[Nunt]

To be clear, I am not defending command socialism. But if the question is whether or not capitalists economies alone lead to modern productive advancement, that is flatly false. And of course, Austrian Libertarians readily explain every problem within capitalism by looking at state intervention. Of course nothing they say can really be falsified because there never has been such a thing a perfect laissez-faire world, so all problems that may pertain to the nature of capitalism--such as massive global recessions--can be blamed on governments simply due to the fact that they exist.

Well thats just because you do not look into the evidence and theory propsed by Austrian economists. If you check for example the Mises.org site, you will find many scholars trying to investigate the cause-effect relationship.

Maybe you have the idea from just looking at someone's 5min reply on a forum that Libertarians/Austrians just say: "A is bad, there is a government, A is governments fault". This isn't true. There's more than just that.

[anticlimacus]

the evidence and theory propsed by Austrian economists.

Any school with its own brand of ideology is bound to have its own insulated evidence. I'm not saying they don't have any "evidence"--but forgive me for being a bit skeptical of this ideological bastion of economics which readily eschews statistical data and empirical research for timeless a priori truths about the individual.

[Nunt]

Any school with its own brand of ideology is bound to have its own insulated evidence. I'm not saying they don't have any "evidence"--but forgive me for being a bit skeptical of this ideological bastion of economics which readily eschews statistical data and empirical research for timeless a priori truths about the individual.

Well, if you want to have a founded opinion on the validity of the conclusions of the Austrian school I suggest you start reading. Just don't start declaring that the Austrian school is unfounded based on some random remarks you have heard on the internet without reading at least some of the scholarly work out there.

[Eran]

Benjamin Franklin famously wrote, "if every Man and Woman would work for four Hours each Day on something useful, that Labour would produce sufficient to procure all the Necessities and Comforts of Life, Want and Misery would be banished out of the World, and the rest of the 24 hours might be Leisure and Pleasure." Now this was 200 years ago, but it is very relevant today--and this is what I am getting at. People could work considerably less than they do without the threat of losing certain basic goods.

Not just could but actually can.

The "problem" is that people today aren't content with the standard of living that would have made Franklin envious. They want more, and are willing to work far more than 4 hours a day to achieve it.

In Franklin's time, people earned about $3/day. Today, you could work for 3 hours/week at minimum wage and earn more. But while that much money (absent government regulations) could be enough to subsist on, life wouldn't be much fun. You would have to live in crowded dormitories (or outdoors) and give up meat, new clothing, a car and the many other luxuries that today's poor take for granted (and which were not available to Franklin).

There is a logic to this system, which Marx described as follows: M(money)-C(Commodity)-M. Money is used to buy certain commodities which creates a profit which accumulates as capital. It begins and ends with money creation. This is the driving factor of the system and how individuals function within it.

Have you noticed that the very same process could have just as easily be described as C-M-C? Commodities are sold for money that enables people to purchase more commodities? This process begins and ends with the commodity created. They are the driving factor of the system and how individuals function within it.

Commodities (or, more generally, products) that people desire are the end of the production process. Money is just a means for facilitating exchange (and a few other functions) just as capital goods are means towards making the process more efficient and productive. The proof is very easy. Capital goods derive their value from the value of the products they can produce. And the value of produced goods is exactly what people would freely pay for them. It is the subjective preferences of consumers that drive the entire process. Not "money".

Since, under capitalism, production is for the purposes of creating profit (as described above), there is also a need for more and more consumption and markets for that consumption. Is all the consumption necessary for social wellbeing? No. What is the consumption about? It is about creating private profits. This creates inefficiencies, waste, overconsumption in some places, and underconsumption in others--overall irrationalities of the system.

Markets are based on cooperation. When people voluntarily cooperate, whether through a brief purchase/sale encounter, or life-long partnership or employment, they do so because each side considers the action beneficial for themselves. It follows that every capitalist transaction has at least two purposes. Not one.

Thus stating that "production is for the purpose of creating profit" is, at best, half true. Sure - the capitalist is producing so as to create profit, while the worker is producing so as to earn a wage. But the profits relies on being able to sell the products to consumers. And consumers do not purchase so that the capitalist will be able to earn a profit, or even so that the labourer may be able to earn his wages.

Consumers purchase products because they want them. And so, in a very meaningful way, the purpose of production is the satisfaction of consumer wants.

And because consumers generally prefer spending less rather than more money, their choices force producers to be as efficient as possible. The capitalist system (and only it) contains internal drivers towards efficiency. And while no human system is ever perfectly efficient, the capitalist system becomes progressively more so. Today's market economy is, in fact, incredibly efficient by historic terms.

Well, let's just take an example. In the US over the past 40 years while production has increased steadily, working compensation has not kept up. In connection with this, inequality has continually increased, major including income and financial disparities. This has occurred all the while labor unions in the US have seen a sharp decline. The reason is not that people don't want to be in unions. But that government has often sided against unions and it has become increasingly more difficult for unions to form. Trends like this have happened throughout the history of capitalism. Yes, you are correct--labor has a huge amount of power, if it is organized (Hence Marx's call in the Manifesto: "Workers unite!". The problem is its capacity to organize is not nearly as easy had as it is for capital to consolidate and organize.

Labour unions have been coddled by governments for many decades. In particular, labour unions have, early on, been allowed to use violence against non-member workers (and let's be clear - it is those non-member workers rather than employers who are the real enemies of the labour union). Later on, the captured political proxies of the labour union have used the power of the state for the same purpose.

It is incredibly easy for workers, especially those working for small employers, to organise. Yet they rarely ever do so.

As for the (disputed) figures over share of production going to wages and growing inequality, how are those indicative of the supposed "bargaining power" of employers?

So while most people actually cannot afford certain goods--like houses, TVs, cars, etc. they are able to buy them by borrowing and then paying interest. Thus individual debt has become a given under current capitalism and has, in fact, become part of the way in which profits are continually made.

This issue, I believe, is greatly overstated. First, precisely those worse-off in our society are those which cannot obtain credit, and yet still tend to own TVs, cars and many other consumer goods.

Profiting from the extension of credit is only possible when most people can, ultimately, pay back their debt. In other words, people can (eventually) afford what they consume. The system allows them to consume before their ultimate earnings. But so what?

