I’ve responded to this specific request in another response on this thread, but my definition of socialism is public ownership of the means of production, operated for public good (however that ends up being defined). Again, if you have time, read that last comment on the post I linked to if you’d like to see more about how market socialism might work.
What I believe has caused the fall of socialism in the past is that most economies which operate socialistically are guided by central planning (typically by a national government). This means that production is allocated according to whatever a central planner believes it ought to be; this is obviously problematic because no one person (or committee of people which represents but a sample of a population) has sufficient information to make socially-optimal decisions on production. Therefore, socialism has been seen to fail at what it (in my understanding) has been its only real goal—production of public good; I believe that these failures demonstrate the inadequacy of planning, not socialism.
Free markets, by contrast, aggregate information from millions of people, dramatically improving their efficiency, when compared to central planning, at producing goods. This is where I believe socialism should come in. Using markets, as opposed to planning, for socialist means, i.e. production of social good, ought to significantly improve both macroeconomic efficiency by decentralizing economic power, and social welfare simply by making it the priority.
my definition of socialism is public ownership of the means of production, operated for public good (however that ends up being defined)
OK, so the USSR, Cuba, North Korea, and China until twenty years ago or so—all were/are socialist countries, right? On the other hand, countries like Sweden or France were never socialist—correct?
its only real goal—production of public good
The expression “public goods” has specific meaning in econospeak, I assume you’re not using that but just talking about goods for public consumption.
But I’m still confused. The (more or less free) markets do indeed signal to the producers what to produce. The mechanism by which they do that is price. Desireable goods command high prices and so create the incentive to make more, while goods not in demand are not sold and their manufacturers either switch production or go out of business.
Given the state ownership of the means of production and the absence of the profit motive I wonder how will the market mechanism operate. After all in USSR and similar countries the “market” existed—people bought things in stores and paid money for what they bought. It’s just that the signals from this market were ignored—nobody cared about them.
What exactly would make state-owned companies with no profit motive care about prices or demand?
“OK, so the USSR, Cuba, North Korea, and China until twenty years ago or so—all were/are socialist countries, right? On the other hand, countries like Sweden or France were never socialist—correct?”
Correct. Socialistic, sure, but not socialist.
“The expression ‘public goods’ has specific meaning in econospeak, I assume you’re not using that but just talking about goods for public consumption”
No, I did not mean public goods in the economic definition. Perhaps I should have said “Public Good”: production of things which the public deems to be uppercase-goods: education, positive social interaction, food, shelter....The list would vary, but yes: “Public Good”(s) for public consumption.
As for the rest, you still haven’t separated out public/private ownership of the means of production (MoP) and capitalist/socialist operation of the MoP. And when I say “market economy”, I mean organization of the MoP such that they respond to market information, i.e. supply and demand. State ownership, as in the USSR, doesn’t respond to supply and demand information; it responds to central planning information. Planners in the USSR decided, with the necessarily-limited information they had, how much of whatever good would be produced. I’m not advocating for that.
As I said in response to another comment on this post, it seems to me you can divide economic organization along three axes: public/private ownership of MoP (i.e. w/ or w/o private property), capitalistic/socialistic operation of MoP (i.e. for profit or Public Good), and operation of MoP according to market/planned rules. Democracy plays an important role in making public ownership work, as demonstrated nicely by both China and the USSR, for different reasons.
China, provides an excellent example of what seems to me to be just about the worst of all of those options. It’s major corporations are state, i.e. (nominally) public enterprises operated for profit according to goals set by provincial and national planning committees. However, because allocation of public ownership isn’t a democratic process, the CCP sort of does whatever it wants with China’s economy, keeping a large portion of the proceeds for itself and needing only to worry about fostering enough growth, for the general citizenry, to prevent itself from being overthrown. But, you at least have the profit motive for workers forcing them to be more productive, even though the system is utterly rigged against them.
The USSR was slightly better in one theoretical way, but worse in another in reality: state enterprises, operated for social good according to goals set by a central planning committee. This means you had the handicap of planning, and there was still the problem of public ownership being allocated undemocratically, but at least the MoP were supposedly being operated for the production of Public Good. However, there was was essentially no incentive for work: no democracy, thus no pressure from the public for the government to be efficient, and no incentive from the market for workers to be productive.
I’d say more about the importance of the democratization/publicization (however you’d like to put it) of the ownership of the MoP, but again, there’s quite a bit more written in that post I linked to a few comments up.
I mean organization of the MoP such that they respond to market information, i.e. supply and demand.
Well, that’s the crux of the issue, isn’t it? How can you organize the means of production so that they will respond to market information without going capitalist?
China, provides an excellent example of what seems to me to be just about the worst of all of those options.
That’s an interesting opinion. It’s interesting because China’s last 20 years represent a colossal success. This “worst of all” system pulled out of poverty many many more people than all the Western charities put together. The Chinese are MUCH better off now than 20 years ago—thanks to this “the worst” system.
the problem of public ownership being allocated undemocratically
I don’t understand—what is allocation (democratic or not) of public ownership?
“Well, that’s the crux of the issue, isn’t it? How can you organize the means of production so that they will respond to market information without going capitalist?”
Responded to this in the other comment thread we have going.
“That’s an interesting opinion. It’s interesting because China’s last 20 years represent a colossal success. This “worst of all” system pulled out of poverty many many more people than all the Western charities put together. The Chinese are MUCH better off now than 20 years ago—thanks to this “the worst” system.”
That was just a matter of convergence: China finally taking advantage of the technology and trade it had waiting at its door, anxious to better-utilize the many types of capital China has in excess of probably anywhere else on the planet (India isn’t quite as resource-rich). Soviet socialism and Leninism had a similar effect on Russia for the first few decades of the USSR. That stopped when the inefficiency of the system became too great to overcome, and China will likely slow down similarly within the next few decades after the industrial-technological-human capital space between it and the developed nations shrinks. In fact, that is exactly what we’ve seen in most other wealthy nations in East Asia: first Japan during the Meiji Restoration ending with the 80′s asset bubble, then South Korea during the Miracle on the Han through easily before the end of this decade, and Taiwan after that, likely to continue longer assuming things remain relatively peaceful with China. Singapore and Hong Kong are the two exceptions, advantaged as they are as an international trade port and traditional entrance to the mainland Chinese market, respectively.
