive, if not ridiculous, that conventional business people tend to dismiss it. Sometimes they protesteth too much, as when Microsoft’s Steve Ballmer compared the GNU GPL to a “cancer”and lambasted open-source software as having “characteristics of communism.”19 In truth, “sharing the wealth” has become a familiar strategy for companies seeking to develop new technology markets. The company that is the first mover in an emerging commercial ecosystem is likely to become the dominant
player, which may enable it to extract a disproportionate share of future market rents. Giving away one’s code or content can be a great way to become a dominant first mover. Netscape was one of the first to demonstrate the power of this model with its release of its famous Navigator browser in 1994.The free distribution to Internet users helped develop the Web as a social and technological ecosystem, while helping fuel sales of Netscape’s Web server software. (This was before Microsoft arrived on the scene with its Internet Explorer,but that’s another story.) At a much larger scale, IBM saw enormous opportunities for building a better product by using GNU/Linux. The system would let IBM leverage other people’s talents at a fraction of the cost and strengthen its service relationships with customers. The company now earns more than $2 billion a year from Linux-related services.


Today, sharing and openness are key to many business strategies. “Open Source: Now It’s an Ecosystem,” wrote BusinessWeek in 2005, describing the “gold rush” of venture capital firms investing in startups with open-source products. Most of them planned to give away their software via the Web and charge for premium versions or for training, maintenance, and support. The pioneers in using open platforms to develop commercial ecosystems on the Internet are Amazon, Google,Yahoo, and eBay. Each has devised systems that let third-party software developers and businesses extend their platform with new applications and business synergies. Each uses systems that dynamically leverage users’ social behaviors and so stimulate business—for example, customer recommendations about books, search algorithms that identify the most popular Web sites, and reputation systems that enhance consumer confidence in sellers.Even Microsoft,eager to expand the ecology of developers using its products, has released 150 of its source code distributions under three “Shared Source” licenses, two of which meet the Free Software Foundation’s definition of “free.” More recently, Facebook has used its phenomenal reach—more than 80 million active users worldwide—as a platform for growing a diversified ecology of applications. The company allows software developers to create custom software programs that do such things as let users share reviews of favorite books, play Scrabble or poker with others online,or send virtual gifts to friends.Some apps are just for fun; others are the infrastructure for independent businesses that sell products and services or advertise. In September 2007, Facebook had more than two thousand software applications being used by at least one hundred people.


Open Content as a Gateway to Commercial Opportunities

Of course, not every business can own a major platform, as Google, eBay, and Facebook do. Still, there are many other opportunities. One of the most popular is to use open platforms to attract an audience, and then strike a deal with an advertiser or commercial distributor, or sell premium services (“get discovered”). Another approach is to use open content to forge a spirited community to which things may be sold (“build a market on a commons”). Get discovered. This dynamic has been played out countless times on YouTube,MySpace, Facebook, and other high-traffic social networking sites. An unknown remix artist suddenly becomes famous when his track is discovered by a network swarm: the story of DJ Danger Mouse that we saw in chapter 6. A band attracts a huge following through viral word of mouth: the story of Jake Shapiro and Two Ton Shoe’s stardom in South Korea. There are even calculated scams to get discovered, like the lonelygirl15 series of videos purportedly shot by a teenage girl in her bedroom, which became a huge Internet sensation in 2006.

As any television network will tell you, the capacity to aggregate audiences is worth a lot of money. The customary way of monetizing this talent is to sell advertising. Or one can parlay newfound name recognition into side deals with the mass media, which have always depended upon “star power” as a draw.Thus,Ana Marie Cox was able to parley her notoriety as a political gossip on her Wonkette blog into a job as Washington editor of Time magazine. Perez Hilton, a Hollywood blogger who attracted a following,was offered  a lucrative perch at the E! cable television channel.We saw in chapter 6 how producer Samuli Torssonen’s Star Wreck attracted millions of Internet viewers, enabling him to strike a deal with Universal Studios to distribute a DVD version.With the same visions of stardom, or at least paying gigs, in mind, thousands of bands now have fan sites, music downloads, and banner ads on MySpace and other sites to promote themselves.

The CC NonCommercial license is one way to help pursue the “get discovered”business strategy. The license allows authors to seek a global Internet audience without having to cede rights to any commercial opportunities. It is not, however, a terribly reliable way to make money, which is why some artists, especially musicians,find fault with the implicit promise of the NC license. Many serious artists regard the NC license as too speculative a mechanism to get paid for one’s creative work. It is a fair complaint, as far as it goes.The real problem is the closed, highly concentrated music industry, which has a hammerlock on marketing, radio play, and distribution. Newcomers and mid-tier talent cannot get past the corporate gatekeepers
to reach an audience, let alone make money.

In an attempt to bridge the sharing economy with the market, and thereby open up some new channels of commercial distribution for commoners, the Creative Commons in late 2007 introduced a new protocol,CC+.The new project aims to make it easier for the owners of NC-licensed content to signal that agreements, products, or services beyond the scope of the CC licenses are on offer—for example, commercial licensing, warranties, or higherquality copies. A photographer who has hundreds of NC-licensed photos on Flickr would be able to continue to let people use those photos for noncommercial purposes—but through CC+, he could also sell licensing rights to those who want to use the photos for commercial purposes. CC+ is a metadata architecture and standard that allows third-party intermediaries to develop services for consummating commercial transactions. People can use CC+ as a simple “click-through”mechanism for acquiring commercial rights for music, photos, text, and other content.

One of the earliest “copyright management” companies to take advantage of the CC+ standard was RightsAgent, a Cambridge, Massachusetts, company founded by Rudy Rouhana. RightsAgent essentially acts as a go-between for people who create NC-licensed works on the Web and those who wish to buy rights to use them for commercial purposes. Just as PayPal facilitates the exchange of money on the Internet, so RightsAgent aspires to be a paid intermediary for facilitating the sale of user-generated content. The rise of CC+ and associated companies brings to mind Niva Elkin-Koren’s warning that the Creative Commons licenses can be a slippery slope that merely promotes a property-oriented, transactional mentality—the opposite of the commons. On the other hand, many people operating in the noncommercial sharing economy, such as musicians and photographers, have long complained that, as much as they enjoy participating in the commons, they still need to earn a livelihood.

Revver is another company that has developed an ingenious way to promote the sharing of content,yet still monetize it based on the scale of its circulation. Revver is a Los Angeles–based startup that hosts user-generated video. All videos are embedded with a special tracking tag that displays an ad at the end. Like Google’s Ad- 0Words system, which charges advertisers for user “click-throughs” on ad links adjacent to Web content,Revver charges advertisers for every time a viewer clicks on an ad. The number of ad views can be tabulated, and Revver splits ad revenues 50-50 with video creators. Key to the whole business model is the use of the CC Attribution- NonCommercial-No Derivatives license. The license allows the videos to be legally shared, but prohibits anyone from modifying them or using them for commercial purposes.

One of the most-viewed videos on Revver sparked a minor pop trend.It showed kids dropping Mentos candies into bottles of Coca- Cola, which produces an explosive chemical reaction. The video is said to have generated around $30,000.26 So is new media going to feature silly cat videos and stupid stunts? Steven Starr, a co-founder of Revver, concedes the ubiquity of such videos, but is quick to point to “budding auteurs like Goodnight Burbank, Happy Slip, Studio8 and LoadingReadyRun, all building audiences.” He also notes that online, creators “can take incredible risks with format and genre, can grow their own audience at a fraction of network costs, can enjoy free syndication, hosting, audience-building and ad services at their disposal.”

Blip.tv is another video content-sharing Web site that splits ad revenues with video creators (although it is not automatic; users must “opt in”).Unlike many videos on YouTube and Revver,blip.tv tends to feature more professional-quality productions and serialized episodes, in part because its founders grew out of the “videoblogging” community. Blip.tv espouses an open business ethic, with shout-outs to “democratization, openness, and sustainability.” While there is a tradition for companies to spout their high-minded principles, blip.tv puts some bite into this claim by offering an open platform that supports many video formats and open metadata standards. And it allows content to be downloaded and shared on other sites. Users can also apply Creative Commons licenses to their videos, which can then be identified by CC-friendly search engines. For all these reasons, Lessig has singled out blip.tv as a “true sharing site,” in contrast to YouTube, which he calls a “faking sharing site” that “gives you tools to make it seem as if there’s sharing, but in fact, all the tools drive traffic and control back to a single site.”28 Lessig’s blog post on blip.tv provoked a heated response from blogger Nicholas Carr, a former executive editor of the Harvard Business Review. The contretemps is worth a close look because it illuminates the tensions between Web 2.0 as a business platform and Web 2.0 as a commons platform. In castigating YouTube as a “fake sharing site,” Carr accused Lessig of sounding like Chairman Mao trying to root out counterrevolutionary forces (that is, capitalism) with “the ideology of digital communalism.”

Like Mao, Lessig and his comrades are not only on the wrong side of human nature and the wrong side of culture; they’re also on the wrong side of history. They fooled themselves into believing that Web 2.0 was introducing a new economic system—a system of “social production”—that would serve as the foundation of a democratic, utopian model of culture creation.They were wrong.Web 2.0’s economic system has turned out to be, in effect if not intent, a system of exploitation rather than a system of emancipation. By putting the means of production into the hands of the masses but withholding from those same masses any ownership over the product of their work,Web 2.0 provides an incredibly efficient mechanism to harvest the economic value of the free labor provided by the very, very many and concentrate it into the hands of the very, very few. The Cultural Revolution is over. It ended before it even began. The victors are the counterrevolutionaries. And they have $1.65 billion [a reference to the sale price of YouTube to Google] to prove it.

Lessig’s response, a warm-up for a new book, Remix, released in late 2008, pointed out that there are really three different economies on the Internet—commercial, sharing, and hybrid. The hybrid economy now emerging is difficult to understand, he suggested, because it “neither gives away everything, nor does it keep everything.” The challenge of open business models, Lessig argues, is to discover the “golden mean.”

It can be hard to conceptualize a “hybrid sector” when we are accustomed to dividing the world into “private” and “public” sectors, and “profit-making” and “nonprofit” enterprises. Open business models quickly run up against deep-seated prejudices that associate property with “freedom”and sharing with “communism.” How can there be a middle ground? Although some like Nicholas Carr seem to hanker for the predatory enterprises of an earlier capitalism, only this time on Web 2.0 platforms, that is not likely to happen in a world of distributed computing. Power is too dispersed for predators to survive very long, and besides, the commoners are too empowered.

