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Tuesday, August 10, 2010


Ok, let's talk about alternatives.

I for one think it's obvious that the world is in dire need of repair. Global inequality is indeed staggeringly high:(still think you're poor? Check this out Thousands of children die every day from ailments which could be treated for pennies. Most of humanity lives under highly corrupt or repressive governments. I honestly don’t comprehend why people shed tears over whether or not relatively poor Americans will get health insurance but don’t similarly weep for absolutely poor inhabitants of the rest of the world for whom our problems would be the least of their worries.

There's a large hostility on part of the left (yes, I mean the real left) towards the market. No, I don't necessarily mean "capitalism" as Professor Wolff defined it, but rather private property qua private property, prices and wages qua prices and wages, management qua management and other things considered market functions. Indeed author Michael Albert has written an entire book arguing for what he calls "market abolitionism".

Feel free to disagree, but attacking the market itself strikes me as absurd. Since the days of Aristotle, it's been well understood that people appreciate things more when they own them. Any decent economist will tell you that in a complex economy a price system is the most accurate way to convey information. And furthermore, anyone with minimal understanding of commerce (something that most people, myself included, have little direct experience with) know that good management is essential to run an enterprise. Lest you write this off as rightwing drivel I suggest you read socialist David Schweickart's rejoinder to Albert's defense of market abolition in which he agrees with me:
Furthermore, I'm convinced that the entrepreneurial spirit is an inherently human trait to be found across cultures and classes. The Grameen Bank and other such organizations have found tons of entrepreneurs in the poorest most desolate parts of the world.

These sentiments underlie the alternative which most Marxists have traditionally proposed. It's the market itself that is the cause of all the suffering in the world and it's the market itself that must be replaced by something superior. They correctly recognized that only thing powerful enough to get rid of the market is the state and it’s the state that must first be controlled. While Bakunin presciently pointed out that this would lead to tyranny on an unforeseen scale, the Marxists maintained their statist convictions and proceeded to take control of state apparatuses. Well, I think we can agree that state socialist alternatives to capitalism have, despite providing some benefits to be fair, largely been disastrous, tyrannical, authoritarian and in some cases genocidal. And it is precisely because they tried to do away with market mechanisms that the horrors of 20th century communism occurred. Mao’s Great Leap Forward is probably the most gruesome example.

These well-documented and well-understood failings of Marxist economics in the 20th century should make one pretty skeptical to say the least to expect Marxism to provide a beneficial alternative to the status quo.

There are other alternatives to capitalism which incorporate market mechanisms that Marxism tried to abolish. Benjamin Tucker and Kevin Carson’s mutualism is one example. Agorism, a system in which corporations and wage labor all but vanish due to nearly all agents in the economy being self-employed, is another. Economic Democracy, a system in which prices are set by and competition is carried out between democratically-run firms is another. Organizations like the Seasteading Institute, correctly recognizing that we don’t really know much about human society are helping people finance and build their own communities on the sea and experiment with all kinds of things that statist constraints prohibit on the land.

To me, this is where an alternative to capitalism will come from, not from any “dictatorship of the proletariat” or anything like the horrors that 20th century Marxist states inflicted upon humanity.

Anarchists in particular, imho, should spend less time focusing on critics of the status quo who neither offered nor tried to offer any detailed alternative (i.e. Marx) and more time learning about and discussing proposed alternatives already in motion.


Boram Lee said...

Hi Scott, thanks for mentioning all these alternatives, many of which I have not even heard of. I am not an economist and pay too little heed to these important issues, but FWIW I'm inclined to agree that alternatives to capitalism incorporating market mechanisms are the most promising route to take. I agree too that top-down social engineering on a massive scale can have disastrous unforeseen consequences, and is not the way to go.

So, instead, we should look at piecemeal small-scale social engineering that can be implemented and tested at the local level by voluntary participants and entrepreneurs. Over time we should be able to tell the successful experiments apart from failures, and the consequences of failure will be locally contained. To name one successful or at least promising case, for example: local currencies like Ithaca Hours or Time Dollars. Local communities can print their own money to circulate only among willing participants in the community, and this is a way of keeping wealth within the community and investing in local enterprises. It sounds like a promising way to stem the Walmartization of local towns and communities. Earlier this year there was the movement initiated by Arianna Huffington et al to "Move Your Money" from Citibank, Bank of America, etc. to local community banks, and that seems to me a promising trend along the same lines as local currencies. These seem to be ways of turning back the tide of "financial capitalism" that Professor Wolff mentioned, and investing in local communities and projects thereby making further small-scale engineering possible.