“I don’t understand—what is allocation (democratic or not) of public ownership?”
It’s a matter of determining in what way socialized claims to ownership are distributed. Private property is essentially a legacy claim—I found it, it’s mine. It’s a natural means of private entities claiming resources, the kind you see dogs and cats using to mark their territory. Socialized claims to ownership are decided by a polity. Historically, the polity which brought about the opportunity for socialized claims has been a small cadre of people, former members of the public who’ve decided to revolt, against private (in this case, state) ownership. However, logically, enough, when they assumed power, they naturally assumed control as well, and once again a form of private ownership occurs.
However, if the polity which brings about socialism is everyone, or you have an inhumanly-magnanimous cadre of people, then everyone ought to (ought being an admittedly imperative word, here) distribute ownership claims democratically, i.e., to everyone. I’ll admit that last bit leaves a big space for things to go wrong, and that’s why I tend to prefer the inhumanly-magnanimous cadre of people, or even a single such person. Alternatively, people tend to respond well to Rawl’s idea of the veil of ignorance and iterations thereof.
Funny how that hasn’t happened under Mao who, presumably, was running a “better” system. And really, is India that resource-poor compared to China? Enough to explain the difference in growth rates?
Soviet socialism and Leninism had a similar effect on Russia for the first few decades of the USSR.
Did they? I am not at all sure about that. Granted, trustworthy statistics are hard to come by, but it does seem to me that the living standards of the Chinese people rose much faster and further than those of Russians under Stalin. The Russians were building heavy industry plants—just like Mao did—and while certainly useful (as WW2 demonstrated), they didn’t do much for ordinary people.
China will likely slow down similarly within the next few decades
Yes, I agree, but no country can support breakneck development for long. China slowing down eventually does not support your thesis that it suffers under “the worst” system.
Socialized claims to ownership are decided by a polity.
Initial ones? Or all the time—meaning claims to ownership can be granted or taken away by the polity at will? If the latter, I would object to calling this “ownership”, it’s much more akin to a mere license.
...distribute ownership claims democratically, i.e., to everyone.
That’s how the ownership of the former Soviet factories, etc. was distributed in the early 1990s.. Basically everyone who worked at a particular factory got a “share” of ownership of that factory in the form of the so-called “voucher”.
You can google up how well that worked.
On the other hand, if you mean non-transferable ownership then it’s not really ownership and I don’t see much use in it.
“Funny how that hasn’t happened under Mao who, presumably, was running a “better” system. And really, is India that resource-poor compared to China? Enough to explain the difference in growth rates?”
No; Mao was essentially running the same system as the USSR: state ownership of the MoP, operated for socialist ends, according to central planning doctrine—the same incentive-less structure for both government and workers. The only thing that’s changed was a kind of democratization of the ends—they now had to be somewhat responsive to the demands of the global market for China to achieve its export-oriented growth. However, China’s domestic market remains essentially constrained by planning.
On the other hand, India is, per the definition we seemed to have agreed on in the other comment thread, no more than nominally democratic (government unaccountable to public demands in a practical sense). However, because it is nominally a democracy, it can’t just go around doing whatever it wants, meaning it has the inefficiency of meeting public demands, the same kind of handicaps to growth as much richer countries, and the inefficiency of a government which is unresponsive to the public. At the same time, this façade means that the average Indian citizen can’t just be abjectly angry with the Indian government: he can and has to vote the current people out for a new group, if it’s so bad.
China doesn’t have to worry about that. Really, the Chinese system is just so incredibly messed up that it seems to be working, for now, in spite of itself. And it’s not the future slow itself down that’s a problem; if having to maintain a growth rate of 8% or better forever is problematic, which we seem to agree is the case, and China’s governmental system will collapse without that, then it’s unclear in how, in the long-term, it’s really a better system. I’ll put it to you this way: which system of governance would be easiest to drop into a wealthy, democratic, Western society which isn’t experiencing rapid economic growth: India’s or China’s?
“Did they? I am not at all sure about that. Granted, trustworthy statistics are hard to come by, but it does seem to me that the living standards of the Chinese people rose much faster and further than those of Russians under Stalin. The Russians were building heavy industry plants—just like Mao did—and while certainly useful (as WW2 demonstrated), they didn’t do much for ordinary people.”
We’re not here arguing about the speed or duration of improvement of living standards; we’re arguing about end-states. In both China and the USSR, living standards did increase dramatically for most people. And the difference is, again, partially attributable to the difference in the technological convergence space between China and the USSR. Imperial Russia was already a minor industrial power before the revolution; China was barely industrialized to any extent before Deng’s reforms in the 80′s, meaning it had nearly a century of growth to catch up on. In consideration of the facts that in neither case do we have democratization of ownership or responsiveness to a market, and in both cases convergence will end, and you see why they did/will stall and fall.
“Initial ones? Or all the time—meaning claims to ownership can be granted or taken away by the polity at will? If the latter, I would object to calling this “ownership”, it’s much more akin to a mere license.”
Initial ones; they’d be dealt out at birth to be utilized at the appropriate time, 14, or 15, or 18, or whatever age a particular vision of the Public Good decides it should be. Think of them like citizenship cards: no matter what country (or vision of the Public Good) you’re born into, you get one, and you can’t legally sell it. These differ primarily in that no one could take it away from you, either, as it’s a claim to your own labor as much as anything else, and you’re free to go to whatever vision of the Public Good appeals to you at that pre-designated age; in that way, they’re more like passports.
“That’s how the ownership of the former Soviet factories, etc. was distributed in the early 1990s.. Basically everyone who worked at a particular factory got a “share” of ownership of that factory in the form of the so-called “voucher”. You can google up how well that worked. On the other hand, if you mean non-transferable ownership then it’s not really ownership and I don’t see much use in it.”
