About Socialism

I think Roemer has abandoned 'coupon socialism'. (I corresponded with him a couple of years ago and as I recall he said that.)

 

Burczak's analysis is more akin to my stance. The attempts at Austrian critique haven't been particularly high powered.

 

Oh yes .. Burczak ... I got his book a few weeks ago ... possibly on your recommendation ... but have not read it yet.

 

It's a neat combination of Marxism and Austrian concepts. Personally I'd like to see greater reference to labour economics, but I don't have the background to really quibble.

 

If it addresses the 'Socialist Calculation Question' it deal with what I think is one of the, in fact the, central objections to 'genuine socialism' if I can call it that.
And it occurs tome that, from the all-important viewpoint of marketing, calling this 'socialism' is, despite the current embrace of social-democratic welfare state measures by college students, a handicap.

It prevents people, at least people like me, from exploring the ideas further. We read "socialism" and we think either, taking-from-the-taxpayer-and-giving-to-the-tax-eater -- which may or may not be a good idea, depending on what the tax-eaters do with the money -- or, the-government-will-control-the-economy. We already know what we thnk about these things. But you're proposing something radically different, so far as I can see, and it should have a name which reflects this. A rose by any other name, etc. (Of course, you can counter, that 'socialism' is becomng popular, that the people you reall want to reach will not be repelled by it -- just the opposite -- and that it's them, not a few eccentrics, that you want to reach. Nevertheless, you ought at least to have an alternative name for it. I can't think of one -- "peoples' capistalism" comes to mnd, but that might repel the Yale undergraduate who hates capitalism (until he goes to work for a large corporate and starts buying things).

Someone I respect very much, Sig Englemann, the fellow behind a method of teaching which he calls "Direct Instruction", also didn't consider the 'marketing' aspect of his program. A name calculated to repel people who enjoy teaching, but his method has a lot of merit in it, especially if your concern is with educating disadvantaged children for whom the public education system is their only hope.

 

I'm a socialist and unsurprisingly will refer to socialism. There's no need to re-brand and try to ensnare the unwary. Instead, the focus should be on the limitations within the anti-socialist argument. Without the socialist calculation debate and realisation that market socialism reduces government discretion, what are we left with? Typically a naive perspective based on sound-bites, such as 'capitalism is natural and reflects human nature'. That ignores any detailed application of behavioural economics and economic psychology. It also ignores economic history and how capitalist markets are often engineered through government coercion.

 

Serious Rightwingers -- who shade into Libertarianism -- acknowledge that we do not live in a genuinely free market society. Every capitalist would like the state to help him suppress competition, subsidize him ... all in the general interest, of course. Although I've been surprised by how easily so many Republicans have stood on their heads with respect to Free Trade, under Trump.

Yes, there is a naive view of human nature -- two views, actually, one on the Right, and one on the Left. Original Sin vs the Noble Savage. The Right view, although many on the Right would not acknowledge this, is basically Darwinian. We're seen to be driven by our biological imperatives, which first of all make us self-interested. The Romantic Left view is less well-grounded, I think: "I'm a nice person, most of my friends are nice, so surely everyone is that way, unless compelled to bad behavior by capitalism."

I recall an incident which has stayed with me -- In the late 60's and early 70's I lived in a house with two other couples in Berkeley -- not a 'commune' in the strict sense, but we shared household living costs. We were part of the 'Food Conspiracy' -- basically a consumers' co-op, buying food at wholesale prices and dividing it up every Saturday. We had ordered some peanut butter. One of our household members -- a very good person, very Left wing and committed to social justice etc -- was ladelling out the peanut butter. You showed her your order form and she gave you that much. When it came to our house, I watched her give us significantly more than we had ordered, quite consciously. (At first I thought she had made a mistake. But she did it on purpose.) Thus fulfilling the Right wing view of human nature. (If we got more, didn't the others have to get less than they ordered? Or did the original suppliers put in a "Bakers' dozen" which my friend knew about?)

And yet, this person was, and still is, very self-sacrificing. She is still an ardent socialist and has dedicated her whole life to fighting for the socialist revolution, which she sees as the only path forward for humanity. Thus fulfilling the Left wing view of human nature, I suppose.

As for the 'human nature' thing -- I just think of the Danes: a thousand years ago, the terror of the English east coast -- "From the fury of the Norsemen, O Lord, deliver us!" -- now the nicest people on the planet. No genetic change, just a change in material circumstances. Not that they are a nation of altruists, and they've probably become a little more realistic about other humans in the last decade or so, especially about some of the adherents of the Religion of Peace.

And of course plenty of examples of going in the other direction: great civilizations, inventive, intelligent, advancing human knowledge -- declining into static backwardness. No change in some fundamental 'human nature', certainly not in their genes.

