Econ-Utopia: The Bloodless Revolution, part 1 of 2: A review of Peter Barnes’ CAPITALISM 3.0

Jonathan Teller-Elsberg, CPE Staff Economist

A few weeks ago, CPE Staff Economist Jerry Friedman wrote an Econ-Atrocity reviewing Bill McKibben’s new book, Deep Economy. Though he says McKibben “has written a clear attack on much of what ails us,” Friedman nonetheless criticizes McKibben for approaching the environmental and social problems of the day from an individualist perspective. For all that McKibben wants to promote and revive “community,” he has the attitude (says Friedman) of a “personal Salvationist . . . [who thinks that] the enemy [is] ourselves: we use too much, waste too much, want too much; and the only salvation for the environment is to change our preferences, use less, recycle more, and choose to live simply.” What McKibben misunderstands or ignores, Friedman argues, is the power of social institutions to drive behavior, regardless of the desires and seemingly free choices of individuals.

I think that Friedman will find solace in Peter Barnes’ recent book, Capitalism 3.0: A Guide to Reclaiming the Commons, since Barnes’ approach is definitively institutional. The problem, according to Barnes, is that the structure of the economy and society leave too much power in the hands of corporate capitalism. Even if all the CEOs and boards of directors and politicians were replaced with kind-hearted souls like McKibben, we would still face pretty much the same issues of environmental decay, economic inequality, and other social ills—the logic of capitalism and the legal structure of private property rights force the leaders of corporations to do what they currently do. He learned this from personal experience as co-owner and manager of several business ventures, most famously Working Assets (a telephone and credit card company that donates one percent of gross revenues to progressive charitable organizations). “I’d tested the system for twenty years, pushing it toward multiple bottom lines [that consider social and environmental impacts in addition to profit concerns] as far as I possibly could. I’d dealt with executives and investors who truly cared about nature, employees, and communities. Yet in the end, I’d come to see that all these well-intentioned people, even as their numbers grew, couldn’t shake the larger system loose from its dominant bottom line of profit.” (Ironically, Bill McKibben is quoted on the front cover of Capitalism 3.0 helping to promote Barnes’ book.)

While the government is necessary, in Barnes’ view it is incapable of successfully addressing these big problems because “most—though not all—of the time, government puts the interests of private corporations first. This is a systemic problem of a capitalist democracy, not just a matter of electing new leaders.” (Emphasis in the original.) Having realized that neither the market economy nor the government has any likelihood of halting global warming or reducing inequality, Barnes began to wonder “Is there, perhaps, a missing set of institutions that can help us?”

He’s been thinking about it for ten years, and he has a positive answer: the commons, which Barnes defines “as a generic term, like the market or the state. It refers to all the gifts we inherit or create together . . . The commons designates a set of assets that have two characteristics: they’re all gifts, and they’re all shared. A gift is something we receive, as opposed to something we earn. A shared gift is one we receive as members of a community, as opposed to individually. Examples . . . include air, water, ecosystems, languages, music, holidays, money, law, mathematics, parks, the Internet, and much more.”

In his previous book, Who Owns the Sky?, Barnes was already on this track. He then argued that the solution to global warming is to establish the atmosphere as a legally recognized commons, owned by all of humanity, now and into the future, and managed by trustees. This “Sky Trust” would be legally obligated to protect the atmosphere on behalf of those innumerable future generations. It could do so by establishing sustainable limits on the amount of greenhouse gases emitted into the atmosphere by human activity, and then auctioning off these permits. Because all people share the atmospheric commons equally, the money from this auction would be distributed on an equal basis. The result would be a slowing and eventual halt to global warming and a simultaneous reduction in economic inequality.

This time Barnes has widened his vision beyond any particular social problem. His hope is that the establishment of an entire commons sector (of which the atmospheric Sky Trust commons is only one example), alongside the government and private, corporate sector, will create an institutional framework that makes it possible to address a wide array of social problems that result from capitalist profit-seeking and government’s systemic inability to be fully representative.

[To be continued in the next Econ-Utopia. . .]

Gerald Friedman, “Econ-Atrocity: The economics, and the politics, of environmentalism,” April 20, 2007,

Peter Barnes, Capitalism 3.0: A Guide to Reclaiming the Commons. Berrett Koehler Publishers, Inc., 2007. The book is available at no charge as an Adobe Acrobat PDF file at

© 2007 Center for Popular Economics

Econ-Atrocities and Econ-Utopias are the work of their authors and reflect their author’s opinions and analyses. CPE does not necessarily endorse any particular idea expressed in these articles.