Institutional Design for social common capitals

Hitoshi Matsushima

No CIRJE-J-304, CIRJE J-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: The world is interested in comprehensively considering what a good life is from multiple perspectives such as the environment, society, and economy. The well-being of individuals and society should not be evaluated solely by the distribution of commodities whose value is shown in the market. The world is rather sympathetic to the view that they should be evaluated by ways of maintenance of natural capital, social infrastructure, institutional capital, or generally "social common capital" (Uzawa, 1995, 2000; Uzawa, 2003, 2005), which are typically difficult to value in the market. For example, at the 2015 Summit, the United Nations adopted the 2030 Agenda for Sustainable Development to resolve global warming, equal society, free participation, and a sustainable economy. As an action plan for consistently achieving such developments, the "Sustainable Development Goals (SDGs)" consisting of 17 goals and 169 targets were presented (United Nations, 2015a). The SDGs aim to encourage citizens around the world to change their consciousness and take concrete actions on social common capital in order to realize a good life. An important part of the essence of social common capital is the so-called "commons", in which users cannot or should not be excluded (nonexcludability), but if the use limit is simply neglected, it will eventually be devastated and exhausted (competitiveness). (Bentham, 1789; Malthus, 1798; Mill, 1859; Hardin, 1968; Ostrom, 1990, 2010). Many modern issues that impede good living, such as the global environment, poverty, inequality, conflict, human rights issues, pandemics, and the abolition of nuclear weapons, can be seen as examples of common issues. In order to deal with the commons, we must change the way citizens' values and institutional systems are in the current capitalist society. This volume regards the realization of good living as a problem of social common capital, and presents a concrete institutional design for solving it. Furthermore, this volume presents "new capitalism" and "new socialism" as social systems required to solve the problems of the commons, and what role the two systems play in problem solving. In particular, new socialism is newly presented in this volume, which is more essential for the solution of the Commons problem. New socialism is defined as a decentralized mechanism that replaces the market, rather than centralized control and planning by the state. Its major feature is based on the famous slogan "work according to ability and receive according to need" (Marx, 1890/1971), which is used to be the future image of utopia, moral law, or communist society, but here not as a utopia but as a practical "incentive scheme" that is indispensable for a desirable decentralized mechanism. This volume considers the issue of climate change (warming) as an application and further deepens the understanding of the commons.

Pages: 76 pages
New Economics Papers: this item is included in nep-env, nep-hme and nep-pke
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