SIX
WAKING UP
From Maximizing Profits to Sustaining Life

I once taught a course at Schumacher College in southern England titled “Can the Earth Survive Capitalism?” I began the class by talking about problems with the current design of our economic system—particularly financialization and extractive ownership design (though I wasn’t yet using that language)—and I planned next to move to solutions about the redesign of corporations. But I found the class wasn’t ready for that next step.

Their minds were on “collapse.” That was the word I heard bandied about in hallways and over dinner, as I came to realize that many of these students—schooled as they were in deep ecology—were convinced that what lay ahead was total ecological collapse, after which we would, if we were lucky, regenerate our civilization at the village level. Schumacher College is near Totnes, the first of the “Transition Towns” in the UK that are preparing locally for a post-carbon world. Local change excited these students, and with good reason. Yet they seemed to subconsciously imagine that the larger economic system—corporations, the stock market, banks—would somehow implode and be vaporized, for they couldn’t picture it all ever really changing. It seemed easier for them to imagine the collapse of civilization itself.

“There are two worldviews in this room,” I said, as I set aside my lesson plan and opened up an hour for unplanned discussion. “I think it’s important that we put them on the table.” One is a view of total social collapse. The other is a view of transformation—not the advent of some utopia but a kind of muddling through to a new social order that would arise out of the one we have. “You don’t want to plan on total collapse,” I said. “If it comes, we won’t be tending our community gardens. We’ll more likely be dealing with a new form of fascism.”

In the hour of freewheeling talk that followed, we brainstormed about the larger transformation needed in our civilization—all the shifts that would be required in law, values, sources of energy, sustainability technologies, international governance, the rebuilding of democracy, the rein-vigoration of communities, and more. What was needed, we agreed, was an entire change of worldview—a new way of thinking about our relationship to the planet and to each other.

With that larger context in mind, we were able to move into discussions about corporate redesign. Soon I found them debating questions of governance and whether employee ownership should be required for all firms. Some of these students were just out of college, while a few had spent decades inside major corporations, but all were able to grasp the issues of ownership design. As a teacher, I came away satisfied—yet also somehow troubled.

STEPHAN’S QUESTION

Something was lacking, not in their understanding but in my own. My thinking to that point had focused on the design of corporations and capital markets. But something in that approach had begun to seem vaguely out of focus to me.

Midweek, the class went on a field trip that was a traditional part of the Schumacher experience. It was a trip I’d taken before, where a question had been asked that stayed with me. It was a question much larger than corporate redesign:

What kind of economy is consistent with living inside a living being?

The question was posed inside a forest not far from Totnes, where we’d gone on a trip led by the college’s resident ecological scientist, Stephan Harding. Taking us on a path deep into the forest to a clearing beneath a leafy canopy, Stephan instructed us to form pairs and take one another by the hand, blindfolded, to experience the forest by touch. I was led to a tactile encounter with a soft, round, cushiony living being that was rooted in the ground—about as large as a cantaloupe and soft as a kitten. But, disturbingly, I could not name it.

When I removed my blindfold, I saw it was “only” a mound of moss. But it moved me, unaccountably, and brought tears to my eyes. It was an experience of intimacy before words. An experience, I would call it, of kinship.

Stephan instructed us, then, to go off alone for a time, and I sat by a creek, feeling something wordless opening in me. As we gathered together again and took our seats on fallen trees, Stephan stood and gave a lecture on deep ecology—that school of thought that recognizes no distinction between the human and natural worlds, that sees all human activity as a subset of the living system of the earth.

Deep ecology and systems thinking are closely related. They’re two different lenses into the same mind-set, one that sees living systems as the preeminent guide we need for designing all physical technologies and social systems. This view starts from a notion of humans not as masters and owners of the earth but as members of it. Everything we think we “possess,” everything we create or build, is not on the earth but of it, as an arm is part of the body.

“Matter is sentience. Sentience is matter,” Stephan said. Picking up a leaf from the forest floor, he went on, “This leaf is a subject. The world is a communion of subjects. Everything has interiority.”