I believe that the greatest weakness of many serious thinkers on both the Left and the Right is that they don't take into account how human beings have evolved, socially (and therefore as individuals) -- and may evolve in the future.

I'm not a socialist, but if I were, I would try to frame my argument around the growing capacity of ordinary people to act in their own true self-interest: what was not possible in the past, may be possible in the future. Isn't that the story of political democracy? Not possible in Pharoh's Egypt, nor in many countries today, but ... turn illiterate superstitious peasants (or, properly speaking, their descendants) into skilled and semi-skilled literate urban dwellers, and it is possible.

If I were a socialist, I'd make an analogous argument for socialism. (As you know, this is basically the Marxist case: socialism was not possible in the past, but is possible now, given the emergence of a new class which can only rule through collective ownership, not through a new form of property which involves exploitation of another class. Nothing to do with 'fairness', but with physical possiblities.)

There are a lot of intelligent politically-interested people on this forum... I wonder what they think of this discussion?

 

The left and right wing dichotomy over the perceptions of human nature is largely a red herring. Take orthodox economics, itself crucial for any coherent argument in favour of free market ideas (only ideas mind you as free markets are neither achievable or desirable). The right winger will crow about the invisible hand, focusing on how our natural tendency towards greed somehow delivers a best possible outcome. They are of course indulging in crass misrepresentation...

First, Adam Smith undoubtedly rejected the concept of hyper-rationality. He referred to conflict in our behavioural responses. There is egoism (translating into a Machiavellian self interest). But there is also our desire to please others. That will generate numerous traits: self sacrifice from pure altruism; satifaction from warm glow altruism; cognitive biases towards conformity; and cooperative decision-making. Without recognition of those traits, the focus on greed is an exercise in myth-making.

Second, the invisible hand analysis isn't really focused on human interaction. It's become a reference to markets in particularly simplistic circumstances. The individual is only used to understand the construction of ideal supply and demand conditions. Other than that, given independence, the individual is irrelevant. I am, according to independence, too insignificant to have any impact on the market. To understand interdependence, and therefore human interaction, we have to shift analysis to stuff like game theory. That confirms our cooperative nature and rejects simple self-interest criteria.

Third, it's certainly true that we have to take into account endogeneity. Its wrongly argued that preferences deliver the economic paradigm. That ignores how the economic paradigm impacts on preferences. Free market economics, for example, was never about delivering free markets. It was, however, about delivering neoliberalism. And neoliberalism has changed behaviour of economic agents. Behaviour, previously treated with contempt, were increasingly legitimised: from tax dodge to pollution law breaking.

From this we can only derive one conclusion. Right wingers, peddling neoliberal snake-oil, were never using human nature to cheer libertarianism. They were encouraging greater coercion, either knowingly (like the elites funding right wing pressure groups) or unknowingly (because they simply ignored economic psychology).

 

I'm not a defender of the intrinsic goodness of Rightwingers, nor of Leftwingers either. I think analysis of peoples' "true" motivations is largely a waste of time. I've been on, and known well, a lot of people of both the (far) Left and Right, also middle-of-the-road liberals, and middle-of-the-road conservatives. Few of them were pure types, in terms of good or bad motivations, or self-interest vs some concern for the public good.

I think we just have to judge by results. Brutal inequal capitalism has begun to lift the world out of poverty. Centralized state-controlled economic systems, not. (Although, in backward countries, these systems were not entirely negative in their effects. But that's another thread.)

I take the viewpoint of Marx and Engels towards capitalism, as expressed in the Communist Manifesto: the bourgeoisie has done wonders in transforming humanity by an astounding development of the productive forces. So long as they keep doing it, and so long as no other system shows that it can do better, we should keep the proven success, while improving it where we can.

If I had your view of socialism, I would look to ways to show that it worked better than the existing system: rather than proposing a leap into the unknown, with all production suddenly being wrested by the force of the state from its current decision-makers, i would propose some sort of slow, voluntary incremental change: why not start something like Mondragon in the US?

It may be the case, as the population gets more intelligent by the decade, and as the educational level creeps up, that the capitalist model will be less and less necessary: maybe your system would prove itself in action, the way capitalism has. The human species has undergone several radical transformations in its way of making a living over the last fifty thousand years -- who is to say that the current system is set in stone?

I don't know anyone on the Right who would disapprove of a voluntary, worker-owned industry -- in fact, I suspect it would meet with approval. It's the centralized compulsory state seizure of private property that we don't like, and I think history has shown we don't like it for good reasons.

 

What collectivist activities do you engage in/live with, Reivs?

