This is not a place for politics. It is especially not a place for politics that have consistently led to catastrophe. The uncharitable reading of this post is that it is simply ignoring the harms of socialism, which is a trivial error of rationality. The charitable reading is that it is proposing a new take on socialism which could actually be beneficial. However, explaining such a point and answering the inevitable objections requires a long political discussion on a board that was explicitly created to avoid such things, due to their tendency to make rationality much harder.
If the charitable reading is correct, this might be an interesting debate, and even perhaps one where we could all learn something. But this simply isn’t the forum for it.
As tailcalled says, there’s really not much overlap between what this post is advocating and what led to (e.g.) millions of deaths under Stalin.
This post is about a way a business can voluntarily choose to organize itself that might lead to better outcomes. The thing that has led to a lot of catastrophes is a way a nation can organize itself which, in practice, has only ever happened as a result of violent revolutions. (Other sorts of socialism have arisen democratically and these have not led to catastrophe; e.g., the Scandinavian countries are pretty good places to live.)
Surely the good or bad effects of socialism are a function of policy? Whether or not a policy arises democratically and/or revolutionarily does not change the policy itself. This is a striking non-sequitur.
The Scandinavian countries are indeed pretty good places to live. This likely has nothing to do whatsoever with democracy per se, but with the fact that the Scandinavian model does not regulate to anything resembling more strongly socialist nations, despite the fact that they famously have a large welfare system. There is no casual mechanism whereby voting for a leader would make the policies of that leader better-though obviously a leader that harmed the people in legible-to-them ways might get voted out! But that would be democracy changing policy, not democracy making a given policy better. As a real-world test case, consider the Maduro regime in Venezuela. While his democratic bona fides are somewhat questionable (there are people who think he stole his election from Juan Guaido), he certainly had enough popular support to be a serious candidate. And that did not prevent his policies from having predictably impoverishing results on Venezuela.
(Preliminary note: I see you’ve had a lot of downvotes in this thread; none of them is from me.)
I agree that whether a policy is good or bad doesn’t depend on how it arises, but what other policies come along with it may do. For instance, so far as I can tell socialism as such doesn’t need to involve much in the way of totalitarianism, but governments brought in by revolutions tend to be totalitarianism whether they are left or right or something else. At least some of the harms of e.g. communism in the USSR seem to me to have been consequences of totalitarianism more than of economic policies as such.
In any case—my apologies if I wasn’t clear enough about this—the democracy-versus-revolution thing was not my main point; my main point was that there is a big difference between (say) Soviet communism (a way of running a whole country) and workers’ cooperatives (a way of running a company), and this difference seems highly relevant to the question of whether the disastrousness of the USSR tells us anything about the likely consequences of organizing more companies as workers’ cooperatives.
A nation isn’t really much like a business, despite occasional rhetoric along those lines from politicians when the policies they prefer for other reasons happen to have the shape of “run the country more like a business”. And a workers’ cooperative isn’t much like a communist or socialist country. If you think that running a company as a cooperative makes it more likely to fail in ways parallel to ways in which communist countries commonly fail, then I think you should show your working: explain how the relevant parallels work. (Including, in particular, explaining why you think such a company is more like Venezuela or the USSR than it is like, say, Sweden.)
(Why did I mention the democracy-versus-revolution thing at all? Because it seems to me that the most plausible ways of ending up with more workers’ cooperatives are more democracy-like than revolution-like, and e.g. it doesn’t seem likely to me that workers’ cooperatives will have much tendency to end up being totalitarian. And, in fact, so far as I can tell actual workers’ cooperatives don’t tend to be totalitarian.)
Scandinavian people think that socialism is a functional gear in having the Nordic model work. However the understandings are so different that the word “socialism” means very different things across the pond. Too little socialism and you have obvious downsides like not having universal healthcare and much distrust among population.
When a country has big tradition of tempering market forces the knowledge tends to be way more practical than “boogieman” understanding. Even if some party doesn’t want to call such balancing acts by particular names they have been around and are not “new”.
Hence the charitable reading that the OP might be calling for a different version of socialism that might conceivably be beneficial. My point isn’t that there’s zero chance that he’s right; my point is that there’s no way to say “hey, let’s do this thing that’s superficially similar to catastrophic policies” without it either not conveying useful information, or that useful information requiring a long political debate to hash out. And that’s not appropriate for the “Politics is the mind-killer, let’s improve our rationality on easier cases” forum. I’d welcome the post and subsequent debate on e.g. a Scott Alexander forum or comment section. But this isn’t the place for it.