Well, the problem is, once again, that those were ownership stakes in state-owned factories—once again, state-owned in a non-democratic system is owned by the class of people who were members of the state government, i.e. members of a private class.
When you say “non-transferable”, do you mean “non-exchangeable”? Because it seems to me as though one thing that ownership ought to be is non-transferable. I can offer to “transfer” my ownership of a particular piece of property to you in exchange for something you own, or, just as easily for you, you can try to kick me out without having to exchange anything. Short of killing me, you can’t take away my labor, or, in the scenario we’ve been working out, my claim to ownership of the MoP, and if you kill me, then neither you nor anyone else gets it, either.
This is where we can bring in both Kant and Rawls; if I devise a moral law (e.g. people ought to try to take others’ ownership claims from them by force) which I would not apply to myself, I can hardly call it a law. On the other hand, if I don’t know whether I’ll be put in the position of the person who has an ownership claim, or a person who tries to take that ownership claim, and we all agree that one of these is a bad thing, then we simply won’t let this scenario arise. This is, again, essentially the market acting on morals: not enough people want for this thing to happen, so it won’t.
Really, the Chinese system is just so incredibly messed up that it seems to be working, for now, in spite of itself.
Heh. I think your theory finds itself in contradiction with empirical reality. Sorry, the reality always wins.
a growth rate of 8% or better forever … and China’s governmental system will collapse without that
It is not obvious to me at all that the Chinese political system will collapse without that.
Initial ones; they’d be dealt out at birth to be utilized at the appropriate time, 14, or 15, or 18, or whatever age a particular vision of the Public Good decides it should be. Think of them like citizenship cards: no matter what country (or vision of the Public Good) you’re born into, you get one, and you can’t legally sell it.
Ah. So it’s not ownership at all—it’s just a work permit. Or an internal passport. I see no reason to call this “ownership”—why do you think this word fits?
those were ownership stakes in state-owned factories
No, this happened in post-Soviet times. The factories were privatized by giving (for free) the ownership shares to the workers. After that process was complete, the factories weren’t state-owned any more, they were owned by the newly-minted shareholders.
Because it seems to me as though one thing that ownership ought to be is non-transferable.
Again, I think you’re badly misusing the word “ownership”. It doesn’t mean what you think it means :-)
Short of killing me, you can’t take away my labor
Sure I can, that’s what slavery is. Or if you’re talking about labor potential I can easily take it away by locking you in a cell.
You seem to think that there is something wrong with voluntary consensual exchanges of things of value. Or do you reject the whole idea of property?
“Heh. I think your theory finds itself in contradiction with empirical reality. Sorry, the reality always wins.”
It only “wins” if the sole concern of a political economy is economic growth. I’ve said pretty clearly that no one can deny that, in that sense, it’s winning. However, it’s doing so by sacrificing human welfare in a way that other systems don’t require—pollution, oppression of free expression, miserable working conditions...the list goes on. You’re continually looking at the economy as if the only figure that matters is income per capita. I don’t think I’ve denied that that’s part of it, but we have quality of life indices for a reason.
“It is not obvious to me at all that the Chinese political system will collapse without that.”
Numerous people—economists and politicians both within and outside of China—have said that, not the specific number I used for example, but that the legitimacy of the CCP government is entirely dependent upon increasing economic growth, as we already have ample evidence to suggest that it, as a planned economy, will not be able to improve quality of living independent of that. I’ll see if I can’t pull up a few quotes to that effect.
“No, this happened in post-Soviet times. The factories were privatized by giving (for free) the ownership shares to the workers. After that process was complete, the factories weren’t state-owned any more, they were owned by the newly-minted shareholders”.
If someone handed you the keys to a car which could barely run, would you go through the expense of getting it back in working condition, or just sell it for parts?
“Ah. So it’s not ownership at all—it’s just a work permit. Or an internal passport. I see no reason to call this “ownership”—why do you think this word fits?”
Tell me, why do you think it doesn’t? Because again, I’m having trouble understanding.
“Again, I think you’re badly misusing the word “ownership”. It doesn’t mean what you think it means :-)”
“You seem to think that there is something wrong voluntary consensual exchanges of things of value. Or do you reject the whole idea of property?”
Well, as you seem to totally reject my idea of ownership, care to give me yours?
“Sure I can, that’s what slavery is. Or if you’re talking about labor potential I can easily take it away by locking you in a cell.”
Yes, but is slavery generally considered a just and viable way to procure labor in a fully democratic society? No; again we can fall back to the Rawlsian veil of ignorance: if I can’t apply the rule of “all people must agree with slavery” to myself (which it seems, by the definition of slavery, that I can’t), then it’s not something people in an egalitarian democratic society will support. And locking me in a cell does nothing to remove my labor from me. You can force me to use it to produce goods for you, but again, that’s slavery, which won’t happen in an egalitarian democratic society. Or even if you don’t force me to work for you, I can still labor to find a way to escape. I fail to see an important distinction between labor and labor potential; they both refer to the ability to do work.
It only “wins” if the sole concern of a political economy is economic growth.
Nope, the concerns of a political economy are irrelevant here.
The contest is between a map and a territory and the territory always wins.
Numerous people … have said that
Yes, I know. But the argument to popularity is not a good way to evaluate forecasts :-/
Well, as you seem to totally reject my idea of ownership, care to give me yours?
Sure. Ownership is a bundle of rights (and each right, of course, has a corresponding obligation on the part of others). What’s exactly in this bundle varies, but typically there will be the right to exclude others (if it’s mine I don’t have to allow others to use it), the right to control, the right to destroy, the right to transfer (sell), etc.
The bundle, as I said, varies. There are limitations on most of these rights depending on your local laws, and some of them are not applicable to certain types of ownership (e.g. if you own a piece of land there is no right to destroy). Borderline cases certainly exist—e.g. you can argue that copyright is a form of property and you can argue that it is not.
You are saying that something like an internal passport gives you a share of “ownership” in all means of production in the society. What does that mean? Which rights do I, personally, have with respect to that which I “own”?
P.S. You haven’t answered the question whether you object to the notion of property in general.
