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The only "legal" cooperation is corporation - it feels like no one else is allowed to take care of own interests in a coordinated matter

Well, I've been thinking that the credit card companies ability to raise our rates because of some late payment on some other loan consitutes a kind of inter-corporate collusion, that feels illegal to me, and yet apparetly it is perfectly legal right now.  The fact that Congress is apparently trying to modify this power that the banks now have seems a kind of proof that it is at least immoral.

Your points about free-rider problems are very interesting, especially at the end.  A free-rider may be in the eye of the beholder, and a producer today is a free-rider tomorrow, and vice versa.  This so-called problem may be a manifestation of the universal belief that one is overworked and underpaid.  

Yes, I believe the rule of law, the "limited government" concept has to be intended to reign in (oooh, pun there) the rulers, the elites and their friends at the banks.  I wonder where the culture of reciprocity fits in with this because it seems that a culture of reciprocity--I'll buy this round, you get the next--goes nicely with a powerful elite for those who are at the bottom, as well as for those at the top.  As long as you know your place and you hang out with those who are your equals.   The culture of reciprocity works nicely in a farming community (or so I've read) where I help you raise your barn and you help me cut the hay fields.  Who are the free-riders in these cases?  Does it matter if the man with the broken leg and the three orphans who can't do any work get to sit down to supper at the end of the day anyway?  

Does rule of law mean interject taxes into the culture of reciprocity--one for you, one for me, and one for "the people?"

Rule of law and government of, by and for the people would seem to replace an elite-defined relationship between classes of unequals, of deference and condescension.  In the US example, historically, the revolution was not only political--no king, no titles, but also social--no more bowing and scraping (of course there is the view that the institution of slavery seriously complicates this because while whites were all "equal" now, they were still more equal than some.  Equal can mean equally low or equally high, of course, and the Euro-Americans apparently preferred to see themselves as equally elevated, nevermind the whole history of "whiteness.")  Clearly operating as equally one of the people is difficult for those who would rather just seize power, especially if they have the means, motivation and opportunity to do so.  This idea that a government of the people by the people and for the people could work seems optimistic.  Perhaps it can't work without optimism.  Sprinkle me with fairy dust. I know I can fly.

by jjellin on Thu Apr 16th, 2009 at 04:37:02 PM EST
The term "free-riding" can be used in very complimentary ways. For example, on one hand Zywicki writes:
These free riders are in the nature of parasites, living off the social surplus created by others. In economic terms, the existence of this social surplus gives rise to a rent-seeking opportunity to divert some of this surplus to the individual without contributing to it. {pg 88}
Here free-riding is associated with rent-seeking behavior.  But rent-seeking is not exactly avoidance of contribution to the social surplus; rather it is aggressive extraction from the social surplus.

On the other hand, when I say that Nature provides amazingly much for free-riding, I mean that no rent payment is asked for many natural benefits. This is close to the classical ideal of free markets as underscored by Michael Hudson.

The real wonder of Nature is absence of conspicuous rent seeking (in the sense of aggressive extraction or exploitation). The "sure" scenario that everyone will eventually maximize their benefits by consuming and procreating as much as possible remains just a theory. The hidden type of natural altruism is that living beings are not optimally greedy; they do leave a lot for "consumption" by others.

In human societies, identification of free-riders and producers is largely a political problem. Already the transition from feudalism to capitalism was muddled by "natural" rent-seeking of capital holders. Marx was working on that new disequilibrium of production and wealth condensation. The current social climate is very favorable to big capital holders. A lot is done in the name of small or mid-size businesses, or small "investors", but eventually the relative (and absolute) benefit is conducted to flow steadily from capital renters to capital holders. In effect, the neo-liberal ideology says that capital holders are the most valuable producers, earning every cent they collect, while capital renters are potentially free-riders living on the goods of capital holders. It does not matter, who are working their asses off day in day out, and who is commuting between New York and London for a weekend just because a bailout profit for sinking mortgage speculations is so juicy.

Eventually, capital holders provide just money, and for that they deserve a much lesser status. The current crisis is a capital crisis - the world is awash with impotent capital, just because the real economy cannot provide double-digit profit growth to the capital holders. Entrepreneurs need capital badly, but a steep rent-price is asked.

The "welfare state" with social security and basic health care is more than just distributing some benefits. It provides an environment with less overhead costs for ill or elderly care to the productive (=actually working and producing) population, and some security of accidents or temporarily setbacks. Redistribution variances between individuals are taken somewhat too seriously. The people most keen on optimal individual benefits from common goods are paranoid profit or rent counters. They tend to project their "rational" delusions to everyone else. Normally, people do their best to earn their living and avoid outside support, even if that means paying off impossible debts or exhaustive work. But if politicians offer no better image but "welfare queen" future, many poor people may find no other option but to subscribe to the picture.  

by das monde on Thu Apr 16th, 2009 at 11:15:23 PM EST
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