Commons Trusts

While social charters ensure a broad political foundation for the co-governance and co-production of common property regimes, they do not make them operational.  That requires the development of commons trusts, which establish the specific legal conditions for people to help each other manage and produce what each of them needs.  Land and forest trusts are familiar examples.

Commons trusts are institutions, usually involving both physical and financial assets, which preserve and manage resources inherited from past generations on behalf of present and future generations.  By definition, commons trusts are the only fiduciary institutions accountable for the long-term preservation and sustenance of a resource.  That’s because neither of our existing property regimes —private nor public—have a mandate to provide fair access and long-term protection for critical resources. Under its current operational rules and institutions, state capitalism has forsaken such long-term fiscal responsibility by neglecting to keep the actual value of the commons separate from the mainstream economy.  This commingling of accounts is why, under the present system, the private and public sectors are spending both the ‘principal’ and the ‘interest’ of the commons—leading to currency volatility and boom-bust cycles, and contributing enormously to the planet’s ecological, energy and political instability. 

The creation of commons trusts allows the private and public sectors to continue to focus on profit, investment and budgetary appropriations, while the commons becomes a primary means of stabilizing the principal of commons reserves to maintain the diversity and sustainability of the overall economy.  Commons trustees have two functions.  First, they have a responsibility to decide what proportion of their commons resources should be monetized by renting them to the private sector for extraction and production.  A percentage of this resource rent would then be distributed to citizens by the state as dividends (or used for other purposes such as maintenance of the commons goods which are being rented, or mitigation of the negative effects of renting these goods). 

Commons trusts thus guarantee that those who are unprotected have rights to basic sustenance from their own resources. Yet the needs of present beneficiaries are a secondary responsibility.  The primary obligation of trust managers is to keep the value created through the commons within the commons to the extent possible, so that the community can hold in reserve the larger portion of its natural, genetic, and material stock for the benefit of people and species yet unborn, while generating cultural, social and intellectual capital for current generations.  In this way, the harmful effects of state capitalism are rebalanced: private industry flourishes from the surplus resources which are rented from commons trusts, the socially marginalized and vulnerable receive a subsistence income from the state, and the primary assets of the commons are preserved and regenerated.  This dynamic equilibrium is achieved through new temporal modalities in the system of multilateral co-governance and co-production introduced through the creation of commons trusts across the world.

In this emerging multilateral system, the financial incentives of businesses and government continue to operate as before.  But the difference now is that the long-term wealth guaranteed by commons trusts is not generated through the potential financial revenue of the commons assets they are managing.  Instead of regarding these commons as a source of profit, commons trusts determine their intrinsic worth (the actual value of passing on what we have inherited to future generations and allowing this stock to be replenished and restored) through the full participatory choice of citizens on whether or not to spend this commons capital.  Commons trusts thus create a new time signature based on the preservation of commons resources and the resilience of the system that manages and produces them—not on the assets of the commons that may have financial value in the marketplace.  Hence, long-term wealth arises, not through consumer demand, investment or capital accumulation, but in the enhancement of the carrying capacity of the global commons to support life and life systems, expressed through sustainable choice.

Broadly speaking, the creation of local commons trusts worldwide entails three significant changes:

• government shifts its primary emphasis from issuing corporate charters and licensing the private sector to approving social charters and open licenses for resource preservation and cultural and social production through commons trusts

• commons trusts exercise a fiduciary duty to preserve natural, genetic and material commons but can decide to rent a proportion of these resource rights to businesses

• businesses may rent the rights to extract and produce a resource from a commons trust, creating profits and positive externalities through innovation, competitive products and services, and adjustment of the market to the actual costs of resources