Actually, I seek to make the individual level more fulfilling by undergirding it by cooperative social planning. I do not think that if we just go by the rule of self-interest that all ends well for all, particularly when wealth is so unequally shared to begin with. My view is that social systems based on private property leads to individualization and unjustifiable inequality, which fragments society and tends to privatize social problems: e.g. the fact that I cannot get health care gets hidden as a personal problem, as opposed to a social problem in that we live in a society where healthcare is not guaranteed for all; or the fact that I struggle to find work becomes my personal problem as opposed to a social problem where finding suitable employment is problematic, etc. My view is that private property should be socialized and the workplace democratized--individuality should be built out of communal structures of cooperation. Capitalist individualism has the tendency of focusing solely on the individual transaction (of a sale or agreement) without considering the context within which such transactions occur. This is a toxic form of individualism, which isolates people and their situations from each other.

There are several points here. First, nobody is proposing a "rule of self-interest". The mix of self- and other-interest that motivates people is varied and independent of the social system. People can (and often are) other-motivated under a purely voluntary system like the one I am proposing. Conversely, people can (and often are) self-interested while cloaking themselves with the rhetoric of the "public good".

To the extent that people are driven by their sense of community, a purely voluntary system is best situated to help them cooperate, collaborate, contribute and otherwise help those communal goals. You claim, but provide no evidence or argument, that "social systems based on private property lead to individualization". In fact, modern capitalist production, much more so than more primitive production methods, is based on wide-scale cooperation, often involving thousands or even millions of people. That need to collaborate pushes people to better appreciate and develop their social skills, trust and good manners.

The fact that you cannot obtain health care is indeed a personal problem. If many people cannot obtain health care, that is a social problem. Every social problem is composed of many personal problems. That many people cannot obtain health care, under a free market (which we don't have at the moment), creates a strong incentive for entrepreneurs to try and find ways of providing you (and the many others who share your problem) with what you need (and are willing to pay for). So here again capitalism contains the very mechanisms for solving its own problems. Moreover, you and some of the many people who share your problem are free to organise and, e.g., form a mutual aid society of the form that was very common and popular in the 19th century. In fact, more people used to be members of "friendly societies" than of trade unions.

When you look at with by telescoping in on an individual transaction, yes it is a form of cooperation. But when you zoom out and look at the bigger picture and realize, for example, that worker Joe just agreed to cut his wages and stay at job X because jobs are scarce, then it becomes clearer that such agreements are made under circumstances that favor one party over another. That what makes capitalist "freedom" and "voluntary cooperation" such a farce. It's all formality without any consideration of substantial differences of those involved in contractual relations.

By the very same token (and much more frequent, historically) is the case that employer Joe just agreed to give worker Joe a pay rise so as to keep him at his job, because good, experienced employees are scarce.

The agreement doesn't favour one part over another. It benefits both parties. And when jobs are scarce, the value, to Joe, of holding on to this job has just increased. There is no farce here. Workers clamour for jobs. They appreciate greatly the combination of services and goods provided by the employer, and for a good reason. A job allows a person to be much more productive than working on his own. This is true to such an extent that even after the employer keeps some of the proceeds of the sale, the employee is left with much more than he would have been able to profit himself.

There is a reason why only a small few individuals and institutions have an exorbitant amount of control over the world's wealth. It is, largely, because there is very much a difference between those who control capital and those who do not. If I work in a factory which then closes down and moves to another country (or state), I as a worker have little to no say on whether or not that happens. If production in society slows down due to an economic crisis and workplaces become vacant while workers remain without jobs although willing to work, I as a worker have little say as to whether or not I can just go into the factory and start producing. I need the permission of those who own the means of production. This is, again, another irrationality of the capitalist system.

What you seem to fail to realise is that those who own the means of production aren't masters either. The true masters in a free market are consumers.

If a factory closes down and moves to another country, it is because, more often than not, the alternative would be that the factory would have to close down. You see, consumers, the true masters, demand lower prices. And only those producers able to lower their production cost would be able to meet the demands of those masters. And if production in society slows down due to an economic crisis, it is because consumers prefer to buy fewer products. The capitalist owner is just as helpless as you the worker are.

In fact, in a competitive market, owners have very little power. Unless they meet consumer demands, they will lose money and eventually be replaced by other producers who will.

Sure, but the conflict peculiar to capitalism is a socially structured one that serves as the basis for capitalist production. It is also preventable by socializing the means of production.

On the contrary. As soon as you socialise the means of production, you open up a wide door to conflicts amongst workers (or amongst communities or syndicates) which find their interests in conflict. And while under a free market, those finding themselves in disagreement with their neighbours or employers can easily move on, an a communalist society, such moves are more difficult. Moreover, since communal decisions impact all members of the community, the stakes are much higher.

Again, the Israeli experience with Kibbutzim is instructive. The Kibbutz movement and individual Kibbutzim have been plagued with conflict from their earliest days. In extreme cases, Kibbutzim split to accommodate differing view points.

The 19th century has seen the "labour pains" of western capitalism. If you look at western societies today you will see flourishing of workers, cooperation with employers, improving working conditions and the virtually complete absence of private-sector labour unions, despite their legal preference.

Well, just look at Mondragon. Workers have much more say about what goes on in their immediate working environment and working lives than they otherwise would. Workers also vote in those who lead boards and direct industry, as opposed to having those who own most the shares having exclusive say. So I think through and through you actually see quite the opposite. It's not so much a top down structure as something more in-between. Workers are not given innocuous choices from those in power, like in the American electoral system, and then they get to vote. Workers actually get to participate in forming the kinds of choices available.

Which raises the obvious question - why is Mondragon such a rare example? If working for a cooperative is so much better for workers, why aren't most workers forming one?

To be clear, I have nothing whatever against worker co-ops. In fact, under a truly free system, I believe both worker co-ops and traditional employment-based production organisations will exist. Through competition and discovery process, employees would have the best possible working conditions under either form of organisation. Those employers who are unable or unwilling to provide their workers with good working conditions will find their workers leaving for either better employers or cooperatives.

They did not come easily--and neither do they stay easily.

