A few of your points about social ownership are quite on the mark. But I’m concerned about your promoting “small government” as a plus for such a system. I don’t think relying on good faith for regulating environmental destruction, nor for eliminating wasteful production (excessive packaging, advertising, tobacco) makes any short- (or even long-) run sense, and there’s nothing wrong with promoting education and health-care (for example) as public goods, rather than accepting conservatives’ promotion of private provision.
Let’s not deceive ourselves into imagining that conservatives will be drawn toward public ownership of the means of production via government shrinkage arguments!
Brent Kramer, Brooklyn, NY (City U. of NY)
Some of these arguments seem quite confused. First, you need to clearly define “social ownership”. The important part of ownership is that it designates who decides how an asset is used. Under “social ownership”, who will be the decision maker?
If it’s the government, then “social ownership” means “government ownership”. Calling the government by another name (ala the spanish anarchists) doesn’t really change this.
If you mean ownership by groups, that already exists.
If you mean that people will make decisions regarding their assets for the greater good, that fails to answer the question and instead goes to the moral philosophy of the people in the political system.
Also, the economic calculation debate was not specific to the arguments of Lange. You can try to work out proxy prices, but without actual trade you won’t be able to create a system that can respond to the constantly changing information. That’s the failure of a planned pricing system. Hayek’s essays on knowledge are valuable here.
Also, it seems strange that you associate public health and public education with capitalism. Those are elements of “social democracy”. More radical capitalists would prefer something more like “liberal democracy” or “libertarian” or “minarchist” or “an-cap” politics… which would involve less (or no) government involvement in health & education.
I guess you can use words however you like… but you’re not really contributing to the debate unless you’re using words in a meaningful way. It would be very easy for me to criticise communism if I started my critique by saying “communism means clubbing baby seals”. But that would achieve nothing in the real world.
This confusion about what “capitalism” means, while common, seems to indicate that you have not become familiar with the beliefs of market liberals. This can make it extremely hard to honestly critique the believe of market liberals.
It is also absurd to say that government failures are market failures. This is a semantics game used to hide a hugely important distinction. And while all humans fail, the idea that a centrally-planned pricing system will fail less has clearly been shown to be wrong.
Reply to Temujin from David
I’m happy defining social ownership as the situation where economic actors see it as their task to use the means of production efficiently. This is not possible under capitalist ownership where private interest gets in the way. I discuss this in detail in my paper. In the scenario I depict, the only necessary government involvement relates to tax collection, the establishment of funding agencies and a judicial system to deal with theft and violence.
I would concede that the formal elimination of capitalist private property will not automatically eliminate all government failure. There will still be problems with moral hazards, empire building, corruption and other bureaucratic perversions. However, these will be generally overcome by cultural changes and the development of an extensive system of supervision as I discuss in my paper.
As I very clearly stress in my paper, the price system I am referring to is a decentralized one where establishments decide the price at which they are going to offer their output and bid for inputs.
I suspect that your vision of pure capitalism might be superior to the system we have at the moment. I certainly have no need to deny that possibility. However, as public choice theory shows, capitalism tends to generate perverse government interventions. Only social ownership can eliminate this problem.
Economic actors have private interests. You can’t stop that unless you genetically engineer humans into cuddly toys.
And you haven’t explained how the ownership structure would be different from a capitalist ownership structure. People would still be able to own things. And presumably exchange would be allowed and it would have to be voluntary. That’s capitalism.
The difference you identify is a difference in attitude (people try to help people). That’s nice. But it’s not a political philosophy or a properly explained ownership structure.
You need to decide (1) who can own things? Options being (a) specially priveledged institutions; or (b) anybody. And you also need to decide (2) how can ownership be transfered? By (a) voluntary exchange; or (b) determined by a priveledged body.
You can’t go on with a philosophy without answering these basic questions.
There is no option of “no ownership”. That option fundamentally misunderstands what “ownership” means. As soon as something has two alternative uses, then a decision needs to be made on how it will be used. The person deciding is effectively the “owner”. So the only way to have no ownership is to have no scarce resources on earth. Not likely.
As for the idea that abolishing private property would abolish government failure — that sentence is absurd. Of course it wouldn’t abolish ANY government failure. Government failure is failure by the GOVERNMENT.
Public choice theory does NOT show that capitalism leads to perverse government intervention. It shows that intervention tends to be perverse. The trick is to get rid of the intervention. It’s no great suprise that the vaste majority of public choice theorists are radical capitalists. If you had intervention and no capitalists, then another group would come along and corrupt the system. You can’t get rid of the perversiveness unless you get rid of the intervention. And if you get rid of the market, then that requires an INCREASE in government intervention! The exact opposite of what you need.
