Commons – the Pros and Cons

Jeff Ferriola – Case Analysis                       Week 3:  Localism & Entrepreneurship

The Ecologist (The Ecologist, 1994) offers a compelling case for the revitalization of commons to minimize the negative impact from enclosures or other forms of alien constraints.  The article outlines a logical argument that individuals within a shared local setting (defined in general terms – not exclusively geographic) are in the best position to govern for the greater good and actually drive sustainability.  Enclosures, such as government policies, exploit local resources and the result is a net loss for the community.  As a counterargument, I believe the analysis needs to take into consideration the broader system.  The key message of this case analysis is to argue a comprehensive scale back to a commons-based model is not practical or advisable on a broader scale.

Critique of the Commons    

My first critique of the commons-based model is the limited evidence that the practice is sustainable over a long period of time in today’s modern age.  Maslow’s Hierarchy of Needs (Wikipedia: Maslow’s Hierarch of Needs) provides a framework of human needs.  Upon achievement of the foundational needs such as physiological and safety, humans seek to move up the pyramid and achieve more.  This theory helps explain the drive for globalization, “bigger is better”, or other phenomenon exemplifying human desire for growth and/or greed.  A commons-based model is likely to provide the foundational needs given their local understanding and personal commitments/responsibility to each other.  However, as the “quality of life” improves and the community grows, the pathway through self-actualization likely differs per person.  In turn, this drives more disagreements than when the commons was simply providing the basic needs of food, shelter, and safety.  Example one is the generational battle within the ADCBE (Peredo, 2005).  The elder generation was relatively more satisfied with the status quo as the younger – and more “business savvy” – generation was looking for alternatives for expansion.  An alternate example that may test the system is a commons formed out of negotiating power as exemplified by the Half Moon Bay fishermen (Kaufman, 2011).  The article lauds the agreement and fishermen’s compliance with the sustainability imperatives.  These imperatives, however, were a condition set forth by the Nature Conservancy as a pre-condition to distributing licenses back to the community.  No one will argue the intent of the conservancy, but these conditional-based agreements seem contrary to the success stories outlined in the Ecologist. Fishermen were put into a position where if they did not agree to the terms, their way of life would be in question – along with their ability to provide the basic needs for their families.   There was little alternative, even with the one-time buyout on the table.  In general, the commons appears to be a very effective way for managing and providing the basic needs for a community with shared interests and needs.  My skepticism for a commons-based approach on a broader scale is the inability for this model to accommodate the changes in interests over time as human nature drives a diverse and sometime opposing set of higher-level needs.

The second critique of the commons-based model is the unstated requirement that a minimum set of conditions needs to be in place in order for the commons model to succeed.  For example, each of the cases outlines the “success” of a commons-based model where the local environment was rich in natural resources or advantages.  Obviously, individuals with immediate access to abundant resources will have a “competitive advantage” in terms of providing the core requirements outlined in Maslow’s hierarchy of needs.  However, no example provides a compelling case or playbook for the commons in resource-poor areas.  The most obvious examples would be geographic settings which do not have an abundance of natural resources.  But a more subtle challenge would be to solve for those that have become dependent upon others and have little means to break out.  For example, inner city slums or significantly depressed suburbs / rural areas that may have lost manufacturing jobs.  What is the value-add of a commons if there is no mechanism to unite or collateral to exchange in trade.  They have become dependent on others.  Governments, which seek to support the needs of all and balance the greater good, are tasked with serving the needs of these individuals.  It is this responsibility which drives the need to potentially exploit the abundant resources of the commons in order to support those in need.  Granted, the root cause of those in plight may be tied directly to the same government’s policies, but the commons-based solution offers little in terms of serving the broader system of needs.  In an extreme comparison using the United States landscape, the commons almost resemble the 1% with the policies and controls in place to protect their interests while those outside the commons are the 99% who must overcome the less favorable conditions.

In Defense of the Commons

Both The Economist and Shuman (Shuman, 2005) explain that the truly successful commons are not mutually exclusive a public policy forums or private business endeavors.  Rather, they are an integrated design – and one in the same.  For the purposes of this analysis, I will utilize the business strategy framework outlined by Treacy and Wiersema (1992).  In their article, they argue any business institution must recognize which of the 3 potential paths they will follow to market leadership.  Operational Excellence is a focus on costs and must capitalize on scale.  Product Leadership focuses on providing the most differentiated and value-added product offering to the market and capitalizes on higher margins.  Customer Intimacy is a relentless focus on customer understanding and catering to their needs; these companies are most sensitive to the customer needs and changing market environment.   No one model is “right” or “better” than the other.  They are different alternatives that are to be applied to the right environment.  It is also important to realize that only a very few companies excel at 2 of these alternatives, while no one is truly able to excel at all 3.  This means a choice must be made.  I believe the difference between the “traditional government model” and the commons-based model is actually a choice between Operational Excellence and Customer Intimacy.

