The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism (24 page)

This Swiss commons has well-established boundaries, allowing only local citizens the right to use common’s resources. Specific rules ensure that there won’t be overgrazing. A covenant restriction first laid down in 1517 states that “no citizen could send more cows to the alp than he could feed during the winter.”
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Cows sent to the mountain for summer grazing are counted at the beginning of the seasonal retreat in order to ascertain how much cheese each family will be given at the annual distribution.
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The commons association holds annual meetings to discuss management, review rules, and elect governing officials. The association is responsible for imposing fines, organizing the maintenance of paths and roads, repairing infrastructure, and collecting members’ fees for the work performed. Fees are generally proportional to the number of cows owned by each household. The association also marks the trees that will be cut for timber for construction and heating and assigns them by lot to households that then harvest the trees. While each household owns its own farm plots—gardens, vineyards, and grain fields—commons-type arrangements allow for the sharing of commons infrastructure, including barns, granaries, and multistory housing units.
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Törbel has maintained a consistently high level of productivity over the centuries by a careful management of its commons. Although each family enjoys private ownership of its land, it has continued to prefer communal tenure of other resources for the very practical reason, wrote Robert McC. Netting in a study published in
Human Ecology,
that it “promotes both general access to and optimum production from certain types of resources while enjoining on the entire community the conservation measures necessary to protect these resources from destruction.”
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Törbel is not an anomaly. More than 80 percent of the Alpine region of Switzerland is managed by a mixed system combining private property for agriculture and commons property for the use of meadows, forests, and wasteland.
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My wife, Carol, and I have had the pleasure of visiting these Alpine communities countless times over the years. What always impresses us is the high quality of life in these villages. The citizenry seems to have struck
just the right balance between the traditional and the contemporary, mixing state-of-the-art commons management, market savvy, and enlightened local governance. The Swiss Alpine villages are an advertisement for sustainable practices and a clear demonstration of what can be achieved when the commons is a vital centerpiece of local life.

Nor are the Swiss Alps commons just a precious oddity. There are literally thousands of similar examples of such commons arrangements, stretching from traditional farming communities in developing countries to the most sophisticated condominium arrangements that govern common-interest developments in suburban communities across America.

In studying the strengths and weaknesses of the three dominant management models of government, the private sector, and the commons, it is far from clear that one is necessarily always better or worse than the other. Which management model is best depends largely on the particular context.

Private-property arrangements are quite efficient for some purposes. But to believe that placing virtually everything on earth in private hands—which most free-market economists advocate—is the best way to go doesn’t pass the smell test, especially when dealing with public goods that everyone needs to have access to in order to flourish. Would we want to fence off every beachfront, lake and river, every forest, every suburban community, every road and bridge, and put the whole of the Earth’s diverse ecosystems into private hands, allowing property owners the exclusive right to charge an access fee for admission and use of the resources, or worse, deny admission altogether? Anyone who has ever experienced the rapacious destruction of ecosystems and resources at the hands of commercial and residential developers would be hard pressed to argue that the private market is always the most efficient means of optimizing the general welfare.

Likewise, while governments have performed laudably in overseeing the management of many public goods, from roads and water systems to postal delivery and public schools, they have often fallen short when it comes to understanding the very complex dynamics that make every local situation a unique experience. A “one size fits all” box of prescriptions and protocols can often lead to horrendous mismanagement—especially when those responsible for oversight are anonymous bureaucrats, without ties to the communities they are administering.

If there is an essential theme to the commons, it is that the people who know best how to govern their lives are the members of the community themselves. If there are resources, goods, and services that are public in nature and are best optimized by public access and use, then they are often best managed by the community as a whole.

After years of field investigations and research on what makes commons work, Ostrom and her colleagues came up with seven “design principles” that seem to be integral to every effective commons surveyed.

First, effective management of a commons requires “clearly defined boundaries” on who is allowed to appropriate from the commons and who is not.

Second, it’s necessary to establish appropriation rules restricting the time, place, technologies, and quantity of the resources that can be used as well as setting up the rules on the amount of labor, materials, and money that can be allotted to the appropriation.

Third, a commons association needs to guarantee that those affected by the appropriation rules jointly and democratically determine those rules and their modifications over time.

Fourth, the commons association should ensure that those monitoring the activity on the commons are the appropriators or are accountable to them.

Fifth, appropriators who violate the rules should, in principle, be subject to graduated sanctions by the other appropriators or officials accountable to the appropriators, to guard against overly punitive punishment that sours their future participation and creates ill will in the community.

Sixth, the commons association ought to build in procedures for rapid access to low-cost private mediation to quickly resolve conflict among appropriators or between appropriators and public officials.

Seventh, it is vital that government jurisdictions recognize and condone the legitimacy of the rules established by the commons association. If government authorities do not provide a minimum recognition of the authority of the commons association to self-manage and, in effect, treat it as illegitimate, the self-rule of the commons is not likely to be able to sustain itself over time.
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These seven design principles appear over and over again in Commons arrangements all over the world. Long before the age of global communications, isolated communities, with little outside contact, came up with similar management models, which raises the interesting question of whether there is a universal constant in play.

