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Peter Barnes: With Liberty and Dividends for All. How to Save Our Middle Class When Jobs Don’t Pay Enough

Peter Barnes: With Liberty and Dividends for All. How to Save Our Middle Class When Jobs Don’t... With Liberty and Dividends for All caps a trilogy of books by Peter Barnes on a “trust and dividend” model that enriches the basic income conversation.A former journalist, entrepreneur, and progressive business leader, Barnes entered the policy arena in 2001 with Who Owns the Sky?Barnes, Peter. Who Owns the Sky? Washington, D.C: Island Press. 2001. In this book he proposed that a meaningful solution to climate change should not only require putting a price on carbon, but also that the revenue generated by climate action (from, say, the auction of tradable carbon permits) should be placed in a “Sky Trust” and issued as dividends to the population at large. Barnes took as a model the Alaska Permanent Fund, which puts into practice the ethical principle that common wealth (natural resources in the case of Alaska, ecosystem services in the case of climate change—the atmosphere serving as a carbon sink) should be considered a public trust and managed for the benefit, including the financial benefit, of all.Barnes followed up in 2006 with Capitalism 3.0, which places the Sky Trust within a broader program, an ambitious vision of a “reboot” of our economy’s “operating system.”Barnes, Peter. Capitalism 3.0 San Francisco: Berrett-Koehler. 2006. Early “scarcity capitalism” sought efficiencies and innovations to overcome scarcities of capital, raw materials, and consumer goods. By the early twentieth century these problems were more or less mastered, and we entered a new era. In Capitalism 2.0, “surplus capitalism,” a new sort of scarcity came to the fore: scarcity of consumer spending—not in absolute terms (by now we are glutted) but relative to our economy’s awesome productive capacity. Aggressive moves to increase consumption have merely led to an ever-escalating spiral of increased production and consumption, along with debt, anxiety, and ecological destruction.Barnes argued that as we are now pressing against ecological limits—not only in terms of carbon emissions but also strain on air, water, ecosystems, etc., plus associated problems of rising inequality and declining happiness—we need to face up to a new form of scarcity, the limitations of our ecological support systems, and that this new orientation will define Capitalism 3.0. We need to place scarce common resources in the care of trusts with a mission of preserving them for future generations, charging for their use and paying equal dividends from the revenue. Barnes continued to use the Alaska Permanent Fund as a model, and delved deeper into a wide range of economic thought and property theory, from Thomas Paine and John Stuart Mill to Ronald Coase and Arthur Pigou.In With Liberty and Dividends for All, Barnes pivots from a focus on ecological limits to a focus on the economic plight of the middle class. He enters standard basic income territory, highlighting the argument that as automation eliminates jobs, households will need new and expanded sources of non-labor income. The solution, again, is commons-based trusts and dividends, and this latest articulation is even more sophisticated and compelling.Barnes makes expanded use of the economic concept of “rent”—non-productive extraction of wealth. This concept allows Barnes and his readers to take insights about the commons as conventionally visualized (the pasture, the forest, the mine, the oil well) and see how they apply to manmade commons like our systems of law and financial markets. Further, Barnes articulates well the argument for issuing debt-free money (as dividends) to ratchet down the high-stakes debt spiral characteristic of Capitalism 2.0. Barnes calculates that a basket of several different major types of rent, if harvested for public benefit and channeled through trusts, could yield yearly dividends of about $5,000 per person in the U.S., or $20,000 for a family of four.When it comes to tactics, Barnes astutely points out that a trust and dividend system needn’t be instituted all at once, and needn’t be built from scratch. The most important step is to “build the pipes”—to establish the mechanism by which recovered rent can be directed to households—and then gradually bring more and more trusts online to increase the flow through those pipes. In the U.S., the pipes are arguably already in place. Any prospective carbon dividend (or other commons-based dividend, or other basic-income-type payment) could be directed through the existing Social Security infrastructure.Barnes points out that the financial crisis of 2008 was a wasted opportunity to bring about systemic change, but that we can prepare for the next opportunity when it comes along. He points to the Townsend movement, a mass movement that was a powerful lobby for old-age pensions in the 1930s and is credited with accelerating the creation of a generous Social Security system, as a possible model for “liberty and dividends for all” advocacy.As the title suggests, the book is U.S.-focused. And basic income specialists will understand that this book is a popular rather than a scholarly treatment of its subject. A topic like the supposed problem of dividends inspiring laziness, to which academic philosophers and economists might be able and tempted to devote a chapter or an entire volume, are dispatched with a paragraph. The especial value of the book is two-fold. First, it is a very good popular treatment. Barnes writes with a clarity and simple elegance that make complex and potentially dry topics in economics and property theory perfectly accessible. (This is the kind of book you can gift to friends and relatives.) Second, the focus on commons-based dividends that has been the central theme of all of Barnes’s policy writings offers the basic income community a model that overcomes two of the primary reservations laypersons have about BI: “How will it be paid for?” (The source of the dividends is baked right into the proposal. We are talking about redirecting certain existing flows of wealth.) And: “I’m not comfortable robbing Peter to pay Paul.” (The flows of wealth we are talking about are not earned income, but unearned rent, legitimately seen as common wealth.)Though With Liberty and Dividends for All is now several years old, it is as relevant as ever. More than a decade after the financial crisis, the “fundamentals” (as they say in the world of finance) have not changed. It is only a matter of time before we face another casino-economy crisis. In the meantime, the climate crisis will only intensify. Automation will only accelerate.Our middle class hasn’t figured out what its problem is. It knows it’s declining and worried about its children’s future. But as to the cause of its descent, not to mention the remedy, it remains confused … . The thought that good-paying jobs might never come back in numbers hasn’t yet penetrated. It’s easier to blame politicians (or China, or immigrants) than to think these questions through (132).The Trump era (in the U.S., and abroad as well) represents paralysis in the face of economic insecurity, blaming migrants and refugees, among other distractions. We still need to “think these questions through,” to collectively navigate our way to a system of income security based on non-labor income. Barnes’s book can help. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Basic Income Studies de Gruyter

