By J.D. Alt
We usually think of a Commons as a “territory” of resources which we, as individuals, share with other members of our local, regional, or national society. The tragedy of the Commons, famously, is a failure of that sharing in which, even though the resources are visibly being depleted at an unsustainable rate, individuals are not motivated to preserve the resources but, instead, are motivated to continue to deplete them. This perverse motivation occurs because each individual makes two rational assumptions: (1) most other individuals will continue to deplete and (2) if he or she personally refrains from depleting, the beneficial impact on the Commons itself will be negligible, negating the personal effort or sacrifice. These rational decisions effectively neutralize the actions of the cooperative gene within the society, leaving the selfish gene in a position of active dominance. The larger the Commons, and the greater the number of individuals who share it, the more powerful are the tragic forces.
The tragedy of the Commons can only be avoided by changing the calculus of the two rational assumptions. Where the group of individuals is small enough that each is known to the other, direct consensus and peer pressure by the cooperative gene can change the calculus. Beyond a certain “intimate” population, however, the calculus can be changed only by the coercive force of a central authority or sovereign power.
Individuals willingly submit to a sovereign power to avoid penalty, but also because (a) they believe most other individuals will do likewise, and (b) they see a personal benefit to be gained if, in fact, most individuals do follow a set of rules to preserve the Commons. When the authority is established and given the power to impose penalties, this can change the rational calculus and avoid the tragedy of depletion.
There are other tragedies, however, which can befall the Commons as well. One is “enclosure” where certain individuals claim and enforce exclusive rights to some portion of the shared resources. This co-opting of the Commons either denies resource access completely—reserving it exclusively for the enclosure “owner”—or requires others to pay “rent” or a “toll” for access.
In large societies which are managed by a sovereign power, enclosure must occur in collusion with that power. As soon as a coercive authority is created it becomes the primary target of control for the selfish gene operating within the society. The selfish gene is drawn to collude with the authority to enclose portions of the Commons for its own exclusive benefit. In this process, the selfish gene conspires to manipulate, control or take the reins of the sovereign authority. A primary means of doing this is by manipulating how, and for what purpose, the sovereign issues its national currency. By high-jacking and controlling this process (primarily through a private banking system that “creates” sovereign fiat currency virtually at will) the selfish gene, in a myriad of large and small transactions, achieves its enclosures.
The tragedy that unfolds with enclosure is an extreme inequality of resource access and allocation. The great majority of individuals in the society will eventually have little, while a sliver of “winners” will have much more than they can productively utilize. This disparity, ultimately, can have no other result than the decline and collapse of the society itself (as predicted in a recent study funded by NASA.)
Coercive authority, then, while potentially avoiding one tragedy of the Commons, inevitably seems to attract another. This occurs even if the authority is democratically elected; in fact, it may well be the case that democracy itself hastens the second tragedy by creating a level playing field for the selfish gene—a “level” which, in actuality, is tilted dramatically in the selfish gene’s favor simply by virtue of its aggressive selfishness.
This is not intended to be an indictment of the selfish gene or private property. Each of us is a combination of selfish and cooperative instincts which play out in different ways, under different circumstances. Our selfish instincts—and the laws of private property— have created, and will continue to create, some of our most spectacular and useful accomplishments as a society. But it must be acknowledged that the selfish gene generates many negative and sociopathic impacts as well—the “externalities,” so to speak, of the will toward personal gain—and there is an important distinction to be drawn between private property and “enclosure”: the former protects what an individual has, while the latter denies an individual the opportunity of ever getting it.
The question therefore arises: Is it possible—without unduly penalizing the selfish gene or threatening the legitimate rights of private property—to more emphatically and directly empower the cooperative gene in the hopes of avoiding the second tragedy? In other words, it is not enough—important as it is—to continuously wage battle against the “externalities” of the selfish gene: it is necessary also to create mechanisms that circumvent the selfish gene’s very selfishness. Specifically, I would argue, it is necessary to devise a way for the cooperative gene to access “sovereign spending” directly—and to do so by a path which nullifies the selfish gene’s collusive drive to high-jack that spending for its own purposes.
Bank of the Commons
What comes immediately to mind is a “Bank of the Commons” (BOC)—a new wing of the Federal Reserve—which is specifically empowered with the task of enabling and funding local cooperative projects. Local advocates would propose the goals, details, milestones, deliverables, and budget for a specific project that creates some collective good, and—if it is approved by the Bank of the Commons—the Federal Reserve would deposit directly into the advocate’s account new fiat dollars to fund the project.
There are two issues in this proposal to contend with, (assuming, of course, you accept the reality that the Federal Reserve actually has the ability to create the new dollars.) First, what would prevent the selfish gene from taking advantage of this funding source? Second, what would be the process by which the BOC “managers” could possibly review and then approve or deny thousands—perhaps tens of thousands—of locally initiated cooperative projects every month? (Obviously, the second issue is also related to the first.)
