Reframing the Commonwealth: Commercial or Civic ?

* Article: Reframing the Commonwealth: Commercial or Civic. By Marvin T. Brown.

(This essay is now available in Michael Boylan, editor, Business Ethics, 2nd Edition (Wiley/Blackwell, 2013)

Part 1 of an important essay from Marvin Brown:

“What do we really want from the businesses in our communities? Jobs? Affordable products? Safe workplaces? Good wages? Donations? Happiness? Perhaps we first need to ask: what kind of community do we want? Can we say we want our community to be wealthy—to enjoy a common wealth? And what would that entail? We can use Amartya Sen and Martha Nussbaum’s (2011) definition of human development to answer that question. They propose that human development can be measured by the capacity of a community’s members to acquire what they have reason to value. People may disagree about what that would include, but in general, it would at least include security, significant relationships, possibilities for self-development, and some control over one’s existence. If we did understand common wealth in this way, then what would be the role of business, and of business ethics, in such a community?

The idea of a commonwealth has been around since the 18th-century Enlightenment. One thinks of the British Commonwealth, the Commonwealth of Nations, or even the Commonwealth of Virginia. Four states in the USA are named commonwealths. For the most part, the notion of the common wealth has had a double meaning: a referential meaning of government and a more symbolic meaning of wealth-in-common. Perhaps one could combine these two meanings with the notion of a government for the common good (wealth). Uniting these two meanings of common wealth, however, is not as easy as it might seem. In fact, since the beginning of capitalism, we have lived in an economy where much of what was a common wealth has been privatized (Bollier 2003). Before we can understand the role that businesses, and business ethics, should play in our communities, we need to first understand what has happened to our common wealth and how we could build a new commonwealth for all of us. We begin with the 18th-century privatization of the commons.

* The Privatization of the Commons

The economist Karl Polanyi called the privatization of the commons part of the “great transformation” of early capitalism (1957). Land that had been open for common use was “enclosed” by legislative acts beginning in the 15th century and continuing until the 18th. The land became the private property of the landowner.

Before the enclosures, commoners or peasants had various common rights. They included the right to access the fields and forests around villages for grazing livestock, gleaning leftover grain, gathering fodder for animals, as well as the right to wood and other materials for fuel. With these rights, many commoners were able to provide for their families by sharing land with others and taking on extra work when they needed to (Neeson 1993, p. 42). The enclosures resulted in the loss of these rights and most of the commoners either moved to the cities and became dependent on wages for their survival or immigrated to the colonies.

A similar enclosure or privatizing of the commons occurred in the American colonies. Stuart Banner describes the parallels between the English enclosure movements and the privatization of land in the Americas this way: Enclosure meant the conversion of an ancient system of property rights, in which individuals and groups often possessed rights to use particular resources scattered in various places, into the familiar modern property system, in which individuals possess all the resources within a given area of land . . . Indian property arrangements were similar in some respects to the English common fields. The combination of individual planting rights in particular plots of land and group resource-gathering right in the remainder would have reminded many English colonists of property systems back home. (Stewart 2005, p. 58)

Instead of sharing land with others, which was the practice of many native tribes, the Europeans believed that ownership gave them exclusive use of the land, and others were guilty of trespassing if they walked across it. Although these different enclosures happened centuries ago, their legacy continues to influence our views of what we share in common and what we own by ourselves. A key source of this ideology has been Adam Smith’s The Wealth of Nations (1776), where we find the promotion of what he called a “commercial society” (Smith 1944, p. 24).

* Adam Smith’s “Commercial Society”

The book’s title is already revealing. Why the wealth of “nations,” and not the wealth of the “commons,” or the wealth of the “commonwealth”? Smith does use the term “commonwealth” in Book V of The Wealth of Nations: “Of the Revenue of the Sovereign or Commonwealth” (1944, p. 747). Book V has little to do with either the commons or with wealth, but rather with the costs involved in the government protection of the commercial society. Smith’s use of the term “nation” appears to refer much more to a social grouping than to the political state. At the beginning of Book V, he writes of four different nations: the nation of hunters, the nation of shepherds, the nation of husbandmen, and then the nation of Smith’s time: “a civilized nation.”

