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Since the first steam engine roared into action, people have worried about where the massive new machinery of the market was headed. In the wake of the Second World War, these questions took a new form: what is prosperity for? For the first time in human history, there was enough to go around, and more. So what would come next? Simply more TVs and cars, and their successor items? Or something different?

Probably the most eloquent statement of the question came in John Kenneth Galbraith’s book The Affluent Society, a best-seller for which Galbraith’s colleagues in the economics profession never forgave him. Galbraith observed that the reigning economic orthodoxy was formulated in an age of scarcity. All the gears were arranged to increase output, and this was assumed to promote the greatest good. But after two centuries of output frenzy, the problem no longer was scarcity. Rather it was glut. The challenge no longer was to produce enough stuff for the people; it was to get the people to buy the stuff produced.

This made the old mental mechanism obsolete. If it took a massive advertising industry to conjure up what economists quaintly call “demand,” Galbraith asked, did it really have the urgency that term implies? Was it even “demand” in any honest sense of the word? Since private consumption had become so dispensable, couldn’t a bit of that spending be shifted to the public sector, where the need indisputably was great—for schools, roads, public transit, help for the needy and the rest?

This was the economic brief for post-war liberalism, and it remains valid to a point. America is still a land of private affluence and public poverty. There is still great economic need. When schools and libraries are begging for funds in the richest nation in the world, only a confirmed ideologue could deny that something is out of whack. But the answer has become more elusive. The old liberal approach meant priming the growth pump to produce revenues to fund public needs. The Right countered that growth alone would lift all boats and government wasn’t necessary. But either way, what happens when the rising tide itself starts to go bad, so that when it rises, a host of problems rise with it? What happens when yesterday’s answer becomes today’s problems?

In Galbraith’s day, need creation meant mainly the wants prodded by advertising, with its pervasive messages of deficiency and craving. Today that process has metastasized into a pharmaceutical industry determined to redefine every state and stage of experience as a pathology in need of “intervention.”

But the economy no longer just plays on the psychology of need. Increasingly it produces actual problems that more expenditure purports to solve. From cancers prompted by toxics in the environment to obesity and coronary ills caused by too much fatty food, for example, a good portion of the nation’s escalating medical bill is growth-induced. Just a few decades ago, hungry children were a subject of national concern. Now the big concern is kids who are fat and cannot focus their own attention.

Add traffic, noise, bad air, the breakdown of neighborhood ties, loneliness, stress—and on and on—and you have iatrogenesis on a systemic level, an economy that creates the problems it is supposed to solve. A mechanism that was supposed to create wealth, and did for a while, now increasingly turns out what John Ruskin, the 19th century essayist, called “illth.” The tragedy—the Tragedy of the Market, one might say—is that it has to create problems and needs, or the gears will grind to a halt. Not all growth does this, of course. But the balance is shifting, and the result is something new, a period of systemic diminishing returns—diminishing not for a particular product or industry, but for the economy as a whole.

It is the kind of dilemma that defines nations and epochs. No one can say for sure how to resolve it, or even if this nation can. But this much is clear: a big part of the answer is sitting under our noses. It is the invisible economy called the commons, which is the part of life that is not the market and not the state, but is the shared heritage of us all. Some people hear the word and think of village sheep pastures in Olde England. But, in fact, the term includes the entire life support system and asset base, both natural and social, that we all hold in trust for those who will come after us.

The sky and oceans, the multitude of species, wilderness and flowing water and the like are commons. So too are language and knowledge, sidewalks and public squares, the stories and games of childhood, the processes of democracy.

The commons is a kind of counterpoise to the market. It provides stability and sustenance rather than restless appetite and craving. It connects to the “we” side of human nature as opposed to the market’s unrelenting “me.” The concept includes anything not owned but shared in common.

For centuries, economists have regarded the commons as a quaint medieval relic and mere fodder for the market (or, in the Soviet model, the state). In their creation myth, the commons is inchoate matter, a kind of economic primal sludge that awaits the vivifying hand of the market to attain reality and life. Forests are worthless until they become timber, quiet is worthless until it becomes an echo chamber for noise, childhood is worthless until it becomes a marketing free-fire zone, ad infinitum.