 

There isn't any incremental change in the market socialism I've referred to. Property rights are either protected, or they aren't. Socialism and capitalism are, by definition, mutually exclusive. You do get the fake libertarians say stuff like "if it's better, why don't we naturally shift towards worker ownership?". Its certainly the case, as described by the work from the likes of Logue and Yates, that worker ownership generates productivity gains. However, there is a clear distinction between productivity and profitability. The latter, given economic rent seeking, often hinders the former. We see that, for example, with discrimination. This is a hindrance to productivity, but continues because of the rents secured by increased worker exploitation.

 

Human civilization has progressed -- where it has -- by evolving away from animal instincts. The Third World is rapidly -- in historic terms -- shedding its primitive tribalism, superstitions, backwardness. Collectivist methods -- state provision of education is the best example, but also infrastructure provision -- are one way this is happening. So also is bringing the market into economic relations. The hubris of the First World is justified, but it won't be for much longer, as the rest of the world catches up.

Trotsky said that human progress, in general, could be seen as the triumph of consciousness over blind forces. He was mistaken with respect to 'The Planned Economy' as an aspect of this, but was right in general. It's what really makes us different from the rest of the animal kingdom -- the triumph of consciousness over blind, tribalist, collectivist, instinct.

 

You are right that we need to 'interrogate', as the academics like to say, our concepts. So it's definitely in order to ask, "What do you mean when you use the word 'socialism'? Is the United States Marine Corps 'socialist'?"

But if you start the conversation by saying "What is socialism?" you'll just end up arguing in circles.

"Socialism" is a word. Words have no intrinsic 'meaning' -- they're not like boxes, which contain things. They're used by people, often in contradictory ways, often vaguely, often inconsistently.

Most of the young people who use that word probably have not really thought about it at all. It's main attraction is that it upsets old conservatives like me.

And on the other hand, there are some very sophisticated socialists who would have no trouble at all -- it wouldn't raise an intellectual sweat or even make them breathe heavily -- to dismiss the idea that the sort of collective disposition of social resources that they want to see, has anything other than a phonetic resemblance to, say, the corrupt crony-capitalism now destroying Venezuela.

 

This is a very interesting debate. My problem in considering your arguments is that you no doubt have a lot of concrete examples in mind, from which you're generalizing. I haven't read enough of your side's materials to supply the concrete examples you are thinking about, and I suspect this is true of most of the people reading this thread -- assuming there are any others!

So may I propose that you expand on your argument with some examples. For instance, I'm not sure what you mean by "the rents secured by increased worker exploitation". I know, generally, what "rent-seeking" is. And it's clear that the aim of an owner of capital is to increase profits, and that productivity increases are just a means to this, not an end in itself. Thus the well-known 'conspiracy against the public' in the oft-quoted Adam Smith observation.

But why would worker-ownership make the workers behave altruistically where capitalist ownership does not? Why would not the 50 000 owners of Widgits, Incorporated not behave like the 5 000 shareholders of the firm now do? (Behave via the people they choose to actually make business decisions.)

 

We can summarise it as a form of inefficient profit inherently linked with the misallocation of resources. The important part is the unique nature of labour (ignored in orthodox models that assume labour can be modelled in the same way as inanimate objects). How can, for example, the employer avoid solidarity which would encourage compensation according to objective productivity criteria? Discrimination serves as an example. White males at the top; minorities and women further down. End result? Minimization of bargaining power. Another example is the internal labour market. Human resource management replaces supply and demand criteria. The purpose? Ensuring greater worker compliance.

The point is that the employer willingly sacrifices productivity in return for profit. Although corporate power was before his time, Smith can still be used. Like other classical economists, he acknowledged importance of bargaining power. Maximization of productivity and minimization of bargaining power are not compatible.

We can of course start with empirical evidence. Its the higher productivity that then informs the debate. There undoubtedly are multiple explanations on offer. There are voice effects from democracy within the firm (arguably linked to the sociological analysis into efficiency wages, where happiness induces productivity gain). Alternatively, there could be gains simply through the elimination of inefficient hierarchy. The worker owned enterprise can focus purely on efficiency issues such as division of labour criteria. Then there is more Austrian-type analysis. There will be improved information flows and therefore reduced problems associated with distributed knowledge. Hayekian information problems, used to critique socialist planning, are also pertinent to the 'visible hand' of managerial planning.

 

Although I am not neutral on these issues, I try to keep an open mind, because humanity is still evolving, and the way we do things at the moment may change radically in the future -- certainly if history is a guide, it's probable that it will.

So speaking as a not-hostile critic, I would say, show how, say, a small engineering firm would be more productive, if its workers ran things. Wouldn't they, if they were sensible, just vote to keep their current management? How would the way they bid for contracts change? How would what they create change?