It was at the end of the lecture that he posed the question. It was a question he himself could not answer, he explained, but he hoped we could begin to do so, because—and he looked at me as he said this—it was a question on which the future of life on earth depended. What kind of economy is consistent with living inside a living being?

DETOUR THROUGH THE COMMON

It was a question that took me many years to understand. There was something basic, utterly simple, that I couldn’t grasp. I needed to journey far from the language of corporations and capital markets to find the answers. I returned from Schumacher and soon found my work at Tellus moving into a new phase as I joined a Ford Foundation initiative looking at how the wealth of rural communities could be kept local. That project drew me into research exploring a variety of ownership designs that worked in partnership with the natural world—managing forests, running farms, harnessing the wind, fishing for lobsters. All of them involved designs governed by local communities.¹

I’d thought that class at Schumacher marked the conclusion of my long journey into understanding the design of ownership. Instead I found myself at the beginning of a new journey. It was about ownership and governance of the commons. Many of the largest challenges looming ahead for human civilization are problems of ecology: climate change, acidification of oceans, deforestation, soil erosion, peak oil, loss of species, groundwater depletion, and more. What is the role of ownership design in causing these problems of the commons and in potentially alleviating them? No quest to understand ownership could be complete, I realized, without some grasp of these answers.

It was the second part of the question—potential solutions—that initially drew my attention. Building on my Ford work, I began looking widely, and among the most striking ownership models I found were the community forests of Mexico. That nation had become a global leader in forest stewardship by granting ownership rights to local communities, many of them indigenous, tribal peoples—like the Zapotec Indians of Ixtlán de Juárez in southern Mexico.

Three decades ago, the Zapotec tribe won the right to communally manage forests previously exploited by state-owned companies. Over time, the problems that bedeviled other forests in Mexico, like deforestation and illegal logging, became relatively unknown at Ixtlán. The reason is that community members have incentive to be stewards of the forest, since forest enterprises employ 300 people doing work such as harvesting timber, making wooden furniture, and caring for the forest. In this design of commons governance, the forest is not walled off as a pristine preserve, nor is it clear-cut to enrich absentee owners. It’s a working forest, with control in the hands of those with an incentive to look out for the long-term interests of both the human community and the natural world.

This is Rooted Membership at work—operating hand in hand with Living Purpose. The forest is not seen as an object whose sole purpose is permitting owners to extract maximum amounts of financial wealth. It’s a living forest, a community of trees and humans. The purpose is to live well together, maintaining the living forest and supporting the human community. Because governance rights are in the hands of humans rooted to that place, they have a natural incentive to be good stewards. And they are able to carry out their mission because they govern the forest; it’s Mission-Controlled Governance.

In Mexico today, I discovered, community forests represent an astonishing 60 to 80 percent of all forests. Worldwide, more than a quarter of forests in developing nations are managed by local communities. Community forests hold promise as a key tool in fighting deforestation, which accounts for nearly one-fifth of all greenhouse gas emissions. But here’s the truly remarkable part: the story of community forests, like the story of cooperative banks, remains virtually unknown. Even within Mexico, the phenomenon is largely invisible.²

Another large-scale solution is found in the ownership model of the conservation easement. It leaves property in the hands of private owners while allowing development rights to be held separately—generally in the hands of an environmental organization or the state. The aim is to permanently prohibit development on particular pieces of land by attaching voluntary, legally binding easements to the property deeds. Easements have been used to protect wetlands, conserve watersheds, preserve agricultural land for family farms, and protect migratory corridors for animals—as with the Malpai Borderlands Group, a ranchers’ organization in Arizona and New Mexico, which has preserved nearly one million acres of unfragmented open space for wildlife.