Another promising area to look at is worker-owned coops, I think the most successful case being Mondragon (which you mentioned earlier in one of your comments). I may be wrong, but I read somewhere (perhaps Wikipedia?) that the reason why Mondragon is so successful where others have failed is that it only allowed workers or participants in their projects to own stocks, so that it was not subject to the fluctuations and gambling on the financial market. Another reason is that they have their own bank to fund innovative projects. It would be interesting to find out how Mondragon has fared in the current recession, I'd like to predict that it wasn't affected by the recession at all, but then again I only have a rudimentary grasp of economics. If anyone knows whether there's any data on this, I'd love to know!

David Pilavin said...

I have a rather odd question:

From whence does the assurance stem that there must be some alternative to Capitalism [or whatever you call it]?

Is it akin to some kind of a religious belief that the good God cannot allow things to go on as badly as they do forever?

Note that I am not implying that Capitalism is great or even good, I am just saying that the assumption that there must be something better is suspect...

To put it otherwise: of all the systems that actually worked [not just sounded good on paper], Capitalism seems to be the least bad of them all.

And, after all, neither Feudalism nor Capitalism nor any other of the systems that worked were first planned and then implemented but all of them were developped through trial and error in a process similar to Natural Selection. And, like NS, this process too had its by-products and its waste...

Robert Paul Wolff said...

David, the answer to your question is in two parts: First, an historical analysis to undermine the claim that capitalism is simply equivalent to rational action, and hence can only be replaced by something less rational. And second, an economic and institutional analysis that shows that capitalism is endlessly changing and evolving, and then tries to figure out in what direction it is evolving. It is not a matter of defining two or three simple ideal models and then debating which one to adopt. One does not "adopt" a structure of economic organization, even if one is Lenin or Trotsky or Stalin, Modern multi-national financial capitalism is very different from mid-twentieth century nationally based industrial capitalism. If we look closely at what is happening today, can we discern the trends that are leading to whatwever weill emerge tomorrow?

That is the perspective I am encouraging us to take.

David Pilavin said...

Dear Prof. Wolff,

I agree with your second point.

However, concerning the first point - I dare not claim that "capitalism is simply equivalent to rational action, and hence can only be replaced by something less rational." This kind of discourse smells too a-priori to be of any value.

I rather say that there is no indication that capitalism can be replaced by something better -- for example, no better working system has hitherto been found.

In other words: The mere fact that Capitalism is bad does not constitute evidence that there is anything better in stock waiting to be unfolded unless one believes in Divine Providence that governs History or some other version of teleology.

Now, if Capitalism is the lesser of all evils *actually available* to us, then it is dangerous to undermine it [I mean, through political action - not through mere talk like we have here] -- lest something worse would come about.

Chris said...

David, better at what? for who? for what? You can't just assume Capitalism is the best, when people who participate in it, and also participate in alternatives, subjectively approve and prefer different models.

For you to claim Capitalism is better for all is totalitarian, and hardly takes into consideration the values of the individual, or small scale communities (or even large).

So let's take the Zapatistas for instance. They are not industrial, they are an agrarian indigenous society, with an anarchist structure. They developed this by directly rebelling - with force - against NAFTA, the State of Mexico, and foreign multi-nationals. For them, living in what the capitalist considers poverty, is better than living in what you consider better.

So why is it you choose to value capitalism as "better," over and above the wills and desires of the Zapatistas? Why is it you're comfortable subscribing it as better for all?

Just appealing to raw statistics about material goods, wealth, and standard of living, consistently fails to factor in the subjective feelings of individuals and communities. To vindicate this point, care the statistics of Scandinavia - in regards to happiness - with those of America. We are 'richer,' have more 'wealth,' and 'produce more,' yet we are less content in life. On that some token, people in alternative economic models can be 'better' off.

Chris said...

I apologize for continuing with a second post, but the way these Marxist and Capitalist talks are continuing is making me cringe. (And I admit, I love Marx's critique of Capitalism.)

Each of you speaks in a jargon so laden with Western values, it makes me cringe when I doubt you've ever even considered the outlooks of those few landscapes left of former colonial victims.