These four “nations” require different levels of government (the sovereign or commonwealth) because they have different amounts of property. The evolution of these four types of nations is a story of the evolution of property—from a hunter nation that does not accumulate property to a “civilized nation” that is characterized by property and property relations. This nation is the last stage of human evolution, wherein, as Smith writes: “Every man thus lives by exchanging or becomes in some measure a merchant, and the society itself grows to be what is property called a commercial society” (1944, p. 24). In Smith’s “commercial society,” all properties—labor, land, or money—are owned by individuals. The commons is effectively eliminated in Smith’s “economics of property.” The only “commons” one can find here would be the market itself, or to use Smith’s phrase, the invisible hand. The common, in other words, has become the commercial.

* The Legacy of Smith’s “Commercial Society”

The connection of a civilized nation with a commercial society has erased, for the most part, the commons of our communities. It created an economic framework that focuses on “me, myself, and I,” rather than on “we.” Wealth, for the most part, is measured by the exchange of commodities and only those who have commodities to exchange can have a “piece of the action,” so to speak. The commercial market includes anything that can be transformed into something that can sell and excludes everything else. In this framework, instead of seeing families and communities, one sees a labor market; instead of seeing the natural living planet, one sees real estate; instead of seeing money as credit for economic growth, one sees money as a commodity in financial markets. Even our participation in higher education, in this commercial society, becomes a means to increase the property value of our knowledge, skills, and gregariousness.

In this commercial commonwealth, businesses have found an accepting framework for focusing on cheap products and high profits. Yes, they may engage in various programs to meet their responsibilities to stakeholders, but, at their core, they see themselves “in business” to increase the value of what they own. In this world, individuals may be rich or poor, depending on their effort and luck, but the commons is either ignored or taken for granted.

The overlooking of what we share in common, and the assumed independence of the commercial from the political, has created a commercial framework not only for businesses, but also for much of business ethics. In contrast to the Western origin of ethics in the civic realm, this can be seen as a privatization of business ethics.

* The Privatization of Business Ethics

In the history of ethics as a discipline, it began as a civic or public ethic. In the first textbook on ethics, Aristotle’s Nicomachean Ethics, Aristotle writes that since ethics is an inquiry into the good for man, not only as an individual but also for the community, it is a sort of political science (1999, p. 2). Most people in the field of business ethics have not followed Aristotle’s view of ethics as belonging to politics. The ethicist Robert Solomon wrote the following in his popular book, Ethics and Excellence (1993, pp. 123–4): The very structure of our society, its ample leisure and personality, are created by business, by the way business spurs and makes productivity possible and the way it distributes the goods throughout society and the world. Indeed, the values of our society—for better or worse—are essentially business values, the values of “free enterprise,” the values of necessity and novelty and innovation and personal initiative. But that does not mean that is it “everyone for himself or herself,” a “dog-eat-dog world, or a world in which “everything goes.” To the contrary, it is a world defined by tacit understandings and implicit rules, a practice defined, like all practices, by mutual understandings and underlying trust, and justified not by its profits but by the general prosperity it brings about.

Solomon’s reference above to “mutual understandings and underlying trust” shows his awareness of the role of what we will see later as the reality of the commons, but what is most significant about his statement is its assertion that “the very structure of society” is “created by business.” In fact, both the implicit commons and the explicit social structures have been privatized. Solomon is not alone, of course. Many in business ethics believe that we should not think beyond what is called the “business case for ethics,” which is that businesses should not have any obligations that harm their “bottom line.” Maybe we should not expect anything else as long as the default framework for business ethics is a commercial society.

Business ethics, in other words, has tended to work within the framework of a commercial society rather than a civic society. Operating in this commercial framework has not prevented ethicists from recognizing the existence of the commons, as we noticed in the quote from Robert Solomon, but we must say that it has not facilitated perceptions of what we actually do hold in common or share with each other. It has operated, in other words, mostly within the framework created by the enclosure of the commons, which has led us to focus on what we own and relationships among owners, not relationships among commoners or citizens.