The scarcity of the commons

The commons is the submissive female in the old gender script, always available, ready to serve, asking nothing in return. Money is what really counts: progress and well-being—the good life—follow always in the train of the dollar bill. This is the conventional notion, and it actually seemed to work for a while. At the start of the industrial age products were scarce, the commons was abundant, and it easily could seem that the latter could serve as a supply depot and waste dump forever.

But things change, even if economic beliefs don’t. After several centuries of this, the nature of scarcity has shifted. Where once the products of the market were scarce, now it is the commons that is scarce and also most needed. Which is more lacking where you live—electronic noise or quiet, cars or clean air, malls or Main Streets where people run into neighbors and friends? Which would do more to make your life better—a high-definition television set, or neighbors who could take care of your kids and watch your house when you go away?

The commons is not a relic of a bygone age. It is a parallel economy that does real work. It produces the language we speak, the air we breathe, the conviviality of public spaces, the quiet that gives us rest. All are things the market tends to destroy. In fact, much market growth these days is not growth at all; it is the cannibalization of the parallel economy. If there is to be well-being in the future, we will have to reverse this trend. Economic policy will have to become commons policy as well as market policy; the government will have to do as much to promote the commons as it does now to promote the market.

To some degree, this is happening already under a different name. What is called “environmental protection” really aims at maintaining the productivity of the natural commons: clean air and water, the thermostatic properties of Earth’s atmosphere, space for quiet and recreation, and the like. The commons is the next supply-side, and it needs to become warp and woof of policy on a global basis.

For millions, this is a matter of basic sustenance. For example, in my wife’s village in the Philippines, people used to catch fish in the stream that runs through the rice fields. Plants grew at the edges that were excellent for such things as washing hair. But since the Green Revolution, with its chemical fertilizers and pesticides, the fish and plants are gone. People have to buy these now, which is a boost for the market but a financial setback for them. Thanks to escalating prices for chemical inputs and stagnant rice prices, the Green Revolution hasn’t been a great deal for farmers on the income side either.

That’s the myopia of economic policy that looks only at the market. A genuine economics would include the whole spectrum of supply. It would promote fish in the streams as well as rice in the fields, through more natural methods of fertilization and pest control, for example. This would help Third World farmers on both the cost and income side.

The subsistence commons is not a Third World anachronism, by the way. It is everywhere people don’t have much cash: community gardens in Harlem, fishing in D.C.’s Potomac River, the mosquito fleet of improvised trucks that comb San Francisco’s business district on trash nights to scavenge paper to sell for recycling. Air is a part of the subsistence economy that we all depend on. In most cities, pollution is worst where the poorest live. The subsistence commons is a global issue, not a Third World one.

Commons economics is about more than subsistence, though. It is an antidote to many pathologies of the old industrial model. Noise is an example. For centuries noise has been regarded as an incident of progress, an offshoot of the wonderful devices that filled the supposed void. Today Americans rate noise as the number-one urban problem—not crime or trash, but noise (which come to think of it is both.)

Quiet is not a mere amenity. People need it for sleep and concentration, both of which are in short supply. One study showed that kids who live in the quiet rear of apartment buildings do better in school than do those who live above the noisy street. The answer of the market is drugs for sleeping and concentration. Commons economics, by contrast, addresses the problem instead of numbing the sufferer. If the pharmaceutical industry is “productive” when it manufactures sleeping pills and Ritalin, is not quiet equally productive when it achieves better results at no expense?

Critics say such things as noise controls are regulatory obstacles to the economy. In reality they are economic measures that meet a real need. Once it is established that quiet is a commons, moreover, then it becomes a form of property, and those who violate it become trespassers. In this and other contexts, commons thinking turns the tables on the “takings” argument—the claim that regulations constitute a “taking” of private property and therefore require compensation. In reality, those who claim an absolute right to do anything with their property often are engaged in a taking themselves—of common property, such as quiet, clean air and water, and so on.