The traditional government bodies which put enclosures in place often have a much broader remit than those responsible for the commons.  In terms of geography, scope of services, and constituency groups, their scale is larger.  They are forced to support the greatest good with limited resources.  They offer few options/customizations because this will increase their cost base.  From a single stakeholder perspective (i.e. the commons), government policy may exploit my resources/benefits and transfers these to other regions.  Putting aside corruption or even bad decision-making, government was put into place to oversee a broader base and balance/satisfy the basic needs of its constituents.

Does this mean a commons-based approach would not work?  No.  A commons-based approach is essentially adopting a modified approach to Customer Intimacy.  The commons intimately understand the local needs and interests.  They understand not only the needs of today, but they have the benefit of the historical experience and vested interest in the future.  A commons-based approach would work best where the government services over or under serve a particular constituency.  The level of infrastructure and “power” the commons would need would vary based on the number and extent of unique circumstances and the gap between what is available versus what is needed. For example, Mexico’s inability to effectively govern the foresting industry provided an opportunity for the Zapotec Indians to self-govern more effectively through a commons-based approach (MALKIN, 2010).

Conclusion

With the right conditions, a commons-based approach could be a viable tactic to provide the foundational needs of a particular stakeholder community.  However, it is important that this community not just be aware of its surroundings in order to incorporate best practices, but also to understand how it fits into the broader system.  Governments need to identify opportunities to customize/relax policies in deference to these groups, especially if it provides a greater and longer-term benefit for their constituencies.  With the said, similar to a business or broader industry, there are life-cycles that must be acknowledged.  The needs of the commons’ stakeholders will progress up the hierarchy of needs, and the commons need to be able to adjust the varying interests and perspectives over time.

Works Cited

Kaufman, L. (2011, November 27). Partnership Preserves Livelihoods and Fish Stocks. New York Times.

MALKIN, E. (2010, November 23). Growing a Forest, and Harvesting Jobs. New York Times.

Peredo, A. M. (2005). Community Venture in Agua Dulce: The Evolution of Civic Into Economic Democracy. The Journal of Applied Behavioral Science, 458-481.

Shuman, M. (2005). The Small-Mart Revolution. San Francisco: Berret-Koehler Press.

The Ecologist. (1994). Whose Common Future. The Ecologist, 3-20.

Various. (n.d.). Wikipedia: Maslow’s Hierarch of Needs. Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Maslow’s_hierarchy_of_needs

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One thought on “Commons – the Pros and Cons

  1. tlhill2012 October 30, 2012 at 10:53 PM Reply

    Thanks for this well-argued and thought-provoking contribution.

    Scale is truly the enemy of the commons, with its requirements for deep and intimate knowledge of the literal or figurative place and for a high level of transparency and communication. One way to interpret this limitation is to argue (almost tautologically) that large scale is in fact destructive, if one values a long-term perspective, preservation of resources or even meaningful relationships amongst community members. There’s a theorist named Leopold Kohr who articulated this well and applied his thinking as a government adviser in Puerto Rico. Perhaps more salient to this course is the example of the WW Gore Company (Goretex). They have been tremendously effective with a radically decentralized and collegial approach. There are truly no bosses, no hierarchy, few rules. Work groups are self organizing and short-lived. The list goes on. And all of this is facilitated by a commitment to scale small enough (fewer than 200 people per site) to facilitate face to face communication, and to a very careful selection and acculturation process. But even in this case, some decisions, notably (given your argument) major capital decisions, are made by the family.

    Another spin on the scale argument is that larger scale is possible with “thinner” content and more effective communications. Arguably, open source systems like wikipedia and linux are commons systems. Decision making is made democratically by an inner core that has proven its bona fides as members of the community with a long-term vision, and who can be tossed out by other community members for either poor coding or poor communicating. But this all happens in the realm of code, where little is ambiguous, and through online communication, in which many human nuances are muted. Finally, these systems generate value but do not apportion value, thus sidestepping one of the most contentious issues of governance. Still, I think open source systems are worth thinking about as modern examples of large scale commons.

    Later in the course, we will explore cooperatives as a more formalized democratic alternative to commons.

    Shifting subjects to motivation, Maslow’s model is powerful but perhaps neglects the “longing to belong” side of human motivation, a side that argues that we are as driven by our need to be part of a group as by individual self interest. This approach conceives of humans as part-of-a-whole rather than as atomized individuals. As such, it is antithetical to most economics and political science, but more consistent with sociology and social psychology. More recently this sort of thinking is creeping into economics and management thinking through notions of rellational governance and economic sociology. Examples include the non-contractual side of supply chain management, the orchestration of research alliances, and even the human control that operates in curency markets. It turns out that currency traders who exist to each other only as emails and orders for (vast) sums manage their market in part by norms of fairness, exchange, and liquidity – and enforce these norms through flames and shunning – very primitiive in/out group behaviors! (I think the author who documents this is Cetina). It’s fascinating, to me at least, to think of the social side of even such a cold, economic exchange as currency exchange.

    Finally, I think the mapping of the commons idea back to Tracy and Wiersema is intriguging, and could be the basis for a final paper. What’s the governance equivalent of product development?

    TL

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