“Nope, the concerns of a political economy are irrelevant here. The contest is between a map and a territory and the territory always wins.”
So, to be clear, you don’t believe that political economy is part of the territory? Really??
“Yes, I know. But the argument to popularity is not a good way to evaluate forecasts :-/”
Some people appreciate an appeal to authority, but I don’t need one to justify what I said. I’ll respond differently to an announcement that you’re going to twist my finger, if you tell me before doing so that you’ll give me a lollipop afterwards if I let you, than I would if you simply told me you were going to twist my finger, right?
“You are saying that something like an internal passport gives you a share of “ownership” in all means of production in the society. What does that mean? Which rights do I, personally, have with respect to that which I “own”?”
Well, labor seems like the obvious component here. Whatever other means of production exist now only exist because someone in the past labored to make them. I’ll concede that I haven’t totally worked out how you’d evenly divide up extra-somatic means of production, i.e. existing private property, but it seems like it ought to be possible to construct a pricing model to evaluate all the means of production in an economy and split that value equally among all participants in that economy.
Shares would represent a compensation for the price assessed of the global means of production by the global market, divided by the number of people in the world, with each person getting one share. This share is an ownership claim because it is exclusive to its original owner (no one is able to take it from me, nor can I take one from anyone else), and I control it (no one can make me use it for a purpose other than one of my choosing). I should’ve asked earlier, are you familiar with the distinction between private property rights and personal property rights? These shares would be an example of the latter, and thus have a different set of ownership rights than the private property rights we tend to focus on now.
P.S. You haven’t answered the question whether you object to the notion of property in general.”
I did on the other comment thread a little while ago, but I’ll say here as well: I’m a consequentialist. If capitalism and private property gets me the end I’m seeking, I’m fine with that. But if it doesn’t, I’m not. Values should be system-neutral.
So, to be clear, you don’t believe that political economy is part of the territory? Really??
Really really :-) Political economy is a description of how the world works. Being a description, it is a map.
This share is an ownership claim.
Let’s do a little gedanken experiment. I hereby give you a piece of paper that represents a share, an ownership claim on your fraction of the global means of production. It is exclusive to you and you control it.
Oh, but say you, it’s fake, it doesn’t represent anything!
OK then. In the system which you describe, what can you do with you “true” ownership claim that you cannot do with the admittedly fake claim which I have just given to you?
If capitalism and private property gets me the end I’m seeking
“Really really :-) Political economy is a description of how the world works. Being a description, it is a map.”
I’ve always thought that ultimately, description is the best that anyone can ever really do. We’ll be getting into epistemology if we go down this route any further; your call on whether or not you want to do that.
“Let’s do a little gedanken experiment. I hereby give you a piece of paper that represents a share, an ownership claim on your fraction of the global means of production. It is exclusive to you and you control it. Oh, but say you, it’s fake, it doesn’t represent anything! OK then. In the system which you describe, what can you do with you “true” ownership claim that you cannot do with the admittedly fake claim which I have just given to you?”
...I’m assuming that the parallel with paper currency is intentional. This is exactly the way in which any system of private property works: the validity of the claim is based on a common social contract. However, as these shares are claims to a publically-owned property, it is a type of personal property, dependent upon some particular formulation of a social contract (stipulating e.g., 1. all material goods are publically-owned, and 2. all people who are capable of conceiving of a vision of the Public Good deserve a share in this publically-owned stock of goods)....I can’t tell if I’m being led somewhere or you missed that completely, though I’m naturally leaning toward the former.
“Can you specify the end you’re seeking?”
In excruciatingly minute detail; suffice to say the most important tenets are egalitarianism, equality, and communitarianism.
ultimately, description is the best that anyone can ever really do.
May I suggest a review of the concepts of the map and the territory?
I can’t tell if I’m being led somewhere or you missed that completely
I think I missed it completely. I just don’t understand what rights does a “claim of ownership” give you. Let me ask the question again: what can you do with it? Let’s take two people, A and B. A has the “claim of ownership”, B does not. They both wake up, walk out onto the street. What can A do that B cannot? Which rights does A have that B does not?
the most important tenets are egalitarianism, equality, and communitarianism.
What happens to people who do not like these tenets?
Would a kibbutz or a hippy commune be an example of a society you want?
“May I suggest a review of the concepts of the map and the territory?”
None is needed; I’m pretty sure that I understand the use of the terms map and territory here. Maps are representations of reality, territories the correspondent reality. I don’t argue against this term pairing, in fact I quite like it, and I’m pretty sure I haven’t violated them in principle. I was just heading in the direction of arguing that all anyone can ever have is a map, so to speak—I’m fundamentally an epistemological idealist. But this is a discussion we could go on about to the end of time.
“I think I missed it completely. I just don’t understand what rights does a “claim of ownership” give you. Let me ask the question again: what can you do with it? Let’s take two people, A and B. A has the “claim of ownership”, B does not. They both wake up, walk out onto the street. What can A do that B cannot? Which rights does A have that B does not?”
I think you might be under a misconception about the idea of market socialism (or my particular version of it, anyway): the only things which don’t have claims of ownership are non-people, in the broad sense. To make the scenario fit, you’d have to ask, “what can A do with A’s claim to ownership that B cannot do with A’s claim to ownership?” B cannot take A’s claim to ownership (be it his labor or the value associated with a single person’s share) and use it to work towards or in any way advance B’s vision of the Public Good if A does not agree with B’s vision of the Public Good. This is the only right/obligation that people in this theoretical can worry about: freedom to exercise agency and vision, and an obligation on the part of each person to respect the exercise of agency and vision of others.
“What happens to people who do not like these tenets?”
They’re free to participate or not participate in my, or any other entity’s, vision of the Public Good, including their own. If a particular vision is in low enough demand, then it likely won’t be achievable due to lack of resources gathered to accomplish it, and any organization around that Public Good will naturally dissolved as people become dissatisfied with it. This gives people an incentive to formulate a vision of the Public Good which is as universally-appealing and inclusive as possible.