The truth of the matter, however, is that we need many things we cannot own, and much that we do claim to own actually comes from a common resource. The ideas in this essay, for example, draw on common knowledge about business and society that many have contributed to and are now available to anyone who visits a library, goes on-line, or talks with colleagues. Music, stories, rituals, and many other things that enrich (en-rich) our lives are part of our common wealth. In fact, much that our commercial markets now threaten—air quality, fresh water, ecosystems, and even the planet—are commons that belong to all of us. For the sake of a viable future, it is time to renew our connections to the commons.

* The Idea of the Commons

In its broadest sense, the “commons” refers to things that cannot or should not be exclusively owned. The commons is the polar opposite of commodities. A widespread image of the commons is a pasture used by several, but owned by no one. This was the image used by Garrett Hardin in his famous piece on “the tragedy of the commons” (1968). He argued that if there were several shepherds using a common pasture each one’s self-interest would lead him to increase his flock of sheep and, if each one did the same thing, the pasture would be overgrazed and destroyed. The “tragedy,” according to Hardin, was that what looked like an abundant resource from an individual point of view was actually a limited resource from a bird’s-eye view. The lesson from Hardin’s narrative seemed to be that the best way to manage the commons was by ownership.

In the 1990s, the economist Elinor Ostrom demonstrated that Hardin was mistaken. She investigated communities that had used and protected what she called common polled resources for hundreds of years (Ostrom 1990). In her research on governing the commons, she found numerous cases where communities did share a commons to everyone’s benefit. Her first case, in fact, described how the citizens of a village in Switzerland had set up rules for sharing a common pasture. One of the rules was that no one could put more cattle on the pasture than they could care for in the winter (1990, p. 61). This community, and others as well, did not experience the commons as a “tragedy,” but as a source of wealth.

Ostrom’s research serves as one of the foundations for current conversations about the commons. David Bollier’s work is another. He makes a clear distinction between a market economy and gift economy (Bollier 2003, p. 48). Bollier makes the following distinctions between the two economies: in a market economy, relations are impersonal and based on property relations. In a gift economy, relationships are personal and based on caring and meeting people’s needs. A gift economy is based on trust in personal relations in contrast to the market economy that is based on trust in the market (the invisible hand).

As Mark Brown has pointed out, not all gift economies are based on personal relations:

– Science is a gift economies based on impersonal relations and motivated not by “caring and meeting people’s needs,” but by (at least in part) egoistic efforts to establish and enhance one’s reputations among colleagues. The greatest honors go to those who give the most, and people “give” not to specific personal others but to the abstract community as a whole. (Brown, personal communication)

Some of the most thought-provoking ideas about the commons have come from thinkers who see the creative sharing and innovation on the Internet as a commons. Michel Bauwens, the Founder of the P2P [peer to peer] Foundation has given a new perspective of the commons that focuses on the processes of sharing.

He writes that P2P processes:

– produce use-value through the free cooperation of producers who have access to distributed capital: this is the P2P production mode, a “third mode of production” different from for-profit or public production by state-owned enterprises. Its product is not exchange value for a market, but use-value for a community of users. are governed by the community of producers themselves, and not by market allocation or corporate hierarchy: this is the P2P governance mode, or “third mode of governance.”

– make use-value freely accessible on a universal basis, through new common property regimes. This is its distribution or “peer property mode”: a “third mode of ownership,” different from private property or public (state) property. (Bauwens 2005)

These three premises ensure that the mode of production is open to all those who have something to contribute to the process, the community is self-governed, and that the product itself is not something that becomes a commodity, but remains useful for others who can benefit from it. Bauwens is searching not for the rules that will protect the commons, but for the common processes that will make such rules unnecessary.

I am not sure if common processes will be enough to secure “all that we share,” to use the title of a recent book edited by Jay Walljasper. All that we share turns out to be a long list.

It includes the following (Walljasper 2010, pp. 7–8):

– Air & water, the land, the Internet, parks, libraries, streets, and sidewalks, dance steps, the airwaves, holiday traditions, music, games, biodiversity, Famous stories, open-source software, the oceans, jokes, and outer space.

As you review this list, and perhaps add to it, you will find that some are abundant, and some are scarce. Some are things that belong to culture and society, such as music or games, and some belong to the biosphere. If we understand wealth as the capacity to acquire what we have reason to value, then many things on this list are sources of wealth. They are also quite different from our commercial wealth.”

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