Build a market on a commons. A number of online business models are based on building communities of deep social affection and respect, and then using the community as a platform for selling merchandise, advertising, or products. Interestingly, some of the most successful “customer relationship” models revolve around music. The Grateful Dead’s strategy of building a business around a rabid fan base (discussed in chapter 6) occurred well before the Internet became prevalent. It is paradigmatic of the digital age, nonetheless. If the band had locked up its music and prohibited free taping of its concert performances and sharing of homemade tapes, it would have effectively weakened the fan base that sustained its business model. Sharing concert tapes actually made Deadheads more inclined to buy t-shirts, official music releases, and concert tickets because the tape sharing deepened the community’s identity and quasi-spiritual ethic. The Grateful Dead’s focus on touring as opposed to studio albums not only intensified the sharing ethic of its fan base, it obliged the band to “keep on truckin’ ” in order to keep earning money.

The Brazilian tecnobrega music scene discussed briefly in chapter 7 is another example of artists making money through respectful, in-person relationships with their fans. In the town of Belém,Brazil, tecnobrega artists release about four hundred CDs every year, but none are sold in stores; street vendors sell them for $1.50 apiece.The CDs function mostly as advertising for live “sound system” parties on the outskirts of town that attract as many as five thousand people and use state-of-the-art audio technology. Immediately following the performances, some artists also sell a significant number of “instant CDs” that are of better quality (and more expensive) than those sold in the streets. (Interestingly, street sales do not compete with after-concert sales.)

“In their live presentations, the tecnobrega DJ’s usually acknowledge the presence of people from various neighborhoods,and this acknowledgement is of great value to the audience, leading thousands of buy copies of the recorded live presentation,” said Ronaldo Lemos of CC Brazil, who has studied Brazil’s record industry. 30 The same basic model is also at work in other grassroots musical genres in Brazil, such as baile funk, which originated in the shantytowns of Rio de Janeiro.

Artists make most of their money from these live performances, not from CDs, said Lemos. Bands earn an average of $1,100 per solo performance at these events,and $700 when playing with other bands—this, in a region where the average monthly income is $350. Altogether, Lemos estimates that the sound system parties as abusiness sector earn $1.5 million per month, on fixed assets of $8 million.

“The band Calypso has been approached several times by traditional record labels,” said Lemos, “but they turned down all the offers. The reason is that they make more money by means of the existing business model. In an interview with the largest Brazilian newspaper, the singer of the band said,‘We do not fight the pirates. We have become big because of piracy, which has taken our music to cities where they would never have been.’ ” Calypso has sold more than 5 million albums in Brazil and is known for attracting as many as fifty thousand people to its concerts, Lemos said.

Another highly successful open business model in the Brazilian music scene is TramaVirtual, an open platform on which more than 15,000 musicians have uploaded some 35,000 albums.Fans can then download the music for free. While this does not sound like a promising business proposition, it makes a lot of sense in the context of Brazil’s music marketplace. Major record labels release a minuscule number of new Brazilian music CDs each year, and they sell for about $10 to $15.32 Only the cultured elite can afford music CDs, and the native musical talent—which is plentiful in Brazil—has no place to go.With such a constricted marketplace,TramaVirtual has become hugely popular by showcasing new and interesting music. TramaVirtual’s artistic and social cachet—itself the product of open sharing in a commons—has enabled it to develop a highly respected brand identity. “By exploiting the trademark,” said Lemos, “Trama has been able to create parallel businesses that work with music, but not in the same way that a record label does.”33 For instance, Trama created a business that sponsors free concerts at universities under its trademark sponsorship. It then sells marketing rights at the concerts to cosmetic makers and car companies. Musicians have gained wide public exposure through Trama, and then used that association to negotiate international record and marketing deals for themselves. CSS (Cansei de Ser Sexy) won a record contract with the American label Sub Pop, for example.

For the past five years, a related business model for music on an international scale has been emerging in Luxembourg.In only three years, Jamendo has amassed a huge international following in much the same way as TramaVirtual—by attracting music fans to its open platform for free music sharing. (The name Jamendo is a mix of the words jam and crescendo.) The site is not a music retailer but a repository for free music—with a business model overlay to pay the bills.

Jamendo’s purpose is not to maximize returns to shareholders, in other words, but to service musicians and fans in a self-sustaining way. It makes most of its money from “tip jar” donations from fans and from advertising on the Web pages and streamed music. Ad revenues are shared 50-50 with artists, and any donations are passed along to individual artists, minus a small transaction fee.

The Jamendo community is sizable and growing. By 2008 it had more than 357,000 active members from around the world. Part
of the draw is the catalog of more than 10,000 albums, all free. Unlike Magnatune, Jamendo does not select the artists that are featured on its site; everyone is welcome to upload his or her music.To help fans identify music they like, the site offers many sophisticated tools. There are some 60,000 member-written reviews, custom playlists, community ratings of albums, and “folksonomy” tags for albums and songs.* Fans are urged to download music through peerto- peer networks such as BitTorrent and eMule because it reduces Jamendo’s bandwidth expenses.

“Users can listen,download,review, remix,and ‘widgetize,’ ”said Sylvain Zimmer, the founder and chief technology officer of Jamendo. As part of its commitment to musicians, the site has a forum * Folksonomies, a cross of taxonomy and folk, are essentially user-generated tags attached to each song and album,which enables categories of music to emerge from the “bottom up,” as fans regard the music, rather than through top-down marketing categories. for artists and listings of concerts, as well as open APIs* so the Jamendo ecosystem can be integrated into other software.

What’s striking about Jamendo is its nonchalant international feel, as if it were only natural to browse for “deathmetal,” “powerpop,” “hypnotique,” “ambient,” “psytrance,” and “jazzrock” on the same site. (These are just a few of the scores of folksonomy tags that can be used to browse the catalog.) “We are a Babel, not a label,”said Zimmer,who reports that India and Japan are heavy downloaders of Jamendo music. Complete, official versions of the site are available in French, the original language for the site, and now English and German. Incomplete versions of the site are available in Spanish, Polish, Portuguese, Russian, Turkish, Italian, Swedish, Czech, and Ukrainian.

Virtually all the albums on Jamendo use one or more of the six basic CC licenses. The CC ethic is a perfect match for the company’s community-driven business model, said Zimmer. “The best way of detecting CC-incompatible content and commercial uses of NC-licensed work is the community. The Creative Commons makes the community feel more confident and active.”34 He adds that if the site’s managers run too many ads, “the community will tell you.”


Commoners as Co-creators of Value

For businesses operating on open networks, it is a mistake to regard people merely as customers; they are collaborators and even coinvestors. As more companies learn to interact closely with their customers, it is only natural that conversations about the product or service become more intimate and collaborative. The roles of the * An API is an “application programming interface,”a set of protocols that enable a software application to operate on a computer operating system, library, or service. Many companies use proprietary APIs to retain control over who may develop applications that will interoperate with their software. Other companies that wish to encourage development of compatible applications—
and thus promote a software ecosystem entwined with the operating system or service—use open APIs. “consumer” and “producer” are starting to blur, leading to what some business analysts call the “prosumer”35 and the “decentralized co-creation of value.”36 The basic idea is that online social communities are becoming staging areas for the advancement of business objectives. Businesses see these communities as cost-effective ways to identify promising innovations, commercialize them more rapidly, tap into more reliable market intelligence, and nurture customer goodwill.


Amateurs who share with one another through a loose social commons have always been a source of fresh ideas.Tech analyst Elliot Maxwell (citing Lessig) notes how volunteers helped compile the Oxford English Dictionary by contributing examples of vernacular usage;how the Homebrew Computer Club in the San Francisco Bay area developed many elements of the first successful personal computer;and how sharing among auto enthusiasts helped generate many of the most important early automotive innovations.37 In our time, hackers were the ones who developed ingenious ways to use unlicensed electromagnetic spectrum as a commons,which we now know as Wi-Fi.They tinkered with the iPod to come up with podcasts, a new genre of broadcasting that commercial broadcasters now emulate.38 Numerous self-organized commons have incubated profitable businesses.Two movie buffs created the Internet Movie Database as separate Usenet newsgroups in 1989; six years later they had grown so large that they had merged and converted into a business that was later sold to Amazon.39 The Compact Disc Database was a free database of software applications that looks up information about audio CDs via the Internet. It was originally developed by a community of music fans as a shared database, but in 2000 it had grown big enough that it was sold and renamed Gracenote.40 A commons can be highly generative because its participants are tinkering and innovating for their own sake—for fun, to meet a challenge, to help someone out. Amateurs are not constrained by conventional business ideas about what may be marketable and profitable.They do not have to meet the investment expectations of venture capitalists and Wall Street.Yet once promising new ideas do surface in the commons,market players can play a useful role in supplying capital and management expertise to develop, improve, and commercialize an invention.


Because online commons are such a rich source of new ideas, the most farsighted companies are trying to learn how they might be harnessed to help them innovate and compete more effectively. MIT professor Eric von Hippel is one of the foremost researchers of this process. His 2005 book Democratizing Innovation describes how the leading participants in high-performance sports—extreme skiing, mountain biking, skateboarding, surfing, and hot-rodding—are forming “innovation communities” that work closely with manufacturers. 41 The most active practitioners of these sports are intimately familiar with the equipment and have their own imaginative ideas about what types of innovations the sport needs. Indeed,many of them have already jerry-rigged their own innovations—better cockpit ventilation in sailplanes, improved boot and bindings on snowboards, a method for cutting loose a trapped rope used by canyon climbers. For companies willing to listen to and collaborate with users, says von Hippel,“communities of interest are morphing into communities of creation and communities of production.” “Users that innovate can develop exactly what they want, rather than relying on manufacturers to act as their (often very imperfect) agents,” von Hippel writes. “Moreover, individuals users do not have to develop everything they need on their own: they can benefit from innovations developed and freely shared by others.”42 Besides finding empirical examples of this trend, von Hippel has developed a theoretical vocabulary for understanding how collaborative innovation occurs. He probes the user motivations for “free revealing” of their knowledge, the attractive economics that fuel “users’ low-cost innovation niches,” and the public policies that sometimes thwart user-driven innovation (patent rights for a field may be fragmented, anticopying restrictions such as the Digital Millennium Copyright Act may prevent user tinkering, etc.).