In a sense, it’s much like the universalizability issue of the Kantian imperative. I can make any particular vision of the Public Good as specific as I like it, but as I add more and more detail to it, the more opportunities I create to turn people off from it. If my vision of the Public Good revolves around my every specific desire, it’s not likely to attract other people because I will have a different set of specific desires from other people. By contrast, if I can formulate a vision of the Public Good which is composed solely of specific desires that appeal to a lot of people, more people will join me in the pursuit of my vision of the Public Good.
This should all sound quite similar to what we have today, because it is. The difference is that, with the abolition of private property and a democratic ownership of the MoP, there’s a lot more room for many different visions of the Public Good to be realized as no one has anymore ability to impose their Public Good vision on people than anyone else does. I always thought this was a pretty meritocratic system.
A territory may be judged to win or lose according to how it is evaluated. Does the territory tell you that GDPis objectively a better metric than QUALYs?
I’ve responded to this specific request in another response on this thread, but my definition of socialism is public ownership of the means of production, operated for public good (however that ends up being defined). Again, if you have time, read that last comment on the post I linked to if you’d like to see more about how market socialism might work.
What I believe has caused the fall of socialism in the past is that most economies which operate socialistically are guided by central planning (typically by a national government). This means that production is allocated according to whatever a central planner believes it ought to be; this is obviously problematic because no one person (or committee of people which represents but a sample of a population) has sufficient information to make socially-optimal decisions on production. Therefore, socialism has been seen to fail at what it (in my understanding) has been its only real goal—production of public good; I believe that these failures demonstrate the inadequacy of planning, not socialism.
Free markets, by contrast, aggregate information from millions of people, dramatically improving their efficiency, when compared to central planning, at producing goods. This is where I believe socialism should come in. Using markets, as opposed to planning, for socialist means, i.e. production of social good, ought to significantly improve both macroeconomic efficiency by decentralizing economic power, and social welfare simply by making it the priority.
OK, so the USSR, Cuba, North Korea, and China until twenty years ago or so—all were/are socialist countries, right? On the other hand, countries like Sweden or France were never socialist—correct?
The expression “public goods” has specific meaning in econospeak, I assume you’re not using that but just talking about goods for public consumption.
But I’m still confused. The (more or less free) markets do indeed signal to the producers what to produce. The mechanism by which they do that is price. Desireable goods command high prices and so create the incentive to make more, while goods not in demand are not sold and their manufacturers either switch production or go out of business.
Given the state ownership of the means of production and the absence of the profit motive I wonder how will the market mechanism operate. After all in USSR and similar countries the “market” existed—people bought things in stores and paid money for what they bought. It’s just that the signals from this market were ignored—nobody cared about them.
What exactly would make state-owned companies with no profit motive care about prices or demand?
“OK, so the USSR, Cuba, North Korea, and China until twenty years ago or so—all were/are socialist countries, right? On the other hand, countries like Sweden or France were never socialist—correct?”
Correct. Socialistic, sure, but not socialist.
“The expression ‘public goods’ has specific meaning in econospeak, I assume you’re not using that but just talking about goods for public consumption”
No, I did not mean public goods in the economic definition. Perhaps I should have said “Public Good”: production of things which the public deems to be uppercase-goods: education, positive social interaction, food, shelter....The list would vary, but yes: “Public Good”(s) for public consumption.
As for the rest, you still haven’t separated out public/private ownership of the means of production (MoP) and capitalist/socialist operation of the MoP. And when I say “market economy”, I mean organization of the MoP such that they respond to market information, i.e. supply and demand. State ownership, as in the USSR, doesn’t respond to supply and demand information; it responds to central planning information. Planners in the USSR decided, with the necessarily-limited information they had, how much of whatever good would be produced. I’m not advocating for that.
As I said in response to another comment on this post, it seems to me you can divide economic organization along three axes: public/private ownership of MoP (i.e. w/ or w/o private property), capitalistic/socialistic operation of MoP (i.e. for profit or Public Good), and operation of MoP according to market/planned rules. Democracy plays an important role in making public ownership work, as demonstrated nicely by both China and the USSR, for different reasons.
China, provides an excellent example of what seems to me to be just about the worst of all of those options. It’s major corporations are state, i.e. (nominally) public enterprises operated for profit according to goals set by provincial and national planning committees. However, because allocation of public ownership isn’t a democratic process, the CCP sort of does whatever it wants with China’s economy, keeping a large portion of the proceeds for itself and needing only to worry about fostering enough growth, for the general citizenry, to prevent itself from being overthrown. But, you at least have the profit motive for workers forcing them to be more productive, even though the system is utterly rigged against them.
The USSR was slightly better in one theoretical way, but worse in another in reality: state enterprises, operated for social good according to goals set by a central planning committee. This means you had the handicap of planning, and there was still the problem of public ownership being allocated undemocratically, but at least the MoP were supposedly being operated for the production of Public Good. However, there was was essentially no incentive for work: no democracy, thus no pressure from the public for the government to be efficient, and no incentive from the market for workers to be productive.
I’d say more about the importance of the democratization/publicization (however you’d like to put it) of the ownership of the MoP, but again, there’s quite a bit more written in that post I linked to a few comments up.
Well, that’s the crux of the issue, isn’t it? How can you organize the means of production so that they will respond to market information without going capitalist?
That’s an interesting opinion. It’s interesting because China’s last 20 years represent a colossal success. This “worst of all” system pulled out of poverty many many more people than all the Western charities put together. The Chinese are MUCH better off now than 20 years ago—thanks to this “the worst” system.
I don’t understand—what is allocation (democratic or not) of public ownership?
“Well, that’s the crux of the issue, isn’t it? How can you organize the means of production so that they will respond to market information without going capitalist?”
Responded to this in the other comment thread we have going.
“That’s an interesting opinion. It’s interesting because China’s last 20 years represent a colossal success. This “worst of all” system pulled out of poverty many many more people than all the Western charities put together. The Chinese are MUCH better off now than 20 years ago—thanks to this “the worst” system.”
