Discussion Drafts

Purpose
This section is posted to invite critique and engagement by economists regarding Commons Capitalism and Commons Capitalism Entities (CCEs). The materials linked from this page are intended to make the economic assumptions and predicted incentive effects of Commons Capitalism explicit enough to be tested, refined, or rejected.

What This Section Is and Is Not
This section is not presented as peer-reviewed economic research. It is a public request for economists to evaluate the economic plausibility of Commons Capitalism as a proposed institutional design, including incentives, constraints, and competitive dynamics.

Author’s Role
I am an attorney developing the legal and governance architecture for Commons Capitalism and CCEs. Where the project implicates economic mechanisms, I would prefer economists to stress-test the claims, identify missing literature, propose alternative models, and suggest empirical strategies.

How to Engage
If you choose to engage, the most useful responses are structured. Identify the specific assumption, mechanism, or inference you dispute. State the alternative assumption or mechanism you would use. Then state the prediction that differs. If you can, suggest a dataset, empirical strategy, or relevant literature that would most efficiently adjudicate the disagreement.

Scope Notes
This section does not address investor returns, investor rights, or public-purpose theory, because Commons Capitalism, as defined on this website, does not depend on investors and does not claim a public or charitable purpose. When “communities” is referenced, it is used only in the internal sense of communities within Commons Capitalism and CCEs.

 

Commons Capitalism Entities as a Market Institution: Surplus Stewardship Without Shareholders

Author: Jonathan D. Cope

Status: Discussion Draft

Version: 1.0

Date: December 28, 2025

Reference code: D25-01

Comments to: jdcope@commonscapitalism.com

Discussion Draft Available at: PDF | READ

Keywords: institutional design; corporate governance; residual claims; labor compensation; acquisition finance; commitment mechanisms; organizational economics

JEL: D23, G30, G34, J33, L22, P16

Disclosure / Conflicts / Funding: None

License: Copyright © 2025 by Jonathan D. Cope. This text is available under the Creative Commons Attribution-ShareAlike License 4.0.

Abstract

This discussion draft introduces the Commons Capitalism Entity (CCE) as an institutional form designed to operate in ordinary competitive markets while preventing private capture of residual surplus. A CCE consists of a nonprofit “commons corporation” parent and one or more wholly owned, market-facing subsidiaries. Subsidiaries pursue profit and compete conventionally, but net surplus is retained and stewarded by the commons corporation for defined internal purposes rather than distributed to shareholders, investors, or managers. The core economic claim is that eliminating private residual claimants changes the intertemporal allocation problem: retained surplus can be committed to a structured set of internal funds that support (i) reinvestment and acquisition, (ii) higher compensation and Nordic-like social benefits, (iii) education and skill formation, and (iv) reserves, while preserving competitiveness and operational discipline at the subsidiary level. The draft frames the CCE as a governance and commitment technology, outlines a set of testable implications, and identifies failure modes and open research questions suitable for economists working in industrial organization, corporate finance, labor economics, institutional economics, and organizational economics.

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