The culture of childhood

The culture of childhood is another commons that has been degraded in the name of growth. Not long ago, kids played their own games. They were weaned on a common stock of story and myth that spoke to them at a deep emotional level. Storytelling in families established a narrative bond between generations and provided a window to the adult world. Today by contrast this rich cultural ecosystem is dying. Kids are immersed in narratives constructed for the purpose of making them want things. They play games devised by corporations, and their toys are expensive high-tech devices in which the content lies in the thing rather than the child.

It is not coincidental that kids are petulant and overweight and have trouble focusing their own attention. The market offers more stuff to consume, such as drugs, counseling, and special diets. A New York City company called Zone Chefs caters special meals to overweight kids for $866 per month. Economists regard all this, without irony, as “growth.” Commons policy, by contrast, would restore the healthful childhood commons. It would re-establish boundaries to commercial huckstering to kids—no ads in school, for example. Videos and TV shows with embedded ads—called “product placement”—would be clearly labeled so parents can avoid them. There would be time on television for parents to design their own messages to talk back to the ads. The raising of healthy children is no less important—no less an economic task—than is the production of televisions and beer. To protect children from commercial predators is not a crimp on the economy; it is a core function of the real economy.

The geography of somewhere

If one thing sums up commons-based economic policy, it is community. The commons is a form of property that embodies the “we” side of human nature—the desire to connect with others rather than to stand apart. This side is increasingly repressed in America today, where even the simple acts of sharing computer programs or patented information in a university research lab have become criminal acts.

All commons provide a counterweight to such imbalance, none more directly than the shared spaces of daily life. Life once was rich in occasions for such spontaneous human interaction. People shopped on Main Streets, visited on front porches and stoops, attended political events in public venues. Abraham Lincoln and Stephen Douglas had their famous debates in county fairgrounds and town squares all over Illinois, and farmers and townspeople sat for hours in the heat and dust to hear. Politics occurred in common space, and this was related directly to the democratic culture that resulted.

Today, by contrast, most Americans live in suburbs conceived as staging areas for consumption. They move about in the hermetic enclosure of cars, and shop in the anonymity of malls, from which political and community activities generally are excluded. Political debates occur in enclosed settings before audiences of big shots. Most Americans watch at home alone. Then people wonder why they feel lonely and depressed, and why the sense of community has vanished.

A commons approach, by contrast, seeks to restore the opportunity for spontaneous interaction in daily life. It encourages development on the traditional village model, for example, with houses close together, front porches for visiting, and shopping within walking distance. It encourages mixed uses and granny flats instead of malls and sprawl, and it builds common spaces, such as community gardens, pocket parks, and benches.

Such arrangements often are called the “New Urbanism.” But actually they are the old village-ism, and they are incubators of friendship and civic engagement. Studies show that the happiest people are those actively involved in helping others. Spatial arrangements that encourage engagement with others can be productive of the happiness that people seek.

There are many other realms to which commons economics can apply, from open-source software and the public domain of knowledge and artistic creation to public revenue. If we cut taxes on work and enterprise, for example, and imposed them instead on activities that expropriate or degrade the commons, then we’d have a healthier commons and market both. If we freed university research labs from the secrecy and paranoia that has come with corporate sponsorship and patent lockdowns, then the science would get a burst of fresh air.

The success of Linux, the computer operating system developed on the web by programmers around the world who contributed without pay, shows how a healthy commons enriches the market, while creating opportunities for creativity and conviviality that the market doesn’t.

This is a template for the emerging economy: a thriving commons sector that both complements the market and provides refuge from it. The market will continue. It answers to a genuine need for initiative and enterprise. But the market will exist in equilibrium with this parallel economy that does some things better—providing health, creativity, community, and freedom of a kind the market has begun to foreclose. The government will maintain the boundaries, and provide a structure of law and support for the commons just as it does for the market—no more and no less.

Officialdom’s sacred measure of productivity and growth—the GDP—will expand to include the production of the commons. Citizens will get annual reports on the state of their common assets, just as shareholders get annual reports on the state of their corporate assets. This will mean big changes, not least for our friends in the economics profession. But they have gone to great pains in recent decades to urge the rest of us to accept destruction in the cause of their version of creation. Isn’t it time we returned the favor and urged some change on them?