Peter Barnes: With Liberty and Dividends for All. How to Save Our Middle Class When Jobs Don’t Pay Enough

Ranalli, Brent
Basic Income Studies , Volume 14 (2): 1 – Dec 1, 2019
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Publisher
de Gruyter
Copyright
© 2019 Walter de Gruyter GmbH, Berlin/Boston
ISSN
1932-0183
eISSN
1932-0183
DOI
10.1515/bis-2019-0018
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Abstract

With Liberty and Dividends for All caps a trilogy of books by Peter Barnes on a “trust and dividend” model that enriches the basic income conversation.A former journalist, entrepreneur, and progressive business leader, Barnes entered the policy arena in 2001 with Who Owns the Sky?Barnes, Peter. Who Owns the Sky? Washington, D.C: Island Press. 2001. In this book he proposed that a meaningful solution to climate change should not only require putting a price on carbon, but also that the revenue generated by climate action (from, say, the auction of tradable carbon permits) should be placed in a “Sky Trust” and issued as dividends to the population at large. Barnes took as a model the Alaska Permanent Fund, which puts into practice the ethical principle that common wealth (natural resources in the case of Alaska, ecosystem services in the case of climate change—the atmosphere serving as a carbon sink) should be considered a public trust and managed for the benefit, including the financial benefit, of all.Barnes followed up in 2006 with Capitalism 3.0, which places the Sky Trust within a broader program, an ambitious vision of a “reboot” of our economy’s “operating system.”Barnes, Peter. Capitalism 3.0 San Francisco: Berrett-Koehler. 2006. Early “scarcity capitalism” sought efficiencies and innovations to overcome scarcities of capital, raw materials, and consumer goods. By the early twentieth century these problems were more or less mastered, and we entered a new era. In Capitalism 2.0, “surplus capitalism,” a new sort of scarcity came to the fore: scarcity of consumer spending—not in absolute terms (by now we are glutted) but relative to our economy’s awesome productive capacity. Aggressive moves to increase consumption have merely led to an ever-escalating spiral of increased production and consumption, along with debt, anxiety, and ecological destruction.Barnes argued that as we are now pressing against ecological limits—not only in terms of carbon emissions but also strain on air, water, ecosystems, etc., plus associated problems of rising inequality and declining happiness—we need to face up to a new form of scarcity, the limitations of our ecological support systems, and that this new orientation will define Capitalism 3.0. We need to place scarce common resources in the care of trusts with a mission of preserving them for future generations, charging for their use and paying equal dividends from the revenue. Barnes continued to use the Alaska Permanent Fund as a model, and delved deeper into a wide range of economic thought and property theory, from Thomas Paine and John Stuart Mill to Ronald Coase and Arthur Pigou.In With Liberty and Dividends for All, Barnes pivots from a focus on ecological limits to a focus on the economic plight of the middle class. He enters standard basic income territory, highlighting the argument that as automation eliminates jobs, households will need new and expanded sources of non-labor income. The solution, again, is commons-based trusts and dividends, and this latest articulation is even more sophisticated and compelling.Barnes makes expanded use of the economic concept of “rent”—non-productive extraction of wealth. This concept allows Barnes and his readers to take insights about the commons as conventionally visualized (the pasture, the forest, the mine, the oil well) and see how they apply to manmade commons like our systems of law and financial markets. Further, Barnes articulates