User-driven innovation is not as esoteric as the “extreme sports” examples may suggest. It is, in fact, a growing paradigm. In one of the more celebrated examples, Lego, the Danish toymaker, invited some of its most fanatic users to help it redesign its Mind-storms robotics kit. The kits are meant to let kids (and adults) build a variety of customized robots out of a wild assortment of plastic Lego pieces, programmable software, sensors, and motors.43 In 2004, when some Lego users reverse-engineered the robotic “brain” for the Mindstorms kit and put their findings on the Internet, Lego at first contemplated legal action. Upon reflection, however, Lego realized that hackers could be a valuable source of new ideas for making its forthcoming Mindstorms kit more interesting and cool. Lego decided to write a “right to hack” provision into the Mindstorms software license, “giving hobbyists explicit permission to let their imaginations run wild,” as Brendan I. Koerner wrote in Wired magazine. “Soon, dozens of Web sites were hosting thirdparty programs that help Mindstorms users build robots that Lego had never dreamed of: soda machines, blackjack dealers, even toilet scrubbers. Hardware mavens designed sensors that were far more sophisticated than the touch and light sensors included in the factory kit.”44 It turns out that not only are Lego fans happy to advise the company, the open process “engenders goodwill and creates a buzz among the zealots, a critical asset for products like Mindstorms that rely on word-of-mouth evangelism,” said Koerner. In the end, he concluded, the Mindstorm community of fanatics has done “far more to add value to Lego’s robotics kit than the company itself.” Another improbable success in distributed, user-driven innovation is Threadless, a Chicago-based t-shirt company.Threadless sells hundreds of original t-shirt designs, each of which is selected by the user community from among more than eight hundred designs submitted every week. The proposed designs are rated on a scale of one to five by the Web site’s more than 600,000 active users.Winners receive cash awards, recognition on the Web site, and their names on the t-shirt label. Every week,Threadless offers six to ten new t-shirts featuring the winning designs.

In 2006, the company sold more than 1.5 million t-shirts without any traditional kind of marketing. Its business model is so rooted in the user community that Threadless co-founders Jake Nickell and Jacob DeHart have declined offers to sell their t-shirts through conventional, big-name retailers. Threadless’s business model has helped it overcome two major challenges in the apparel industry, write Harvard Business School professor Karim R. Lakhani and consultant Jill A.Panetta—the ability “to attract the right design talent at the right time to create recurring fashion hits,” and the ability “ to forecast sales so as to be better able to match production cycles with demand cycles.”

A number of companies have started successful enterprises based on the use of wikis, the open Web platforms that allow anyone to contribute and edit content and collaborate. Evan Prodromou, the founder of Wikitravel, a free set of worldwide travel guides, has identified four major types of wiki businesses: service providers who sell access to wikis (Wikispace, wetpaint, PBwiki); content hosters of wikis (wikiHow,Wikitravel,Wikia); consultants who advise companies how to run their own wikis (Socialtext); and content developers (WikiBiz, an offshoot of Wikipedia).

Since the success of a wiki-based business depends upon honoring the integrity of wiki users, Prodromou scorns what he sees as the backhanded strategies of business models based on “wikinomics” and “crowdsourcing.” He sees such models as sly attempts to get “suckers” to do free work for the entrepreneur owning the business. A sustainable commercial wiki, said Prodromou at a conference, respects the community of users and does not try to exploit them.It strives to fulfill a “noble purpose”for users and demonstrate in a transparent way that it offers value .Any hint of trickery or calculation begins to sow distrust and erode the community. Yet any wiki-based business must be able to set boundaries that allow the owners to make responsible business decisions; those decisions, however,must respect the wiki community’s values.

It is hard to predict what new models of “decentralized cocreation of value” will take root and flourish, but the experiments are certainly proliferating. Staples, the office supplies store, now hosts a contest inviting the public to suggest inventions that Staples can develop and sell under the its brand name.47 A number of massmarket advertisers have hosted competitions inviting users to create ads for their products. One of the more interesting frontiers in userdriven innovation is tapping the audience for investment capital. SellaBand (“You are the record company”) is a Web site that invites bands to recruit five thousand “Believers” to invest $10 apiece in their favorite bands; upon reaching the $50,000 mark, a band can make a professional recording, which is then posted on the Sella- Band site for free downloads. Bands and fans can split advertising revenues with SellaBand.48 Robert Greenwald, the activist documentary filmmaker, used e-mail solicitations, social networks, and the blogosphere to ask ordinary citizens to help finance his 2006 film Iraq for Sale: The War Profiteers.

 

Reintegrating the Sharing and Commercial Economies

If there is persistent skepticism about the very idea of open business models, from both business traditionalists focused on the bottom line and commoners committed to sharing, it is because the commons and the commercial economy seem to represent such divergent moral values and social orders. One depends upon reciprocal exchanges of monetary value, with the help of individual property rights and contracts; the other depends upon the informal social circulation of value, without individual property rights or quid pro quos. A market is impersonal, transactional, and oriented to a bottom line; a commons tends to be personal and social and oriented to continuous relationships, shared values, and identity.

Yet, as the examples above show, the market and the commons interpenetrate each other, yin/yang style. Each “adds value” to the other in synergistic ways. Historically, this has always been true. Adam Smith,the author of The Wealth of Nations,was also the author of The Theory of Moral Sentiments, about the moral and social norms that undergird market activity. The market has always depended upon the hidden subsidies of the commons (folk stories, vernacular motifs, amateur creativity) to drive its engine of wealth creation. And the commons builds its sharing regimes amid the material wealth produced by the market (free software is developed on commercially produced computers).

What has changed in recent years is our perceptions. The actual role of the commons in creative endeavors has become more culturally legible. For businesses to function well on Web 2.0 platforms, they must more consciously integrate social and market relationships in functional, sustainable ways. If the results sometimes seem novel, if not bizarre, it is partly because networking technologies are making us more aware that markets are not ahistorical, universal entities; they are rooted in social relationships. Open business models recognize this very elemental truth, and in this sense represent a grand gambit to go back to the future.

 

AUTHOR
David Bollier is the Editor of OntheCommons.org and the author of Silent Theft: The Private Plunder of Our Commons Wealth (Routledge) and Viral Spiral: How the Commoners Built a Digital Republic of Their Own (New Press) from which this chapter has been extracted. He can be contacted at david@bollier.org.
SOURCE
Viral Spiral: How the Commoners Built a Digital Republic of Their Own (New Press)

People Sharing Resources: Toward a New Multilateralism of the Global Commons

 

Sections 

 

 


 

 

 



jq.png

 

By James Quilligan

The Limits to Private and Public Goods

Thee opening decades of this century are a pivotal time in which many of our current beliefs and practices will be re-examined. During the last century, the economic and political catastrophes that befell the world inspired an earlier generation to create a multilateral system defined by an unprecedented vision of cooperation and security for the international community. It promised that global private goods (financial investment, private credit and trade) and global public goods (aid, loans through the International Monetary Fund and World Bank and other assistance from international development programs) would resolve the world's major domestic and transborder economic problems. But this grand experiment in international cooperation has failed miserably.

For generations our resources have been under assault from global market forces, regional and national policy development, and inadequate legal recognition of common property rights. State capitalism, powered by cheap labor, fossil fuels, low commodity prices and unrealistic interest rates, has generated a planet wide 'fire sale', liquidating Earth's resources at an increasingly rapid pace. Now this centuries long credit boom of natural and material resources is ending and we are staring, incredulously, into a gigantic void of our own making. We have begun to see that the benefits of perpetual economic growth are not compensating for the vast damages and risks they create from energy insecurity, global warming, ecological degradation and species loss to hunger, poverty, debt and financial meltdown. We're also realizing that neither the private sphere of property and trade nor the public sphere of government provision and distribution which created these problems to begin with are capable of solving them. On one hand, international commerce cannot address the harmful externalities that transcend borders because global 'private' goods are profit-driven for the benefit of consumers and shareholders, not equity driven for the masses. On the other hand, sovereign governments are not equipped to manage global problems either by themselves or through a global institutional framework, since there is no actual 'public' governance at the international level to effectively manage and protect these resources for the world's people as a whole.

 

Tragedy of Enclosures

Beginning with Garrett Hardin's classic example of shepherds who share a field to graze their flocks, but unwittingly cause the land to be overused and degraded the idea of scarcity through over consumption has been called a tragedy of the commons. There are countless instances of openly accessed resources becoming vulnerable to encroachment and misuse, leading to acute social or ecological problems. Yet Elinor Ostrom and others have shown that failed commons are not inevitable. When local users communicate, build trust, and organize to create rules to govern how their resources should be used, they can protect their commons from overuse in the interest of the common good.

So the primary challenge facing the world is not one of failed commons. Rather, it's a tragedy of enclosures the legalization of private property and commodity exchange by the state, and the transference and overuse of commonly managed resources by the marketplace. the history of the privatization of capital and natural resources is well known. Beginning in the 12th century in northern Europe, and intensifying during the 16th century, the emerging free market laid claim to what seemed to be an endless supply of natural resources existing in empty and limitless space. Enterprising merchants, bankers and politicians enclosed these 'vacant' areas and turned them into legally titled property. Over the past several centuries, similar enclosure movements have spread across the world, subjugating and extracting resources which were previously unownable, fully accessible and often governed by local custom. Under the system of property rights and sovereign boundaries that has evolved, resource managers (public sector) and producers and providers (private sector) are kept distinctly separate from resource users (commoners). These social divisions produce and reproduce the modern institutional norms of economic management and the creation of market value through profit and interest, which are said to be the basis of dynamic social progress and economic growth. But through this process of wealth creation, poor and native peoples have been evicted from their villages and lands and displaced from their means of subsistence, while customary rights and traditions over resources are criminalized. The history of enclosures is a legacy of struggle and violence over rightful claims to property, which continues today.