That was just a matter of convergence: China finally taking advantage of the technology and trade it had waiting at its door, anxious to better-utilize the many types of capital China has in excess of probably anywhere else on the planet (India isn’t quite as resource-rich). Soviet socialism and Leninism had a similar effect on Russia for the first few decades of the USSR. That stopped when the inefficiency of the system became too great to overcome, and China will likely slow down similarly within the next few decades after the industrial-technological-human capital space between it and the developed nations shrinks. In fact, that is exactly what we’ve seen in most other wealthy nations in East Asia: first Japan during the Meiji Restoration ending with the 80′s asset bubble, then South Korea during the Miracle on the Han through easily before the end of this decade, and Taiwan after that, likely to continue longer assuming things remain relatively peaceful with China. Singapore and Hong Kong are the two exceptions, advantaged as they are as an international trade port and traditional entrance to the mainland Chinese market, respectively.
“I don’t understand—what is allocation (democratic or not) of public ownership?”
It’s a matter of determining in what way socialized claims to ownership are distributed. Private property is essentially a legacy claim—I found it, it’s mine. It’s a natural means of private entities claiming resources, the kind you see dogs and cats using to mark their territory. Socialized claims to ownership are decided by a polity. Historically, the polity which brought about the opportunity for socialized claims has been a small cadre of people, former members of the public who’ve decided to revolt, against private (in this case, state) ownership. However, logically, enough, when they assumed power, they naturally assumed control as well, and once again a form of private ownership occurs.
However, if the polity which brings about socialism is everyone, or you have an inhumanly-magnanimous cadre of people, then everyone ought to (ought being an admittedly imperative word, here) distribute ownership claims democratically, i.e., to everyone. I’ll admit that last bit leaves a big space for things to go wrong, and that’s why I tend to prefer the inhumanly-magnanimous cadre of people, or even a single such person. Alternatively, people tend to respond well to Rawl’s idea of the veil of ignorance and iterations thereof.
Funny how that hasn’t happened under Mao who, presumably, was running a “better” system. And really, is India that resource-poor compared to China? Enough to explain the difference in growth rates?
Did they? I am not at all sure about that. Granted, trustworthy statistics are hard to come by, but it does seem to me that the living standards of the Chinese people rose much faster and further than those of Russians under Stalin. The Russians were building heavy industry plants—just like Mao did—and while certainly useful (as WW2 demonstrated), they didn’t do much for ordinary people.
Yes, I agree, but no country can support breakneck development for long. China slowing down eventually does not support your thesis that it suffers under “the worst” system.
Initial ones? Or all the time—meaning claims to ownership can be granted or taken away by the polity at will? If the latter, I would object to calling this “ownership”, it’s much more akin to a mere license.
That’s how the ownership of the former Soviet factories, etc. was distributed in the early 1990s.. Basically everyone who worked at a particular factory got a “share” of ownership of that factory in the form of the so-called “voucher”.
You can google up how well that worked.
On the other hand, if you mean non-transferable ownership then it’s not really ownership and I don’t see much use in it.
“Funny how that hasn’t happened under Mao who, presumably, was running a “better” system. And really, is India that resource-poor compared to China? Enough to explain the difference in growth rates?”
No; Mao was essentially running the same system as the USSR: state ownership of the MoP, operated for socialist ends, according to central planning doctrine—the same incentive-less structure for both government and workers. The only thing that’s changed was a kind of democratization of the ends—they now had to be somewhat responsive to the demands of the global market for China to achieve its export-oriented growth. However, China’s domestic market remains essentially constrained by planning.
On the other hand, India is, per the definition we seemed to have agreed on in the other comment thread, no more than nominally democratic (government unaccountable to public demands in a practical sense). However, because it is nominally a democracy, it can’t just go around doing whatever it wants, meaning it has the inefficiency of meeting public demands, the same kind of handicaps to growth as much richer countries, and the inefficiency of a government which is unresponsive to the public. At the same time, this façade means that the average Indian citizen can’t just be abjectly angry with the Indian government: he can and has to vote the current people out for a new group, if it’s so bad.
China doesn’t have to worry about that. Really, the Chinese system is just so incredibly messed up that it seems to be working, for now, in spite of itself. And it’s not the future slow itself down that’s a problem; if having to maintain a growth rate of 8% or better forever is problematic, which we seem to agree is the case, and China’s governmental system will collapse without that, then it’s unclear in how, in the long-term, it’s really a better system. I’ll put it to you this way: which system of governance would be easiest to drop into a wealthy, democratic, Western society which isn’t experiencing rapid economic growth: India’s or China’s?
“Did they? I am not at all sure about that. Granted, trustworthy statistics are hard to come by, but it does seem to me that the living standards of the Chinese people rose much faster and further than those of Russians under Stalin. The Russians were building heavy industry plants—just like Mao did—and while certainly useful (as WW2 demonstrated), they didn’t do much for ordinary people.”
We’re not here arguing about the speed or duration of improvement of living standards; we’re arguing about end-states. In both China and the USSR, living standards did increase dramatically for most people. And the difference is, again, partially attributable to the difference in the technological convergence space between China and the USSR. Imperial Russia was already a minor industrial power before the revolution; China was barely industrialized to any extent before Deng’s reforms in the 80′s, meaning it had nearly a century of growth to catch up on. In consideration of the facts that in neither case do we have democratization of ownership or responsiveness to a market, and in both cases convergence will end, and you see why they did/will stall and fall.
“Initial ones? Or all the time—meaning claims to ownership can be granted or taken away by the polity at will? If the latter, I would object to calling this “ownership”, it’s much more akin to a mere license.”
Initial ones; they’d be dealt out at birth to be utilized at the appropriate time, 14, or 15, or 18, or whatever age a particular vision of the Public Good decides it should be. Think of them like citizenship cards: no matter what country (or vision of the Public Good) you’re born into, you get one, and you can’t legally sell it. These differ primarily in that no one could take it away from you, either, as it’s a claim to your own labor as much as anything else, and you’re free to go to whatever vision of the Public Good appeals to you at that pre-designated age; in that way, they’re more like passports.
