American Permanent Fund

Peter Barnes: Capitalism 3.0 — Chapter 9: Building the Commons Sector (pages 135-154)

An American Permanent Fund would be the centerpiece of the new commons sector proposed in this volume. It’s a way to fix, or at least ameliorate, capitalism’s flaw of concentrating private property among the top 5 percent of the population. It would do this, like the Alaska Permanent Fund, by distributing income from common property to every citizen equally. This would add a third set of “pipes” through which income would flow to Americans, the first two being wages and private property income.

As discussed in chapter 7, the American Permanent Fund’s income would come in part from the sale of pollution permits — mostly for carbon dioxide — and in part from the commons’ share of corporate profits. The first revenue source would be directly correlated to our efforts to curb global warming. If we decided to reduce carbon dioxide emissions, say, by 3 percent per year for the next three decades, as scientists say we must, this would generate a substantial flow of income into the American Permanent Fund. Some of that might be invested or spent on public goods, and some would be used for per capita dividends. The faster we reduced emissions, the higher these dividends would be. In effect, the dividends and public goods would be a bonus to Americans for doing the right ecological thing. Eventually, when a post-carbon infrastructure is built, carbon emissions would stabilize at a low level, and so would this revenue source for the American Permanent Fund. By this time, the second revenue source — dividends from holding a portion of publicly traded corporate shares — would kick in. This revenue source would give every citizen a stake in increasing corporate profits, just as the first source gives them a stake in decreasing pollution. Who could object to that combination?

Getting the Permanent Fund up and running, even if it starts small, would be a crucial precedent and signal. Like the Social Security Trust Fund, it would be a pipeline through which more money would flow over time. It would establish a fundamental principle for the commons sector — one person, one share. And it would change the way Americans think about our economic relationship with nature: every penny not paid by a polluter would be a penny out of everyone’s pocket. It wouldn’t be just future generations, then, who experience a loss when nature is degraded; the bank accounts of living Americans would suffer as well. Irresponsibility toward the future would carry an immediate and widely felt price. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 10: What You Can Do (pages 155-166)

To build Capitalism 3.0, we each have unique roles to play. I therefore address the final pages of this book to a variety of people whose participation is critical. ...
POLITICIANS

Everyone wants your attention. Channel 5 is on line 3 and a powerful lobbyist is at your door. It’s hard for you to see the forest for the trees. What can I possibly tell you?

What I want to tell you is, there’s a fork in the road. On one side lies capitalism as we know it; on the other, an upgrade. You must decide which branch to take. Your choice has vast ramifications. Very possibly, the fate of the planet is in your hands. Trillions of dollars are also at stake. I want you to be courageous. I want you to choose the upgrade.

But that isn’t what one says to a politician. What one says is, we need to reduce our dependence on foreign oil, create jobs in America, and protect the environment. All those things cost money, and government doesn’t have enough. But here’s what government can do.

• First, delegate to an independent authority — something like the Fed — the power to cap U.S. carbon consumption. That way, when energy prices go up (which they inevitably will), you won’t get blamed. Also, make sure the carbon authority pays dividends, like the Alaska Permanent Fund. Then, when checks are mailed to your constituents, you can take credit.
• Second, talk about jobs and energy independence in your speeches. And push for an American Permanent Fund financed by sales of pollution permits. Within a few years, thousands of people in your district will be installing new energy systems and cashing dividend checks. You’ll be a hero.
• Finally, tell your donors not to worry. You’re a low-tax, small-government, pay-as-we-go kind of person. You think the environment should be protected through market mechanisms. You favor an ownership society in which every American has a tax-deferred savings account and no child is left behind. ...

What’s particularly nice about Capitalism 3.0 is that we can install it one piece at a time. We needn’t shut the machine down, or delete the old operating system, before installing the new one. Indeed, we’re not even replacing most of the old operating system, which is fine as it is. Rather, we’re attaching add-ons, or plug-ins, that allow for a gradual and safe transition. A formula for describing this is:

Corporations + Commons = Capitalism 3.0

Like the governor of James Watt’s steam engine, these add-ons will curb our current engine’s unchecked excesses. When illth of one sort gets too great, the new bits of code will turn the illth valve down, or give authority to trustworthy humans to do so. If money circulates too unequally, the new code will alter the circulation, not by re distributing income but by pre distributing property. It will make similar adjustments when there’s too much corporate distortion of culture, communities, or democracy itself.

What’s also nice about the new operating system is that, once installed, it can’t be easily removed. That’s because it relies on property rights rather than government programs that are subject to political ebb and flow. If you have any doubt about this, consider the staying power of Social Security and the Alaska Permanent Fund, both of which distribute periodic payments that have attained the status of property rights. Social Security is over seventy years old and has never been cut once; in 2005, it survived a privatization campaign led by President Bush. Similarly, the Alaska Permanent Fund, now more than twenty-five years old, repelled an attempt in 1999 to divert part of its income to the state treasury. ...

And, for businesspeople, here’s the best part: Capitalism 3.0 will preserve the driving force of American capitalism, the profit-maximizing algorithm. It will do this not only by leaving the algorithm alone, but also by giving all Americans, via the American Permanent Fund, a financial stake in its success. All Americans will benefit both from nature’s health and from the health of corporations. ... read the whole chapter