Ostrom and her colleagues put this notion to the test in laboratory experiments. They found that when subjects are faced with a common-pool resource problem and are kept from communicating with one another and forced to make decisions independently and anonymously, they invariably overuse resources. However, when they are allowed to openly communicate with one another, overharvesting is dramatically cut. The laboratory studies also reveal that the subjects are willing to pay fees to fine other violators, demonstrating a commitment to “sanction others at a cost to themselves.”
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Ostrom also found that when subjects are able to make their own rules about withdrawals and whether or not they will punish others and how much, they move toward a withdrawal system in the lab that is very close to optimal. They also rarely have to punish another member, but are willing to do so if necessary. What the lab experiments suggest is that when people
are able to design their own rules for managing common-pool resources, they intuitively reach for some variation of the design principles that have given form and direction to commons management around the world.
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Most economists would be nonplussed because their discipline is so wedded to the idea that human nature is purely self-interested and that each individual seeks to optimize his or her autonomy. The very idea of freely choosing to pursue the collective interest is anathema to many market-oriented economists. They might be well served by boning up on the findings of evolutionary biologists and neurocognitive scientists. A spate of studies and discoveries over the past 20 years is shattering the long-held belief that human beings are, at their core, utilitarian-seeking loners prowling the marketplace for opportunities to exploit their fellow human beings and enrich themselves.

We are learning that our species is the most social of beings, boasting a very large and extremely complex neocortex. The worst punishment that can be imposed on a human being is ostracism. Cognitive scientists tell us that our neural circuitry is soft wired for experiencing empathic distress and that evolutionary survival has depended far more on our collective sociability than our self-directed proclivities. Far from being an anomaly, the Commons approach to marshaling economic activity appears to be much better suited to our biological instincts than the stark picture of an anonymous marketplace where an invisible hand mechanically rewards selfish behavior in a zero-sum game.

Why, however, this sudden interest in retrieving the commons as a governance model for society? There is no easy answer, but let me suggest at least some of the relevant parameters.

The Reagan/Thatcher-led economic movement to privatize public goods and services by selling off telecommunications networks, radio frequencies, electricity generation and transmission grids, public transport, government-sponsored scientific research, postal services, rail lines, public lands, prospecting rights, water and sewage services, and dozens of other activities that had long been considered public trusts, administered by government bodies, marked the final surrender of public responsibility for overseeing the general welfare of society.

Deregulation and privatization spread quickly to other countries. The magnitude of the capitulation was breathtaking in scope and scale. Governments were hollowed out overnight, becoming empty shells, while vast power over the affairs of society shifted to the private sector. The public, at large, was stripped of its “collective” power as citizens and reduced to millions of autonomous agents forced to fend for themselves in a marketplace increasingly controlled by several hundred global corporations. The disempowerment came with lightning speed, leaving little time for public reaction and even less time for public engagement in the process. There was virtually no widespread debate at the time, despite the breadth of
the shift in power from the government to the private sector, leaving the public largely unaware and uninvolved, although deeply affected by the consequences.

For the most part, free-market economists, business leaders, neoliberal intellectuals, and progressive politicians—like President Bill Clinton of the United States and Prime Minister Tony Blair of the United Kingdom—
were able to prevail by portraying the market as the sole key to economic progress and castigating critics as old fashioned and out of touch or, worse, as Soviet-style apologists for big government. The collapse of the Soviet empire, with its widespread corruption, inefficiencies, and stagnant economic performance was trotted out at every occasion as a whipping boy and proof positive that the well-being of society would be better assured by placing all the economic marbles in the hands of the market and letting government shrivel to the most rudimentary of public functions.

Large segments of the public acquiesced, in part because they shared a sense of frustration and disappointment with government management of goods and services—although much of the ill feeling was contrived by a business community anxious to penetrate and mine a lucrative economic largesse that had long remained under government auspices and beyond the reach of the market. After all, in most industrialized countries, publicly administered goods and services enjoyed an enviable track record. The trains ran on time, the postal service was dependable, government broadcasting was of a high quality, the electricity networks kept the lights on, the telephone networks were reliable, the public schools were adequate, and so forth.

In the end, free-market ideology prevailed. But it wasn’t long before various segments of the public—trade unions, small businesses, nonprofit organizations, and grassroots activists in the industrialized and developing world—began to catch their breath, take stock, and realize that the private sector had seized and gulped down, in one big bite, much of the wealth-producing endowment of the planet in the blink of an eye, transforming it into corporate fat and muscle, with sufficient clout to flick off any challenge to its supremacy.

With governments eviscerated and no longer able to offer a viable counterweight to the private market, affected constituencies began to search for another governing model that better reflected their interests and sensibilities. Disenchanted by centralized and sometimes impersonal bureaucratic government management on one extreme and a manipulative and tight-fisted commercial juggernaut determined to capture every aspect of life in the folds of its income stream and profit margins on the other, those constituencies began looking for a governing model that would allow for a more democratic and collaborative way of organizing economic life. They rediscovered the commons.

Communities were also beginning to experience the growing degradation of local ecosystems, first at the hands of governments wielding
geopolitical power and then, with deregulation, global companies bullying every region of the world into compliance with their thirst for cheap labor and lax environmental regulatory oversight.