Chapter 2 Capitalism 3.0 : A Short History of Capitalism

1. Chapter 2 Capitalism 3.0 :A Short History of Capitalism The Decline of the Commons & the Ascent of Private Corporations

2. Decline of the Commons: • Approx. 10,000 years ago: Rise of human agriculture and permanent settlements led to private property. Titles were created and often passed to heirs – typically oldest son. • In Europe, codified many of these practices yet bodies of water, shorelines, wildlife & air were explicitly classified as res communes, resources available to all. Kings and Feudal Lords often laid claim to the res communes, only to have such claims periodically rebuked. • 1215 Magna Carta – Which established forests & fisheries as res communes was signed (under force) by the King of England • Two Reasons in the Modern Era: Enclosure, Externalities

3. Quest for Balance • 17th Century John Locke looks to balance the commons and private property…one can acquire property but there's a limit to how much he or she can rightfully appropriate (Continental Cap) • This limit is set by two conditions: 1. No more than he/she can join his/her labor to 2. It has to leave “enough and as good” in common for others * * Reflects English common law of the time (e.g. riparian landowner could withdraw water for own use, but couldn’t diminish the supply available to others)…such beauty twas not to be…

4. Enclosure: The transformation that launched the Modern Era (of Disinheritance) • 18th – 19th Century: Local gentry, backed by Parliament fences off village lands, converts them to private holdings • Impoverished peasants drift to cities, become industrial workers • Landlords invest agricultural profits in manufacturing • Thomas Paine* “two kinds of property” : (1) natural (earth, water, air) in which all have a birthright (2) artificial or acquired (invention of men) in which equality is impossible, diminishing one’s birthright seeking “indemnification for that loss” with a “national fund.” * Like John Locke, he believed nature was a gift of God to all

5. America & our relationship to The Commons: • Land Ordinance of 1785 • Homestead Act • Morrill Land Grant College Act • Reclamation Act • 1877 Desert Land ActHundreds of square miles removed under the Homestead Act land said to be worthless, sold for 25 cents an acre to anyone promising to irrigate it (Haggin & Tevis, Kern River “Robbery”) ◊1995 Expectorating the Spectrum Congress gives digital broadcast frequencies away free to the same media companies to whom it gave the analog spectrum free of charge

6. Ascent of the Corporations: Rise of the publicly traded stock company • 1776 Barely a handful of corporations in Britain or America • Early America, state legislatures retained some control • By mid-19th cent. Corporations could live forever, engage in legal activity, merge with or acquire other corporations (Frankensteinomics) • End of 20th cent. Corporate power (economic and political) was global • Two problems with Frankensteinomics: (1) It is not a real person (2) Its growth pays no adherence, allegiance, or care to principles of biological growth * * Compound Interest knows nothing about the needs of topsoil, reforestation and general ecological principles of proper restoration and regeneration

7. “If accounting could be made, private appropriations of the commons in America alone would be worth trillions of dollars” pg. 19 Bayh-Dole Act Proprietorships & PartnershipsCorporations (y axis Sales are in the Billions)

8. From Shortage to Surplus Capitalism • Capitalism 1.0, Shortage Capitalism: Before 1950 “demand exceeded supply” • Capitalism 2.0, Surplus Capitalism: Around 1950 we entered the phase where there was no limit to what the corporation can produce. Problem is finding buyers. (Finding buyers means funding buyers as the New Deal spending loses ground to Military-Industrial-Complex spending) - Rise of credit - needs replaced with thneeds

9. Middle class: Time, Companionship and Community Poor: Lack of goods (lack of ability to pay, not actual scarcity of product) Land, resources dumping sites abundant yet aggregate capital scarce Rules and Practices fixed accordingly to assist capital scarcity. Protecting this element of artificial scarcity (aggregate capital) is placed above all else. Scarcity: A class by itselfAsphalt over Topsoil

10. 3 Pathologies of Capitalism: • Destruction of nature • Widening the gap • Failure to promote happiness 1. Based on comparative rather then absolute conditions (David Hume calls it the Narcissism of small differences, psychologists and economists refer to it as Hedonic Adaptation) 2. Surplus capital foments anxiety (Live without a “Net” pay) 3. Surplus capital speeds up life and creates great stress (what does that say for the speed of life when capital is digital?)