With the current possible sale of Saratoga Springs' sole full-service grocery store--known in the vernacular as the "Ghetto Chopper"--we could all stand to see how we got to this tipping point and what can (and ought to) be done to prevent losing this and other community assets that, under our current legal and economic systems, are held in the private domain.

A Brief History of American Capitalism

American Capitalism was created to encourage the conversion of "natural capital" to private capital and was a necessary first step towards growing the wealth of the nascent United States. Additionally, John Locke saw a need for private holding of property as a driving force motivating people to work. Locke sought to balance the privatization of the commons by stipulating that whenever one "joins to [nature] something that is his [sic] own, and thereby makes it his own...no man but he can have a right to [it], at least where there is enough, and as good, left in common for others."(1) As explained in his book Capitalism 3.0: A Guide to Reclaiming the Commons, Peter Barnes translates this passage as:

"[A] person can acquire property, but there's a limit to how much he or she can rightfully appropriate. That limit is set by two considerations: first, it should be no more than he can join his labor to, and second, it has to leave 'enough and as good' in common for others." (p. 16)

Barnes next posits that this first stage of Capitalism (version 1.0), an economy of shortage existed and needed to be converted to an economy of sufficiency. At that time, our nation had what were considered unlimited natural resources ("capital"), but not enough goods and services to supply to its population. What was needed was an efficient mechanism to convert natural capital held in common ownership to private capital. Enter the publicly-traded corporation, supplementing the financially-constrained partnerships by including a board of directors, a set of executive officers, and an ever-changing set of shareholders (strangers wishing to invest in corporation) whose fiscal investiture was guarded by the board and executive officers. In the early nineteenth century, these corporations were chartered for specific operations, often in the form of transportation improvements and collection of revenues generated by such improvements. The corporations were granted temporary charters by state legislatures to conduct a restricted set of operations. Alas, by the mid-1800's, corporations were granted the gift of immortality, could engage in any lawful business activity, and were allowed to merge with, or acquire other corporations. The coup de grace came in 1886 when the US Supreme Court declared that corporations were "persons" and entitled under the Fourteenth Amendment to protections afforded to all citizens (2). Henceforth, corporations possess the sovereign powers of immortality, self-government, and limited liability. Thus the corporation became what it is today: an "automaton designed to maximize profit for stockholders. It externalizes as many costs as it possibly can, not because it wants to, but because it has to. It never sleeps or slows down. And it never reaches a level of profitability at which it decides, 'This is enough. Let's stop here.'" (Barnes, pp. 21-22)

As corporations rapidly converted the commons to private wealth, in the process consumer goods and services became abundant and eventually were available in surplus. By the 1950's, John Kenneth Galbraith, in his book The Affluent Society (3), wrote that the scarcity of goods was a thing of the past for a majority of Americans. This signaled a change from shortage capitalism to surplus capitalism. Now the driving force of the economy was shifted from production to sales and marketing: How to get people to buy things they don't really need or cannot realistically afford. This produced the Madison Avenue-based and credit-fueled phase Barnes calls "Capitalism 2.0." Scarcity consisted not of goods and services, but rather for the poor, it was income was in short supply, and for the middle classes, the externalities of time, companionship, and community were all becoming more precious and scarce.

The shift from Capitalism 1.0 to 2.0 also saw some aggregate shifts in the availability of land, natural resources, and environmental sinks (places to dump wastes). In the earlier era, these were abundant and their consumption by the engines of Capitalism could be, by and large, ignored. Thus it is no wonder that the legal emphasis was tilted towards legally protecting the rights of capital above the rights of the commons. Now, however, it is apparent, through a whole-Earth perspective and our improved environmental monitoring networks, that limits are being reached in availability of arable and habitable land, non-renewable natural resources, and waste-handling capacity of the biosphere. The playing field has changed, but the rules of play have remained the same. Surely, something needs to change.

Whither the Commons?

In Capitalism 3.0, Barnes argues that neither the State (i.e., government) nor the Market can effectively manage the Commons since the Commons has no voice or value under the present rules. The Commons exists, under the current operating system, as both the Garden of Eden that nourishes us all and the sewer system into which we can throw all our wastes. The Commons supplies the Market with a seemingly inexhaustible source of raw material which is just waiting to be used for adding value to land. Likewise, the Commons is thought to be able to transmute our wastes into benign and even beneficial byproducts. [While this is true for managed closed-loop systems, indeed it is the very cornerstone of Permaculture, such endeavors realize and account for the finite nature of the source and sink provided by the local biome.] Much of the rest of Barnes' book is dedicated to providing a framework by which our Capitalism-based economic operating system can be "upgraded" to a more relevant and realistic set of algorithms and rules that honor future generations, non-human species, and strive for a more socially-just engine of economic development. By introducing the notion of a Commons Trust, Barnes does a fine job of illustrating how such a revised operating system could address myriad problems confronting us today: Global Climate Change, Peak Everything, Resource Wars, perpetuation of poverty, loss of culture and community, decreasing levels of "happiness," and the disproportionate distribution of wealth.

