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Capitalism 3.0: A Guide to Reclaiming the Commons Hardcover – October 15, 2006

4.4 out of 5 stars 18 customer reviews

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Editorial Reviews

From the Publisher

January 5, 2007
By Lee Drutman

PETER BARNES is a businessman in a quandary. He's a firm believer in free markets, but he's also convinced that our current version of resource-depleting, pollution-spewing capitalism is pushing nature ever closer to collapse -- and generating a gaping divide between rich and poor that increasingly defies all conceptions of fairness.

Yet Barnes is no fan of government either. It's too susceptible to corporate pressure to be effective, he argues, and besides, do we really want politicians setting prices?

The co-founder and former president of Working Assets Long Distance, a telephone service that donates to nonprofit organizations, thinks he has a better idea: Establish an independent "common wealth" sector to protect shared assets like air and water, and maybe even cultures and communities. Secure these assets in a trust that belongs to everyone, he writes in "Capitalism 3.0," and profit-making corporations couldn't wantonly gobble them up. Plus, everybody would benefit equally from their use. If it sounds farfetched, maybe that's the point: "We ignore common wealth because it lacks price tags and property rights," warns Barnes, who already has incorporated a nonprofit organization called the Sky Trust to protect the atmosphere.

Barnes' tale of capitalism gone mad begins with the Industrial Revolution, when the primary social problem was a scarcity of goods and the primary economic problem was coordinating limited investment capital. Land and natural resources, by contrast, appeared endless. Hence, what he calls Capitalism 1.0 developed with rules and practices that privileged capital above all else, particularly the joint-stock corporation.

By 1950, scarcity was no longer a problem. But the great engines of capitalism, already programmed to maximize production and profitability, were incapable of slowing down. Instead, they entered a new phase Barnes calls Capitalism 2.0. Instead of filling human and social needs, he writes, they began creating what Dr. Seuss' villain in "The Lorax" calls "thneeds," things we didn't know we needed. Worse, corporations continue to impose their "illth," British critic and author John Ruskin's word for goods produced by an economy that don't contribute to human welfare, on a natural environment whose capacity for absorbing is far less boundless that previously thought.

Barnes is at his best in diagnosing the structural maladies in today's iteration of capitalism, which has created a "world is awash with capital, most of it devoted to speculation" but "healthy ecosystems are increasingly scarce." The main problem, as he sees it, has to do with the three algorithms that drive market behavior: Maximize return to capital; distribute property income on a per-share basis, and the value, or price, put on nature is zero. And, he notes, 5% of the world's people control half the property shares.

The obvious moral of "The Lorax" parable, in which the evil Once-ler cuts down all the truffula trees to make thneeds, Barnes says, is that "trees need property rights too." If the trees belonged to everyone, held in trust, their price would not be zero -- the Once-ler would have to pay (and the trust would be responsible for protecting the trees from extinction). Such a set-up, the author argues, would not only protect nature, but also allow everyone (not just the wealthy) to benefit equally from its occasional use. If such a plan were implemented properly, this would be what Barnes calls "Capitalism 3.0," in which "[w]e'll have more things we truly need -- healthier ecosystems, communities, culture -- and fewer thneeds."

Barnes' new and improved capitalism is more an exploration than a detailed plan. Even if the details prove unworkable (and they may very well), he deserves plaudits for offering a way past the stale debates of statism versus privatization. Instead of chiding greedy capitalists and venal politicians, perhaps we ought to look more closely at the rules and incentives to which they are duly bound to respond. And perhaps in doing so we will discover something new right under our noses.

About the Author

Peter Barnes, MSc, FCIArb, FCIOB, MRICS is a qualified arbitrator and adjudicator and works for Alway Associates, providing contract advice.