 

Global Common Goods

Perhaps what we are anticipating, but have been unable to define because of society's pervasive commitment to free markets in driving global economic integration and to sovereign reciprocity in making global decisions, is the idea of global common goods the shared resources that fall outside the domains of both private and public goods. The commons exist at the intersection of society and nature and are expressed in many contexts of life. They include a wide diversity of collectively inherited or produced resources belonging to all human beings equally. These commons whether local, state, interstate, regional or global in scope connect us to the things we share and need to survive on all levels of human activity. Yet, because 'the commons' are not part of our everyday vocabulary or worldview, they are often unrecognized. We have to refocus our conditioned mental categories to recognize the broad range of commons that exist all around and within us (Figure 1).

Figure 1

Types of Global Commons

Noosphere - indigenous culture and traditions, community support systems, social connectedness, voluntary associa- tions, labor relations, women and children's rights, family life, health, education, sacredness, religions and ethnicity, racial values, silence, creative works, languages, stores of human knowledge and wisdom, scientific knowledge, ethnobotanical knowledge, ideas, intellectual property, infor- mation, communication flows, airwaves, internet, free culture, cultural treasures, music, arts, purchasing power, the social right to issue money, security, risk management

Biosphere - fisheries, agriculture, forests, land, pastures, ecosystems, parks, gardens, seeds, food crops, genetic life forms and species, living creatures

Physiosphere - the elements, minerals, inorganic energy, water, climate, atmosphere, stratosphere

Some of these resources cultural, social and intellectual are renewable. Many others natural, genetic and material resources are not (or may be replenishable at very slow rates). At first glance, such differences may seem trivial. Yet the modern economic interpretation of these differences that various commons are more or less replenishable has led to our civilization wide crisis. The prevailing assumption by state capitalism that the natural, genetic and material world is infinitely replenishable, and that any scarcities of non-renewable resources can be managed through the price system, has led to the market imperative of unlimited economic growth. It's provided the 'empirical' and ideological justifications for the profit motive, speculation, capital accumulation, unrealistic levels of production and consumption, misallocated resources, debt, unemployment, inequality, boom-bust cycles, global competition for resources and exploitation of the world's poor.

That doctrine is now being challenged by people outside of the private and public sectors through their reintegration of the various types of commons. In transcending the polarized relationship between business and government, this commons movement is emerging as a potent counterforce to state capitalism. It represents a consciously organized third sector, including citizens as co-managers and co-producers in the shared management and preservation of their own resources.

The commons are not just resources but the sets of relationships they create, including the communities that use them, and the cultural and social practices and property regimes that manage them. They represent the common responsibility of people to protect and sustain their valuable common goods. But unlike local common goods, which have a familiar legacy of ownership, global common goods have yet to be defined clearly in terms of their interconnectedness, common history and planetary rights. Participatory rules and institutions have not been fully developed for cross-border commons including outer space and the atmosphere, the oceans and sea-beds, world food supplies and water sources, population growth and migration, technology and media, and trade and finance. It's clear that human society needs to build a much deeper awareness and stronger identity between its local and global commons. The decision-making, social cohesion and collective wealth implicit in common goods must be able to scale up and down. Local commons groups need the technical support and knowledge of a commons-based multilateralism; yet multilateral rules and institutions must also embody the expertise and skills of community groups based on decisions made at the grassroots.

Ultimately, the governance and production of common goods, both locally and transnationally, will shift the emphasis of government away from the sanctioning of private industry. It will redirect this power and authority in two directions upward toward the sanctioning of the international commons under a restructured multilateralism, and downward toward the sanctioning of local commons by the world's citizens under widespread com- mons agreements. To create scale-free commons, local and global commons groups must share a commitment not to exploit the scarcity-value of depletable resources. As a result, the focus of the private sector will also move away from devaluing commons resources as unaccountable external costs, and businesses will adopt a framework of property management and value that refi‚ects a more accurate measure of the actual costs of resource production.

 

Co-Governance

Until the modern era of enclosure and commodification, com- munities had always made up their own rules for creating and maintaining local resources. Unlike the world's public and private sectors, commoners have broad experience in the supervision and sustenance of living systems to ensure equitable ways of sharing their uses and benefits. This knowledge which is still held and practiced by many indigenous peoples and community groups is now being rediscovered. People across the world are returning to the transparent stewardship of their local commons and becoming involved as providers as well as recipients of resources, goods and services. Now, however, the commons involves more than just the stewardship of natural and material resources: modern technologies have also created a new generation of cultural commons with unique forms of participation and social capital. Co-governance involves the principle of subsidiarity taking decisions at the lowest possible level of authority and creating new checks and balances on the overall decision-making activities of the state. The inclusion of people in the decisions that directly afi€ect them formalizes the process of just governance and democratic oversight by closing the gap between resource users and resource managers, producers and providers. Co-governance thus entails the development of non-centralized rules and institutions pertaining to the major questions of access, control, use and distribution of the wealth generated on a commons. These activities evolve out of the shared meaning and values of the stakeholders who depend upon a resource for their survival and well-being. The sharing of duties and decision-making over the use, protection and replenishment of a particular resource therefore requires personal and group qualities such as moral responsibility, reciprocity, trust, mutual aid, fellowship and cooperation.

The kinds of expertise and understanding that people have developed through the local management of resources must be scaled up to the global level. Incentives for sharing the global commons need to be built into multilateral rules and institutions. By the same token, local development needs an international support system that is generative in purpose not technocratic, nationalistic or commercial. It's really not global governance that is required, but global co-governance. This mutual governance would involve independent states giving regulatory legitimacy and authority to global institutions through international standards for the management and protection of global common goods. Initially, these common goods could be created through a cooperative system for managing long-term risks, such as degradation of Earth's living systems, global climate change, nuclear proliferation, terrorism, trade protectionism, security of global supplies, threats of fragile and failed states, and unequal representation of developing nations in global decision-making.

 

Co-Production

While co-governance brings together resource users and managers, co-production involves the collaboration of resource users and resource producers and providers through open social networks. Increasingly, traditional social divisions between produc- tion and reproduction of commons resources are disappearing and unique forms of social and cultural meaning are emerging. Many people are finding new identity and significance through sharing information, seeking consensus-based solutions, keeping value in their communities, and distributing the benefits that arise from the use of commons resources. Countless hub-culture communities are forming, not only on the internet, but also through local, regional and global organizations (Figure 2).

Figure 2

Emerging Forms of Co-Production

resource-based economies, bartering, gift economies, complementary currencies, community reciprocity systems, free shops, fair trade markets, producer cooperatives, trade unions, entrepreneurial networks, scientific and academic commons; and internet modalities such as open source software, open electronic media, shared licensing, collaborative knowledge and design, social networks, attention economies, creative commons copyrights, wikipedia, websites, file sharing, email and chat rooms

A notable development in many of these networked relationships is the free labor and creativity that are generated without financial incentives or rewards. When users are directly involved in the production and delivery of goods and services, they develop cooperative skills, knowledge and wealth beyond the constraints of extractive profits, patents, trademarks, copyrights, traditional ownership, paid work, commodity values and other value-added measures. Social production thus entails not only new forms of property management, but also a difi€erent measure of value. This new capital based on communication, care, respect, validation, cooperation, common welfare and transparent decision-making is reframing the political debate on commons resource management and the direct production of social and cultural wealth.

As mentioned, the idea of 'global public goods' created by sovereign nations is really a non-sequitur since there is no international framework corresponding to domestic public government which is designed to manage resources for the people of the world as a whole. But we are recognizing that another form of global goods social innovation, networked collaboration, collective action, voluntary associations, peer support networks and multi-stakeholder participation is being created at the international level. It's possible that the co-production of global common goods can now be facilitated through direct collaboration between local resource users and multilateral institutions, where service users become involved in the mutual support and delivery of goods and services. The creation of a global resource pool entails an entirely new phase of multilateralism, in which nations collectively agree to preserve and protect the various commons of Earth and maintain a pool of shared production and goods large enough to provide for everyone's needs. In giving up a portion of their sovereignty, rich nations would recycle their excess resources through this global clearinghouse, which would then be redistributed to poor nations needing assistance. The resources required for production and the goods that are produced would go into this common pool, and the goods which people consume or use would come from it.

 

Social Charters

The Universal Declaration of Human Rights guarantees to every person the freedom from want and fear. This is a good beginning. Yet because human rights are dependent on government to legitimate them, the UN Declaration does not redirect the source of these rights away from sovereign governments to the sovereign people of a particular commons. As global citizens, regardless of national obligations, we have a responsibility to engage in areas of community and transborder action where the state and private sectors have little jurisdiction, authority or experience. Commons rights difi€er from human rights and civil rights because they arise, not through the legislation of a state, but through a customary or emerging identification with an ecology, a cultural resource area, a social need, or a form of collective labor. Commons rights afiƒrm the sovereignty of human beings over their means of sustenance and well-being. They vest us with a moral authority and social legitimacy to make decisions and create agreements on the sharing of resources that ensure our rights to survival and security.

This creates an entirely new context for collective action. Instead of seeking individual and human rights from the state, people may begin to claim long-term authority over resources, governance and social value as their planetary birthrights both at a community and global level. Commons rights provide an important basis for creating covenants and institutions that are not state-managed to negotiate the protection and sustenance of resources and ensure that the mutual interests of all stakeholders are directly represented. Through the assertion of people's inherent rights to a commons, the role of the state would become much more balanced between enabling the corporate sector and enabling citizens. Instead of regulating commerce and finance in the public interest (while also regulating the commons for the benefit of commerce and finance), the new duty of the state would be to confirm the declarations of the rights of people to their commons, allowing them to manage their own resources by recognizing and upholding their social charters and commons trusts.

A social charter is a social and institutional framework providing incentives for the management and protection of commons resources. Creating a social charter requires the support and involvement of people across a region or community of interest who depend on specific common goods for their livelihood and welfare. A social charter can be developed for a single commons or for overlapping commons (Figure 1).

Given the uniqueness of every commons, there is no universal template for social charters but a baseline is emerging. A social charter for a commons should include, at minimum, a summary of traditional or emerging claims to legitimacy; a declaration of the rights and entitlements of users and producers; a code of ethics; elaboration of common values and standards; a statement of benefits; a notice of claims to reparations or re-territorialization of boundaries; and a practical framework for cooperation. Democratic and transparent decision-making for the maintenance and preservation of a particular commons would be developed through the collective action of citizens, customary representatives, social networks, academics, scientists, bilateral donors, development partners, regional organizers, intergovernmental organizations, media and other stakeholders with limited input from national governments and the private sector. Citizens who create a social charter thus ensure that administrative power is decentralized in order to maintain community access to and sovereignty over their own commons.