Actually, they stay very easily. Employers routinely provide (ununionised) workers with flexible working hours, longer vacations, more benefits and far higher wages than required by law. This disproves the suggestion that unions or legislation are required to improve the conditions of labour.

What I see there is capital consolidating amongst a small group of private owners who dominate society. In principle workers can join unions, but capitalists will do everything in their power to prevent this from happening--just as they do today.

There is no reason to expect capital consolidation amongst a small group of private owners. That has never happened is unlikely to happen. The best protection workers have isn't unions - it is the combination of competition between employers and freedom to enter the market is self-employed or cooperating workers.

The best system would allow workers to form their own firms, organised by whatever principles they wish. But any system is subject to potential abuse, inefficiency and stagnation. Only allowing maximal freedom to organise and cooperate, including (but not exclusively) through capitalist production, will minimize these problems.

Invisible hand does not solve every problem. It will not necessarily provide people with efficient healthcare, schooling, shelter, or even food. It will not necessarily supply communities with needed roads and modes of transportation. It will not necessarily do anything about the externalities of its production, such as destroying the environment.

What makes you think the invisible hand cannot solve every economic problem? In particular, undirected markets already provide people with efficient shelter and food, schooling and healthcare (when not corrupted by government intervention). If communities need (and their members willing to pay for) roads and other modes of transportation, who will stop entrepreneurs (the fingers of the invisible hand) from providing those? More to the point, why would people settle and live in communities not served by roads?

Moreover, your very own system, since it lacks central planners and coordinators, would also be a realisation of an invisible hand.

As for externalities, those would be internalised through a combination of property rights, use rights and consumer pressure.

To be sure, I have been talking about market socialism. There are price mechanisms in this system. The key difference is the socialization of the means of production and the democratizing of the workplace.

As I pointed out, socialization of the means of production and democratization of the workplace simply shift your concerns about the ill-effects of capitalism one level up. You will still see inequality (between successful and unsuccessful cooperatives), unemployment (when a cooperative has to dissolve due to ongoing losses, and its members are unable to find employment) and greed.

[Voluntarism]

To be sure, I have been talking about market socialism. There are price mechanisms in this system. The key difference is the socialization of the means of production and the democratizing of the workplace.

Focussing on this point, the problem with your proposed system is that it does not properly price capital. I agree that you can price other things and get some efficiency gains but by not properly pricing the capital it will flounder in comparison. Eran's Kibbutz example shows most of the problems that arise and the relatively inefficient ways that members had to use to work around the absence of a proper price mechanism.

I'm not sure if I'm channelling a previous post by Eran, but the use of capital is essentially a roundabout way of attaining ends. Farmers can plant, grow and harvest crops very successfully using nothing but their labour. Taking a roundabout route of using people's labour to mine a series of metals and fluids, processing them, and building a series of specialised tractors and machines for planting, fertilising, watering and harvesting is even more efficient. Trying to plan and organise such a roundabout route is nigh on impossible let alone trying to know whether or not the roundabout route was actually an efficient use of the groups labour (and other scarce resources).

W.r.t. your Spanish factory workers example, it seems very easily explainable but it would be good to read about the episode. If you have a link that would be appreciated.

[Eran]

This is an excellent point that I have missed in the context of this discussion. Thanks!

[anticlimacus]

The "problem" is that people today aren't content with the standard of living that would have made Franklin envious. They want more, and are willing to work far more than 4 hours a day to achieve it.

In Franklin's time, people earned about $3/day. Today, you could work for 3 hours/week at minimum wage and earn more. But while that much money (absent government regulations) could be enough to subsist on, life wouldn't be much fun. You would have to live in crowded dormitories (or outdoors) and give up meat, new clothing, a car and the many other luxuries that today's poor take for granted (and which were not available to Franklin).

Production has immensely surpassed that of Franklin's time--why would you think that by working less, all of the sudden life would become miserable and boring? My point was that people could work significantly less and still live comfortably. Consumption would change, no doubt. But there's no reason to think that meat would no longer be an option and crowded dormitories would be the only living option. Nothing like this happened when working time was cut in half by labor movements in the early 20th century. Leisure becomes a welcomed part of life, where people do not need to spend half of their life making profits for somebody else.

Have you noticed that the very same process could have just as easily be described as C-M-C?

No--that would be producing solely for the sake of a particular need, not to earn a profit. Money, within the capitalist economy, is not just a medium. It is also the end and purpose of production. Selling goods for the sake of profit becomes an end in itself. Hence the constantly increasing advertising in capitalist economies, and the need for new markets. We do not just produce what is needed. Production occurs within an effort to persuade people to buy certain goods. The motivation for this is accumulation of capital. Money is king in capitalism, not the consumer.

Consumers purchase products because they want them. And so, in a very meaningful way, the purpose of production is the satisfaction of consumer wants.

Consumers purchase because they are convinced they need something or want something. Yes, consumers actually put money on the table without a gun to their head. But it would be misleading to then say that consumers rule, just like it would be misleading to suggest that voters rule in a democracy like the US. Capitalism stimulates want, even meaningless and wasteful want. That is why billions are pumped into advertising and seeking to find new ways to manipulate potential consumers. Capitalism creates a passive consumer society. This is quite different from the notion that goods are simply produced to satisfy wants. Producers don't just wait for community and consumer suggestions. They quite deliberately create and try to create consumer wants.]

And because consumers generally prefer spending less rather than more money, their choices force producers to be as efficient as possible. The capitalist system (and only it) contains internal drivers towards efficiency. And while no human system is ever perfectly efficient, the capitalist system becomes progressively more so. Today's market economy is, in fact, incredibly efficient by historic terms.

How is it "incredibly efficient by historic terms"? It seems to me there is an incredible amount of waste in the capitalist economy. The massive market of advertising, for an example, is a complete waste. The fact that goods can be consumed en masse and dumped in mass in certain places while others live on next to nothing is a complete waste. Moving an industry to another part of the world for cheaper labor only to sell those goods back in the home country is a complete waste, and done solely for profits, not efficiency.

Labour unions have been coddled by governments for many decades. In particular, labour unions have, early on, been allowed to use violence against non-member workers (and let's be clear - it is those non-member workers rather than employers who are the real enemies of the labour union). Later on, the captured political proxies of the labour union have used the power of the state for the same purpose.