“That’s how the ownership of the former Soviet factories, etc. was distributed in the early 1990s.. Basically everyone who worked at a particular factory got a “share” of ownership of that factory in the form of the so-called “voucher”. You can google up how well that worked. On the other hand, if you mean non-transferable ownership then it’s not really ownership and I don’t see much use in it.”
Well, the problem is, once again, that those were ownership stakes in state-owned factories—once again, state-owned in a non-democratic system is owned by the class of people who were members of the state government, i.e. members of a private class.
When you say “non-transferable”, do you mean “non-exchangeable”? Because it seems to me as though one thing that ownership ought to be is non-transferable. I can offer to “transfer” my ownership of a particular piece of property to you in exchange for something you own, or, just as easily for you, you can try to kick me out without having to exchange anything. Short of killing me, you can’t take away my labor, or, in the scenario we’ve been working out, my claim to ownership of the MoP, and if you kill me, then neither you nor anyone else gets it, either.
This is where we can bring in both Kant and Rawls; if I devise a moral law (e.g. people ought to try to take others’ ownership claims from them by force) which I would not apply to myself, I can hardly call it a law. On the other hand, if I don’t know whether I’ll be put in the position of the person who has an ownership claim, or a person who tries to take that ownership claim, and we all agree that one of these is a bad thing, then we simply won’t let this scenario arise. This is, again, essentially the market acting on morals: not enough people want for this thing to happen, so it won’t.
Heh. I think your theory finds itself in contradiction with empirical reality. Sorry, the reality always wins.
It is not obvious to me at all that the Chinese political system will collapse without that.
Ah. So it’s not ownership at all—it’s just a work permit. Or an internal passport. I see no reason to call this “ownership”—why do you think this word fits?
No, this happened in post-Soviet times. The factories were privatized by giving (for free) the ownership shares to the workers. After that process was complete, the factories weren’t state-owned any more, they were owned by the newly-minted shareholders.
Again, I think you’re badly misusing the word “ownership”. It doesn’t mean what you think it means :-)
Sure I can, that’s what slavery is. Or if you’re talking about labor potential I can easily take it away by locking you in a cell.
You seem to think that there is something wrong with voluntary consensual exchanges of things of value. Or do you reject the whole idea of property?
“Heh. I think your theory finds itself in contradiction with empirical reality. Sorry, the reality always wins.”
It only “wins” if the sole concern of a political economy is economic growth. I’ve said pretty clearly that no one can deny that, in that sense, it’s winning. However, it’s doing so by sacrificing human welfare in a way that other systems don’t require—pollution, oppression of free expression, miserable working conditions...the list goes on. You’re continually looking at the economy as if the only figure that matters is income per capita. I don’t think I’ve denied that that’s part of it, but we have quality of life indices for a reason.
“It is not obvious to me at all that the Chinese political system will collapse without that.”
Numerous people—economists and politicians both within and outside of China—have said that, not the specific number I used for example, but that the legitimacy of the CCP government is entirely dependent upon increasing economic growth, as we already have ample evidence to suggest that it, as a planned economy, will not be able to improve quality of living independent of that. I’ll see if I can’t pull up a few quotes to that effect.
“No, this happened in post-Soviet times. The factories were privatized by giving (for free) the ownership shares to the workers. After that process was complete, the factories weren’t state-owned any more, they were owned by the newly-minted shareholders”.
If someone handed you the keys to a car which could barely run, would you go through the expense of getting it back in working condition, or just sell it for parts?
“Ah. So it’s not ownership at all—it’s just a work permit. Or an internal passport. I see no reason to call this “ownership”—why do you think this word fits?”
Tell me, why do you think it doesn’t? Because again, I’m having trouble understanding.
“Again, I think you’re badly misusing the word “ownership”. It doesn’t mean what you think it means :-)”
“You seem to think that there is something wrong voluntary consensual exchanges of things of value. Or do you reject the whole idea of property?”
Well, as you seem to totally reject my idea of ownership, care to give me yours?
“Sure I can, that’s what slavery is. Or if you’re talking about labor potential I can easily take it away by locking you in a cell.”
Yes, but is slavery generally considered a just and viable way to procure labor in a fully democratic society? No; again we can fall back to the Rawlsian veil of ignorance: if I can’t apply the rule of “all people must agree with slavery” to myself (which it seems, by the definition of slavery, that I can’t), then it’s not something people in an egalitarian democratic society will support. And locking me in a cell does nothing to remove my labor from me. You can force me to use it to produce goods for you, but again, that’s slavery, which won’t happen in an egalitarian democratic society. Or even if you don’t force me to work for you, I can still labor to find a way to escape. I fail to see an important distinction between labor and labor potential; they both refer to the ability to do work.
Nope, the concerns of a political economy are irrelevant here.
The contest is between a map and a territory and the territory always wins.
Yes, I know. But the argument to popularity is not a good way to evaluate forecasts :-/
Sure. Ownership is a bundle of rights (and each right, of course, has a corresponding obligation on the part of others). What’s exactly in this bundle varies, but typically there will be the right to exclude others (if it’s mine I don’t have to allow others to use it), the right to control, the right to destroy, the right to transfer (sell), etc.
The bundle, as I said, varies. There are limitations on most of these rights depending on your local laws, and some of them are not applicable to certain types of ownership (e.g. if you own a piece of land there is no right to destroy). Borderline cases certainly exist—e.g. you can argue that copyright is a form of property and you can argue that it is not.
You are saying that something like an internal passport gives you a share of “ownership” in all means of production in the society. What does that mean? Which rights do I, personally, have with respect to that which I “own”?
P.S. You haven’t answered the question whether you object to the notion of property in general.
“Nope, the concerns of a political economy are irrelevant here. The contest is between a map and a territory and the territory always wins.”
So, to be clear, you don’t believe that political economy is part of the territory? Really??
“Yes, I know. But the argument to popularity is not a good way to evaluate forecasts :-/”
Some people appreciate an appeal to authority, but I don’t need one to justify what I said. I’ll respond differently to an announcement that you’re going to twist my finger, if you tell me before doing so that you’ll give me a lollipop afterwards if I let you, than I would if you simply told me you were going to twist my finger, right?