Conservation easements are a cheaper way to stop development than outright purchase. And they yield tax advantages for owners. Throughout the United States, many millions of acres are under the protection of conservation easements. And the concept is spreading to Latin America, Canada, Australia, the Pacific, and the Caribbean.³

A similar model I explored is the community land trust, where families own their homes and a community organization owns the land beneath them. There are hundreds of examples in the United States, and more are forming in the wake of the housing crisis. I also studied catch shares, ownership rights to the use of fishing grounds, which were first used to help ailing fisheries in Australia, New Zealand, and Iceland, and later to revive red snapper in the Gulf of Mexico and halibut in Alaska.⁴

These models represent an intriguing twist on the disaggregation of ownership—the idea that ownership is a bundle of rights, which can be unbundled and distributed in novel ways. They show that the problem is not disaggregation itself but the purpose behind it. When the Haroldsons gave a twig of ownership rights to a mortgage lender, which wielded it against them, extractive purpose was the problem. With community land trusts and catch shares, twigs of ownership are given to parties with Living Purpose. And in these cases, disaggregation helps create solutions.

What these models show is that an economy consistent with living inside the living earth is an economy that effectively joins the interests of humans and the natural world. At work in many of these models is a kind of organic reciprocity. When ownership rights are in the hands of those whose self-interest depends on the health of the forests, the fish, and the land, they have a natural tendency toward stewardship. Self-interest and the interests of the whole become one and the same. Rooted Membership, Living Purpose, and Mission-Controlled Governance are among the ownership patterns that make this possible.

COMMON OWNERSHIP IN A NEW KEY

Something else struck me. Many of the models I found in rural areas put ownership in the hands of low-income people. One design particularly close to my heart is the resident-owned community, which was first devised in New Hampshire and later spread across the United States. It had its genesis in 1983, when residents of the Meredith Center Trailer Park faced eviction because an out-of-state developer wanted to buy the land beneath their homes. With a loan from the New Hampshire Community Loan Fund, residents bought the park themselves.

That stroke of ingenuity, or grace, or whatever it was, grew into the loan fund’s Manufactured Housing Park Program, which uses a cooperative ownership model to help people in mobile homes and other kinds of manufactured houses purchase the land on which their homes stand. The process works a legal transformation in the nature of their property. Manufactured homes previously viewed by banks as personal property (in the same category as a car or a boat) become real estate. That means they get better loan terms. It also means, as studies show, that residents plant more flowers, attend more school conferences, enjoy higher property values, and move less often. By owning the land where they live, a community of low-income people becomes a communion of subjects, their homes no longer a collection of objects viewed by an absentee landlord as a way to extract maximum rent.⁵

Here again is Rooted Membership at work—bringing a transformation not in an ecological community but in a human community, through locally rooted, collectively held ownership. At the heart of it is Living Purpose. And the design is fed by Stakeholder Finance, where capital becomes a friend, not a master.

It’s intriguing to me that the resident-owned community model was devised by a financial institution. It wasn’t a big bank with executives striving to make multimillions for themselves. Yet this loan fund has nearly $70 million under management. And it pays investors up to 4 and 5 percent interest annually, at a time when bank certificates of deposit are paying a fraction of that.

The founding director of the New Hampshire Community Loan Fund—still at the helm after more than 25 years—is Juliana Eades. I met her at a conference one day. What struck me was how approachable she seemed and how much she laughed. She had short gray hair, wore not a trace of makeup, and was at ease in simple cotton slacks when nearly everyone else was wearing a suit. Juliana is as far from a banker type as you can get. I talked with her for half an hour and came away not knowing that she was the president of the fund. When I asked about her position, she simply told me that she’d been there since the beginning.

Her organization isn’t seeking to build an empire by taking possession of all these mobile home communities, or by putting mortgages on them and then flipping them so that someone else can extract their value. Instead, the goal is to help regular nonfinancialized folk enjoy the benefits of full ownership. When the model proved itself in New Hampshire—with 90 resident-owned communities experiencing zero defaults—a new organization, ROC-USA, was created with the aim of taking the model nationwide.

At work is a remarkable sensibility. Instead of a clutching after more and more for the self, this approach to ownership embodies a letting go, a spreading of the bounty. It’s generative ownership at its best: ownership as embodied generosity, yet financially hard-nosed at the same time. These people aren’t getting a gift; they’re buying land. The loan fund isn’t in the business of philanthropy; it makes loans that are paid back with interest. The end point is common ownership, by common folk—regular people, members of the working class.

