The discussion provoked by my post about socialism growing
in the womb of capitalism has been fascinating, but completely irrelevant to
what I was trying to say. Let me
explain. I was not arguing that
socialism would be a good thing rather than a bad thing. I was not arguing that socialism was likely to
replace capitalism any time soon [in fact, the conclusion of my paper is that
it is not.] I was actually trying to
think in the way Marx thought. I was
asking: what developments now taking
place in the advanced sectors of capitalism are preparing the sorts of new
social relationships of production that would be manifested in a socialist
economy. In short, I was asking: Is socialism
growing in the womb of capitalism? It
was their failure to ask this sort of question that led Marx to call his
predecessors “Utopian socialists.”
If in fact, as I argued in that paper, advanced capitalism
inevitably and unavoidably transforms purely economic decisions of profitability
and efficiency, driven by the prices presented to the firm by the market, into
quasi-political choices among alternative policies, driven by questions of
desirability [according to some measure], then the structural pre-conditions
for socialism may well be developing within the womb of capitalism, just as
Marx’s analysis of the transition from feudalism to capitalism led him to
expect.
Would I look forward with pleasure to the prospect of
socialism? Indeed. Do I think there would be many difficult
questions to be answered, among which is how to promote technological
innovation? To be sure. But if I am right that socialism is, in a
sense, growing in the womb of capitalism as we speak, then the relevant
question is not whether these new relations of production are a good or bad
thing, as though we had the option of turning back the clock to the earlier
stages of capitalist development. The
relevant question is whether we can establish collective democratic control
over these new relations of production in a way that has proved impossible with
regard to capitalist relations of production.
12 comments:
Can you give an example of corporate managers having "to adopt decision making procedures that are, in their logical structure, political rather than purely market driven in nature" - hypothetical, or otherwise?
Yup. Read my paper, "The Future of Socialism"
(Reposted--I thought I might be persona-non-grata. We'll see...)
The assignment of the relative contribution of inputs to outputs within a firm is sensitive to the choice of accounting methods, which for internal operations fail to provide anything like the determinate external signals of the market. The large corporation is impelled, in virtue of of its organization, the indeterminacy of accounting methods and by external forces (market forces among them) toward internal political decision making. A beautiful and ironic argument.
Something more can be said about corporate organization. The argument holds up without it, but the observation that corporations are not merely market actors responding to price signals has independent support in some remarks of Heath on mechanisms of cooperative benefit:
"...the catallactic theory of the firm, which regards the corporation as simply a “privately owned market,” obscures the primary rationale for this institution, by trying to shoehorn it into a model of efficiency gains based purely on exchange."
Concerning the primary rationale: "Corporations institute teamwork, and thus help achieve economies of scale... Corporations, for instance, also produce significant benefits for their employees through internal diversification (e.g. making it less risky for workers to develop highly specialized skills). The suggestion is simply that the corporate organizational form permits individuals to achieve economies of scale that would be impossible (or prohibitively expensive) to organize through market contracting, and that this provides the primary explanation for its success."
Heath's account does not explain why corporate management should inexorably devolve to quasi-political decision making.
I. M. Flaud, thank you so much for reposting this very interesting comment. I should explain that I am quite ignorant of the enormous literature on the corporation. What you report Heath as saying is really very interesting, and I think supports my claim that capitalism is continually evolving. It would be interesting to explore the ways in which a socialist economy would draw on and develop further, rather than simply reject, the organizational innovations of the capitalist firm.
I should give the reference: Heath, Joseph. The Benefits of Cooperation. Philosophy & Public Affairs Volume 34, Issue 4, pages 313–351, Fall 2006.
The example you provide in "The Future of Socialism" of political decision making in large corporations would seem to be an extremely common feature of today's corporate reality. But what about state involvement? For example, Novartis, a Swiss pharmaceutical company makes a drug called Gleevec, used to treat forms of cancer. Novartis is trying to market the drug to Columbia but it costs nearly double Colombia’s per capita income for a year’s supply. As a result, the Colombian government is considering issuing a much cheaper generic copy. Enter the U.S.: Obama is threatening to withhold $450 million for peace talks between the Columbian government and FARC. Many actors, much money, competing interests - all political. Clearly decision making within Novartis has been thoroughly politicized. Again, this is an everyday occurrence, the reality of contemporary multinational corporate enterprise. So does this count as an instance of political decision making by "some form of political mechanism?"
It certainly does, Jerry, although it is not an example I thought of when I wrote that essay. In countless ways, capitalism has evolved past the market driven reality of the early days [and, as someone will surely point out, even in the early days the state played an important role]. Now, if someone will just figure out how to mobilize masses of working men and women into a coherent force that can tackle the entrenched powers ...
The state played a role even in the early days, at least to the extent that property rights were enforced to enable trade. The corporate managers Hayek claimed would be hampered by a command economy relied at least on this much. Another early social program for business is the limited liability corporation. The mechanism of cooperative benefit in this case isn't gain from trade. Surely those social arrangements ought to be accounted for, beyond whatever the signaling a free market, in the absence of the other mechanisms of cooperative benefit, might yield to Hayek's corporate managers.
The state played a role even in the early days, at least to the extent that property rights were enforced to enable trade. The corporate managers Hayek claimed would be hampered by a command economy relied at least on this much. Another early social program for business is the limited liability corporation. The mechanism of cooperative benefit in this case isn't gain from trade. Surely those social arrangements ought to be accounted for, beyond whatever the signaling a free market, in the absence of the other mechanisms of cooperative benefit, might yield to Hayek's corporate managers.
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