If you even take a cursory look at the history of labor you really notice that it is the other way around. Violence against workers has been hugely on the side of owners and employers not the other way around. The government, particularly in the US, has also stepped in in favor of business, not labor. Labor unions have been on the retreat for the past forty years precisely because business has successfully won over government against labor. What you have said here is backasswords.

As for the (disputed) figures over share of production going to wages and growing inequality, how are those indicative of the supposed "bargaining power" of employers?

The theory is that as production increases so do wages--particularly if wage earners have an equal amount of say over production. If owners of stock and CEOs are making more money as production increases, shouldn't I as the actual producer? Well if the exact opposite is actually happening--and often happens--it stands to reason that one group (those running away with the actual profits) has a sizable advantage over the other.

First, precisely those worse-off in our society are those which cannot obtain credit, and yet still tend to own TVs, cars and many other consumer goods.

This really has not been the case--for instance the housing bubble was quite the opposite. But even credit card companies actually seek out potential defaulters, because they can then get them for higher interest rates. At any rate, the point is really that instead of workers being able to simply afford these goods, they have to use credit and then pay interest on it. It's almost as if they end up having to pay interest on their own wages. Moreover, it's not just the capacity to buy now and pay later--there is a point at which household debt becomes crippling, which is more and more the case in contemporary capitalism.

To the extent that people are driven by their sense of community, a purely voluntary system is best situated to help them cooperate, collaborate, contribute and otherwise help those communal goals. You claim, but provide no evidence or argument, that "social systems based on private property lead to individualization". In fact, modern capitalist production, much more so than more primitive production methods, is based on wide-scale cooperation, often involving thousands or even millions of people. That need to collaborate pushes people to better appreciate and develop their social skills, trust and good manners.

No, I did not provide hard empirical evidence. However, one thing coeval with the rise of capitalism is the privatization of work life (in other words it becomes my personal salary in relation to an employer as opposed to it being communal pay, as in democratic workplaces, or communal work). This also occurs in relation to consumption, which is geared toward the private individual consumer. So in both production and consumption individuals are structurally geared to look toward their own personal immediate concerns. The fact that what they do has social consequences or is even a product of social conditions becomes increasingly obfuscated. Private taste trumps public interest--and markets are geared towards creating those needs. The political sphere has followed suit--The continual production of ready made politicians, marketed and sold to the voter by dominating political parties is similarly the model of modern day capitalism.

By the very same token (and much more frequent, historically) is the case that employer Joe just agreed to give worker Joe a pay rise so as to keep him at his job, because good, experienced employees are scarce.

Perhaps, as I said, this is the case more specialized and professional occupations, but I don't think it is accurate that this is historically the case for average workers within capitalist society. Rather workers are often forced to compete against other workers--this seems more so to be the case than employers having to compete against other employers for workers. Hence unemployment or cheaper labor elsewhere is constantly used against labor in order to keep them in check.

The true masters in a free market are consumers.

Again, maybe in theory--but not reality. Take, once again, democracy in advanced capitalist nations. Ideally, the true masters are the voters. But it does not really work out this way. What we end up having is the illusion of control and power, when really we are just receiving prepackaged choices and being convinced that we need to decide between one or the other. Now if consumers united, just like if workers united, and were able to effectively demand change, and fight that battle over time--yes, I do agree that they would eventually win. But those in power, those who control both the political and economic market place (often the same groups) are masters of preventing that from happening. A fragmented, individualized, consumer society becomes a very impotent society.

On the contrary. As soon as you socialise the means of production, you open up a wide door to conflicts amongst workers (or amongst communities or syndicates) which find their interests in conflict. And while under a free market, those finding themselves in disagreement with their neighbours or employers can easily move on, an a communalist society, such moves are more difficult. Moreover, since communal decisions impact all members of the community, the stakes are much higher.

Again, the Israeli experience with Kibbutzim is instructive. The Kibbutz movement and individual Kibbutzim have been plagued with conflict from their earliest days. In extreme cases, Kibbutzim split to accommodate differing view points.

The 19th century has seen the "labour pains" of western capitalism. If you look at western societies today you will see flourishing of workers, cooperation with employers, improving working conditions and the virtually complete absence of private-sector labour unions, despite their legal preference.

Actually, this is quite the opposite. Socializing the means of production is based on the cooperative use of them. Really, what we end up seeing is more potential for conflict among workers in capitalism, precisely because they are continually pitted against each other (often using race, ethnic, and sex barriers as a mode of instigating antagonization). Now, I have never stated that socialization eliminates conflict. It eliminates the fundamental conflict endemic to capitalist production, and by so doing it provides a more equal and functioning democratic structure within which other conflicts can fairly be worked out.

As for the so called "legal preference" of unions--again, I don't know what you are talking about. Unions grew significantly during the Great Depression and were then curtailed by the Taft-Hartely act. Since the late 1970s they have increasingly been on the demise, and during the most important conflicts between labor and business, the government consistently has sided with big business.

why is Mondragon such a rare example?

Well I'm not so sure that it is. There are a number of cooperatives in the US and Europe—however, it’s no surprise that the dominant mode of production in capitalism is actually the opposite (i.e. top-down, wage labor), particularly if what I have been saying is true: capitalism is based on a fundamental conflict between labor and capital, and within the capitalist economy capital holds the significant advantage. I mean its also no surprise that while most people in the US support unions, unions are nevertheless on the decline. This is by design and is integral to the structure of a system built upon wage labor. Moving away from this is actually transforming the entire socio-economic system.

There is no reason to expect capital consolidation amongst a small group of private owners. That has never happened is unlikely to happen. The best protection workers have isn't unions - it is the combination of competition between employers and freedom to enter the market is self-employed or cooperating workers.

We live in a world of corporatized giants, this is both coeval financial and wealth inequality. There is, actually--and has often historically been--significant pockets of capital concentration.

The best protection workers have isn't unions - it is the combination of competition between employers and freedom to enter the market is self-employed or cooperating workers.

The best system would allow workers to form their own firms, organised by whatever principles they wish. But any system is subject to potential abuse, inefficiency and stagnation. Only allowing maximal freedom to organise and cooperate, including (but not exclusively) through capitalist production, will minimize these problems.