And you can stress things as clearly as you like, but that won’t make them work. The price system in the free market is as decentralised as you get. If you don’t allow people to voluntarily interact, including with private ownership, then you won’t maximise the flow of knowledge around the economy. There is already a system where businesses decide their own prices and bid on inputs — it’s called the market.
The system we have now is “social democracy”. I am not a social democrat, though having said that I accept that it’s been a fairly good system compared with many others that we’ve seen. Better than industrial socialism, agrarian socialism and national socialism (fascism) anyway.
Again — I fear that you have not done capitalism the service of actually exploring what it’s proponents suggest. One good (and interesting) source of information would be David Friedman, the anarcho-capitalist. If you can find his paper “love is not enough” that is a great start. Alternatively, “the machinery of freedom” is an intro-guide to an-cap ideas.
I’m trying to gain a better understanding of Socialism, so just a few questions for clarification if you don’t mind.
In the second to last paragraph of your introduction you state,
“Thirdly, the welfare system would be cut back drastically. There would be work for all and only the seriously ill or disabled would be eligible for welfare payments.”
How does this account for lazy people who’s only talent seems to be inventing excuses for why they can’t work? Do you agree that these people exist? When those who work hard see those who don’t work hard making the same income, what will be their motivation to continue working hard?
Also, does “the seriously ill or disabled” include those who are alcoholics and drug addicts under your view of socialism?
To the extent that shirking continues to be a problem, there will need to be counter-measures. Although I would expect this to be a diminishing problem. There would still need to be some role for performance related pay and people could still get sacked and relegated to work that is less preferred, less well paid and more easily monitored.
Alcoholics and drug addicts are able to work.
Here is my response to Temujin September 23 2008. Sorry for being so tardy.
Under social ownership enterprises do not “own” the assets under the control, however, they have custodial rights and obligations over them. They have a right to the assets because they have outbidded other users and they are obliged to protect them and put them to efficient use.
Public choice theory does NOT show that capitalism leads to perverse government intervention. It shows that intervention tends to be perverse. The trick is to get rid of the intervention. It’s no great surprise that the vast majority of public choice theorists are radical capitalists. If you had intervention and no capitalists, then another group would come along and corrupt the system. You can’t get rid of the perverseness unless you get rid of the intervention. And if you get rid of the market, then that requires an INCREASE in government intervention! The exact opposite of what you need.
Public Choice theory endeavours to explain the reasons for perverse government interventions and not just simply describe them. According to my reading they see the cause in vested interest – particular capitalists and workers using government to improve their position at the expense of everybody else.
I would contend that under socialism the convergence between the interests of the individual and everyone else would diminish dramatically. Although it would not vanish entirely, for example, one’s personal satisfaction and careers prospects may to some extent be bound up with the success of an enterprise, product or investment proposal; or one’s wage and work options will depend on the demand for ones skills.
While government may still have an involvement in the overall direction of investment, it would have no say in the specific investment decisions. These would be determined by individual enterprises and the banks operating in a competitive and transparent environment.
With no recessions or government trying to restrain “overheated” labor markets, the demand for labor will always be high. So workers will be far less inclined to demand that their existing jobs be “saved”. Even less so if adjustment assistance is widely available and workers have become more accustomed to learning new things.
The social ownership that I am describing would allow people to voluntarily interact but they would not face the obstacles put in their way by private ownership.
There are no obstacles put in people’s way by humans owning things. Indeed, humans (or groups of humans) own all things that are used.
The only question is (1) should ownership transfer voluntarily or involuntarily; and (2) should a coercive politically-powerful group own everything.
If the government owns the assets (ie has ultimate control over their use) then they will decide how those assets are used according to political reasons. Public choice theory clearly shows that politicians and bureaucrats do NOT generally make better decisions than free people interacting voluntarily.
By giving more power to politicians and bureaucrats you will only have more government failure. You give them power hoping they will do the right thing. They will not.
Politicians will act to maintain their power. People who run organisations will do so to meet their own goals — help friends, support pet projects, get kick-backs. You are creating people with not economic power (which comes and goes) but political power (which can be maintained). And the only check on their power is your hope that they will be nice. And even if they are all nice, you hope that will be brilliant.
The only way to reduce government failure is to have smaller government… not bigger and more powerful government that you propose.
If your ideas of coordination are so great — do them voluntarily. They will be obviously successful and the world will change voluntarily.
I plan to continue valiantly soldiering on with the counter-intuitive idea that socialism can deliver small government. It is a work in progress.
I’ve perused your material before and I must say that you are probably the most cogent socialist thinker I’ve seen on the internet. Having said this, I don’t necessarily agree with everything you say and I struggle with some of your ideas but you’ve clearly demonstrated that you’ve given your position careful and detailed thought.
