ourEconomy

Plunder of the commons: compensate the commoners!

After centuries of enclosure, privatisation and colonisation, it's time that the commons were returned to all of us.

Guy Standing
13 September 2019
Image: Randy Heinitz, CC BY 2.0

The commons are part of our culture and constitution, and in Britain have been so since the Charter of the Forest was sealed in November 1217 alongside the Magna Carta. They are separate from private property and state property. They belong to us as commoners, as citizens, equally. And they cannot be taken from us legitimately unless we give prior consent voluntarily.

They are natural resources and assets – land, water, air, forests and what lies under the ground – and they are social amenities and institutions, civic bodies and time-honoured procedures of common law, and cultural symbols and institutions. They include the accumulated knowledge and body of ideas that are intrinsically public goods. Together, they embody and give meaning to society.

Yet our commons have been plundered, illegitimately. We think of enclosure of land, notably by the Tudors and in the Victorian age. But we need to expose the systemic plunder of all forms of common that has taken place since Thatcher, and accelerated under austerity. We need a strategy to retrieve and revive them and principles of commoning, of shared activity, that have accompanied the commons over the ages. This is not just a matter of redressing injustices of ancient history, since rarely has more been done to ensure loss of our commons than by the Coalition Government of Conservatives and Liberal Democrats between 2010 and 2015 and then the Tory Government since 2015. Both parties are responsible.

It began with Thatcher in the 1980s, epitomised by her notorious remark that ‘there is no such thing as society’. She adopted the ideology of her mentor, Friedrich von Hayek, an adherent of the Austrian school of economics, according to which something that has no price has no value. This convenience allows the commons to be seen as valueless and thus disposable.

The commons are bequeathed to us, linked to social memory. Their loss has come via encroachment, enclosure, commercialisation, privatisation, neglect and ‘social forgetting’. But as one examines what has happened to all types of common over the past four decades, one realises that the modern plunder has been dominated by something else that will become even stronger if Brexit goes ahead. This is the permitted colonisation of our commons, by foreign capital and state interests. Ironically, this has been done mostly by politicians prone to proclaim their nationalism and patriotism. Almost definitionally a feature of colonisation is that foreign interests have least concern for national or sub-national cultural mores.

The most conspicuous, and costly, instance of colonisation was the give-away privatisation of North Sea or Scottish oil, which ironically led to most of the oil production sites being owned by Chinese state capital and the current government adding to the long list of subsidies by undercutting the cost of dismantling unprofitable oil rigs.

The privatisation of water in England and Wales in 1989 led to majority ownership by foreign private equity funds, followed by criminal poisoning of rivers by deliberate dumping of untreated sewage while sending abroad of billions of pounds in dividends as the corporations piled up debt. Thames Water was found guilty of pouring 1.6 billion tonnes of untreated sewage into rivers, while they had given over £1 billion to its foreign shareholders. Other companies have been found guilty of doing much the same, without anybody being prosecuted. Those corporations were also given by Thatcher 424,000 acres of what had once been common land.

The mass sale of council housing, part of our social commons, not only created a contrived shortage of public housing but drove up property prices, accelerated by the permitted colonisation of our most iconic properties, including some of the many nominally owned by the Crown Estate. A growing proportion of UK housing is owned by foreign property companies and dubious oligarchs, who keep a remarkable number unoccupied for years.

Then there was the privatisation of the railways, a feature of which was that under Section 25 of the privatisation Act of 1993 only one entity is banned from ownership, the British government in the name of the people. So, today much of the rail system is owned by French and German government entities.

Part of what advisers to Thatcher called ‘the micro-politics of privatisation’ is to run down public commons through cuts to spending, until people feel less attached to them and less opposed to privatisation. This has been accentuated under austerity, when imposed spending cuts have been most severe on many forms of commons, since most are not statutory obligations. For instance, there are about 27,000 parks in the UK. A survey of park managers showed that over 90% have experienced severe budget cuts forcing them to cut maintenance and consider commercialising or selling off land.