In essence, these two questions constitute the dilemma described by Thomas Piketty in his recent book Capital in the Twenty First Century—namely that while it is true (he finally admits after some 500 pages) that a sovereign currency issuer does, in fact, have the ability to directly fund virtually any collective “need” within its own national society, ponderous national governments are poorly structured to do so in any kind of rational or effective way. The democratic electoral system is too slow and cumbersome to make decisions about this kind of sovereign spending—and central banks are too obtuse to make good decisions about what collective goods need pursuing in any given locality. Here’s how Piketty puts it:
It is of course possible in the abstract to imagine much larger central bank balance sheets. The central banks could decide to buy up all of a country’s firms and real estate, finance the transition to renewable energy, invest in universities, and take control of the entire economy. Clearly, the problem is that central banks are not well suited to such activities and lack the democratic legitimacy to try them…. The problem is not one of technical (monetary) possibility but of democratic governance. (p.552)
Instead of simply assuming, however—and in such an off-hand fashion!—that legitimate “democratic governance” cannot possibly be inserted into a central bank’s procedures for issuing fiat currency, why not try to imagine a way that it could? This is precisely what a “Bank of the Commons” might accomplish.
The technology that would make this possible, of course, is the internet—and a platform already exists which would be a good starting “model” for the effort: the crowd-source funding platform KICKSTARTER. If you haven’t spent some time at the KICKSTARTER website, I invite you to visit. And while you’re there, imagine that the projects are not profit-seeking entrepreneurial start-ups or artistic ventures, but rather large and small cooperative projects advocated by specific local groups. Just to give a quick example, imagine a core group of moms and teachers organizing to form a cooperative venture to build and operate an early childhood reading and day-care center to be shared by every family in a certain urban neighborhood. The presentation would (a) document the need for their collective project, (b) establish the costs of its various components, and (c) identify the availability of the actual resources necessary for implementation. The internet “crowd” would vote for their favorite projects, and every month the Bank of the Commons would “approve” the top, say, 1000 projects.
In other words, the Bank of the Commons would be, itself, a crowd-sourcing “commons”. The “managers” who have to make all those evaluations and decisions about what, in fact, might be a viable and useful project creating a local collective good, are NOT government bureaucrats or Wall Street insiders—they are the great population of internet citizens themselves.
But what about the selfish gene? The crowd-sourcing selection process leaves “him” out of the picture simply because it’s virtually impossible to coerce or fool a large number of unknown people into cooperating with a private collusion. After a project is funded, however, what prevents the local advocacy group from turning out to be a small group of colluding individuals who intended, from the beginning, to take the new fiat dollars and use them for some private, selfish purpose?
This, I believe, could be addressed in two ways: First, the BOC funding would include terms of agreement holding the advocacy group legally bound to use the funds as they proposed. Second, the advocacy groups would be required to keep ALL their funds in—and make ALL their transactions through—an account at the BOC itself. Any internet citizen, interested in a specific project, would be able to “observe” the project’s account on the BOC platform. In a real sense, then, the Bank of the Commons is a direct “democratic governance” for all the cooperative genes in our society. What would Mr. Piketty say to that?
Finally, what if the local cooperative advocates did their best, spent all the money as they proposed, but still the project, for whatever reason, failed to produce the intended collective good? Well, in that case, what’s been lost? The fiat dollars have still been spent into the private economy where they can now enable citizens to buy food and housing and cars and shoes. If prices begin to rapidly rise it would be very easy for the Bank of the Commons to dial back the number of projects it funds—or to cease funding them altogether until the inflation is brought under control. In the meantime, however, one can imagine tens of thousands of creative projects that would give a lot of people something interesting and useful to do—in addition to creating real collective benefits. Best of all, though, there’s not a single governmental bureaucrat or Wall Streeter involved!
Bank of the Commons, fascinating idea!
Gotta love any idea not involving gov bureaucrats, if possible, and especially Wall Street!!
Brilliantly J.D.ish, again.
“The fiat dollars have still been spent into the private economy where they can now enable citizens to buy food and housing and cars and shoes.” Woah there Nellie! Wait a minute, I don’t want to pay for land or natural resources. There are two arable acres of land per living person in the United States. The government withholds from us nearly 30% of our land which is equivalent to 1,115,344 square miles and is equal to the combined land masses of Great Britain, France, Germany, Italy, Spain, Poland, Greece, New Zealand, Ireland, Bahrain, Hong Kong, Liechtenstein, the Cayman Islands, Anguilla, and Bermuda. Combined these countries support populations of 383,502,896 people which is 66,533,896 MORE PEOPLE THAN THE ENTIRE POPULATION OF THE UNITED STATES in the size of land mass the U.S. government controls. Yet the poverty rate and homeless rates in the U.S. are higher than ever. So let’s instead, give everyone access to free land and enough resources to make ourselves self sustaining and THEN work on creating an economy that serves truly free and secure people.
having everyone produce their own food/energy is far from sustainable and nothing but a libertarian wet dream.
there is no other choice than cooperation.
the banking cabal is trying to keep the dollar as worlds trade currency through the trade system that favors alliances with the Multinationals and their control over durable production of resources they control and are trying to gain control of mainly water now .
Very interesting. One or two questions came to mind. Surely some projects will outlive their needs. How will defunding of those projects be determined? Or are many of them destined to continue for an extended time using money that could be better applied elsewhere? After all it may not even take a thief, just someone who ” believes” he is doing the right thing.