 

Commons Trusts

While social charters ensure a broad political foundation for the co-governance and co-production of common property regimes, they do not make them operational. That requires the development of commons trusts, which establish the specific legal conditions for people to help each other manage and produce what each of them needs. Land and forest trusts are familiar examples. Commons trusts are institutions, usually involving both physical and financial assets, which preserve and manage resources inherited from past generations on behalf of present and future generations. By definition, commons trusts are the only fiduciary institutions accountable for the long-term preservation and sustenance of a resource. That's because neither of our existing property regimes private nor public have a mandate to provide fair access and long-term protection for critical resources. Under its current operational rules and institutions, state capitalism has forsaken such long-term fiscal responsibility by neglecting to keep the actual value of the commons separate from the mainstream economy. This commingling of accounts is why, under the present system, the private and public sectors are spending both the 'principal' and the 'interest' of the commons leading to currency volatility and boom-bust cycles, and contributing enormously to the planet's ecological, energy and political instability.

The creation of commons trusts allows the private and public sectors to continue to focus on profit, investment and budgetary appropriations, while the commons becomes a primary means of stabilizing the principal of commons reserves to maintain the diversity and sustainability of the overall economy. Commons trustees have two functions. First, they have a responsibility to decide what proportion of their commons resources should be monetized by renting them to the private sector for extraction and production. A percentage of this resource rent would then be distributed to citizens by the state as dividends (or used for other purposes such as maintenance of the commons goods which are being rented, or mitigation of the negative efi€ects of renting these goods). Commons trusts thus guarantee that those who are unprotected have rights to basic sustenance from their own resources. Yet the needs of present beneficiaries are a secondary responsibility. The primary obligation of trust managers is to keep the value created through the commons within the commons to the extent possible, so that the community can hold in reserve the larger portion of its natural, genetic, and material stock for the benefit of people and species yet unborn, while generating cultural, social and intellectual capital for current generations. In this way, the harmful efi€ects of state capitalism are rebalanced: private industry fi‚ourishes from the surplus resources which are rented from commons trusts, the socially marginalized and vulnerable receive a subsistence income from the state, and the primary assets of the commons are preserved and regenerated. This dynamic equilibrium is achieved through new temporal modalities in the system of multilateral co-governance and co-production introduced through the creation of commons trusts across the world (Figure 3).

In this emerging multilateral system, the financial incentives of businesses and government continue to operate as before. But the difi€erence now is that the long-term wealth guaranteed by commons trusts is not generated through the potential financial revenue of the commons assets they are managing. Instead of regarding these commons as a source of profit, commons trusts determine their intrinsic worth (the actual value of passing on what we have inherited to future generations and allowing this stock to be replenished and restored) through the full participatory choice of citizens on whether or not to spend this commons capital. Commons trusts thus create a new time signature based on the preservation of commons resources and the resilience of the system that manages and produces them not on the assets of the commons that may have financial value in the marketplace. Hence, long-term wealth arises, not through consumer demand, investment or capital accumulation, but in the enhancement of the carrying capacity of the global commons to support life and life systems, expressed through sustainable choice.

Broadly speaking, the creation of local commons trusts worldwide entails three significant changes:

• government shifts its primary emphasis from issuing corporate charters and licensing the private sector to approving social charters and open licenses for resource preservation and cultural and social production through commons trusts

• commons trusts exercise a fiduciary duty to preserve natural, genetic and material commons but can decide to rent a proportion of these resource rights to businesses

• businesses may rent the rights to extract and produce a resource from a commons trust, creating profits and positive externalities through innovation, competitive products and services, and ad- justment of the market to the actual costs of resources

 

Commons Reserve Currency

Under the present economic system, money is created by national governments and private banks through loans. To maintain the supply of money needed to repay both the interest and principal on these loans, banks must continually find new credit applicants to create sufiƒcient demand for more loans. Hence, banks are continually pushing credit, driving corporations to borrow more to produce, and citizens to borrow more to consume. This is our global dilemma. On one hand, no amount of corporate production and consumer spending can satisfy the banks' continual demands for repayment of these loans; on the other, the algorithm of perpetual economic growth adopted by banks, corporations and consumers has no ofi€setting formula for repaying the accumulating debt and redeeming the damage that this compulsive growth is wreaking on the commons. In terms of non-renewable resources such as oil as well as many other renewable resources human society has been spend- ing not only the interest but significant portions of the principal. If we do not reverse this situation if bank-driven overproduction and overconsumption continue to generate speculation and hoarding of physical and financial assets, loan defaults and job losses, hunger and poverty, and carbon emissions and climate change soon the planet will not only have diminishing returns from the interest on its commons resources, but the principal itself will be gone.

Figure 3                              Temporal Modalities Generated by Commons Trusts

... express human potential in real time by generating economic rent and exchange credit from the enclosure, extraction and use of commons assets, driving consumption and investment in private goods to meet the basic needs of current generations... preserve and manage long-term commons assets for future generations by holding them in trust and establishing a commons reserve base with a new metric of sustainability
... lease resources to the private sector for the short-term, from which credit finance and revenues are generated to fund entrepreneur- ship and for-profit development and to re- plenish and protect specific commons.. decide on resource user fees for the mid-term, in conjunction with the state, from which divi- dends and other pubic goods are distributed directly to the poor and those who are displaced or sufi€er the efi€ects of resource extraction

Since the money system and individual purchasing power are social commons, perhaps there is a way to both stabilize and democratize money. The world community could create a form of monetary reference belonging and accountable to everyone that is not dependent on the economic or political decisions of a single state or the monetary nationalism of currency-issuing states. Global commons representatives could collaborate to produce an international currency, backed by a new kind of reserve asset, to provide a stable and usable exchange credit for business, trade and other social transactions. This new system would generate a broad measure of common wealth and well-being that is not based on productivity, profit or interest, but on the perpetual vitality and continuous adaptation of local resources to support a good quality of life for all human beings. It would mean turning the present system of private credit including banking and finance into a commons utility through the conversion of debt to equity across all sectors of society. It would mean using our commons-based capital cultural, social, intellectual, natural, genetic, and material as collateral for an equity-based global reserve system that issues credit underpinned by these resources.

Under this new reserve system, commons assets would form the basis of a composite standard of value. For example, a Reserve Basket of Global Common Goods could include indicators for cultural resources such as indigenous wisdom, household work and the arts; social resources such as health, literacy, economic output and income distribution; intellectual resources such as scientific knowledge, intellectual property and information fi‚ows; natural resources such as air and water quality, ecosystem health and biological diversity; genetic resources such as living creatures, organs and seeds; and material resources such as minerals, water and the atmosphere. Rather than convert commons assets into a market value, these indicators would generate a unique index

based on the sustainability of the global commons and the value that these common goods have for our natural and social quality of life and that of future generations. Resource units in this reserve index would include historically important depletable resources, and also resources that are currently depletable and are likely to be depletable in the future. But it would also include resources that are replenishable and refi‚ect social productivity, human security and well-being. By continually measuring and averaging the indices of each resource in this basket, trustees of the commons reserve system could decide the proportion of those commons resources that should remain untapped as principal. At the same time, the commons reserve system would replace the present interest rate mechanism with a sustainability rate (Figure 4).

Figure 4
                                  Basket of Global Common Goods as Resource Reserves

(including quantifiable indicators for cultural, social, intellectual, natural, genetic and material commons)

                                     - averaged into a composite standard of value    -    

                             maintaining principal                         creating a sustainability rate
                                                            - expressed through -

                                                     Commons Reserve Currency
                                                             Co-Credit Exchange

This commons reserve currency would function through the creation of co-credit a participatory unit of value used in trading, in- vestment and decision-making. As co-credits are lost or gained in each transaction, the deficit or surplus would be accounted with reference to the sustainability rate a real-time measure refi‚ecting the capacity of the global commons to provide and sustain the well-being of present and future generations. At any given moment, if the sustainability rate is low, the co-credit is worth less relative to its value in an exchange, which may cause a buyer to spend less, or perhaps not spend or to postpone spending; and if the sustainability rate is higher, the co-credit will be worth more in the exchange, which may convince the buyer to spend more. So, through co-credit exchange among buyers and sellers, community members would determine the value of their own production based on the capacity of the global commons to support the natural and social quality of life. Each use of a co-credit (whether the sustainability rate is low or high) is literally a vote for the longevity, regeneration and diversity of the planet's common goods, enabling human civilization to protect its principal and withdraw from the commons a smaller portion of its resources. Since the commons reserve system guarantees a stable and lasting source of global capital, the development of co-credit exchange would eliminate the need for banks, financial institutions, government issued currency, and a debt based money system in which the continual payment of interest on loans requires unsustainable levels of production and consumption to monetize the existing debt.

 

Global Common Wealth

Endless economic growth is crashing against the limits of Earth's vital systems. In coming years, the recovery of our suppressed commons as a source of participative governance and non-monetized value will become critical as the private and public sectors search for a way out of the current global economic, energy and ecological crises. It's a challenging puzzle:

• we cannot end the financial crisis without a new monetary system

• we cannot create a new monetary system without creating long-term incentives for solving the ecological and energy crises

• we cannot create long-term incentives to solve the ecological and energy crises without a low carbon system of production and trade

• we cannot create a low carbon system of production and trade without a new multilateral system of governance

• we cannot create a new multilateralism without a total redefinition of wealth

A New Story of Global Common Wealth is emerging. Imagine a world ... where businesses thrive. Governments evolve power upward to an international trusteeship for the commons, giving up a portion of their sovereignty through new global standards of cooperation, trust and shared values. Government authority also shifts downward to citizens and their commons organizations through social charters. Local commons trusts organize and affliate with each other across the world, providing independent checks and balances on the power of global corporations, sovereign governments and multilateral institutions. Global co-governance creates the means for a systematic redistribution of global common goods. Cultural and social production preserves resources and generates new wealth, alongside but independent of the private production of wealth. A commons reserve currency available through co-credits enables humanity to base its economic transactions directly on the sustainability and resilience of the global commons. And world society creates a dynamic equilibrium between (private) property rights, (public) sovereign rights, and (commons) sustainability rights through a new multi-lateral system of co-governance and co-production, transcending the dichotomies of state capitalism and transforming life across the planet.