If you read even the earliest socialists, you will find that they always recognized unions ultimately cannot protect workers. They ultimately end up compromising with business, fragment, and become a part of the political process within the capitalist system. Unions are only really effective if they maintain a revolutionary agenda. "Workers unite!" has always been the call. The best system would be where workers are not, from the beginning, separated from capital--the best system is where we all share capital begin with a democratized workplace.

What makes you think the invisible hand cannot solve every economic problem? In particular, undirected markets already provide people with efficient shelter and food, schooling and healthcare (when not corrupted by government intervention). If communities need (and their members willing to pay for) roads and other modes of transportation, who will stop entrepreneurs (the fingers of the invisible hand) from providing those? More to the point, why would people settle and live in communities not served by roads?

Well--because it hasn't! I mean the highway system in the US did not come about the invisible hand. Neither did much of the computerized technological advancements and others, which came from highly planned investments in the military. Many of the actual comforts of modern society have come from very deliberate planning, not the "invisible hand of the market".

Moreover, your very own system, since it lacks central planners and coordinators, would also be a realisation of an invisible hand.

As for externalities, those would be internalised through a combination of property rights, use rights and consumer pressure.

My system is not opposed to planning. After all capital is shared in common, and communities can decide to very deliberately invest in things that would be in the interest of all. I have even mentioned this several times in relation to the Federated society, which would, ideally, pool some resources together for the common good of all--perhaps even becoming "an employer of last resort."

As I pointed out, socialization of the means of production and democratization of the workplace simply shift your concerns about the ill-effects of capitalism one level up. You will still see inequality (between successful and unsuccessful cooperatives), unemployment (when a cooperative has to dissolve due to ongoing losses, and its members are unable to find employment) and greed.

I think this is very exaggerated. Again, I have never said we would have no conflicts. Part of the point is to actually create a fair and just communal organization where problems can be effectively dealt with together. As for inequality, I think it is OK so long as it is also based on a certain amount of equality: equality in basic goods and in opportunity. As for unemployment, I have already stated that a socialist economy would necessarily be based on full employment.

Focussing on this point, the problem with your proposed system is that it does not properly price capital. I agree that you can price other things and get some efficiency gains but by not properly pricing the capital it will flounder in comparison. Eran's Kibbutz example shows most of the problems that arise and the relatively inefficient ways that members had to use to work around the absence of a proper price mechanism.

I'm not sure if I'm channelling a previous post by Eran, but the use of capital is essentially a roundabout way of attaining ends. Farmers can plant, grow and harvest crops very successfully using nothing but their labour. Taking a roundabout route of using people's labour to mine a series of metals and fluids, processing them, and building a series of specialised tractors and machines for planting, fertilising, watering and harvesting is even more efficient. Trying to plan and organise such a roundabout route is nigh on impossible let alone trying to know whether or not the roundabout route was actually an efficient use of the groups labour (and other scarce resources).

Mises's problem of pricing value has long been shown to be fallacious (Which is, I believe, what you are getting at). First of all, many of the command socialisms had a great many success--the Soviet economy grew substantially, and its collapse had to do largely because of its competition with Western capitalism. Other command economies have found similar types of success such as China, Cuba, and Venezuala. (This is not a defense, necessarily, of these kinds of societies, but I think they do show that Mises's argument was a bit simplistic). There have also been other modes of economic planning within capitalist states that have been greatly effective, for instance the national highway system, or the Marshal Plan which reconstructed Europe. In fact, most advanced capitalist economies have employed forms of social planning effectively throughout the 20th century. Secondly, we are not simply talking about centralized command economies, the subject of Mises's ire. Decentralized social organization could also plan effectively, as local communities and syndicates would be able to know what their own needs are and how to appropriately coordinate with other communities through very rigorous planning. Third, I have been proposing a model of decentralized market socialism (Some would propose centralized market socialism). So in my model goods and services are priced largely by demand.

[Eran]

Production has immensely surpassed that of Franklin's time--why would you think that by working less, all of the sudden life would become miserable and boring? My point was that people could work significantly less and still live comfortably. Consumption would change, no doubt. But there's no reason to think that meat would no longer be an option and crowded dormitories would be the only living option. Nothing like this happened when working time was cut in half by labor movements in the early 20th century. Leisure becomes a welcomed part of life, where people do not need to spend half of their life making profits for somebody else.

Sure - I was taking an extreme scenario of working (at minimum wage) for only 3 hours a week. If you work as a skilled worker for, say, 20 hours a week, you can earn more money than most Americans did in the early 20th century. You can have your own apartment and eat meat every day (except Friday).

No--that would be producing solely for the sake of a particular need, not to earn a profit. Money, within the capitalist economy, is not just a medium. It is also the end and purpose of production. Selling goods for the sake of profit becomes an end in itself. Hence the constantly increasing advertising in capitalist economies, and the need for new markets. We do not just produce what is needed. Production occurs within an effort to persuade people to buy certain goods. The motivation for this is accumulation of capital. Money is king in capitalism, not the consumer.

Producers produce to make money. But producers wouldn't make money if consumers didn't buy their products. And consumers do not buy products so that producers make a profit. Consumers buy products because they value those products. The goal of the producer is, at best, only half the picture.

As for efforts to persuade consumers to consume - those certainly take place, just as, in a democracy, efforts take place to persuade citizens to vote. Ultimately, either you treat members of your society is autonomous beings capable of making their minds up about what's in their best interest, or you throw away democratic participation as well as the market process and institute a benign dictatorship.

Consumers purchase because they are convinced they need something or want something. Yes, consumers actually put money on the table without a gun to their head. But it would be misleading to then say that consumers rule, just like it would be misleading to suggest that voters rule in a democracy like the US. Capitalism stimulates want, even meaningless and wasteful want. That is why billions are pumped into advertising and seeking to find new ways to manipulate potential consumers. Capitalism creates a passive consumer society. This is quite different from the notion that goods are simply produced to satisfy wants. Producers don't just wait for community and consumer suggestions. They quite deliberately create and try to create consumer wants.

Why would the desires of workers and community members in your society be more accurately reflected in their voting choices than those of American voters or consumers today?

