I.  Introduction.

  A.  Purpose  and Scope.

     1.  Alternative Economic System.  An alternative economic system is essential because capitalism¹ concentrates wealth and power in the hands of a few, exploits labor by paying low wages and offering minimal social benefits, and overexploits natural resources. The new system must be capable of competing in both national and global markets, while spreading wealth throughout communities, raising living standards, curbing excessive capital accumulation, and promoting innovation, efficiency, and economic growth—all without sparking economic upheaval or revolution. Commons Capitalism, driven by its innovative engine—the Commons Capitalism Entity (CCE)—is proposed as the optimal solution for these challenges.

     2.  Defining Commons Capitalism. Commons Capitalism is best described as a viable hybrid economic system that defies the traditional labels of both capitalism and socialism. It combines the profit-making and competitive mechanisms of capitalism with a model in which net profits are managed as a common pool resource. This design enables the equitable distribution of business wealth among past, present, and future workers, enriches communities through tiered redistribution, and effectively reduces the concentration of wealth among the economic elite.²

     3.  The Commons Capitalism Entity (CCE). A Commons Capitalism Entity (CCE) consists of a dual-structured organization: on one hand, a nonprofit “commons corporation” that has no shareholders, members, or any other stakeholders; on the other, a wholly owned for-profit subsidiary (structured as a corporation or limited liability company). A single commons corporation may oversee more than one subsidiary. In this arrangement, the CCE retains title to the means of production,³ and the earned surplus—or net profits—is held in the “commons” to be distributed among past, present, and future workers.

     4.  Commons Capitalism Versus Socialism. Although Commons Capitalism may produce outcomes reminiscent of socialism, such as spreading wealth throughout communities and reducing individual wealth concentration, it is fundamentally different. Socialism typically involves social ownership⁴ of the means of production as opposed to private ownership,⁵⁶⁷ whereas in Commons Capitalism, each CCE privately owns the means of production. No CCE is directly or indirectly owned by the public, community, collective, cooperative, or even by its employees—this design ensures there are no stakeholders or other potentially vested entities influencing the system.

     5.  A Tripartite Framework for Worker Well-Being. Commons Capitalism forms one pillar of a three-part framework aimed at nurturing worker well-being.⁸ It stimulates private sector initiatives by providing premium wages, profit sharing, and Nordic-style social benefits to workers, who then circulate this wealth within their communities. The other two pillars supporting worker well-being are robust government services (including social welfare, universal health insurance, state ownership, and taxation) and the efforts of Non-Governmental Organizations (NGOs). Importantly, Commons Capitalism operates without requiring any special governmental intervention—such as tax exemptions or public ownership of property—and it is not a charitable organization; it is designed specifically to benefit the private class of workers.

  B.  Objective of This Research.

     1.  Unveiling Commons Capitalism. Commons Capitalism is a transformative economic system that builds on traditional laws, customs, and economic principles to compete in today’s dynamic global marketplace—both nationally and globally—with the goal of ultimately outcompeting and replacing much of conventional capitalism. Although the concept is entirely new, it can be challenging to grasp given that our society has viewed the economy through a capitalistic lens for the past 350 years. Some dismiss the innovative Commons Capitalism Entity as merely a workers’ cooperative, while others compare it unfavorably to a perpetual motion machine. However, understanding Commons Capitalism—and its engine, the Commons Capitalism Entity—may be best approached like appreciating a complex piece of literature. As Vladimir Nabokov famously noted, “you can’t read it; you can only reread it.” In other words, revisit this research repeatedly to fully grasp and appreciate the nuanced ideas it presents.

II.  Structural Requirements of CCEs.

  A.  Initial Considerations. Before determining the structure and the consequent operational mechanics of a CCE certain organic requirements are necessary for a CCE to be viable. If a CCE cannot achieve any of those requirements, the CCE’s success as an economic going concern and accomplishing its chartered purposes are greatly diminished. Those requirements are as follows:

     1.  Separate Entity Formation. Separate business organizations must be formed for the commons corporation and each subsidiary entity of a CCE.

     2.  Non-Stakeholder Model. The commons corporation must have no shareholders, members, or stakeholders.

     3.  Officer and Director Transaction Restraints. All officers and directors must be restrained from alienating personnel (e.g., hire, fire, or promote) and property (e.g., buy, sell or lease).