LOCAL DOMINION

Yet another model proving workable is community wind. The best example of this is Denmark, where a grassroots movement launched the drive to put up wind farms. Many turbines erected in the 1980s and early 1990s were owned by the wind guilds, and today cooperatives still own a substantial portion of installed capacity. When in 2009 Denmark passed legislation encouraging wind development, it required new wind projects to offer at least 20 percent ownership to locals. Similar arrangements are working in Germany, where half of renewable energy generation is owned by farmers and other regular citizens.⁶

Common ownership of wind creates a powerful benefit: it reduces the community resistance that wind often encounters with absentee ownership. This has been seen in Germany, Canada, and other nations besides Denmark. Community ownership is a way to “democratize electricity,” wind specialist Paul Gipe told me. Yet in the United States, community wind is just beginning to be more widely known. “Only a few of us on the fringe are talking about community wind,” Paul said.⁷

In the states, community wind generally takes the form of municipal ownership—ownership by local communities. Wanting to see this model up close, I join some friends one cloudy Thursday afternoon at Rowe’s Wharf in Boston for the 45-minute ferry ride to the wind installation in Hull. In 2001, the small town of Hull put up the East Coast’s first commercial-scale turbine, and that is what my friends and I are journeying to see—along with 350 other people who’ve bought $10 tickets for the cruise led by the Mass Energy Consumers Alliance. We stand in line close to an hour before boarding the Freedom vessel, taking our seats finally inside the ferry’s large central room, where the crowd is festive, as though we were at a church barbecue or a state fair. This is the seventh or eighth trip to Hull that Mass Energy has run.

“We probably should have had a second boat, because we had to turn people away,” an organizer says over the loudspeaker.

At our destination, Pemberton Point, we disembark and walk to the turbine. There the organizer asks, “How many of you have touched a wind turbine before?” Many step forward. My friends and I stand and watch.

“I hope we look back on this in 20 years and think of it as quaint,” Susan says.

Katherine goes to look and returns to say, “Not a lot going on in there. A ladder and a box.”

“A hundred yards away, you don’t hear anything,” the organizer announces. We stand 50 feet away and can hear it, but it isn’t loud. “It’s about the sound of a dishwasher,” Susan says.

I spot one of the citizen organizers who led the effort to put up this turbine, Andrew Stern, and step forward to chat with him. “How did it all begin?” I ask. “When you started, what did you do?”

“You call up and schedule a meeting,” he says. “You have a lot of doughnut and coffee meetings” with people like the plant manager and a town selectman.

When he approached them, I ask, what did they say?

“They didn’t say no,” he replies with a laugh.

This turbine has been built because there are local people with authority over electricity generation—people you can sit down with over coffee. It has been built, in other words, because the community owns the power plant. As a small sign on a chain link fence tells us on the way out, this turbine is owned by “Town of Hull Municipal Light Plant.”

To my mind, this place is in sharp contrast to Salem, where the local electric plant (a coal plant) is owned by Dominion, a publicly traded company headquartered in Richmond, Virginia. Our citizens’ group in Salem has long hoped to see the plant shut down and wind power possibly built there. But the local manager has no authority over such things. And the CEO at Dominion, Thomas Farrell, isn’t someone we can get on the phone. Even if by some miracle he flew in for doughnuts (an infinitesimal chance, given that the Salem plant represents a speck of the company’s $15 billion in revenue), he likely would remind us that his duty was to shareholders, not to Salem.

