Common Asset Societies

In the long term, empowering local economies is only possible if they have the capacity to create value. Otherwise, community wealth will inevitably be extracted away.

In a simple economy, people produce goods and services which others are willing to pay for. They don’t depend much upon outside infrastructure.

But in a complex economy, most value production relies on a wider variety of infrastructure. These have become centralised, operating at larger and larger scales, and are controlled by big institutions — state or commercial.

We can see the patterns of enclosure in this development. Local infrastructure, which is a kind of local commons, was abstracted away — that’s the process of centralisation.

Without making moral judgments, we can see that this was a systemic process — institutions seeking to manage well, corporates seeking efficiency. They achieved these goals through amalgamating and standardising.

Wishing to create new local infrastructure, we need to make sure that these systemic tendencies can’t lead, all over again, to the enclosure of what we build.

1. 1. Investment needed
   We need to minimise
   • debt finance
   • private control
   • non-local control
   and maximise
   • local investment
   • community ownership
2. 2. Guarantees that ownership and control are structured in such a way that they continue to support local productive capacity.
   We need
   • effective, but not suffocating asset locks
   • local affordability
3. 3. Management enabling infrastructure that is efficient enough to provide real utility to local producers
   • local returns to efficiency gains
   • local feedback to operators

To avoid taking out bank loans or selling equity, the company or community creating the infrastructure can consider issuing pre-paid vouchers for the future product at a discount.

These can be sold to investors who can later sell them on, or to the end users directly.

In a common asset society, four different types of members share ownership and control. Both the end users of the good or service produced — for example, energy use — and the investors are on board.

Apart from that, there are stewards who are paid to deliver products and maintain facilities. In the case of infrastructure that provides energy, the company supplying the equipment could fulfil the stewards’ role.

A fourth type of owner has a passive role: The custodian has veto rights on decisions and makes sure that the company acts in alignment with commons values.

Chris Cook, who came up with this model as a Fellow at the Institute for Strategy, Resilience & Security (ISRS), calls this type of agreement a “nondominium”, as nobody is a dominant owner.

Our first project using this model is in fact not an energy facility, but a Housing Commons in Stroud. You can apply the roles to communal house ownership, too. The vouchers — Rent Credit Obligations (RCOs) — are issued in units of square meters.

UK legislation allows flexible mutualised agreements. The legal and governance details need to be worked out for every specific use case.