Secondly, is this simply another proposal for the job guarantee? Or maybe the same thing, will it work hand in glove with the JG?
A “resource” is only a “resource” if it can be used, or is useful. A common parkland is a resource that is used, and is useful to many people, but in itself, it can’t be depleted, unless it is cut up and sold to developers. By the same token, all metals and other minerals are a “resource” needed by, and useful to a great number of people. Unlike a parkland, the quantity of these “resources” are automatically depleted as soon as they are used.
If we don’t wish to deplete them, then they are no longer a “resource”.
I therefore fail to understand your comment about the “tragedy of depletion” – do you mean the “tragedy of exhaustion, or extinction”? If that is what you are describing, then where do we draw the line? And who draws the line?
The profit motive, and the financial system, has led to a disconnection between the society’s productive and consumption capacity. In a rational world, production has one single purpose, and that is consumption. If production does not lead to consumption then the whole exercise is a waste of time, energy and resources.
We had one in the 30s and 40s. It was called the RFC, Reconstruction Finance Corporation. It worked well as an agency of the govt, not a part of the central bank. At one point it was the largest bank in the world.
The BRIC nations all use the same model. So what is new here? Move it under the commercial banks?
Garrett Hardin’s “Tragedy of the Commons” myth has been debunked many, many times, but just like the old economic myths of “deposits create loans” or “deficits are bad” if you repeat something often enough it becomes an accepted truth, and it keeps being reprinted in textbooks, taught as gospel in our schools, and ends up in articles like this to “prove”, sadly (tragically) that the common man is so selfish that he will destroy the commons if left to his own devices. Hardin’s article was all theoretical with no proof to back up his assertion–yet, what he says “seems” so true that we accept it as such. Many actual studies have been done which refute his myth and can be found with a Google search. In fact, articles suggest that the commons was regulated by the community, whose members met once a year to discuss the state of affairs and took steps to prevent the very thing Hardin suggests in his myth. Hardin’s anecdotal story is describing merely what might happen in an unregulated environment where no one takes responsibility, but this doesn’t seem to be historically accurate of the real commons. But I have read that Hardin was a Malthusian who did not like the idea of uncontrolled breeders taking over the earth, so perhaps this myth fed into his prejudices. While his myth makes for good first-year philosophy debates, (as does Plato’s allegory of the cave)– it should be pointed out that Hardin’s “Tragedy” is not fact. Just as there is no proof that there was such a cave as Plato’s, with chained prisoners, nor an actual shadow-filled wall, there is no proof that a depleted commons existed, as communities seem to have devised common sense ways of regulating them to prevent such a depletion. But Bentham already covered this possibility in his Utilitarianism, i.e., individual decisions may be good for the individual but bad for everyone else overall. If I walk on the grass, I have a shortcut. If everyone takes a shortcut, we have no grass. As this article suggest, I will not walk on the grass because I expect everyone else not to, either. If everyone walks on the grass and beats out a path, I see no reason not to take the path, to do otherwise would be a waste. In fact, some architects wait to see how natural traffic flows before installing sidewalks so that “do not walk on the grass” signs become unnecessary.
This article then seems to be addressing the age old question of politics: there is a pie of resources, and a means must be had for dividing up the pie, insuring that the pie is maintained so that it is not completely depleted, or in the case of renewable resources, that more pies are baked for future generations. The best form of government then becomes the question: shall we have democracy, aristocracy, socialism, capitalism? Our present form is a democratic republic, and our treasury is really nothing more than a “common bank” even if we do not see it as such, and Congress is the means by which the resources are now distributed. Unfortunately, our mainstream economists and press have everyone convinced that there is an immediate limit to the pie–misinformation being the real “tragedy of the commons”, i.e. the country is broke, there are not enough dollars to invest, we are in debt to China. Resources are indeed the real wealth, not dollars. If we can convince people that we have sufficient resources and that dollars are just a means to distributing the resources, then we can use the existing political system to implement what needs to be done–we don’t need to reinvent the wheel. The question is, can the citizenry be educated to the fact? An informed citizenry can demand that their political body (congress) implement sane strategies. The political mechanism is in place already; it awaits an informed citizenry to demand sane investments. Pete Peterson and his ilk are spending millions and millions of dollars to throw up a wall of shadows to keep the citizenry in a a cave of ignorance to make sure that they continue to believe the scarcity meme–social security is broke (let Wall Street have your retirement funds). Those who receive the largest share of the pie now will continue to spend millions to keep their special place at the table, and as long as they can keep the common folk in the dark, fearful of shadows on the wall, they will succeed in gaining bigger and bigger slices of a pie that is really nothing more than our commons. Now there is the “selfish gene” at work. Since we don’t have millions of dollars to counteract the scarcity meme, and we don’t own the press (five corporations do), I suppose we have to use the best means available to us–the internet, letters to the editor? call in talk shows to counteract the scarcity meme?
Very good and timely. Ties in well with this recent CFR report.
“Print Less But Transfer More: Why Central Banks Should Give Money Directly To The People.”