Your depiction of consumers is insulting and patronising. You know that what they want is "meaningless and wasteful". Why should your choices (or that of any other person) supersede those of sovereign adults? How would you know what is or isn't meaningful to different people?

True, producers don't just wait for community or consumer suggestions. And that is great. Because it means innovative producers can come up with products nobody has thought of before them.

However, they don't "create" consumer wants. The failure of most products and businesses is evidence for that. Rather, they try (at their own risk) to predict what consumers would appreciate, once offered.

How is it "incredibly efficient by historic terms"? It seems to me there is an incredible amount of waste in the capitalist economy. The massive market of advertising, for an example, is a complete waste. The fact that goods can be consumed en masse and dumped in mass in certain places while others live on next to nothing is a complete waste. Moving an industry to another part of the world for cheaper labor only to sell those goods back in the home country is a complete waste, and done solely for profits, not efficiency.

Efficiency is the ratio between product value produced and resources consumed. System A is more efficient than system B if it produces the same (or more) using fewer resources. The wealth of modern society is precisely the result of the great efficiency in resource use. Automation means that human resources are used more efficiently. But we also made huge gains in the efficient use of physical resources.

Advertising isn't wasteful. If it were, producers would have saved the money by avoiding it. Rather, advertising is the means to get your product, name brand and associated good feeling to consumers. As a result of advertising, consumers are made aware of the products available, and feel good about consuming them.

Moving an industry to another part of the world is incredibly efficient, if production costs are lower in that part of the world. Efficiency and profit are closely related, and in the drive to maximise profits, improving efficiency is a major tool.

If you even take a cursory look at the history of labor you really notice that it is the other way around. Violence against workers has been hugely on the side of owners and employers not the other way around.

Can you give me a single example in which violence was initiated by employers rather than by workers? Please note that occupying the owner's property is a form of violence, and using force to evict trespassers is perfectly legitimate.

In every single labour dispute, the workers can always simply walk away. But strikes are never only about the workers refusing to work. Strikes invariably include using force to try and block strike breakers.

The theory is that as production increases so do wages--particularly if wage earners have an equal amount of say over production. If owners of stock and CEOs are making more money as production increases, shouldn't I as the actual producer? Well if the exact opposite is actually happening--and often happens--it stands to reason that one group (those running away with the actual profits) has a sizable advantage over the other.

That isn't the theory. The output of the production process go to the suppliers of different factors of production, including labour, management, land and capital. The proportions depend on the incremental value of each factor, or, equivalently, on its price in the market. Let's say a worker continues to do the same job year after year, but the capitalist owners invest in expensive machinery that makes the same work produce a larger amount. Why should the worker rather than those who actually made a difference benefit?

To be clear, automation usually does result in higher marginal productivity by worker, and total worker compensation went up significantly over the past few decades. Unfortunately, government-induced health-care inflation has absorbed much of those compensation increases in the US.

However, one thing coeval with the rise of capitalism is the privatization of work life (in other words it becomes my personal salary in relation to an employer as opposed to it being communal pay, as in democratic workplaces, or communal work).

Actually, work used to be much more private before capitalism, when people worked their own land or, as artisans, in one-person or small-scale production. Small-scale or private production is the natural and traditional human condition.

Further, nothing stops workers from forming unions, mutual support organisations, friendly societies, etc. All of those flourished during the 19th century's rampant capitalism. Rather than capitalism, the atomisation of society is the result of government policies. In the past, people relied on each other - family, neighbours, co-workers, society members, etc. for help and support. Today, people expect faceless and bureaucratic government to provide them with support.

So in both production and consumption individuals are structurally geared to look toward their own personal immediate concerns.

Again, there is nothing inherent in the capitalist (not to mention voluntaryist) system that mandates or even pushes in that direction. People may form partnerships, syndicates or labour unions, consumer groups or communes. The huge success of social media (including, btw, this very site) is evidence that people do appreciate social relations.

Which parts of their lives (work, consumption, entertainment, play, etc.) they wish to socialise and which they wish to engage in privately is up to them, not to you.

Private taste trumps public interest

True public interest is nothing but the combination of private interests. What is typically referred to as "public interest" is actually the private interest of people deeming themselves "leaders".

Perhaps, as I said, this is the case more specialized and professional occupations, but I don't think it is accurate that this is historically the case for average workers within capitalist society.

Yet average workers today earn many times more than average workers did decades ago. And the vast majority of them earn well over minimum wage, and are not unionised. So it isn't either government action or union negotiations responsible for the huge increase in wages.

Rather workers are often forced to compete against other workers--this seems more so to be the case than employers having to compete against other employers for workers.

What makes you say that? Of course workers compete against each other. But then so do employers. All the time. Don't be misled by the fact that it is typically the employer who makes an offer for a given job and salary, and workers decide whether to accept it or not. Supermarkets determine the food of their products, and consumers have "no bargaining power". Yet supermarkets, in their mutual competition, push prices down.

Take, once again, democracy in advanced capitalist nations. Ideally, the true masters are the voters. But it does not really work out this way.

I agree. But there is a huge difference between voting and consuming. First, when you vote, you are required to condense all your preferences into a single choice. As a consumer, you make hundreds or thousands of consumption decisions each year. Second, when you vote, you know your vote isn't likely to make any difference in your life. Consequently, you vote based on your emotions, based on which vote makes you feel good, usually due to affiliation with a particular party or candidate. When you consume, you know you (and you alone) will bear the consequences of your choice.

People act much more rationally as consumers than they do as voters.

But those in power, those who control both the political and economic market place (often the same groups) are masters of preventing that from happening. A fragmented, individualized, consumer society becomes a very impotent society.

What power do "those in power" have to prevent consumers (or workers, for that matter) from forming voluntary unions?

As for the so called "legal preference" of unions--again, I don't know what you are talking about. Unions grew significantly during the Great Depression and were then curtailed by the Taft-Hartely act. Since the late 1970s they have increasingly been on the demise, and during the most important conflicts between labor and business, the government consistently has sided with big business.

The most important form of legal preference is that while workers can quit at any time and for any reason, employers aren't similarly allowed to terminate their relation with employees.