The chart shows the global context of commons trusts through an example - a Sky Trust for clean air, climate wealth and security.

3apic.png

AUTHOR
James Bernard Quilligan has been an analyst and administrator in the field of international development since 1975. He has served as a policy advisor and writer for many politicians and leaders, in- cluding Pierre Trudeau , Francois Mitterand, Julius Nyerere, Olof Palme, Willy Brandt, Jimmy Carter and HRH Prince El Hassan. 
SOURCE
Kosmos Journal - Fall/Winter 2009 - http://www.kosmosjournal.org/kjo2/library/kosmos-articles/people-sharing-resources.shtml
 

 

The Commons of Mind, Life and Matter: Toward a Non-Polar Framework for Global Negotiations

 

by James Bernard Quilligan

 

 

 

The Market State and the Liquidation of Biophysical Capital

The term commons was first used during the enclosure period in Britain when people were removed from their communal lands. Since then, commons have come to represent areas of cogovernance and co-production that lie outside of the market and state sectors (or Market State), including food, water, clean air, energy, information, internet, culture, indigenous peoples' rights and other concerns. The recent failures of the Doha Round of world trade talks, the UN Conference on the global economic crisis and the Copenhagen Summit on climate change have brought the commons into sharper focus. Since these community-managed resources are a primary source of economic, social and creative value, could they provide a meta-level context for global negotiations? Commons have different meanings, of course, because we associate them with different levels of scale. At community and regional levels, the commons are largely a territorial concept involving the local appropriation, use and benefit of a particular property; at the global level, it's more of a functional concept involving sovereign resource management rather than questions of use and benefit. But the increasing openness of political systems and interconnectivity of economies and information networks has created new possibilities for multi-level management of the commons, requiring principles and linkages that reach from the local levels of social and political organization to higher levels of multilateral governance.


Sections:

The Market State and the Liquidation of Biophysical Capital

How did this happen?

History's Legal Tautology: Res Nullius Vs. Res Communis

Today's Superbubble: Surplus Vs. Deficit Nations

Tomorrow's Great Adjustment: Renewable Vs. Depletable Resources

Planetary Non-Dualism: From North-South Dialogue to Transborder Metalogue

Beyond the Pairs of Opposites: Commons Sovereignty as Global Natural Law


This article focuses on why the international community has been unable to bring the full range of commons issues and their representatives into strategic discussions. It calls for a new framework of global interaction and dialogue based on natural law. To create this metalogue on the global commons, world society must engage in a kind of non-dualism: a recognition that the various beliefs, qualities, or practices which appear separate are actually part of the same phenomena. As on the individual level of consciousness and being where the 'mind-body split' is healed through introspection, global non-polarity will also require collective self-inquiry, dialogue and reconciliation on the ontological nature of world community. Ontology means being present. If global citizens, their representatives and institutions are sourcing the vast potentials of their mental, natural and physical commons, this would be a significant step toward global non-polarity.

Bringing these various issues and representatives together on a global scale: which has never been done: is one dimension. But even when major conferences are held on single issues, they tend to leave out the non-quantitative (i.e., undervalued) aspects of the commons, which represent the real dispersion of human power in the world. It isn't that this intersubjectivity is entirely missing, but that it is still underrepresented and repressed in multilateral negotiations. As indicated in Figure 1, the noosphere (consciousness), expressed through the economic ideology of the Market State, has dissociated from the biosphere (life, nature, biology) and the physiosphere (physical matter). This imbalance did not emanate from the biophysical world, but in the human mind. In earlier times, value emerged from the biological resources, physical utilities and human labor of a community, and living close to these sources of life and sustenance created social trust, stability and cohesion. In recent centuries, as industrial civilization was forged by extracting and burning up these assets, biophysical value has gradually become a mental abstraction, a rational coefficient. Through the economic growth imperative which fuels the conversion of finite resources into money and commodities, the collective mind is repressing its own organic and material roots, decoupling the economy from its underlying sources of resilience and survival and creating countless side-effects that threaten human and animal life and the greater health of the planet.


Figure 1 Dissociation of the Commons

Noosphere (Social, Cultural & Intellectual) - political and economic ideology, indigenous culture and traditions, community support systems, neighborhoods, social connectedness, voluntary associations, labor relations, women and children's rights, family life, health, education, sacredness, religions, ethnicity, racial values, recreation, silence, creative works, languages, words, numbers, symbols, holidays, calendars, stores of human knowledge and wisdom, scientific knowledge, ethnobotanical knowledge, ideas, intellectual property, data, information, billboards, communication flows, airwaves, internet, free culture, sports, games, playgrounds, roads, streets, parking, sidewalks, plazas, public spaces, national parks, historical sites, museums, libraries, universities, music, dance, arts, crafts, money, purchasing power  

Biosphere (Natural & Genetic) - soil, agriculture, fisheries, wilderness, trees, forests, wetlands, ecosystems, pastures, parks, gardens, plants, seeds, algae, topsoil, food crops, photosynthesis, pollination, life forms, species

Physiosphere (Material & Solar) - rocks, minerals, metals, chemicals, hyrdocarbons, technology, hardware, buildings, the elements, solar energy, wind energy, tides, hydropower, beaches, oceans, lakes, springs, streams, watersheds, aquifers, land, inorganic energy, atmosphere, ozone layer, stratosphere


 

How did this happen?

It's well known that the Scientific Revolution brought about a clear differentiation between biology and physics: a recognition that the physical world provides the basic conditions for the biological. It demonstrated that the organic realm is moving upward in evolution into greater differentiation, structural order and complexity, while many (though not all) components of the physical realm are gradually moving in the opposite direction, dissipating into chaos. The fact that life and matter are playing different evolutionary roles also provided a new basis for the social management of property. During the Middle Ages, the lands, resources and labor that were not part of the feudal system were shared by people through culture and custom. As ideology replaced theology during the 14th-17th centuries, divine hierarchies, kingly sovereignty, and feudal governance structures were displaced. Just as the biosphere and physiosphere had been differentiated, it was also clear that the conscious agent making this separation was the noosphere: rational consciousness was differentiating itself from the biophysical. Critical thought, rationality, freedom and democracy began to define human life. The emerging ideas of economic and political individualism led political philosophers to conclude that, just as the mind 'owns' the body, a person has the right to own property. With this rationalist basis for contractual property, traditional rights to common property were overthrown.

Yet the intoxicating premise of the Market State: that the noosphere is not part of the biosphere: suppressed the fact that Earth functions as a living organism and that the biosphere is actually a vital part of the noosphere. This has created a profound contradiction. On one hand, the historic schism of biology and physics advanced the cause of scientific progress, industrial production, capital accumulation and national governance structures, and much of world civilization took a great leap forward. On the other hand, the conscious ideology of economic growth provided a rationale for the endless borrowing and massive appropriation of commons resources. The extraction and production of commodity and monetary value from the Earth and from social labor have effectively separated human consciousness, community and culture from nature and matter.

 

History's Legal Tautology: Res Nullius Vs. Res Communis

A standard definition of the commons does not apply at all levels of social, political and economic organization. Many local commons are deeply embedded in their own cultural, historical, economic and political structures, while the global commons is still an evolving concept. As noted in Figure 2, local commons emphasize the ownership or management of a territory of goods: involving the principles of exclusion (some persons may be prevented from using a good); non-exclusion (no one can be prevented from using a good); rivalness (the use of a good by one person reduces its use for others); and non-rivalness (the use of a good by one person does not affect its use by others).

Global commons emphasize the functional use of resources beyond national borders where local principles have less significance because of the state-centric international laws governing the various resource domains across borders. Given these different assumptions, multi-governance and institutional linkages for the commons do not yet scale up (or down) from the community to the regional and international levels.

Historically, the legal basis for the global commons: in public trust doctrine, public domain, human rights, national constitutions, and international treaties, protocols and conventions: has been circumscribed by the liberal constraints of state sovereignty, which emphasize the management of a territory and the consent of the governed within it. Hence, through the consent-based international law of sovereign nations, all claims on the commons, whether inside or outside of state borders, must be approved by each state as a nominal member of the larger community of states. But this is problematic. Whether inside or outside of state borders, if people derive their rights to a commons from natural law and view government as an interloper: a fictitious entity holding property which is entrusted to humanity: then these liberal legal claims may be challenged.

The historical rights to local commons have their basis in customary law. Prior to the Market State, property use was heavily influenced by custom and culture, and in many communities, established norms of behavior, rights or responsibilities acquired the force of law. Customary law is sometimes confused with public domain law. While customary law emphasizes the social and cultural limitations of commons management, public domain is focused more on the unrestricted use of public goods through civil law. Public domain had its origins in the ancient Roman concepts of res nullius and res communis. Res nullius refers to things that have not been made into property and have no owner: for example, untamed animals and abandoned lands. Res communis, on the other hand, refers to things that are common to everyone, though they may be in a wild, unappropriated state, like forests and oceans. There is a significant difference between the two principles. Under res nullius, common goods cannot be owned by anyone. Under res communis, 'ownership by everyone' is based, not on community, but on the self-interest of each member of the community, which means that ownership of 'common property' may be licensed to a private individual or group.

The voyages of Columbus, Magellan and other explorers demonstrated the apparently limitless expanse of the world and its inexhaustible resources. As global sea trade escalated in the early 17th century, the Netherlands became involved in a shipping dispute: but there were no legal precedents pertaining to international waters. The concept of the in?nite extent of nature entered the modern legal canon through the work of Dutch jurist Hugo Grotius. Rather than use the customary laws of land and community, based on social obligations between commoners and landlords, Grotius developed his doctrine of unrestricted open access to the high seas especially for government and commercial representatives involved in extraterritorial relations. In his 1609 book, the Free Sea, Grotius argued that because the seas belong to no one and are ungovernable, they can be claimed as an area of open access for everyone. Since the world beyond national territories was in?nite and unaccountable (res nullius), he reasoned, then these new areas were open to public management (res communis).