Less noticed has been loss of the civic commons. Access to the law and protection against illegal acts are the essence of common law, with respect for due process, legal representation and proportionality of punishment for misdemeanours and crimes, all enshrined in Magna Carta. All have been corroded, intensifying hidden forms of social income inequality. Thousands of actions previously not regarded as criminal have been made into crimes, and those accused of crimes have been made to bear more of the cost, forcing many commoners to forego formal defence.

Worst of all, social policy, notably in the form of Universal Credit, has made a mockery of due process, which requires proper trials with proper representations before punishment is meted out, which must be proportionate. Under Universal Credit, peremptory sanctions are often genuinely life threatening – leading to ‘deaths of despair’ – but they are imposed without any due process, leading to loss of vital benefits for many months until an appeal can be heard.

This is cruel, contrary to common law and not proportionate to the alleged actions that prompt sanctions. A majority of appeals eventually lead to a reversal of the sanction, but often too late to rectify the damage done. Here too there has been creeping colonisation, via the privatised outsourcing of social policy practices operated by foreign-owned companies.

Meanwhile, the educational, information and intellectual commons have been plundered more than at any time in history. Thomas Jefferson, a founding father of the US Constitution, correctly said, ‘Ideas, in nature, cannot be made the subject of property.’ Sadly, that is precisely what has been done in the neo-liberal era.

A globalised intellectual property rights system was immensely strengthened by TRIPS (Trade-Related Aspects of Intellectual Property Rights) passed through the World Trade Organisation in 1994, shaped by a few US multinationals, backed by the US and UK governments. This has facilitated the commercialisation, privatisation and colonisation of ideas. Since 1994, the annual filing of patents has more than tripled, with the global stock of patents close to 12 million, each giving monopolistic control of some idea for 20 years or more.

Many patents result from publicly-funded research, diminishing the risk. But TRIPS allows corporations to receive monopolistic income for two decades, or use the patent to block others from producing something. Those claiming to believe in free markets should have opposed the trend, but reveal their class-based ideology by keeping quiet. There is evidence that the patent system hinders economic growth and innovation. It merely increases inequality and rentier capitalism. George Osborne, as Chancellor, made it even more blatant with his Patent Box tax break that in practice benefits multinationals coming to Britain if they have patented products, particularly Big Tech and Big Pharma. That tax break merely accentuated the plunder of the intellectual commons.

While patents have mushroomed, copyright monopoly has been vastly extended to many decades after a person’s death. Industrial designs and brand names have also been turned into monopolistic property. In sum, intellectual property rights have slashed the knowledge commons; any claim that there is a free market economy is an insult to the English language.

Meanwhile, the erosion of the education commons is creating a frightening political erosion. Since the ancient Greeks, education has been an integral part of leisure (schole); it is a public good, and its primary objective historically has been the forging of character and the ability to be a good citizen. Again, Jefferson captured that best, along with John Stuart Mill and Cardinal Newman. But that perspective is anathema for neo-liberals, for whom schooling is for preparing people for the job market, for developing ‘human capital’.

In their framework, all education that does not increase employability, competitiveness and economic advantage is dispensable. Consequently, there has been an erosion of the arts, civics, philosophy, ethics and history. Music teaching in state schools is disappearing. The education commons as the teaching and preservation of vernacular and non-standard thinking has shrunk.

This has weakened the ability of citizens to participate in and comprehend political discourse, leading to seduction by simplistic platitudes and appeals to emotion, rather than reason and evidence.. Commentators have paid insufficient attention to loss of the education commons as a cause of the growth of populism and thinly-veiled neo-fascism stalking modern politics, epitomised by Donald Trump and Boris Johnson.

The plunder of all forms of commons has hit lower-income citizens particularly hard, especially as they have always been ‘the poor’s overcoat’. The neglect, enclosure, commercialisation, privatisation and colonisation of the commons has increased social income inequality, to the disadvantage of the growing precariat. It is one reason for believing that inequalities have grown by much more than conventional income statistics suggest.

The effects are cumulative, and can be explained partly by what is known as the Lauderdale Paradox. In 1804, the Earl of Lauderdale, an amateur political economist, wrote an essay in which he argued that as private riches rise, public wealth declines. The rich can create ‘contrived scarcity’, so driving up prices of what had been free or low-cost goods and denying access to resources needed by commoners to maintain subsistence.

