So most of what I see about a library economy is that you can use items indefinitely, and I absolutely think that we should have that ability. The actual mechanism of how it works is up in the air, and hasn't been deeply explored to my knowledge. What I imagine is that people say "I need this for x time" and it gets catalogued. If someone tries to check out a luxury item (imagine like a book or something) after the due date, they must return the other item first or has the option to extend the borrowing term as far as needed. Things that would be essential would still be available, but the person gets reminded about their obligation to the community to have the item returned.

As for how it's different, an everything library can exist in some capacity in all systems. The difference is that a library economy allows for items to be used without cost, and doesn't commoditize the items. It creates a system of mutual respect towards the rest of the community, and incentivizes groups of people to act creatively together for projects. It functions more like a store where you don't buy anything and return it to the community, rather than paying money to use a tool for a week. It also incentivizes highly durable, extremely usable objects (imagine the right to repair, but without any anticonsumer behavior)

That's great! I'm willing to bet that they call it "the library of things", right? Yes, these everything libraries exist already in a small and limited capacity, generally serving a small area. The reason I brought it up is because the library economy is an alternative to capitalism in seeking solutions for climate change.

The reason capitalism would need to end is because capitalism is all about growth for the sake of growth; the ideology of cancer. This means that capitalists aren't happy with creating what's necessary, they want to manufacture as much as possible as cheaply as possible to get all of the money. If a library economy exists beside capitalism, it will be attacked and eroded endlessly. Just look at the publishing industry's attack on libraries for digital media. They're creating artificial scarcity on digital goods, something that is literally unbound by quantity.

How does it handle things that are borrowed more than they're returned?

The reason it's different is because it replaces the other 2 methods serving capital with the 1 option that serves the community. It's more like a store where you don't buy anything, but then give those items to the community when you no longer need them. Buy? Rent? Why do those things when you could borrow from the community, help improve it, and then return it to the community? Having a picnic next to the lake? Borrow a cooler for a day! Need to drive across the country? Borrow an electric car for a year! Need something at all times, like a cellphone or a washing machine? Borrow it indefinitely!

Instead of overproducing items at the expense of killing us all in climate crisis, a library economy produces what's necessary and lets the people decide what's best for the items through direct democracy and electing library stewards to handle the operation of the library. Nothing is commoditized, nothing prevents you from owning things, and nothing prevents you from building your own things. It incentivizes highly durable, repairable items. It creates the foundation for mutualism and helping each other. Most importantly to me, it creates a society where we no longer have to consider money while also enriching our lives.

It sounds like you're more interested in the few from the majority deciding everything on behalf of the minority. It feels like you understand the problem with our bourgeois democracy, but use it as a bludgeon to attack true democracy. We can decide to elevate the voices of minorities. We don't have to perfectly model our planned economy based on previous attempts, instead we can create our own system based on our culture and collective experiences. One of the huge failures of the USSR was not ensuring people that identify as kazakhs were part of the governing body of Kazakhstan. We don't have to repeat mistakes, we can choose to learn from them. I imagine elected reps from unionized ethnic groups to help make guiding principles for governing the commons by the commons. It may work, it may not. I don't know, but that doesn't mean we can't try.