I can see the logic of the general socialist argument -- namely, that the free market does not always make socially-optimal decisions. This seems obvious to me, and so we have to argue on a case-by-case basis about where things should not be left to the sum of millions of atomized personal decisions. But I think that's a quite different argument than the one you're making.

On another note: you're probably familiar with the various Marxist discussion arenas on the web, such as Louis Proyect's list. You ought to put your case there -- I've seldom seen any discussion at all among these people about how socialism would actually work, any attempt to address the Scoialist Calculation Problem for instance. It would be good to get some of them thinking about this problem.

 

How small? SMEs are unaffected. In terms of large enterprises, we know that managerial entrenchment goes hand in hand with hierarchy. Restrictions on information flows protects the manager's position. It accentuates agency costs. With less transparency, there's also magnified influence costs. In crass terms, brown nosing is rewarded.

And, as already remarked, we've started with an empirical focus. We know that productivity gains are achieved. We just have a debate over the source. I'd sit on the fence and say they're all in play. It's a circumstance where the Austrians can actually offer a lot (and certainly more than the orthodox economics obsession with a blueprint technical approach to the firm).

The free market doesn't exist. We shouldn't see socialism as just more interventionist. That's liberal and social democracy after all.

The importance of the individual is maintained in market socialism. That is illustrated by two key features. First, it's based on protection of property rights. Second, it requires genuine economic choice.

I'm no Marxist. While it's certainly the case that we can't understand economic outcome without reference to Marxism, those proclaiming to be Marxists tend to kick the notion of pluralist perspective right in the crotch. They become as belligerent as someone simply parotting ideology from the Adam Smith Institute.

 

I have no idea, but it's probably very small. Maybe we can save some time (mine) and embarrassment (yours) here: IMO socialism is even worse than capitalism.

So now you know you have made an incorrect assumption.

What else are you incorrect about, hmmmm?

 

Yes.

My options have been forcibly restricted to bad ones by the removal of my right to liberty, and I am not going to stop identifying that fact, sorry. You can call identification of injustice and oppression "complaining" if you like, but that will not alter the truth. I'm on a treadmill -- like every other productive person -- so the best way for me to make progress is to stop the treadmill, not run faster. Running faster just makes the escalator of privilege that the treadmill powers go up faster. I'm not interested in running faster on the treadmill so the privileged folks riding the escalator it powers -- maybe you? -- can be borne upwards at their leisure, without lifting a productive finger.

GET IT???

IOW, "Shut up and get back on the treadmill." Like I said.

 

Gosh, I hadn't realised you lived in a Third World dictatorship. I assumed you were a First Worlder, the recipient of incredible privilege, safety, freedom, and opportunity. My mistake.

Alrighty then .. you hop off the treadmill and demand that the hard runners take care of you (because after all, you hate them). That sounds like an awesome plan.

 

Socialism is as good as each member of the collective wants it to be.

 

State provision of education is not socialism. It's capitalism funded 'luxury'.

And the hubris lies in thinking a man is an island. That only works for the very rich.

 

I think the words "socialism" and "capitalism" are responsible for more confusion than almost any others you can think of.

Most people I know, or know of, have no problem with the idea that it's a good idea for the state to try to make sure everyone is educated to a basic level, and, on the other hand, don't think it would be a good idea for the government to nationalize all the farms and supermarkets in order to make sure that everyone can eat.

People who agree on these basic propositions can then argue about what is the best way for the state to carry out that educational task -- government-run schools controlled by the centralized national state, some form of decentralization, some form of parental choice, even vouchers -- and they can argue about what role the state should play in making sure the food that private farms and supermarkets provide us isn't contaminated with botulism or dangereous chemicals.

And there will never be a definitive answer to these latter questions, since times change and we change with them, culture has a huge influence -- state schools in Finland are a very different proposition from state schools in South Africa -- so we've got to remain flexible and open to experiment and change. And no human institution is perfect, so any diligent person can always come up with some horror stories about the failure of any system you care to name.

I don't think any sensible conservative or liberal would really disagree with this.

 

It seems to me that unless everybody got an extra portion of peanut butter, then that would be okay. Maybe there was a sale or something. However, if that wasn't the case, then that devout socialist who fights for social justice was not being fair, and the other members in your group got screwed.

Another Berzerkleyite? I was there from the mid 70s to mid 80s. Barrington, hanging out on the ave, silver ball, annapurna... the original north face near the triangle back when it was handmade and guaranteed for life.

 

Yes, Bezerkely -- in a house on what is now Martin Luther King Avenue. I still have a rigid-frame backpack I got, I think at North Face. The aluminium zippers have all perished but it's otherwise fulfilling its guarantee. Bliss it was in that time to be alive, but to be young was very heaven.