The Earl lived in simpler times, thinking that public wealth was somewhat protected ‘against the rapacity of private avarice’ by the impossibility of private owners banding together. Our era of rentier capitalism, with its plutocracy and plutocratic financial and multinational corporations, means that slashing public wealth is all too easy, worsened by the micro-politics of privatisation, by which politicians and civil servants can facilitate the plunder, often to their pecuniary advantage in their post-political or civil service life.

In the 12th and 13th centuries, civil strife over loss of the commons led to the Charter of the Forest of November 1217, in which commoners’ rights were asserted and reparations assured. Today, we need a new Charter for reviving the commons and for compensating the commoners – you and me – for loss of our commons. In my new book, Plunder of the Commons: A Manifesto for Sharing Public Wealth, a 44-Article Charter of the Commons is presented. Readers will have their own priorities. But what we should demand is that every Party going into the next General Election should present their variant of a Commons Charter.

Articles 43 and 44 of the proposed Charter are crucial. The starting point is that private interests have obtained part of the commons or are using them for pecuniary advantage. As such they owe the commoners compensation. As commoners we are equal, and so the compensation should be equal for all. We might call this the Commons Equality Principle.

What complicates that principle is that the commons belong not just to current generations, but to those who follow us as well. This leads to what is known as the Hartwick Rule of inter-generational equity. Revenue raised from the sale or use of common resources must only be paid out if that does not deplete what is available for future generations. This requires us to distinquish between exhaustible (non-renewable) commons, such as oil and minerals, non-exhaustible (renewable), like land, water, air, skyline and ideas, and replenishable commons, such as forests.

What is proposed is that levies be made on all uses of our commons, with the proceeds used to compensate the commoners, as a matter of social justice. If government were allowed to decide on how the resultant revenue were spent, almost certainly the equality principle would be sacrificed. So, the next step should be the establishment of a permanent Commons Fund, into which the levies would be placed and reinvested.

With the range of levies potentially available, such a Fund could be built up fairly quickly. Here three derivative rules should apply. The Fund would have to respect the rule that investments would be made only in sphere that did no harm to the commons, or the environment; they should not jeopardise the future commons.

Revenue gained from investment of the levies on exhaustible common resources should be treated as a capital asset, respecting the Hartwick Rule. That means that only the net return should be distributed to today’s commoners. This is the principle that has guided the Norwegian Oil Fund, which has been built up from levies on use of its North Sea oil. Its annual return from investments has exceeded 6%, its net return has been over 4%. So, to maintain the capital, each year it disburses 4% of the Fund. Such has been the Fund’s growth that technically every Norwegian is a millionaire

Third, the Commons Fund could treat levies on non-exhaustible and replenishable commons as revenue for compensating current commoners, because similar revenue could be raised next year and into the future. In short, the Fund could be built up with primary revenue from the levies and secondary revenue from its investments. And 4% of the money from the exhaustible commons combined with, say, 80% of that from non-exhaustible resources and somewhat less from those deemed replenishable (allowing scope for replenishment) could be paid out as Common Dividends to all commoners, equally, as a fundamental economic right.

In effect, what this proposal amounts to is an environmental fiscal policy as well as a route to social justice, involving a shift from taxing income from labour to taxing private wealth and misuse of our commons, and in the process modestly building a new income distribution system based on economic security.

Guy Standing is author of Plunder of the Commons: A Manifesto for Sharing Public Wealth, published by Pelican Books, to be presented at a public launch at the LSE on October 2.. He is a council member of the Progressive Economy Forum, and a Fellow of the Royal Society of the Arts.

Economics journalism that puts people and planet first. Get the weekly ourEconomy newsletter Join the conversation: subscribe below

Comments

We encourage anyone to comment, please consult the oD commenting guidelines if you have any questions.
Audio available Bookmark Check Language Close Comments Download Facebook Link Email Newsletter Newsletter Play Print Share Twitter Youtube Search Instagram