I would like to focus here on the loss of community. As one of the three forks of the Commons River in Barnes' model, the Community includes the shared gifts of the commons we inherit rather than earn. In Saratoga Springs that tributary includes the gifts of Yaddo, Congress Park, the Racetrack, the Public Library, the Arts Center, a semi-natural greenbelt, and a vibrant walkable downtown. Arguably, none of us alive today worked towards putting these assets into the public domain, although many of us have worked hard towards preserving them from being lost by all.

Barnes postulates that much of the problem with the current operating system of Capitalism occurs when the rights of Capital bump into the rights of the Commons. Currently, the former wins and the latter loses. Marjorie Kelly, in her book The Divine Right of Capital (4), points out this algorithmic glitch in the current operating system. She asserts that stockholders, since they are considered the "owners" of the corporation, have rights that trump those of stakeholders (including the community and the employees), whose very livelihoods may be compromised by the fiduciary obligations of the corporation's governing board to maximize returns to the stockholders. This glitch leads to the devolution of efforts aimed at improving the "common good" and the widening of the distribution of 50% of the wealth to the top 1% of income-earners. This alone is a good argument supporting former Labor Secretary Robert Reich's proposal of the abolition of Corporate Taxes to be replaced by Shareholders Taxes (as put forth in his book $uperCapitalism).

Introducing the Commons Trust

Suppose there were a third sector of the economy, added to the Private sector and the Public sector, called the Commons sector. Imagine all shared, pre-existing gifts of Nature, Community and Culture--which the current operating system is fond of ignoring as "externalities" to their capital-conversion engines--were placed in the hands of trusts whose trustees were bound in perpetuity to preserve such gifts for those with no voice at all in the current system. This would include the indigent, the generations yet unborn, and the millions of other species upon which our very existence may indeed rely. Now corporations and governments would have to answer to another voice that isn't bound by "one dollar, one vote," or "one person, one vote", and has vision that sees further than the next fiscal quarter and the next election cycle. Now, a new negotiating partner has taken a seat at the table; one that cannot be bought off, bribed, cajoled, bamboozled; one that has the "common good" as its moral compass.

Now suppose that a trust is formed to preserve the character of Saratoga Springs as a "City in the Country" and that one of its goals is to preserve the diversity and vibrancy of its downtown core. And another is to encourage the transition of the downtown core from a car-centric, carbon-emitting, 20th-century burg to a pedestrian-centric, carbon-neutral 21st-century model of self-sufficiency and sustainability. Natural, Community, and Cultural resources would be placed into this trust, with the intention that they be preserved at sustainable levels through the traditional market mechanisms of supply and demand. For example, say that a corporation wants to acquire the "right" to pollute part of the greenbelt. If there is enough capacity for such actions, the "right" could be sold to that corporation, with the proceeds of the sale going to those who own it: the Trust. The trust may be set up to redistribute 25% of the proceeds to a fund for environmental remediation, put 25% into an investment fund to acquire more Commons, and to distribute the remainder equally among the city's residents (much like the Alaska Permanent Fund).

Can a Trust Save the "Ghetto Chopper?"

Now let's say that the Trust, seeing a grossly undervalued parcel of developed land (Railroad Place Price Chopper) that is ripe for the picking by an opportunistic land developer, decides that the land is worth keeping as it is currently operating in the interest of the Commons (an affordable, if not profitable, supermarket within walking distance of 80% of the downtown core residents and employees). The Trust decides to purchase the land from the current owners in a form of Conservation Easement: The Trust buys the land for less than the owner would normally get, but the seller is given incentives by the State (e.g., reduced capital gains tax or other tax breaks), to sell to a Commons Trust. The Trust would then set up the terms of the "Conservation Easement," in recognition of the unique value and relative scarcity of the Community asset and the likelihood that, barring the intervention of the Trust, the land would be re-developed for the good of the Private Sector at the expense of the Commons Sector. Terms may stipulate that subsequent sale of the property would predicate the continued existence of an affordable supermarket, mixed-use housing at a given percentage of affordable housing units, and "green" or LEED construction practices. The sale price could be lower than it would be in the absence of the Trust since the Trust is not seeking to make a profit on the sale, although it certainly would not be precluded from doing so. The savings on the sale price to the buyer could be used to recoup the costs of finding a tenant for the new supermarket and/or to offset the oft-cited argument that "green" building practices are not cost-effective (in the eyes of the developer) when applied to anything but upscale, high-end condominiums and boutique shops.

Our economic operating system is grossly outdated. Our communities are suffering while only a handful of individuals are prospering. The eminent loss of the Downtown Price Chopper serves as a bellwether for the trajectory of Capitalism version 2.0. Much of the operating system is, and many of its algorithms are still useful, but economic "hackers" have exposed pernicious security vulnerabilities (in the form of negative externalities which can be "capitalized" on). These security vulnerabilities will continue to be exploited by some for private gain at the expense of all of us, as well as those yet unborn, until we address them with systemic reform rather than a tapestry of patches. In the words of Peter Barnes, it's time to upgrade!

(1)- John Locke, Second Treatise of Government, 1690. Chapter 5, Section 27.

(2)- Supreme Court decision Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394 (1886)

(3)- John Kenneth Galbraith, The Affluent Society, 1958. Page 2.

(4)- Marjorie Kelly, The Divine Right of Capital, 2001.