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September 29, 2005

Managing the Commons

Managing our assets: seven highly effective habits that would promote the commons and enhance our lives.

There’s a widespread (and false) belief that the commons, unlike private property, is unmanageable. This is in part due to Garrett Hardin’s essay, “The Tragedy of the Commons,” which argued that commons are inherently self-destructive. The truth is that there are effective ways to manage almost any commons, large or small (though global commons present special challenges).

The commons most desperately in need of better management are those gifts of creation that are near their carrying capacities: airsheds, watersheds, aquifers and habitats for other species (including the oceans). Other commons that need attention include the electromagnetic spectrum, the Internet, seeds, DNA, the arts, the “capital commons,” roads and streets, and “human mind space.” Here I set forth general principles of commons management and describe how several specific commons could be managed.

General principles

The commons manager is a trustee on behalf of one or more designated beneficiaries. The manager/trustee must at all times be loyal to those beneficiaries and have no conflict of interest whatsoever with commercial users of the asset.

  • Unless specifically authorized to do so, the manager must not diminish the principal, or inherited value, of the asset.
  • The manager must pro-actively maintain and restore the asset to assure its health and longevity.
  • The manager has the right to limit usage of the asset, and the duty to do so when necessary to protect its inherited value. In cases where asset usage must be limited, the manager has both the right and duty to charge prices for such use.
  • If there’s income from asset usage, the manager may spend that income for asset maintenance and restoration, equal dividends to beneficiaries and/or public goods that are specified by the trust.
  • The manager shall post all income and expenses on the Internet quarterly, and shall make a full public report to beneficiaries annually.

Here’s how some specific commons could be managed:

Air trusts at various levels could manage air pollution. Unlike current regulatory agencies, these trusts would give pollutees an ownership stake in clean air. They’d reward people for conserving and penalize them for polluting. Over time, they’d catalyze a transition to clean energy.

Watershed trusts would limit the amount of fertilizers and pesticides that can be used within a watershed. This would protect streams and rivers from noxious run-off and boost incentives for organic farming. Such trusts could also hold water and development rights.

Aquifer trusts would protect underground water tables which are being depleted faster than rain replenishes them.

A spectrum trust would charge commercial broadcasters and telecommunications companies for using our airwaves. The revenue would support non-commercial broadcasting and the media budgets of political candidates.

City street trusts would charge drivers for using crowded streets at peak times and use the revenue for mass transit and bike paths.

A capital commons trust would be a giant mutual fund owned by all Americans on an equal basis. Publicly traded companies would contribute shares to the fund at the rate of 1 percent per year, up to a maximum of 10 percent of their shares. The contributions would be the price these companies pay for the socially created benefits of public liquidity — a small price for the hefty benefits. (When a company “goes public,” its stock leaps spectacularly because it can be sold instantly to anyone.)

Artistic freedom vouchers would allow individuals to contribute refundable tax credits to creative workers of their choice, or to intermediaries who pass funds along to creative workers. In exchange for voucher support, artists would freely share their works over the Internet. In this way, a publicly supported cultural sector would co-exist with a private, copyright-protected sector, without government bureaucracy.

It’s worth nothing that none of these commons management models requires corporations to change their current mode of behavior. CEOs would continue to maximize profit, while commons managers follow different algorithms. Government would facilitate the growth of the commons sector, but not run it.