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Interest in the idea of the commons — shared wealth and assets in the public domain, not necessarily under government control — has percolated in diverse circles over the last decade.

Peter Barnes’ short book is an effort to paint, in broad strokes, a theory of the commons and an argument for intentional expansion, development and nurturing of the commons. Elaboration of the commons, he says, is necessary both to save the planet and to achieve equity objectives. Much of the interest in commons has been driven by environmental concerns; Barnes’ emphasis on the social dimension is an important additional element.

Understanding what Barnes means by Capitalism 3.0 requires first getting a handle on the two previous versions. Capitalism 1.0, he says, was shortage capitalism, when people wanted more than the economy could provide. Capitalism 2.0, the current operating system, is surplus capitalism — under which corporations’ problem is not producing enough, but creating demand for the excess of things they can produce.

There are three crucial rules (“algorithms”) of Capitalism 2.0, plus a key starting feature. These are: returns to capital must be maximized; property income is distributed on a per-share basis; and the price of nature equals zero. The starting condition is massive inequality — the top 5 percent own more property shares than the remaining 95 percent.

Capitalism 2.0 succeeds at producing wealth, of a sort, but it also yields three pathologies: destruction of nature, increasing inequality, and no increase in happiness correlating with an increase in stuff. Barnes’ cites long-term survey data to back up his claim about happiness. He suggests a couple explanations: after basic needs are met, more things do not make people happier, and that current economic arrangements increase levels of stress and anxiety.

Barnes’ Capitalism 3.0 will involve an expanded commons sector to counterbalance the corporate sector.

The starting point for thinking about this expanded commons sector is recognizing the existing commons. Barnes explains that there are two sets of commonly held assets. The first category is natural assets. He focuses not on forests or water bodies that are publicly owned or held in trusts with public purposes, but on the contributions that natural assets make to collective well-being — fresh water replenishment, soil formation, nutrient cycling, flood control and more. The second category is community and cultural assets. One obvious example is the Internet. Another is the system of stock exchanges, laws and communications media that make it possible to trade stock easily. Citing various estimates of the annual economic contributions of these common assets to the economy, and doing back-of-the-envelope calculations, he concludes that common assets (excluding government-owned assets) exceed in value all private wealth.

One problem in Capitalism 2.0 is that corporations encroach on the commons. They seek to privatize it — that is, to transfer control from society to corporate owners. And they use it to absorb waste (pollution) and externalize their costs.

For Barnes, the Capitalism 3.0 solution to corporate encroachment on the commons it to “propertize” it. He distinguishes this concept from privatization — he doesn’t want the commons transferred to a limited set of owners. Instead, he calls for the creation of common property rights. They may take various forms. One example would be individual shares vested in every citizen, where people receive actual monetary returns on the revenues earned by commonly held assets. Another example is trusts, where trustees manage common assets on behalf of society, with the mandate to preserve the asset for future generations.

Barnes’ Capitalism 3.0 also will see the elaboration of new kinds of commons. He sketches an array of options. He envisions an American Permanent Fund (modeled on the Alaska Permanent Fund, which pays dividends to Alaskans based on revenues from state oil leases), paying citizens based on charges imposed on corporations for polluting the commons. He calls for an inheritance fund, with every child given wealth at birth, with funding coming from an estate tax on the wealthy. He also calls for expansion of the cultural commons, with diminished monopolization of ideas and culture through patenting and copyright.

Many of Barnes’ ideas are open to serious criticism on their own terms. Does the trust structure really provide for protection of assets as against corporate encroachment? Should common assets properly be managed by more democratic structures? Does the idea of charging polluters effectively give them a right to pollute?

These are criticisms Barnes acknowledges and addresses, if only briefly in this short book. More important than these questions about particular structures, however, is Barnes’ overall framework. Capitalism 3.0 is a consequential book about a vital idea — a valuable contribution to the commons in its own right.

— Robert Weissman