“You are saying that something like an internal passport gives you a share of “ownership” in all means of production in the society. What does that mean? Which rights do I, personally, have with respect to that which I “own”?”
Well, labor seems like the obvious component here. Whatever other means of production exist now only exist because someone in the past labored to make them. I’ll concede that I haven’t totally worked out how you’d evenly divide up extra-somatic means of production, i.e. existing private property, but it seems like it ought to be possible to construct a pricing model to evaluate all the means of production in an economy and split that value equally among all participants in that economy.
Shares would represent a compensation for the price assessed of the global means of production by the global market, divided by the number of people in the world, with each person getting one share. This share is an ownership claim because it is exclusive to its original owner (no one is able to take it from me, nor can I take one from anyone else), and I control it (no one can make me use it for a purpose other than one of my choosing). I should’ve asked earlier, are you familiar with the distinction between private property rights and personal property rights? These shares would be an example of the latter, and thus have a different set of ownership rights than the private property rights we tend to focus on now.
P.S. You haven’t answered the question whether you object to the notion of property in general.”
I did on the other comment thread a little while ago, but I’ll say here as well: I’m a consequentialist. If capitalism and private property gets me the end I’m seeking, I’m fine with that. But if it doesn’t, I’m not. Values should be system-neutral.
Really really :-) Political economy is a description of how the world works. Being a description, it is a map.
Let’s do a little gedanken experiment. I hereby give you a piece of paper that represents a share, an ownership claim on your fraction of the global means of production. It is exclusive to you and you control it.
Oh, but say you, it’s fake, it doesn’t represent anything!
OK then. In the system which you describe, what can you do with you “true” ownership claim that you cannot do with the admittedly fake claim which I have just given to you?
Can you specify the end you’re seeking?
“Really really :-) Political economy is a description of how the world works. Being a description, it is a map.”
I’ve always thought that ultimately, description is the best that anyone can ever really do. We’ll be getting into epistemology if we go down this route any further; your call on whether or not you want to do that.
“Let’s do a little gedanken experiment. I hereby give you a piece of paper that represents a share, an ownership claim on your fraction of the global means of production. It is exclusive to you and you control it. Oh, but say you, it’s fake, it doesn’t represent anything! OK then. In the system which you describe, what can you do with you “true” ownership claim that you cannot do with the admittedly fake claim which I have just given to you?”
...I’m assuming that the parallel with paper currency is intentional. This is exactly the way in which any system of private property works: the validity of the claim is based on a common social contract. However, as these shares are claims to a publically-owned property, it is a type of personal property, dependent upon some particular formulation of a social contract (stipulating e.g., 1. all material goods are publically-owned, and 2. all people who are capable of conceiving of a vision of the Public Good deserve a share in this publically-owned stock of goods)....I can’t tell if I’m being led somewhere or you missed that completely, though I’m naturally leaning toward the former.
“Can you specify the end you’re seeking?”
In excruciatingly minute detail; suffice to say the most important tenets are egalitarianism, equality, and communitarianism.
May I suggest a review of the concepts of the map and the territory?
I think I missed it completely. I just don’t understand what rights does a “claim of ownership” give you. Let me ask the question again: what can you do with it? Let’s take two people, A and B. A has the “claim of ownership”, B does not. They both wake up, walk out onto the street. What can A do that B cannot? Which rights does A have that B does not?
What happens to people who do not like these tenets?
Would a kibbutz or a hippy commune be an example of a society you want?
“May I suggest a review of the concepts of the map and the territory?”
None is needed; I’m pretty sure that I understand the use of the terms map and territory here. Maps are representations of reality, territories the correspondent reality. I don’t argue against this term pairing, in fact I quite like it, and I’m pretty sure I haven’t violated them in principle. I was just heading in the direction of arguing that all anyone can ever have is a map, so to speak—I’m fundamentally an epistemological idealist. But this is a discussion we could go on about to the end of time.
“I think I missed it completely. I just don’t understand what rights does a “claim of ownership” give you. Let me ask the question again: what can you do with it? Let’s take two people, A and B. A has the “claim of ownership”, B does not. They both wake up, walk out onto the street. What can A do that B cannot? Which rights does A have that B does not?”
I think you might be under a misconception about the idea of market socialism (or my particular version of it, anyway): the only things which don’t have claims of ownership are non-people, in the broad sense. To make the scenario fit, you’d have to ask, “what can A do with A’s claim to ownership that B cannot do with A’s claim to ownership?” B cannot take A’s claim to ownership (be it his labor or the value associated with a single person’s share) and use it to work towards or in any way advance B’s vision of the Public Good if A does not agree with B’s vision of the Public Good. This is the only right/obligation that people in this theoretical can worry about: freedom to exercise agency and vision, and an obligation on the part of each person to respect the exercise of agency and vision of others.
“What happens to people who do not like these tenets?”
They’re free to participate or not participate in my, or any other entity’s, vision of the Public Good, including their own. If a particular vision is in low enough demand, then it likely won’t be achievable due to lack of resources gathered to accomplish it, and any organization around that Public Good will naturally dissolved as people become dissatisfied with it. This gives people an incentive to formulate a vision of the Public Good which is as universally-appealing and inclusive as possible.
In a sense, it’s much like the universalizability issue of the Kantian imperative. I can make any particular vision of the Public Good as specific as I like it, but as I add more and more detail to it, the more opportunities I create to turn people off from it. If my vision of the Public Good revolves around my every specific desire, it’s not likely to attract other people because I will have a different set of specific desires from other people. By contrast, if I can formulate a vision of the Public Good which is composed solely of specific desires that appeal to a lot of people, more people will join me in the pursuit of my vision of the Public Good.
This should all sound quite similar to what we have today, because it is. The difference is that, with the abolition of private property and a democratic ownership of the MoP, there’s a lot more room for many different visions of the Public Good to be realized as no one has anymore ability to impose their Public Good vision on people than anyone else does. I always thought this was a pretty meritocratic system.
A territory may be judged to win or lose according to how it is evaluated. Does the territory tell you that GDPis objectively a better metric than QUALYs?