Aren’t these obviously, non-subtly different from the stuff that has consistently led to catastrophe? Or am I missing some similarity? (I have to admit that I’m somewhat weak on the relevant history, so it’s possible I’m missing some obvious deep similarity.)
At least one critical similarity is that this plan relies on people ignoring economic incentives, and tries to handwave this away by pretending that people will cooperate in the face of free rider dynamics in the hopes of future payoffs. If that was true, game theory would be a lot simpler.
Are you on Data Secrets Lox? That is much more the place for this sort of discussion, and it would let us talk about whatever you like without transgressing the no politics board.
I’m not handwaving anything I wrote a whole section about how experiments contradict this and what could explain this:
“Experiments have shown that people randomly allocated to do tasks in groups where they can elect their leaders and/or choose their pay structures are more productive than those who are led by an unelected manager who makes pay choices for them.[20] One study looked at real firms with high levels of worker ownership of shares in the company and found that workers are keener to monitor others, making them more productive than those with low or no ownership of shares and directly contradicting the free rider hypothesis.[21] It turns out there are potential benefits to giving workers control and a stake in the running of the organization they work for. This allows workers to play a key role in decision making and reorient the goals of the organization.[22]
One explanation for this phenomenon is that of “localized knowledge”. According to economist Friedrich Hayek, top-down organizers have difficulty harnessing and coordinating around local knowledge, and the policies they write that are the same across a wide range of circumstances don’t account for the “particular circumstances of time and place”.[23] (For examples of this, read Seeing Like a State by political scientist James Scott) Those who make the top-down policies in a traditional company are different to those who have to follow them. In addition, those who manage the company are most often different to those who own the company. These groups have different incentives and accumulate different knowledge. This means that co-ops have two main advantages:
Workers can harness their collective knowledge to make running the firm more effective.
Workers can use their voting power to ensure the organization is more aligned with their values.
Interestingly enough, I have yet to come across a co-op that uses the state of the art of social choice theory, so they could potentially get a lot lot better.“
The specific handwave I’m referring to is Amartya Sen’s.
“In the case of the free rider hypothesis, these ‘rational fools’ act based on such a narrow conception of self-interest that they don’t take into account the obviously damaging long-term consequences of their behavior, both to the firm and ultimately to themselves. Normal, reasonable people—who are different to rational economic man—are usually happy to put efforts into a collective endeavor that will deliver benefits for them in the long run, even if that means foregoing some short-term gains.”
This sounds like it would predict that people reliably cooperate on prisoner’s dilemmas, and pick stag in stag hunts. In reality, of course, that’s not a thing! Cooperation exists, but tends to require coordination mechanisms. Worse, it sounds like it’s advocating an incoherent decision theory. While there are certainly times where it’s wise to make a choice that isn’t the best in the most narrow, myopic possible sense (Newcomb’s problem is the obvious example, or superrationality dynamics), that’s very different than putting efforts into collective endeavor in the hopes of collective success.
The evidence you cite is interesting, though Lao Mein’s evidence suggests it isn’t a slam dunk. But Sen is committing a fallacy here, and the same fallacy as was often used in support of socialist regimes. As such, it’s a valid answer to tailcalled’s question.
I cite four different studies that show that the theory doesn’t match the observations, Lao Mein doesn’t cite anything. This is the most extreme version of being a selective skeptic.
He cites the observation that socialized firms have not taken over the economy. That’s clearly true and clearly relevant. Your response was that you’d already explained why socialized firms might not take over even if they were productive. What were those reasons again? Reviewing your post, it looks like it might be the difficulty of gaining investment and brain drain from the most productive workers leaving, but both of those reasons would be strong arguments against socialization. Rose Wrist’s ideas for gaining investment anyway are interesting, but until socialized firms actually do raise enough funding to compete, saying that they theoretically maybe can sounds remarkably hollow.
The point of evidence is to see things that are more likely under one hypothesis than another. In the world where socialized firms are better, I do not expect to see them failing to take over. In the world where they are not, I do expect that it’s possible to generate arbitrarily long lists of pro-socialism citations.
The strength of a case depends on the strength of the evidence, not on the number of citations!
I cited controlled experiments, you counter with an observation that I have already responded to in both the post and the comments:
I explained this in this section:
One issue that arises with starting a socialist firms is acquiring initial investing.[27] This is probably because co-ops want to maximize income (wages), not profits. They pursue the interests of their members rather than investors and may sometimes opt to increase wages instead of profits. Capitalist firms on the other hand are explicitly investor owned so investor interests will take priority.