Stepping away from the Zapatistas, numerous Native American groups - yes we didn't kill them all - still exist in small nations throughout the US. They publish books, write articles, go to college, etc, and no one seems to bother to listen. They have been warning about climate problems, and resource depletion, deforestation, water polution, etc, for decades! And I can safely assure you if you take the time to hear their side of things, they not only loathe capitalism, they could care-less about Marxism, and they certainly have their own traditional models, methods, and approaches, to the economy and politics. So for Marxist and Capitalist to just sit here as if they are the only games in town, and anyone not playing with them is not "better off," or as "well to do," or living an inferior lifestyle, is frankly to be a proponent of further colonialism and totalitarianism. Ignore, and silence the non-traditional-western opposition, and keep on your merry ways. How I wish one would address what is to be done a community says "we want neither!"

Chris said...

Finally, here's Chomsky on "well isn't Capitalism the best we have."

David Pilavin said...

Chris, I was not insisting that "Capitalism is better for all". I only departed from premises accepted by Prof. Wolff and by most other people participating in this present discussion who criticized capitalism as *objectively bad* [and so, accepted the existence of objective criteria for "good" and "bad" in Politics and in Economics] and my point was merely that Capitalism being bad does not entail the existence of any better alternative.

Now, if you come and say that there are no objective criteria at all for good and bad, then with you I would have an altogether different discussion.

After all, if all that matters is one's subjective feeling about this or that then an argument of the sort: "I like Capitalism better than [...]" is as good an argument in favour of Capitalism as any -- as a better argument for a political system is not possible even in principle and no better argument is needed.

Chris said...

You're not speaking to me honestly. You said:

"I rather say that there is no indication that capitalism can be replaced by something better -- for example, no better working system has hitherto been found."

And I immediately refuted this claim by pointing out that people who have been exposed to the capitalist system, have rejected it, and successfully found alternatives. So before we discuss the subjective/objective dilemma, it's at least quite clear that alternatives to any kind Marxist, or Capitalist order do in face exist, and have existed. Unfortunately this conversation Wolff has created, and people have been following, simply fails to limelight this basic reality.

Now I know for sure I can criticize capitalism as Objectively bad. No system has destroyed more landscape, and sent more species into extinction, than capitalism. The rot it impacts on drinking water, oceans, air, forest, and non-human species, is profound. Frankly, the system has no serious future if it continues to think the whole word can industrialize and somehow not destroy the land base that gives humans - and non-humans - life.

I don't think I need to say there is or isn't an objective basis for good or bad. And even if I did say there was/wasn't, I still would not impose my view on others that my preferred model is BETTER for a community who chooses to live differently in the face of my model. Therefore, as the - now tacit - imposer, I ask you to rectify my question. What happens when a community says to the capitalist, and marxist, "we reject both!" How do you convince them, your capitalism is better than their way of life (especially when Capitalism has no sustainable future)?

Appeal to objective or subjective good/bad concepts.

If you don't, we are stuck in your admitted dilemma, of saying "i prefer this, therefore it's better."

Scott said...

We've already been over this. Professor Wolff wrote:

"If you think that capitalism is the only alternative to feudalism or slavery, then your only concern, if you feel one, will be to figure out ways to ameliorate some of that misery. If you do not feel the slightest concern for that misery, then I have nothing to say to you. Go your way, and try to stay out of trouble.

But, suppose capitalism is not the equivalent of rationality. Suppose that just as capitalism grew out of feudalism, so perhaps something different can grow out of capitalism, something even more rational, even better at serving human needs and avoiding the periodic crises, such as the one we are now in. Then I for one want to figure out what that is and work to bring it about. I do not expect those who have benefitted the most from capitalism to join me in this struggle, although some may. But I can at least hope that those harmed by capitalism, those impoverished in the face of its outpouring of goods, those who have no option but to take a bad job, rather than the even worse job or no job that would otherwise be their lot, will join with me, or allow me to join with them, in the fight."

In the spirit of these words I wanted to talk about alternatives to capitalism for the sake of argument. My point was that if there is to be an alternative to capitalism it will come from market-based approaches and not from Marxism. Can we just stay on topic and leave whether capitalism is the best system for another discussion?

Chris said...

The reason I take the topic off course, is because the foundations of the topic are frankly flawed. Objectively that is. I can directly point to a flaw, and therefore the conversation, if it's to be sincere, should not continue on as usual.