well the argument for issuing debt-free money (as dividends) to ratchet down the high-stakes debt spiral characteristic of Capitalism 2.0. Barnes calculates that a basket of several different major types of rent, if harvested for public benefit and channeled through trusts, could yield yearly dividends of about $5,000 per person in the U.S., or $20,000 for a family of four.When it comes to tactics, Barnes astutely points out that a trust and dividend system needn’t be instituted all at once, and needn’t be built from scratch. The most important step is to “build the pipes”—to establish the mechanism by which recovered rent can be directed to households—and then gradually bring more and more trusts online to increase the flow through those pipes. In the U.S., the pipes are arguably already in place. Any prospective carbon dividend (or other commons-based dividend, or other basic-income-type payment) could be directed through the existing Social Security infrastructure.Barnes points out that the financial crisis of 2008 was a wasted opportunity to bring about systemic change, but that we can prepare for the next opportunity when it comes along. He points to the Townsend movement, a mass movement that was a powerful lobby for old-age pensions in the 1930s and is credited with accelerating the creation of a generous Social Security system, as a possible model for “liberty and dividends for all” advocacy.As the title suggests, the book is U.S.-focused. And basic income specialists will understand that this book is a popular rather than a scholarly treatment of its subject. A topic like the supposed problem of dividends inspiring laziness, to which academic philosophers and economists might be able and tempted to devote a chapter or an entire volume, are dispatched with a paragraph. The especial value of the book is two-fold. First, it is a very good popular treatment. Barnes writes with a clarity and simple elegance that make complex and potentially dry topics in economics and property theory perfectly accessible. (This is the kind of book you can gift to friends and relatives.) Second, the focus on commons-based dividends that has been the central theme of all of Barnes’s policy writings offers the basic income community a model that overcomes two of the primary reservations laypersons have about BI: “How will it be paid for?” (The source of the dividends is baked right into the proposal. We are talking about redirecting certain existing flows of wealth.) And: “I’m not comfortable robbing Peter to pay Paul.” (The flows of wealth we are talking about are not earned income, but unearned rent, legitimately seen as common wealth.)Though With Liberty and Dividends for All is now several years old, it is as relevant as ever. More than a decade after the financial crisis, the “fundamentals” (as they say in the world of finance) have not changed. It is only a matter of time before we face another casino-economy crisis. In the meantime, the climate crisis will only intensify. Automation will only accelerate.Our middle class hasn’t figured out what its problem is. It knows it’s declining and worried about its children’s future. But as to the cause of its descent, not to mention the remedy, it remains confused … . The thought that good-paying jobs might never come back in numbers hasn’t yet penetrated. It’s easier to blame politicians (or China, or immigrants) than to think these questions through (132).The Trump era (in the U.S., and abroad as well) represents paralysis in the face of economic insecurity, blaming migrants and refugees, among other distractions. We still need to “think these questions through,” to collectively navigate our way to a system of income security based on non-labor income. Barnes’s book can help.

Journal

Basic Income Studies – de Gruyter

Published: Dec 1, 2019

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