A socialist firm can be more productive and not dominate the economy if it’s hard to start a socialist firm.
The strength of a case depends on the strength of the evidence, not on the number of citations!
This is not a place for politics. It is especially not a place for politics that have consistently led to catastrophe. The uncharitable reading of this post is that it is simply ignoring the harms of socialism, which is a trivial error of rationality. The charitable reading is that it is proposing a new take on socialism which could actually be beneficial. However, explaining such a point and answering the inevitable objections requires a long political discussion on a board that was explicitly created to avoid such things, due to their tendency to make rationality much harder.
If the charitable reading is correct, this might be an interesting debate, and even perhaps one where we could all learn something. But this simply isn’t the forum for it.
As tailcalled says, there’s really not much overlap between what this post is advocating and what led to (e.g.) millions of deaths under Stalin.
This post is about a way a business can voluntarily choose to organize itself that might lead to better outcomes. The thing that has led to a lot of catastrophes is a way a nation can organize itself which, in practice, has only ever happened as a result of violent revolutions. (Other sorts of socialism have arisen democratically and these have not led to catastrophe; e.g., the Scandinavian countries are pretty good places to live.)
Surely the good or bad effects of socialism are a function of policy? Whether or not a policy arises democratically and/or revolutionarily does not change the policy itself. This is a striking non-sequitur.
The Scandinavian countries are indeed pretty good places to live. This likely has nothing to do whatsoever with democracy per se, but with the fact that the Scandinavian model does not regulate to anything resembling more strongly socialist nations, despite the fact that they famously have a large welfare system. There is no casual mechanism whereby voting for a leader would make the policies of that leader better-though obviously a leader that harmed the people in legible-to-them ways might get voted out! But that would be democracy changing policy, not democracy making a given policy better. As a real-world test case, consider the Maduro regime in Venezuela. While his democratic bona fides are somewhat questionable (there are people who think he stole his election from Juan Guaido), he certainly had enough popular support to be a serious candidate. And that did not prevent his policies from having predictably impoverishing results on Venezuela.
(Preliminary note: I see you’ve had a lot of downvotes in this thread; none of them is from me.)
I agree that whether a policy is good or bad doesn’t depend on how it arises, but what other policies come along with it may do. For instance, so far as I can tell socialism as such doesn’t need to involve much in the way of totalitarianism, but governments brought in by revolutions tend to be totalitarianism whether they are left or right or something else. At least some of the harms of e.g. communism in the USSR seem to me to have been consequences of totalitarianism more than of economic policies as such.
In any case—my apologies if I wasn’t clear enough about this—the democracy-versus-revolution thing was not my main point; my main point was that there is a big difference between (say) Soviet communism (a way of running a whole country) and workers’ cooperatives (a way of running a company), and this difference seems highly relevant to the question of whether the disastrousness of the USSR tells us anything about the likely consequences of organizing more companies as workers’ cooperatives.
A nation isn’t really much like a business, despite occasional rhetoric along those lines from politicians when the policies they prefer for other reasons happen to have the shape of “run the country more like a business”. And a workers’ cooperative isn’t much like a communist or socialist country. If you think that running a company as a cooperative makes it more likely to fail in ways parallel to ways in which communist countries commonly fail, then I think you should show your working: explain how the relevant parallels work. (Including, in particular, explaining why you think such a company is more like Venezuela or the USSR than it is like, say, Sweden.)
(Why did I mention the democracy-versus-revolution thing at all? Because it seems to me that the most plausible ways of ending up with more workers’ cooperatives are more democracy-like than revolution-like, and e.g. it doesn’t seem likely to me that workers’ cooperatives will have much tendency to end up being totalitarian. And, in fact, so far as I can tell actual workers’ cooperatives don’t tend to be totalitarian.)
Scandinavian people think that socialism is a functional gear in having the Nordic model work. However the understandings are so different that the word “socialism” means very different things across the pond. Too little socialism and you have obvious downsides like not having universal healthcare and much distrust among population.
When a country has big tradition of tempering market forces the knowledge tends to be way more practical than “boogieman” understanding. Even if some party doesn’t want to call such balancing acts by particular names they have been around and are not “new”.
Aren’t socialist co-ops a totally different kind of socialism from the stuff that has “consistently led to catastrophe”?
Then we probably should not use the same word.