It’s not that Dominion lacks resources to spend on wind. A few years earlier, Farrell managed to find a massive $6 billion lying around that he spent buying back company stock (at a time when the company was telling Salem that it couldn’t afford to pay the property taxes it once had paid).⁸ There’s one community that Farrell responds to, and it isn’t local.⁹

Hull is different. There the process of building a wind development involved the community. In 1997, teachers Malcolm Brown and Anne Marcks led citizen meetings, and the planning carried over into the curriculum of Marcks’s senior high school physics class. Brown, a retired philosophy professor and one-time member of the Hull Municipal Light Board, told E magazine, “The Hull experience shows it is easier to win approval for wind projects if the benefits are enjoyed close to home, flowing to local residents transparently and directly. This way the project is ours, not theirs. We’re the investors and we’re the beneficiaries.”¹⁰

WAKING UP

There are many ways that generative designs contribute to solving problems of the commons. Community wind helps eliminate roadblocks to clean energy. Resident-owned communities spread wealth. Conservation easements preserve natural places. Community forests prevent deforestation. After studying these designs, it dawned on me why my original approach was off target. In the face of these radically different designs, the monoculture of profit-maximizing corporate design began to seem an industrial-age artifact—suited to certain circumstances, toxic in others. As ubiquitous as that design is, I began to get a glimmer that its day might pass—when we the people wake up.

I began to see why the idea of redesigning the corporation is out of focus. Years had passed since I’d listened to Stephan in the forest, but I finally got it. You don’t start with the corporation and ask how to redesign it. You start with life, with human life and the life of the planet, and ask, how do we generate the conditions for life’s flourishing?

I saw why I’d had a hard time answering Stephan’s question, about the kind of economy best suited for living inside a living being. The set of answers looks different, depending on where you stand when you ask the question. If you stand inside a large corporation like Dominion and ask what kind of economy we need, the answers are about incremental change from the existing model. The only way to start that conversation is to fit your concerns inside the frame of profit maximization (“Here’s how you can make more money through sustainability practices”). Asking corporations to change that frame is like asking a bear to change its DNA and become a swan.

If you take the more radical stance of standing inside the law and ask how to change the profit maximization mandate—which we at Corporation 20/20 explored at length—you find yourself in the sunless thicket of corporate governance (directors’ duties, common law, Delaware court cases). I and my colleagues spent years wandering in that thicket, and I saw the tendrils of things-as-they-are ensnare the feet of the most intrepid explorers. Few who enter that thicket emerge with sanity intact.

Those approaches aren’t how the founding generation of America began. They didn’t start with complicated arguments about the law or tell the king that caring for the peasants would improve his return on investment. They articulated truths they held to be self-evident. That’s what Stephan did in that forest. He said simply:

“A thing is right when it enhances the stability and beauty of the total ecosystem. It is wrong when it damages it.”¹¹

That’s right as rain. It’s another piece of the secular morality that can guide us: the sustainability of the larger system comes first. Everything else has to fit itself within that frame. What kind of social architectures are consistent with a living world where all beings can flourish?

A NEW PARADIGM EMERGES

This is the perspective of the whole, and it’s the perspective from which Stephan spoke. “The economic system is waging a massive war on nature,” he said. “We can talk new business systems as much as we like. But unless we have this perspective”—putting the good of the whole first—“we’re not going to make it.” When the whole is damaged, all are damaged. When it flourishes, all can flourish. This understanding is basic to systems thinking, which stands upon a fundamental insight:

There are no separate systems.

This was key to the radical re-visioning of science that physicists confronted in the early 20th century, when systems thinking was first introduced. In the mechanistic worldview of Descartes and Newton, scientists conceived of matter as made of separate particles. But at the atomic and subatomic level, physicists encountered a strange new world, which confronted them with the wrenching necessity of constructing an entirely new view of reality. Physicist Fritjof Capra wrote:

In their struggle to grasp this new reality, scientists became painfully aware that their basic concepts, their language, and their whole way of thinking were inadequate to describe atomic phenomena. Their problems were not merely intellectual but amounted to an intense emotional and, one could say, even existential crisis.¹²