To be clear, I opposed many of the provisions of Taft-Hartly which limit the ability of unions to strike. In my opinion, the right of workers to strike can only be limited by whatever contractual obligations to the contrary they voluntarily sign. However, and by the same token, employers should be free to fire employees subject only to mutually-agreed terms.

Well I'm not so sure that it is. There are a number of cooperatives in the US and Europe—however, it’s no surprise that the dominant mode of production in capitalism is actually the opposite (i.e. top-down, wage labor), particularly if what I have been saying is true: capitalism is based on a fundamental conflict between labor and capital, and within the capitalist economy capital holds the significant advantage.

Actually, it is very much a surprise. Capital is not static. New firms are created all the time, often starting at a small scale. Given what you characterise as the "fundamental conflict between labour and capital", you would think that many firms would be started by labour (which has access to capital either through savings or through temporary borrowing). Such firms would find it much easier to recruit workers, and thereby gain an advantage over capitalist firms. Neither banks nor consumers really care about the nature of the firm, so worker-owned firms will suffer no disadvantage relative to capitalist firms.

We live in a world of corporatized giants, this is both coeval financial and wealth inequality. There is, actually--and has often historically been--significant pockets of capital concentration.

We live in a large world. There is plenty of room for corporate giants without any owning significant fraction of wealth. The wealthiest people in the world own less than $100bn each. Global GDP, by contrast, is over $70,000bn. World wealth is $223,000bn. So no person in the world owns more than about 0.03% of the world's wealth. That doesn't seem like much concentration, does it?

Well--because it hasn't! I mean the highway system in the US did not come about the invisible hand. Neither did much of the computerized technological advancements and others, which came from highly planned investments in the military. Many of the actual comforts of modern society have come from very deliberate planning, not the "invisible hand of the market".

True. The "invisible hand" can only work where it is allowed to. In the 19th century there have been numerous private roads in the US. But government took over those roads, providing roads for "free". As for computerised technological advances, the US government was behind early computer communication protocols, but the industry has made huge advances since then. To suggest that we owe the modern Internet to the US government is like the famous joke that if it weren't for Edison, we would have been watching TV to candle-light.

The invisible hand isn't about lack of planning - it is about lack of central planning. I thought you and I agreed that central planning isn't required for a modern economy.

After all capital is shared in common, and communities can decide to very deliberately invest in things that would be in the interest of all.

I thought capital is owned by individual communities, rather than by society at large. Sure - communities can decide to very deliberately invest in things that would be in the interest of all. But then so can firms or individuals. The capitalist system includes several means for individuals to pool their resources towards achieving larger goals.

As for inequality, I think it is OK so long as it is also based on a certain amount of equality: equality in basic goods and in opportunity. As for unemployment, I have already stated that a socialist economy would necessarily be based on full employment.

You stated that, but you have not articulated a mechanism whereby that would happen. Who would force wealthy communities to support poorer ones? Who would be forced to provide employment to unemployed people? Since you claim to be an anarchist, there can be no central body with such powers. Hence it could only be done through the voluntary cooperation of communities, right?

But if you assume that you can rely on communities to voluntarily cooperate, and since communities are democratic, and their choices reflect the preferences of their members, why assume that individuals couldn't also be relied upon to voluntarily cooperate?

And what's to stop syndicates and communities to flourish side-by-side with capitalist production firms? If things go well, wouldn't workers be eager to work for a syndicate rather than a capitalist? Wouldn't people prefer living in a mutually-supportive community over atomised neighbourhoods?

What are you worried about?

First of all, many of the command socialisms had a great many success--the Soviet economy grew substantially, and its collapse had to do largely because of its competition with Western capitalism. Other command economies have found similar types of success such as China, Cuba, and Venezuala.

Surely you are joking. The Soviet economy grew substantially when measured from the starting line of post WW I Russia. But relative to any capitalist or semi-capitalist economy, the Soviet production system sucked. Those of China, Cuba and Venezuela similarly failed. They failed, btw, by the only relevant standard, namely the attitude of their citizens. All communist countries forcibly limited emigration, while no capitalist country ever did. Why?

Mises explained that socialist economies operating in a mixed-economy world can rely on price signals from market economies to guide their prices. It is an autonomous socialist economy that he proved to be an impossibility.

There have also been other modes of economic planning within capitalist states that have been greatly effective, for instance the national highway system, or the Marshal Plan which reconstructed Europe.

The effectiveness of the national highway system is hard to assess, since we don't know how much more efficient a private alternative may have been. Regardless, and as stated above, the system was put in place in the context of a market economy. Thus prices for the various factors of production (including capital) were known. In your system there is no market in capital, and thus no mechanism for determining its price, either in monetary form (i.e. interest rates) or in physical form (e.g. price of land, as land isn't sold or bought).

The Marshal Plan wasn't a central plan. Money was transferred to European governments who used it to buy American goods. Once the money was transferred, it was used in the context of a market economy.

Third, I have been proposing a model of decentralized market socialism (Some would propose centralized market socialism). So in my model goods and services are priced largely by demand.

Goods and services - yes. But not capital.

[Torus34]

Gentlemen:

In your erudite exploration of specific points, have you perhaps shifted focus from the question presented in the OP? Perhaps, just perhaps, mind you, a recap of your positions vis-à-vis the OP might be in order at this time.

[SolarCross]

Gentlemen:

In your erudite exploration of specific points, have you perhaps shifted focus from the question presented in the OP? Perhaps, just perhaps, mind you, a recap of your positions vis-à-vis the OP might be in order at this time.

So much is so normal for any thread.

I have general question to all, especially collectivists, that is closely related to the OP.
If a society did not have any individuals in it, would it be a society?

[anticlimacus]

So much is so normal for any thread.

I have general question to all, especially collectivists, that is closely related to the OP.
If a society did not have any individuals in it, would it be a society?

No, all societies have individuals--however, this is relative, and my next sentence will explain why. THere is no "individuality" without society. "Person" "Individuals" these are social categories which vary depending on the social context. Yes, all societies are built up of human beings--without human beings, there is no society. But society makes us "individuals"--society alone can "personalize" us.

[Joe Liberty]

That makes no sense at all. I am an individual with or without society. I am not a "social category", I'm a unique individual human being. "Society" is the construct, as it's an abstract.