Hence the charitable reading that the OP might be calling for a different version of socialism that might conceivably be beneficial. My point isn’t that there’s zero chance that he’s right; my point is that there’s no way to say “hey, let’s do this thing that’s superficially similar to catastrophic policies” without it either not conveying useful information, or that useful information requiring a long political debate to hash out. And that’s not appropriate for the “Politics is the mind-killer, let’s improve our rationality on easier cases” forum. I’d welcome the post and subsequent debate on e.g. a Scott Alexander forum or comment section. But this isn’t the place for it.
Aren’t these obviously, non-subtly different from the stuff that has consistently led to catastrophe? Or am I missing some similarity? (I have to admit that I’m somewhat weak on the relevant history, so it’s possible I’m missing some obvious deep similarity.)
At least one critical similarity is that this plan relies on people ignoring economic incentives, and tries to handwave this away by pretending that people will cooperate in the face of free rider dynamics in the hopes of future payoffs. If that was true, game theory would be a lot simpler.
Are you on Data Secrets Lox? That is much more the place for this sort of discussion, and it would let us talk about whatever you like without transgressing the no politics board.
I’m not handwaving anything I wrote a whole section about how experiments contradict this and what could explain this:
“Experiments have shown that people randomly allocated to do tasks in groups where they can elect their leaders and/or choose their pay structures are more productive than those who are led by an unelected manager who makes pay choices for them.[20] One study looked at real firms with high levels of worker ownership of shares in the company and found that workers are keener to monitor others, making them more productive than those with low or no ownership of shares and directly contradicting the free rider hypothesis.[21] It turns out there are potential benefits to giving workers control and a stake in the running of the organization they work for. This allows workers to play a key role in decision making and reorient the goals of the organization.[22] One explanation for this phenomenon is that of “localized knowledge”. According to economist Friedrich Hayek, top-down organizers have difficulty harnessing and coordinating around local knowledge, and the policies they write that are the same across a wide range of circumstances don’t account for the “particular circumstances of time and place”.[23] (For examples of this, read Seeing Like a State by political scientist James Scott) Those who make the top-down policies in a traditional company are different to those who have to follow them. In addition, those who manage the company are most often different to those who own the company. These groups have different incentives and accumulate different knowledge. This means that co-ops have two main advantages:
Workers can harness their collective knowledge to make running the firm more effective. Workers can use their voting power to ensure the organization is more aligned with their values. Interestingly enough, I have yet to come across a co-op that uses the state of the art of social choice theory, so they could potentially get a lot lot better.“
The specific handwave I’m referring to is Amartya Sen’s.
“In the case of the free rider hypothesis, these ‘rational fools’ act based on such a narrow conception of self-interest that they don’t take into account the obviously damaging long-term consequences of their behavior, both to the firm and ultimately to themselves. Normal, reasonable people—who are different to rational economic man—are usually happy to put efforts into a collective endeavor that will deliver benefits for them in the long run, even if that means foregoing some short-term gains.”
This sounds like it would predict that people reliably cooperate on prisoner’s dilemmas, and pick stag in stag hunts. In reality, of course, that’s not a thing! Cooperation exists, but tends to require coordination mechanisms. Worse, it sounds like it’s advocating an incoherent decision theory. While there are certainly times where it’s wise to make a choice that isn’t the best in the most narrow, myopic possible sense (Newcomb’s problem is the obvious example, or superrationality dynamics), that’s very different than putting efforts into collective endeavor in the hopes of collective success.
The evidence you cite is interesting, though Lao Mein’s evidence suggests it isn’t a slam dunk. But Sen is committing a fallacy here, and the same fallacy as was often used in support of socialist regimes. As such, it’s a valid answer to tailcalled’s question.
I cite four different studies that show that the theory doesn’t match the observations, Lao Mein doesn’t cite anything. This is the most extreme version of being a selective skeptic.
He cites the observation that socialized firms have not taken over the economy. That’s clearly true and clearly relevant. Your response was that you’d already explained why socialized firms might not take over even if they were productive. What were those reasons again? Reviewing your post, it looks like it might be the difficulty of gaining investment and brain drain from the most productive workers leaving, but both of those reasons would be strong arguments against socialization. Rose Wrist’s ideas for gaining investment anyway are interesting, but until socialized firms actually do raise enough funding to compete, saying that they theoretically maybe can sounds remarkably hollow.
The point of evidence is to see things that are more likely under one hypothesis than another. In the world where socialized firms are better, I do not expect to see them failing to take over. In the world where they are not, I do expect that it’s possible to generate arbitrarily long lists of pro-socialism citations.
The strength of a case depends on the strength of the evidence, not on the number of citations!
I cited controlled experiments, you counter with an observation that I have already responded to in both the post and the comments:
You are not engaging with the evidence I cited.