Capitalism 3.0 by Peter Barnes

Peter Barnes, the founder of Working Assets, tackles a big issue in this book: how do you protect the public interest in a capitalist society? Traditionally we've tackled this through government regulation (or just privatized things and hoped for the best, which never seems to be the outcome). Barnes suggests a different approach, which he calls "Capitalism 3.0," an "upgrade" the "operating system" of capitalism (to use his analogy).

He begins by defining a "commons sector" - things like the physical environment and our culture - and makes the case (based on American and British law) that we have recognized that these things are the property of all citizens. He then proposes the creation of institutions to manage them, with explicit property rights.

The idea, put very simply, is that when someone dumps pollution into the environment, uses broadcast spectrum, or cuts down a forest, they are taking something with real value from its owners - all of us. Corporations will always do this, because they are designed to make money, and if you can take property from the public without paying for it, they make more money. Government has tried to control this through regulation but usually failed, because that control involves unpopular choices and because the democratic process is so influenced by wealth. His idea is that a group of trusts, designed to be somewhat isolated from political pressure but legally and financially accountable to the public, could protect the commons.

So, if you want to pollute the air - which belongs to everyone - you have to pay the trust managing the air for the privilege. Proceeds of these trusts would be redistributed back to the owners of the resource being managed - the public.

This becomes a self-regulating market mechanism for managing public resources, which are valuable but which currently have no property rights attached to them. He makes a good case for this as an alternative to failed approaches of the past, and the book is a concise and interesting description of his rationale for this and how it might actually work. The really hard part - how we'd get there - is what's missing, but that's s small criticism - he's clearly focused on the vision of where we might go, and the path there would be complex indeed.

Get it from Amazon.