REPLY TO COMMENTATORS -- TWO

Let me now turn to a variety of comments on my CREDO. First of all, GTChristie has it exactly right. I am pleased that at least one person understood what I was doing. The images of the lone rider and the barn raising were not intended as arguments. They were designed to capture two competing spirits or orientations toward the world in which we live. Murfmensch, akapital, and Angus all said things I agree with or found helpful. By the way, for anyone interested, twenty years ago I wrote a lengthy critique of Nozick's ANARCHY, STATE, AND UTOPIA that was published in the Arizona Law Review. It is apparently available online [isn't everything?]

Let me, instead, say something about markets and the nature of an evolving capitalism. [Once again, I have written much of this, in a paper entitled THE FUTURE OF SOCIALISM, which is also online somewhere.] Markets have been with us for thousands of years, and will always be with us [need I, as a philosopher, remind us that the Agora where Socrates walked and talked was the central marketplace of Athens?] It is not markets I have a beef with, it is capitalism.

But rather than talk about the problem with capitalism, let me talk about the way in which capitalism is developing. I will here be trying to articulate what Marx called "the laws of motion of capitalist economy." In early capitalism, each firm is small, both in size and in relation to the total market for its inputs and outputs. It is what economists call a price taker at both ends. That is to say, the entrepreneur [who typically runs the company he owns] is forced to pay whatever the going market price is for his inputs, including labor [it is usually a man at this stage, by the way] and to sell his output at whatever the going market price is for cloth or shoes or pins or carriages.

This state of affairs may thrill the Ayn Rand disciples in the world, like Alan Greenspan and Rand Paul [if I may make a literary allusion, Ayn Rand is the Smerdyakov to Milton Friedman's Ivan -- see THE BROTHERS KARAMZAOV], but it does not thrill the entrepreneurs at all. They hate being slaves to the market. It makes their planning difficult and cuts their profits. So, like rational capitalists, they take whatever steps they can to rectify the situation. They increase the scale of their operations, they merge with other firms, all so that they can command a larger share of their input markets [including labor] and dominate their output market. They do this not out of a secret love for socialism [product of their Ivy League or Oxford/Cambridge educations], but because they correctly believe that it is the way to maximize their profits.

Firms also undertake to produce for themselves some of their inputs, as a way of controlling the costs. In short, the firms engage in horizontal and vertical integration. As firms get larger and larger, producing many of the intermediate products required for their production processes, they become unhooked from the tyranny of market forces. A large retailer like Sears actually dictates to its suppliers what big box appliances they will make for sale in Sears stores, and at what price. In industries like automobiles, "market share" becomes a central concern of each firm, and product differentiation, rather than price, controls their decision making.

Eventually, a global capitalist economy develops that is thoroughly integrated with national political regimes and capable of controlling what taxes are paid, and even demanding [and getting] public funds for bailouts when their reckless decisions has endangered their firms.

Once again, this takes place, despite ceaseless rhetoric about "free markets" and "the free enterprise system," because it is good for business, good for profits, good for capitalism. The problem is not markets [as though everything could be blamed on the buying and selling of vegetables in the local Whole Foods], but deep flaws in the INEVITABLE evolution of capitalism. The people who dominate our economy are not stupid. They introduce the systemic changes that lead to our various crises because it makes them rich to do so.

There simply is no way to turn the clock back to the 1950's or 1890's or 1850's. We are long past the time when firms were small, run by their entrepreneur owners, and markets were unaffected by the failure or success of individual firms. You may not like where we are, but it is where we are, and the only possible way forward that does not continue to enrich the few and impoverish the many is to embrace the trend toward planned economic decisions and subject those plans to a different set of criteria -- planning for the good of all, not the enrichment of the few.

Now, this is not the silliness of "market abolitionism." It is, not to put too fine a point on it, socialism.