[anticlimacus]

I've been out of town and have only limited access--I posted above in relation to Tax's OP question, however there are a couple of comments I wanted to make to Eran before moving on. Sorry for the double post.

Surely you are joking. The Soviet economy grew substantially when measured from the starting line of post WW I Russia. But relative to any capitalist or semi-capitalist economy, the Soviet production system sucked. Those of China, Cuba and Venezuela similarly failed. They failed, btw, by the only relevant standard, namely the attitude of their citizens. All communist countries forcibly limited emigration, while no capitalist country ever did. Why?

Mises explained that socialist economies operating in a mixed-economy world can rely on price signals from market economies to guide their prices. It is an autonomous socialist economy that he proved to be an impossibility.

The issue isn't necessarily how well the Soviet Union did in relation to Western Capitalism (i.e. the US which was not hit at all by WWII, and was the leader of the world after WWII for more reasons than being just "capitalist"). The question was whether or not there could be any success in a socialist command economy, and clearly we have examples where it was.

The Marshal Plan wasn't a central plan. Money was transferred to European governments who used it to buy American goods. Once the money was transferred, it was used in the context of a market economy.

The point here was that it was planned at all. As I mentioned before, Mises's ire was directed towards central planning. First, in theory his idea fails as "centralized market socialism" developed as a theoretical response to Mises. Second, as I showed above central planning has had some significant successes within socialist economies. Most importantly, as I get to below, Mises simply does not address decentralized socialist societies. Marshal Plan was state money given to European governments to direct their own rebuilding--this was an investment by the US to keep those European states capitalist. Both the US and the European governments were heavily involved in this planning--as states typically are when capitalism develops!

My model is of decentralized market socialism. Not only does Mises's arguments fail in theory, but it simply does not account for any kind of anarchism--particularly anarcho-syndicalism.

Goods and services - yes. But not capital.

What would be so difficult about this? Capital, as investment funds controlled by community banks, is employed where entrepreneurs think they can start up good business. It would be very efficient, more so than in just economic terms, because capital goes where it is both profitable and good for local communities, in terms of not unloading massive extrinsic costs.

[anticlimacus]

That makes no sense at all. I am an individual with or without society. I am not a "social category", I'm a unique individual human being. "Society" is the construct, as it's an abstract.

"Individual" is defined, always, in relation to others--and this is relative. Even in the most banal sense, "individual" is just an abstraction from multiple neural patterns that change over time. How we end up carving this out into a single "individual" worthy of particular "rights" depends on the social context.

What is the "individual"? Just go to court and plead "insanity," and you see how this becomes relative. Individuality, basically the same as "person" is a relative term defined differently depending on context.

We are what we are not in isolation as pure timeless "individuals". We are what we are only in relation to others. Only by relating ourselves to others can we ever come up with the idea of "individuality"

[Joe Liberty]

"Individual" is defined, always, in relation to others--and this is relative.

No, it's not. One person is an individual. You don't need any context at all, it's an objective fact.

We are what we are not in isolation as pure timeless "individuals". We are what we are only in relation to others. Only by relating ourselves to others can we ever come up with the idea of "individuality"

"Society" not an objective entity, it is nothing but a collection of individuals. You're saying that the abstract, which is literally nothing outside of the context of its component parts, is necessary to define the component parts. That's bass-ackwards.

[SolarCross]

No, all societies have individuals--however, this is relative, and my next sentence will explain why. THere is no "individuality" without society. "Person" "Individuals" these are social categories which vary depending on the social context. Yes, all societies are built up of human beings--without human beings, there is no society. But society makes us "individuals"--society alone can "personalize" us.

Society makes us individuals, society alone can personalise us? lol wut? This literally sounds bass ackward. Individuals make society. Individuals can personalise society.. which is literally what you are doing, you are creating an imaginary personhood for an arbitrary aggregate of an unspecified number of hypothetical individuals. This is a step way beyond what religious nuts do with their (possibly) imaginary super persons they call gods. You have created an imaginary person called "society" that according to your self-created mythology creates man in its own image.

[Torus34]

It's important to see 'human society' for what it is and not as a simplistic reification. It is the sum total, if you please, of the interactions between individuals. We can establish groupings of interactions and recognize these as sub-societies. Even these sub-societies represent an extraordinary number of interactions. We can also recognize certain structures of interactions: religions, governments, corporations and baseball teams. Again, we should see them as both constructs and interaction groupings.

Seen in this manner, the OP could be re-stated as: Would the individuals in a grouping in which the interactions are governed by the ideology of libertarianism fare better than those in other groupings? Again, I've suggested criteria for evaluation.

[anticlimacus]

Society makes us individuals, society alone can personalise us? lol wut? This literally sounds bass ackward. Individuals make society. Individuals can personalise society.. which is literally what you are doing, you are creating an imaginary personhood for an arbitrary aggregate of an unspecified number of hypothetical individuals. This is a step way beyond what religious nuts do with their (possibly) imaginary super persons they call gods. You have created an imaginary person called "society" that according to your self-created mythology creates man in its own image.

The first thing to say is that it is pretty well documented that human beings have always been social animals. The Rousseauean or Lockean "primal individuals" never existed. What we have always had are human relations. Society is not made of individuals. It is made up of human relations. Society is a complex interchange of various relations. From that "Individual" is derivative.

[SolarCross]

The first thing to say is that it is pretty well documented that human beings have always been social animals. The Rousseauean or Lockean "primal individuals" never existed. What we have always had are human relations. Society is not made of individuals. It is made up of human relations. Society is a complex interchange of various relations. From that "Individual" is derivative.

Yeah yeah, the world is flat, there are 99 angels dancing on the head of a pin. Sorry to burst your bubble but human beings are not ants, you are not the borg queen and we will not be assimilated.

[mum]

The first thing to say is that it is pretty well documented that human beings have always been social animals. The Rousseauean or Lockean "primal individuals" never existed. What we have always had are human relations. Society is not made of individuals. It is made up of human relations. Society is a complex interchange of various relations. From that "Individual" is derivative.

An individual is a derivative of society ? Really ?
So in your mind society as a group makes decisions, individuals do not make decisions ?
Do individuals have rights other than that which their particular society collectively decides ?