Grotius's proposals were reinterpreted through the Peace of Westphalia in 1648, when the structure of the nation-state was formally adopted. The rising nations of Europe had already been using res nullius and res communus selectively. They invoked res nullius within their foreign colonies through the principle of terra nullius, or land belonging to no one. This doctrine gave sovereign nations a legal justi?cation to ignore the traditional claims of those who inhabited non-sovereign territories. Denied their natural rights, indigenous peoples were driven o? their lands by foreigners determined to exploit their labor and resources for trade. International law thus allowed modern states to circumvent the customary laws of local commons and pursue their expansionary interests through wars, colonization, slavery and the unequal distribution of commons resources.

Meanwhile, beyond their colonial boundaries, the new European states employed an extended version of Grotius's principle of res communis in international relations: the doctrine that the public property of all humanity could be guaranteed only through the sovereignty of nations which were loosely affiliated on the basis of recognizing one another's sovereignty. Res communis thus created a weak world order which precluded neighborly responsibilities of solidarity and cooperation with other states through the strong 'individualism' of national sovereignty: the self-interest of each state in guaranteeing nonexclusive use and open access to the commons. Today, under this liberal doctrine, resource areas that are shared by several nations through international treaty (such as the Mediterranean Sea and Antarctica) are considered international commons, while resource areas which are open to all nations (oceans, seabeds, atmosphere) are considered global commons. By assuring everyone the unrestricted access to areas that fall outside of national jurisdictions, state oficials can claim that 'the commons belong to everyone' through public domain and open access. To the modern ear, the concepts 'public' and 'open' have a ring of democratic inclusiveness, but this is a hollow promise: resource areas such as world fisheries, the atmosphere and outer space are heavily restricted through sovereign treaties and conventions. Hence, collective decision-making, which is frequently based in natural or customary law on the local commons, rests entirely upon consent-based, sovereign law at the global level. As long as the customary principles of exclusion, non-exclusion, rivalness and non-rivalness are superseded by the modern right of sovereign states to manage the commons beyond national borders, broadly shared governance and equal access to the global commons are not realizable. This neglect of effective global commons management has resulted in many international imbalances.

 

Today's Superbubble: Surplus Vs. Deficit Nations

From the time of Grotius through the Second World War, nations continued to view the global commons as res communis through international liberal law. During the post-war period, many colonial nations achieved political independence from their ruling countries, yet still found themselves reliant on the world's rich nations for economic assistance. The 1944 Bretton Woods conference promised a multilateral system in which foreign assistance and loans would flow from rich to poor nations, and all would adjust their payments balances for mutual benefit. But there was a flaw in the Bretton Woods framework: different structural incentives for nations with current account deficits and surpluses (deficit or surplus in a current account measures a nation's income relative to its spending and indicates whether it is mostly saving or borrowing from abroad). Under the terms of the Bretton Woods agreement, the International Monetary Fund has legal powers to ensure that deficit nations adjust their fiscal balances and pay their debts, but there is no reciprocal mechanism requiring surplus nations to make adjustments and recycle their trade surpluses and currency reserves. (The exception is the United States, which is a deficit nation but is not immediately forced to adjust its fiscal balances because of its reserve currency.)

Two mutually dependent models of economic development and growth have resulted. There is the model of export growth, oversaving and under-consumption in many Asian nations like China and Japan, as well as Germany and the petrodollar states; and the model of cheap imports, low-cost foreign loans, and debt-financed consumption in nations like the United States and the United Kingdom. Essentially, surplus nations are encouraged to build up savings of foreign reserves and withdraw these export earnings from circulation, leaving potential purchasing power idle rather than using it to buy the products of nations with trade deficits. Because the IMF is unable to link global capacity with global demand, the global economy must depend on deficit nations to sustain their global demand for the surplus output of the rest of the world.

With no way of stabilizing the world's widening trade imbalances, distorted growth and misaligned exchange rates, a monetary superbubble has developed between surplus and deficit nations.

Can this imbalance be reconciled? A far-reaching proposal was put forward by John Maynard Keynes in 1941. He suggested a negative interest rate on international trade and exchange which would automatically increase the circulation of money for lending and investment. Creditors would be required to pay interest periodically on their holdings of surplus international currency in the same way that debtors pay interest on their loans. Thus, each nation would be obliged annually to clear its accounts and maintain a neutral balance, preventing the accumulation of surpluses or deficits. Unfortunately, Keynes' proposal would not adjust today's superbubble. Negative interest rates used to balance interest rates may eliminate compound growth, debt and inflation, and increase the velocity of money, but this in itself would not realign market prices with the underlying value of social and ecological goods and services. As long as the locus of demand is still measured in market prices rather than in the intrinsic value of social labor, income, wages, purchasing power, and natural and physical resources, the current patterns of overproduction and overconsumption and the competitive pressures on the Earth, its ecosystems, human labor and social creativity will continue. It's not the utility value or demand for goods and services that is key in ensuring stable currency value. What is crucial is the preservation value which underlies that demand, not as a capital asset or commodity-based currency, but as an intrinsic store of wealth that resists devaluation.

What Keynes was probably envisioning was a commons of global financial liquidity in which inflow and outflow are in balance, creating a state of dynamic equilibrium. It is useful, therefore, to consider the international financial adjustment process through system dynamics, in which dynamic behavior arises when a flow accumulates in a stock and is later recycled as a flow. (This meaning of stock is not the same as the capital account of a business security.) In system dynamics, stock is a quantity of something that exists at a single point in time, as opposed to a flow which is measured over a period of time. To use a familiar example: a bathtub accumulates a stock of water, while the activity in its faucet and drainpipe represent flows into and out of the tub. The stock increases if the inflow is greater than the outflow; and the stock decreases when the outflow is greater than the inflow. In terms of current accounts, surpluses are like stocks, and deficits are like flows (this is a generalization, since surplus and deficit each has its own forms of accumulation, inflows and outflows, but it is a fair illustration of the broad pattern of balance-of-payments among nations). The point is that stocks are not bound by time, while flows are time-dependent. This makes stocks persistent and inert: stopping the inflow to a stock means that the stock will stay at the same level unless the outflow increases. These dynamics are present in the superbubble created by the Bretton Woods system, where the time variables for stocks and flows differ significantly

(Figure 3)

 

Market forces do not adjust the structural distortions between current accounts, because stocks (trade and capital surpluses), inflows (trade, finance, debt payments) and outflows (trade, finance, aid, loans) vary widely, creating timelags in the liquidity of money and exchange of goods and services. Instability in the global financial system is the result of a structural flaw in which the intrinsic value of commons resources are measured only through effective demand when it is registered in the marketplace: even though the time-bound flows of that demand may be widely disconnected from the recurrent stocks of supply. A major international adjustment is needed to clear the superbubble that has resulted from these different timeframes and incentives in the balance-of-payment system which allows surplus nations to accumulate financial assets without recycling them, while requiring deficit nations to pay their debts and reconcile their fiscal balances. This adjustment between the stocks and flows of the world's national current accounts must be accomplished by counterposing the interest rate with a long-term mechanism for sustainability, not with a negative interest rate.

 

Tomorrow's Great Adjustment: Renewable Vs. Depletable Resources

Since the 18th century, economists have argued that vesting power in the individual through property ownership helps prevent aggressive market forces from resulting in excessive exploitation and inefficient production of scarce resources. This may have been a useful strategy during the past few centuries when market products were relatively scarce and natural resources were relatively abundant. But now, it's the reverse: goods and services produced by nature have become scarcer and more valuable, while goods and services produced by people have become more plentiful and less valuable. Yet we still have the same system for managing scarcity and generating profits as in former times, using the same two principles for adding value to commons resources. First, the market takes renewable resources like information, ideas, languages, codes and music, which are not limited as a raw input of production and may not generate an adequate price because of their abundance, and makes them artificially scarce through restrictive property regimes like patents, trademarks and copyrights. The rationale is that innovation, financial development and public wealth will be generated by exclusionary property rights and scarcity: even through proprietary claims on renewable resources result in massive inefficiencies by suppressing innovation, creativity, productivity, access, culture and civic life. Second, economic production requires a steady chain of material and natural resources, which are components of the underlying physical materials and ecosystems that support life. To extract their value, the economy treats these depletable resources, which are limited as a raw input of production, as though they are essentially limitless by holding commodity prices artificially low to increase the rate of consumption. Yet the input of raw materials from the environment and the output of wastes from the economy undermine the resilience and diversity of the very physical resources, life-forms and ecosystems upon which the economy depends for the reproduction of capital. This misalignment in the market incentives of renewable and depletable resources has created deep discrepancies between the interests of private capital accumulation and natural preservation and social production.

This is reflected in the superbubble behind:

- the stocks and flows of economic products

- the stocks and flows in the current accounts of nations that produce, trade and finance these products

- the stocks and flows of labor, material resources and ecosystems from which these goods are extracted and produced

Since ecological and social production are both necessary for human livelihood, well-being and survival, the intrinsic value of the commons transcends the imputed value expressed through the constraints of private property, state sovereignty and traditional economic measures. It is the task of international negotiators to treat renewable and depletable resources as part of this broader environmental and economic continuum. Global discussions on climate change are already using the language of stocks and flows. On one side, the flows of current carbon dioxide emissions are frequently emphasized by industrialized nations. Various mechanisms have been discussed to reduce these flows, including legal penalties on present flow liabilities, which could generate funds for a global financial pool to address the problems of climate change. On the other side, the historic legacy of carbon dioxide emissions: from colonialism to industrial pollution: is generally regarded as a stock issue by nonor newly-industrializing countries. In this view, the stock of greenhouse gases in the atmosphere was created over the past two centuries and the damage is already done. These nations claim the right to follow the same path toward industrialization as others before them, while being compensated for the previous buildup of carbon stock. Proposals to adjust the stock of past damage in the name of social and ecological justice include development, aid, investment, global stimulus, climate wealth funds and reparations.

From the broader perspectives of intergenerational and interspecies justice, such measures fall short because there is no reciprocal mechanism for enforcing a dynamic equilibrium between ecological and material stocks and their inflows and outflows. Negotiators cannot reconcile these structural imbalances because present market measures are not adequate in aligning international carbon credits and deficits with the broader global inflows and outflows of greenhouse gases. Proprietary ownership, market pricing, interest rates, climate bonds, carbon credits and sovereign regulations do not create transformational incentives commensurate with the scope of the problem and cannot clear the superbubble resulting from the different objectives and timeframes between the financial and credit exchanges of nations and the realities of the planet's entropic debt. Even if we were to slow the flow of greenhouse gases into the atmosphere, for example, this would not reduce the stock that is already there: yet this has not been factored into state-to-state negotiations or market incentive schemes. When the international system is finally adjusted, it must link the stocks and flows in the current accounts between surplus and deficit nations with the stocks and flows of the global commons, including both renewable and depletable resources. This opens new vistas for global negotiations.