They realized, in the end, that the universe isn’t made up of things at all, but of patterned flows. “What flows is a mysterious, nonindividualized something we call energy,” Ervin Laszlo wrote in The Systems View of the World. Some of the energy flows twist themselves into relatively stable patterns, which allows “things” to emerge, “like knots tied on a fishing net,” he went on. These are the particles of matter. Whirling energy appears in the relatively stable patterns of electrons, which join to form larger patterns called atoms. Atoms twist into chemical molecules; molecules form cells. Cells build into organisms, and organisms join in “superorganic communities” both ecological and social—such as forests, towns, corporations. These living communities unite to form the global system of Gaia, the living earth. The whole has “the character of a vast system of balanced energies,” Laszlo wrote, “acting in some discernible form of cohesion.”¹³

This dramatic shift in worldview led Thomas Kuhn to the notion of paradigm shifts—when the concepts by which a community describes reality are deeply rewritten. Expanding on Kuhn, Capra spoke of a social paradigm, the constellation of concepts, values, and practices shared by a community that forms a vision of reality around which the community organizes itself.¹⁴

The paradigm now receding, Capra went on, has been with us for centuries and consists of entrenched ideas and values—including the idea of the economy as a mechanical system, of life as a competitive struggle, and of progress as unlimited economic and technological growth. “Last but not least,” Capra wrote, is the notion that it’s natural that “the female is everywhere subsumed under the male.”¹⁵

Paradigms, values, and worldviews are not free-floating concepts but become embedded in institutional designs. A paradigm shift in capitalism faces us today. The signals are everywhere around, in financial and ecological crises. Yet the old worldview remains entrenched in the ownership designs of corporations and capital markets. Mutely, these designs enact the view of economic activity birthed with the industrial age: a view of business as a machine, feeding in “natural resources” and “human resources” in order to output goods and services. In capital markets, the view is of corporations as objects owned by shareholders, their purpose the churning out of endless streams of earnings like an assembly line.

DOMINION

This is the paradigm of dominion—the dominion of humans over the natural world, of male over female, of whites over other races, of capital over labor. Dominion is from the Latin dominium, meaning “ownership,” which is from dominus (“master”). In the words of 18th-century British legal theorist William Blackstone, ownership confers upon the owner the right to “sole and despotic dominion.”¹⁶ That is the traditional view of ownership. It is the root concept for the whole paradigm.

Generative designs for ownership of the commons silently embody a different model of ownership—not about dominion but about belonging. It’s about a sense of belonging to something larger than oneself, a common whole. And this is a matter not of sentimentality but of literal truth. It’s a matter of biological reality. The life in which we all participate—the life of the forests, the fish, the land—makes our lives possible. The notion of isolated individuals, dwelling securely in some financial sphere above the rest of us, is a fantasy. It’s a biological impossibility, for life in isolation does not exist. “Sustained life is a property of an ecological system rather than a single organism or species,” as biologist Harold Morowitz put it.

“Life is a property of planets rather than of individual organisms.”¹⁷

If new designs for ownership of the commons are more grounded in reality, that doesn’t mean they’re the whole answer for how to build a new economy. The models I studied aren’t panaceas. Some people say catch shares are a bad idea rather than a good idea. Municipal utility officials are often deaf to citizen input. Conservation easements in their agricultural form—designed to protect farmland from development—often fail to stop the long decline of farming communities.¹⁸ Community loan funds operate in businesslike ways, but most still need grant income.

These models aren’t perfect. They’re not some magical tool to end all problems of the commons. Climate change can’t be stopped by changing ownership designs; other kinds of faster action by government are needed. At this moment in time, what commons ownership designs represent are tools of awakening. Our minds have been so colonized by the paradigm of industrial-age capitalism that we’ve lost the ability to imagine other ways of organizing an economy. These humble designs remind us that there are many ways. After the long flight of fantasy of financialized capitalism, generative ownership designs for the commons are ways to begin coming to our senses. By the bye, they work.

I had found the answer to the first question I’d set out on my journey into the commons to investigate, about the role of ownership designs in solving problems of the commons. What I planned next to explore was the other part of my question: what was the role of ownership design in causing problems of the commons? I knew where to begin that journey. The answer had something to do with a core concept in the industrial paradigm: the idea of growth.