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Product Details

  • Hardcover: 195 pages
  • Publisher: Berrett-Koehler Publishers; 1 edition (November 1, 2006)
  • Language: English
  • ISBN-10: 1576753611
  • ISBN-13: 978-1576753613
  • Product Dimensions: 6.4 x 0.8 x 9.5 inches
  • Shipping Weight: 15.2 ounces
  • Average Customer Review: 4.4 out of 5 stars  See all reviews (18 customer reviews)
  • Amazon Best Sellers Rank: #1,363,686 in Books (See Top 100 in Books)

Customer Reviews

Top Customer Reviews

By Robert David STEELE Vivas HALL OF FAMETOP 1000 REVIEWER on December 27, 2006
Format: Hardcover Verified Purchase
I concur with all the 5 star reviews with respect to this book presenting a vision for the next level of capitalism nurturing the commons rather than destroying it, but it is not the whole story. It is simple without being simplistic, but the terms "ecological economics" (see my reviews of books by Herman Daly) and "natural capitalism (see my reviews of books by Paul Hawken) are not an integral part of this story. Neither is public philosophy, although the author clearly has an ethical public policy of his own.

Like the work of Paul Hawken, Amory Lovins, Hunter Lovins, and Herman Daly, it does not accuse nor seek repatriation of benefits as much as it seeks to educate and demonstrate why respect for the commons is good for business.

I recommend Michael Sandel's "Public Philosophy: Essays on Morality in Politics," and Paul Hawken's "The Ecology of Commerce," in addition to this book, but those deeply interested in this topic might wish to expand their range by browsing some of my lists on democracy, capitalism, and security.

The book ends with numerous ideas, some easy to implement, like time banks (I see a rush to displace banks, money, credit, and interest coming down the pike), and some more difficult but essential, such as reversing the spectrum licenses and land licenses awarded to corporations under Capitalism 1.0, and putting those resources to work for all of the people.

The author spends some time noting that government is not the complete answer, and I not only agree, I am eagerly waiting for a book called Government 3.0 or Democracy 3.0, something that brings together the diverse literature on the need to localize agriculture and energy again, stop the global corporations, e.g.
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Format: Hardcover
Peter Barnes does a masterful job in re-imagining economics to take account of the commons, the shared resources that we inherit together and must pass along undiminished to our children. This book is lucid and highly readable as it deconstructs key flaws in conventional economics and proposes innovative solutions that protect the commons. Barnes is a former businessman (cofounder of Working Assets) and journalist, so he approaches the subject with sophistication and clarity.

Barnes notes, for example, that conventional economics typically fails to account for the hidden subsidies that companies take from the commons (air, water, spectrum, public lands, federal R&D, etc.). Companies also use the commons as a convenient place to "externalize" their wastes, social disruptions and other costs. Barnes suggests some new legal and institutionl strategies -- such as stakeholder trusts -- as ways to harness market forces while preserving our "common wealth." This book is succinct, profound, idealistic and practical.
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I have just read Capitalism 3.0 by Peter Barnes and am very impressed. Peter is a Georgist of the US variety although that fact is not immediately apparent as the book is written in a very light, non-ideological, non academic style. It is an extremely accessible and well written case for 'the propertisation' of the commons - emphatically NOT 'privatisation'. It does not discuss land value taxes/rents directly but places them indirectly within the context of all commons and proposes a solution to 'the tragedy' of all commons that, followed through, would nevertheless deliver LVT and something like a citizens income.

Peter sees a need for a counterbalance to corporate power linked to private property, but not by State ownership and hence not by any measure that smacks of Socialism. Instead he puts forward the idea of many kinds of Trusts holding many kinds of commons property- from the GHG emisison rights to scientific knowledge to community land. Apart from the very essential job of supporting Commons Trusts and assigning property rights and legal protections to them, governments would thereafter stand aside. Governments would especially distance themselves from disbursing the receipts/rents/ licence fees collected for the use of the various commons as their susceptibility to corporate influence, according to Peter Barnes, is systemic and cannot be overcome. It is a very American approach - rather than intervening directly to regulate the power of an damaging but essential force, a countervailing force is introduced to dynamically re balance the system. A global Trust would be required to protect the atmosphere but this would not be given political power per se - but it would have significant economic power to balance the existing private sector influence of the WTO.
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I am enthusiascially asking you to take the leap and read this book. It is so refreshing to read words from someone who has made it "big", who also understands that that isn't all there is to being alive and well in America. The author clearly states that running a company that makes money is desirable and that that isn't the end of it. There are other considerations and other ways to impact the world than simply raking in the dough. I have long thought there was an ugly face to capitalism and it seemed to me I was the only one who saw it that way. It is comforting and reassuring to know I am not alone. Give it a try, okay? It won't hurt much and it helps to know there is a different way to see it all.
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