     4.  Flexible Board Governance. The state of incorporation for the commons corporation must allow for the most dynamic management system possible, polycentric governance, which includes:

       a.  Delegation. Delegating the functions of the board of directors,

       b.  Appointment of Directors. Using designators and classes of voters to appoint directors,

        c.  Director Qualifications. Prescribing the qualifications for the directors, and

        d.  Derivative Suits. Allowing any director of the commons corporation to bring a derivative suit against the corporation and other directors.

     5.  Potential Multi-Forum Organization. The commons corporation must be able to organize in a choice of multiple jurisdictions. Each subsidiary entity must operate independently of all other subsidiary entities.

     6.  Cross-Jurisdictional Operations. Both the commons corporation and the subsidiary entity must be able to operate in all foreign (state) jurisdictions.

  B.  Addressing the Organic Requirements.

     1.  Separate Business Organizations. The subsidiary entity’s primary directive is to generate a reasonable profit—this goal must remain free from any interference by the commons corporation’s broader mission. In this framework, the commons corporation and the subsidiary operate with distinct priorities: the subsidiary emphasizes equity and profit generation, while the commons corporation focuses on fulfilling its mission. As a result, the subsidiary is organized as a wholly owned corporation or a limited liability company, with its own officers and an independent board of directors. This structure ensures that the subsidiary can pursue its profit-making mandate without being hindered by the goals of the commons corporation.⁹

     2.  No Shareholders, Members, or Other Stakeholders. For existential reasons, a commons corporation must operate without any form of stakeholders. This means that all net profits distributed from the subsidiary are reinvested back into the corporation’s mission rather than being used to pay dividends. By eliminating shareholders, the organization avoids pressures for dividend distribution and prevents employees from claiming any immediate beneficial interest in net profits. This approach sidesteps complex legal issues related to ownership rights, profit-sharing, and shareholder derivative suits.¹⁰ It also empowers the corporation to allocate funds for retirement, disability benefits, or future acquisitions at its own discretion. Table 1, Column B., lists the states (including the District of Columbia) that allow nonprofit corporate organizations to function without a requirement for members or shareholders; any variations are footnoted, and states that mandate membership are disqualified as organizational venues for commons corporations.

     3.  Restraints on Alienation of Personnel and Property. To safeguard the interests of the CCE, it is essential to restrict the unchecked authority of its officers, directors, and subsidiary managers to alienate personnel and property. Unilateral powers—such as the ability to hire, fire, promote staff, or to buy, sell, or lease property—can lead to mismanagement and steer the organization away from its core mission. Notable instances, like the fraudulent and financial misconduct¹¹ observed in organizations such as the National Rifle Association of America under Wayne LaPierre,¹² demonstrate the risks of concentrated decision-making. In contrast, by embedding a workers’ committee veto into the governance framework and mandating independent and worker appointed directors, decisions that impact both human and material assets are subject to independent oversight and accountability. This measure not only reinforces ethical and sustainable management practices but also aligns seamlessly with the foundational purpose and distinctive financial structure of commons capitalism.

     4.  Flexible Board Governance. Use of Dynamic Management System. Many states have adopted portions or the entirety of the Model Nonprofit Corporations Act (MCNA)¹³—a model set of statutes proposed to guide the governance of nonprofit corporations by state legislators. Currently, thirty-seven of the fifty states have implemented some version of the MCNA. In particular, progressive state legislatures that have adopted the MCNA provisions regarding the duties of the board of directors—such as those outlined in Arizona Revised Statute § 10-3801¹⁴—enable a more dynamic management system. The jurisdictions highlighted in Table 1 (green section, jurisdictions 1-21) predominantly reflect these enactments, illustrating the effective application of the MCNA.

       a.  Delegating Functions of the Board of Directors. The commons corporation is required to divide its net profits among five distinct divisions, with each division managed by an independent director, as detailed below. To preserve the independence of each division’s administration, neither the independent director nor the division’s personnel and assets will fall under the direct control of the executive director. This design is intended to prevent any undue concentration of power or accumulation of assets by the executive director for personal gain. Furthermore, if state statutes permit, the corporation—under the authority of its charter—may assign specific board functions to individual directors, thereby eliminating the need for the board to exercise comprehensive oversight over every division. In addition, the corporate charter and bylaws can be formulated to protect each division’s director from interference by the executive director. States that authorize this kind of delegation for nonprofit corporate organizations are identified in the green section of Column C in Table 1.