Anyway, here's the flaw.
First we open with the discussion of "could there be alternatives?"
Than we are led to:

"But, suppose capitalism is not the equivalent of rationality. Suppose that just as capitalism grew out of feudalism, so perhaps something different can grow out of capitalism, something even more rational, even better at serving human needs and avoiding the periodic crises, such as the one we are now in. "

Where as what I'm saying is, premise 1 is in fact true. It's demonstrative. Go to Chiapas Mexico. Talk to the Zapatistas.

But, if you do look at the Zapatistas you must quickly realize that their anarchist society did not "grow out of" - as premise 2 of you and Wolff's thought experiment goes - capitalism, but fundamentally rejected it, and instead RETURNED to more indigenous way of life. So, by your standards, the alternative went in the opposite direction.

Essentially, you all are being myopic in looking for alternatives that 'grow out of,' and entirely ignoring alternatives that exist, and reject.

Marinus said...

It seems that Scott's contribution is edging us towards the question of what good we can expect to get out of markets. Like Prof. Wolff says, there is a common belief that market activity just is maximally rational activity. Well, those of us who are a little more skeptical of the goods of the market (or, at least, skeptical that they go *that* far) can still make sense of this fact, and get some use of it. Everybody is going to admit (or be forced to admit) that just the brute existence of some market doesn't magically make everything better for everybody -- there is some story to be told about how that market makes our lives better. And that story is going to give us some pre-conditions that need to be met for the market to actually benefit us. I think there is a lot we can learn which is very enlightening if we take a close look at when (and only when) markets are good for us. We can do this in the type of language and formal framework normally used by the advocates for laissez-faire economics. After all, as the saying goes, one philosopher's modus ponens is another's modus tollens: 'A entails B' can either be an argument for B or against A.

I've recently had a discussion touching on this topic on the Oxford Practical Ethics blog, regarding the trade in organs. I'm willing to put together a more comprehensive, polished version of this line of thought for a guest post, if anybody is interested.

Boram Lee said...

David, you write:

"...and my point was merely that Capitalism being bad does not entail the existence of any better alternative."

Of course you are right but I don't think anyone disputes it. The point is simply that "better" and "best" are comparative terms, and being best in the set of actual alternatives past and present does not entail being best simpliciter, i.e., better than anything else in the set of all alternatives, actual and possible.

In the philosophy of science, realists who argue for the existence of unobservable theoretical entities like atoms, on the assumption that they are inferences to the best explanation, have been criticized on the basis that "best" here only means best among existing alternatives. A better theory could come along that denies the existence of atoms. And one might even use pessimistic meta-induction from the history of science to argue the point that it's very likely that present theories could be false or if true, only approximately so, that there's room for improvement.

Perhaps likewise, then, for the philosophy of social sciences. But the simpler point is that just as the badness in various respects of capitalism does not entail there being a better alternative, it does not entail there not being one either. And we will never know unless we imagine other alternatives and test them. Scott's point was, I believe, that testing alternatives with central planning on a massive scale would be dangerous with consequences even more disastrous than capitalism. So I had suggested small scale testing in my earlier comment.

Boram Lee said...

Chris writes: "...and entirely ignoring alternatives that exist, and reject." Yes, I'd love to hear more about that too.

Marinus writes: "I've recently had a discussion touching on this topic on the Oxford Practical Ethics blog, regarding the trade in organs. I'm willing to put together a more comprehensive, polished version of this line of thought for a guest post, if anybody is interested." Yes, I'd be interested, thanks.

David Pilavin said...

Boram, I entirely agree with you on both points:

1. That better alternatives *may* exist [I never denied it].

2. That alternatives should be tested in volontary, small-scale communities before any attempts at implementation.

Now this last point poses a problem as people advancing alternatives tend to vaccinate their theories from falsification by saying that their thing could work only on a world wide scale.

That's one of the methods used by some Orthodox Marxists to explain away the failures of Communism.

It is akin to a quack doctor proposing a new medicine that is supposed to cure all deseases but only on the condition that all people in the world would consume it -- otherwise it would kill those who take it.

Some religious leaders sometimes use this technique too. They say:

Prayer works, but only if one "deserves". Any subsequemnt failure of a prayer to work would be explained by the undeservingness of the supplicant, or his community, or whatever.

Chris said...