 

Planetary Non-Dualism: From North-South Dialogue to Transborder Metalogue

Since the late 1960s, various claims have been made on the common heritage of humanity. These include: seabeds (beyond coastal jurisdictions), Antarctica, the moon, satellite orbits, space communications, solar energy, endangered species, genetic resources, rain forests, atmosphere, food, ocean resources, cultural legacies, technology and commodities. The North-South dialogue on these transboundary domains was a matter of much interest during the 1970s, but has now been precluded by other factors. Although the common heritage concept originated in the global South, Northern nations have used it to their advantage, defining the commons in the Grotian tradition: a space of liberal freedom under multisovereign authority. Public domain and open access have thus been on the agenda of corporations and financial institutions seeking to exploit natural resources, and governments seeking to attain greater political leverage over other governments holding resources. Through the political cartel of the G8, and now the G20 (which is seen by some as broadening the world's decision-making to include the interests of developing nations), common heritage has been folded into the normative interests of the world's richer corporations, banks and states.

After the Second World War, the assertion of national rights to throw off the shackles of colonialism led many developing nations to insist on self-determination in the protection of their own resources. Until the 1980s, permanent sovereignty over natural resources was linked with a strong commitment to human and social development, global wealth redistribution and a new international economic order. Once the Cold War ended and the pace of globalization sped up, however, virtually all nations in Latin America, Asia, Africa, the Middle East, and Eastern Europe gravitated toward the global marketplace, not only for trade and finance, but as a primary means of fighting poverty and promoting development. Thus, for the past two decades, developed and developing nations have been acting similarly in consolidating the permanent sovereignty of their domestic commons, as well as the prohibitory management of commons beyond their borders. Essentially, a new club of major governments, from North and South, is using consent based sources of liberal international law (treaties and customary international law) to manage a restrictive global property regime of sovereign neutrality and open access, which amounts to exclusive and non-sustainable use of the global commons. Because national priorities, stemming from the sovereign right to development, determine whether natural resources may be conserved, exploited or destroyed, the global commons is left without effective measures for governance, enforcement or development.

Although civil society and social movements in many nations have been vocal about protecting world resources and the rights of the poor to development, they are mostly excluded from strategic multilateral negotiations, where the dialogue is less about allocation, use and benefit of the global commons for the common good than about the politics of international business and national security. Since the field of international development has acquired the baggage of transnational capitalism and state sovereignty, including structures of global social hierarchy, division of labor, and public-private partnerships, it is important that the kinds of development associated with the commons are clearly differentiated. Among the defenders of the commons, there is a tendency for one side to emphasize social and economic advancement, human development and creative potential, and the other to stress nature, preservation and limits to economic development. Although social production, justice and human rights may seem divergent from sustainability, conservation and the environment, in most cases they are complementary. An example is the digital technology that helps people in poor nations to manage their natural and physical commons through information, coordination, and economic and social innovation. Hence, the real issue is not the apparent dissimilarities between ecology, culture and society. The world's greatest discrepancy is between the commons and the Market State: because ecological and social production create natural wealth, ecosystems services and social cohesion: not dead commodities, unnecessary services and social disparities.

Since the collapse of the North-South dialogue, the meaning of 'development' has changed. Many developed nations are now in deficit and many developing nations are in surplus. The new political dichotomies are not always easy to pinpoint. Sometimes the polarized viewpoints still line up at international conferences as divisions between rich-poor and surplus-deficit nations. Because of the mounting biophysical debt of many surplus nations, deficit nations are questioning the legitimacy of the world's unfair balance-of-payments adjustment system. As settlement, some developing states have been seeking a 'Global Deal' to provide financial and technical assistance for development, carbon emission reductions and other environmental safeguards. But compensation for developing nations is only an interim solution. Many bargainers now recognize that major biological and physical damage to the planetary environment has occurred and that all nations are running an entropic debt. So the strategic interests that are lining up at today's global gatherings are primarily representing different sovereign and commercial positions on the stocks and flows of renewable and depletable resources. Unfortunately, this new positionality simply shifts the focus in international discussions from whether nations have surpluses or deficits to whether nations have access to a greater balance of renewables (scientific knowledge, cultural heritage, ideas, knowledge and social relationships) or depletables (ocean fisheries, soil, hyrdocarbons, water and minerals). These politics do not serve the interests of poverty reduction, sustainable development or alleviation of the planet's biophysical debt.

The North-South dialogue ended when global policy issues became more diffuse through increasing economic integration and the softening of national boundaries. Negotiations on world resources are no longer a dialogue about development issues among geographical blocs but a metalogue on cross-border problems affecting all states. Competition and comparative advantage between nations must now be refocused by expanding global discussions: making them broadly representative, cross-sectoral and interdisciplinary: to integrate the domains of global development, aid, environment, trade, finance, monetary policy, energy, climate change, human security and political security. International negotiators have an obligation to include all of these issues in the larger context of the stocks and flows of commons resources. To correct the world's burgeoning superbubble and transform the economy into a component part of the environment, the withdrawal rates of depletable resources must be slowed to allow stocks to catch up with flows, and the withdrawal rates of renewable resources equilibrated with their replenishment rates. Such adjustments would have huge significance. Integrating the stocks and flows of the economy with the stocks and flows of the environment will automatically infuse the customary principles of exclusion, non-exclusion, rivalness and non-rivalness into planetary decision-making, bringing the local and global commons fully into scale.

 

Beyond the Pairs of Opposites: Commons Sovereignty as Global Natural Law

The laws which govern today's international system evolved during a period when global economic and ecological interdependence was not a major factor. Our legal framework for the political and economic management of common property originated in Roman times when the entire planet held less than 300 million people; and these principles were further elaborated at the international level by Grotius when world population was around 550 million and the lands and seas of Earth were still being charted and seemed infinite in extension. The idea of imposing measures of economic growth and order on empty, limitless space may have seemed logical when the globe was much less crowded and resources more abundant. But this seems folly now that nearly 7 billion people are competing for the planet's resources. Since global integration has become the driving force in civilization, our beliefs in capital value, private property, sovereignty over resources, comparative advantage in trade, and energy independence must undergo extensive reconsideration, not unlike the time of Grotius, when the era of feudal society passed, the national state was created and international law was developed.

The ideology of the Market State holds that private property and the right to exclude others is the best way to prevent ?nite resources from being depleted or destroyed, yet legal history shows that property management is also a form of entrustment which entails the right of access to goods held in common. To protect its commons, human society must transform the state-centric legal system of absolute sovereignty and ownership. It's time to revisit res nullius in its pure form. If the world belongs to no one, as res nullius claims, then we are not its owners but its trustees. On this basis, humanity would hold the global commons in trust through a new framework of cooperation and agreement based on natural law, customary law and public trust doctrine, and all states would be under peremptory obligation to honor the governance principles of exclusion, non-exclusion, rivalness and non-rivalness. Non-polarity in the ecological and material allocation, use and benefit of common goods would thus resolve the surplus imbalances and cynical claims of res communis: the doctrine of international 'public' domain and 'open' access to the property of all humanity (which therefore needs to be managed and allocated by a few on behalf of the rest).

Internalizing the value of the commons through individual and collective accountability to the whole system of Earth will require institutional procedures and rules aligned with dynamic systems theory and evolutionary systems theory. Managing these variables across time and scale: community, regional and international: requires objectives and principles of value which apply at each level while expressing the pattern of a larger holarchy. A purposeful monetary design is needed to harmonize the divergent components of the commons, integrating the economy as a subsystem of the finite biospheric commons, with its inflows of raw materials and outflows of wastes. To make this adjustment both at the level of the algorithms of financing and debt, and at the level of stabilizing the stocks and flows of ?nite biological and material resources and renewable resources, the international community could create a sustainability rate entirely independent of market goods and services (as introduced in "People Sharing Resourcesâ€, Kosmos, fall/winter 2009). While the interest rate could continue to function in linear time for limited-term objectives (Figure 4), the sustainability rate would reflect longer-range variables, such as the alleviation of poverty, preservation of resources, elimination of climate change and pollution, maintenance of social production, production of new ideas and knowledge, reproducibility of biophysical goods and other measures of human well-being and social quality of life. With the global commons as its reserve, the value expressed through the sustainability rate in every exchange of goods and services would be secured by the resilience and diversity of the world's social, cultural, intellectual, natural, genetic, material and solar resources.

 

Today's global superbubble is the result of deep structural imbalances between economic ideology and policy (noosphere), and environment and labor (biosphere) and physical resources (physiosphere). The challenge is to assemble international representatives from all regions and sectors to discuss global commons issues in a negotiating format which integrates these three streams of evolution. The settlement of national current accounts with the world's biophysical imbalances requires a new monetary framework based on an understanding that the noopshere is a subsidiary of the biosphere. This can come about only through the cooperation of people acting, not as national or corporate representatives, but as representatives of present and future generations and species, so that competition becomes a strategy of collective, rather than individual, survival. When commons sovereignty is vested in humanity and life, and self-interest and common interest become part of the same holarchy of being, the dichotomies between capitalism and socialism: as well as developed and developing nations: will dissolve. Nothing will change, yet everything will change. Proponents of the free market may still assert that we all share consciousness through the price system. Environmentalists may still maintain that we all share life, and proponents of social labor may still say that we all share matter. Trustees of the global commons will say that we all share minds, life and matter, and therefore, no one may own the Earth.

Source: http://www.kosmosjournal.org/kjo2/library/kosmos-articles/the-commons-of-mind.shtml

James Bernard Quilligan is Chairman for the Secretariat of Global Commons Trust, and Chairman for Global Commons Affairs of the International Renewable Energy Organization. He has been an analyst and administrator in the field of international development for thirtyfive years and has served as a policy advisor and writer for many politicians and leaders, including Pierre Trudeau, François Mitterand, Julius Nyerere, Olof Palme, Willy Brandt, Jimmy Carter and HRH Prince El Hassan. He is a member of the Kosmos Board of Directors.