       b.  Appointment of Directors. The commons corporation charter must expressly provide for both the designation of some directors and the election of others by classes of members. States that authorize these kinds of such designations and classes for nonprofit corporate organizations are identified in the green section of Column D in Table 1. Since workers are not members of the corporation and having directors that are elected by workers adds to the independence of the directorship, workers must necessarily elect one or more of the directors of the corporation. Although the executive director can designate one of the directors, the executive director’s authority over the directorship is very muted given the number of independent directors and worker-elected directors.

        c.  Director Qualifications. State nonprofit statutes, along with the Model Nonprofit Corporation Act, generally require that directors be natural persons and permit—though do not mandate—additional criteria such as residency, membership, age, or professional credentials to be imposed through the organization’s articles of incorporation or bylaws. Many nonprofit bylaws specify that directors be at least 18 years old and possess specialized skills—such as financial, legal, or nonprofit management expertise—aligned with the organization’s mission and governance needs. State proscriptions of a director’s qualification are identified in the green section of Column E in Table 1. Generally, most states have few, if any, proscriptions that would be detrimental to the qualifications of a commons corporation director.

        d.  Derivative Suits. Crucially, directors of the commons corporation and their represented constituents retain the right to participate in proposing and modifying these distribution rules, embedding democratic governance into profit sharing. To safeguard against misapplication, the board will implement a director‑led monitoring system that tracks each group’s use of its share of net income, enabling early detection of misallocation. If a group underperforms or violates agreed rules, graduated sanctions can be applied to restore compliance without undue disruption. While accessible, low‑cost dispute resolution mechanisms serve as the first recourse for inter‑group conflicts, every director needs to retain the right to bring a derivative suit as a last resort to enforce equitable treatment and uphold fiduciary duties.¹⁵ Such a derivative action empowers a director to sue on the corporation’s behalf against fellow directors who obstruct fair distribution, reinforcing accountability at the highest level. Embedding clear responsibilities from the lowest operational levels up to the board ensures that derivative claims dovetail with a structured chain of accountability, cementing the CCE’s commitment to transparent governance and the equitable sharing of net profits.

     5.  Potential Multi-Forum Organization. Under the Commons Capitalism Entity (CCE) framework, a commons corporation must organize in a choice of multiple jurisdictions to optimize for legal flexibility, risk diversification, and to ensure that no single jurisdiction’s statutory constraints can inhibit its core design—while each wholly owned for‑profit subsidiary remains an independent entity, governed separately to preserve its profit‑seeking function and shield the commons corporation from operational liabilities. Finally, both the commons corporation and each subsidiary must, ensuring continuous safe havens for growth and dispute resolution regardless of local legal fluctuations.

     6.  Cross-Jurisdictional Operations.

      [Reserved]

III.   Resisting Capitalist Enclosure.

  A. No Residual Claim to Assets or Power.  Commons Capitalism Entities hinge on a single nonprofit “commons” corporation legally structured as a nonstock entity without members, so that no residual claim to assets or profits can ever accrue to private stakeholders. The directors and officers powers are strictly circumscribed: no officer or director may unilaterally (alienate) hire, fire, buy, sell, or lease property without approval votes by worker-elected representatives, embedding veto rights that block any attempt at privatizing resources. Safeguards extend to legal recourse: any director, including any elected by workers or appointed as an independent overseer, retains standing to initiate derivative suits for any breach of fiduciary duty, keeping managerial authority in check. An independent ombudsman or auditor, empowered by corporate charter, periodically reviews and publishes all transactions, reinforcing transparency, worker veto powers over any proposed transfer of property or personnel, and enforcement of rules between divisions.

  B. Common-pool Administration. This blueprint scales: each new CCE replicates the same nonprofit-led architecture sponsoring its own for-profit subsidiaries, enabling potentially hundreds of independent CCEs to spring up across industries. Every subsidiary operates under the strict chartered oversight of its commons corporation parent, so individual actors can never carve out private ownership or supervisory command over assets or staff. Net revenues always flow into a common-pool resource governed by the board under the same veto and oversight regimes, starving out any private accumulation of wealth or power within the network.¹⁶ By focusing solely on these governance proscriptions and polycentric nesting, CCEs stand as living laboratories of common-pool administration, resisting both internal enclosure and commons collapse.¹⁷