Essentially, what I’ve gathered from you is that our current economic system is the product of evolutionary development and does not exist is stasis but continues to change within the context of an evolutionary continuum. I’m not sure if you’ve been asked this before, but one of the things I don’t understand is why, given this fact, our society must of necessity become socialistic within the narrow definition of Marx and Engels. It almost sounds like something imposed by design rather than the product of evolution.
In other words, given that evolution itself is an inherently ateleological process, why do you think and how do you know that a socialist society is an historical inevitability? Perhaps you’ve already addressed this in some of your other works but in the event that you haven’t, your insight would be welcome here.
I am worried about your definition of Socialism. Is not true socialism a form of economic organization in which productive enterprises are owned, oropganized and directed by the workers who operate them? Optimally very decentralized and democratic. Is not anything else “State Capitalism?” Central state owns all enterprises. Can go very sour. Consider the Soviet Union.
Also I take issue with your destriction of the population that would continue to need public help (welfare) in your economic paradise. You limit, I believe, to the disabled. Has it not occurred to you that women in the throes of raising infants and toddlers have too much on their plate to be earning a decent living in the out-of home workplace, no matter how kind the economy is to paid workers—that is to workers whose labor is included in the definition of pay worthy work. In our country, we so automatically exclude the work of raising the next workforce—-which is extraodinarily intense when these tiny future workers are new to the world—-from the definition of legitimate labor that we can overlook the need to provide it with material support.
Or do you assume that infants will naturally go into day care immediately after birth so their moms can go right back to their day jobs and support themseves? In which case I think you will be looking at a lot of social trouble. Get a university librarian to generate a list of articles on the connection between the level of stress hormones in the infant brain and the growth of brain cells and the development of synapses. Or ask some elementary school teachers about the deep anger of elementary school children whose mothers have only been available to them on a very limited basis for all of their young lives.
You might study the child allowance systems of the worlds most successful socialist states, the Scandinavian socialist democracies. Or check out Veneuzuela’s federal housewives’ payment. Better yet, raise a child from infancy and find out for yourself. I admire your ambition, but as the person who designed the nation’s 1960s nuclear civil defense program for Hudson Institute at the far too young age of 24, I can tell you that it it is an enormous mistake to start designing social institutions before you have had some hands on experience in child rearing, and understand the intensity of its demands on the adults who are brave enough to attempt it. The infants in my plan would have died.
Please organize your socialist polity to pay for the necessary work of nurture.
Same comment, spelling corrections:
Also I take issue with your restriction of the population that would continue to need public help (welfare) in your economic paradise. You limit it, I believe, to the disabled and the very sick. Has it not occurred to you that women in the throes of raising infants and toddlers have too much on their plate to be earning a decent living in the out-of home workplace, no matter how kind the economy is to paid workers—that is to workers whose labor is included in the definition of pay worthy work. In our country, we so automatically exclude the work of raising the next workforce—-which is extraodinarily intense when these tiny future workers are new to the world—-from the definition of legitimate labor that we can overlook the need to provide it with material support.
I read your comment and I agree that thrusting infants into day care has had debilitating effects; however, a cursory reading of Marx and Engels will reveal that neither had a favorable view of what we call the “nuclear family”. In keeping with dialectical materialism, the family as a social construct emerged at a given stage in human evolution as a reflection of capitalist society.
Just as the capitalist owner exploits his workers, so do the father (or mother, or both) exploit the children, and this construct will fade away as society changes the way in which it produces and allocates its resources. Said another way, just as the means of production will be collectively owned, the parenting of children will become a collective responsibility to the extent that children are unable to raise themselves. “It takes a village to raise a child”, as it were.
I’m not saying I agree with this, I’m merely saying that this is how most orthodox communists would answer your question. Whether or not it has any scientific merit or is beneficial for the child is a different matter.
Looking at this concept in the light most favorable to your position, it is clear that this is an interesting theory. Now the obvious question: If it is such a good idea, surely you can point to several examples of the success of this system. Plase name the top three examples.
i ask this in good faith.
Response to Tom Fuquay:
The experience of places like Soviet Union, eastern Europe, China, Cuba etc is of limited relevance. These countries were extremely backward, economically, socially and politically. Socialism’s failure or defeat under these conditions was not surprising.
Why hasn’t socialism taken off in more developed places like Nth America and Western Europe? A good question. Here is another good question. Why did it take industrial capitalism a few hundred thousands years to first catch on?
For the answer to all the questions just search The Venus Project or Zeitgeist Movement.
The projects are evaluated periodically, with two in-depth evaluations in the middle of the year and at the end. ,
interesting blog, bookmarked for the future referrence, what template do you use ?
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