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Herb Gintis critique of progressive economics

by rootless2 Thu May 26th, 2011 at 07:14:15 PM EST

Krugman believes that liberalism can be restored to its 1950's health without the need for any new policies. However, 1950's liberalism was based on southern white racism and solid support from the unions, neither of which exists any more. There is no future in pure redistributional policies in the USA for this reason. Indeed, if one looks at other social democratic countries, almost all are moving from corporate liberalism to embrace new options, such as Sarkozy in France (French socialists have the same pathetic political sense as American liberals, and will share the same fate).
I am sorry that we can't do better than Krugman. There are very serious social problems to be addressed, but the poor, pathetic, liberals simply haven't a clue. Conservatives, on the other, are political sophisticated and hold clear visions of what they want. It is too bad that what they want does not include caring about the poor and the otherwise afflicted, or dealing with our natural environment.

from Gintis' Amazon review of Krugman's book.


The review of Klein's "Shock Doctrine" is just as interesting.


On the other hand, it would be nice if Klein's alternative were generally viable. Thomas Jefferson's vision of forty acres and a mule would be vindicated, albeit in a more socially organized manner. But it is not. Worker's control is a great dream (I dreamed it myself for many years), but it founders on the reality of capital diversification, which the worker-owned firm cannot handle. Cooperative land holding is just a myth, pure and simple, and always has been, throughout human history.

Like many progressives, Klein's instincts are anti-market (although even her precious cooperatives are marketing cooperatives, after all). It is a plain-faced fact that poor countries that have attempted to compete in the world market place rather than shelter themselves from it have done quite well, China and India being the most prominent. The idea that socialist cooperatives might outcompete capitalist firms has little going for it. Perhaps a country with mountainous oil revenues can play at sounding anti-capitalist (e.g., contemporary Venezuela), but the future of prosperity in virtually all poor countries depends on developing markets and state institutions that support markets in a synergistic and democratic manner. It is up to us to dirty our hands (and hearts?) to help them attain this, rather than remaining pure but ineffectual, fighting for a socialist world that, far from struggling to be born, simply cannot exist.

Both reviews and the discussion following are thought provoking - at least to me. From my point of view, Gintis has two things wrong - one he totally overestimates the intellectual coherency of standard economics (which is surprising) and two, his annoyance the stupidity of "progressive" orthodoxy I think causes him to jump too far the wrong way. But - worth considering.
It does strike me that like most economists Gintis does not seem to know how manufacturing works and that he dismisses racism too easily - maybe he should get out of Northhampton now and then.

Display:
Amazon.com: Herbert Gintis' review of The Shock Doctrine: The Rise of Disaster C...


It would be nice if this were the case, but it most certainly is not. First, right wing free-marketers are a small group of ideologues that are treated with bemused contempt by serious students of economic policy. Milton Friedman was a brilliant economist, but he free-market rantings in his later years were simply embarrassing. There is absolutely no future in free-market economics, and it is not taught in any respectable economics department, including the University of Chicago. The modern economy is inevitably, and deeply, government regulated, and the welfare state, which redistributes huge sums from the more to the less well off, is not threatened anywhere. The IMF is indeed practically Neanderthal in its ideology and behavior, but most economists, and indeed whole governments, are hostile to its ambitions.

Ok, this was written in 2008, but there was no lack of examples back then either.

I think he needs to leave his focus on what is taught at respectable economics departments and look at what is practised in the world today.

And while leaving little to work with in his scatching critique of anything but "attempted to compete in the world market place", I think that this view leaves much to be wanted. It is the common focus on economic institutions at te expense of political power relationships and relationships between biotic and economic wealth.

So with this little to go on, I am not impressed.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri May 27th, 2011 at 05:14:20 PM EST
He definitely seems to me to be confused by a life in very liberal enclaves.  However, I find his comments about the limitations of co-op models to be more persuasive than I want them to be.
by rootless2 on Fri May 27th, 2011 at 08:45:11 PM EST
[ Parent ]
I agree that co-ops are a very hard form to keep working, in particular big ones.

The swedish Coop food store chain is my favourite example of a depressed organisation. In theory a democratic organisation with 3 million members, in practise run by and for upper management.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sat May 28th, 2011 at 08:34:33 AM EST
[ Parent ]
while gintis optimism about the intellectual level of econ departments is silly, his point is important. If you look at RW econ, it basically accepts a mixed economy, but wraps its authoritarian and ugly political views in some Hayekian BS about free markets. Nobody seriously suggests Boeing or AirBus try the naked free market. But Gintis remarks make me think that we have the same thing on the left: a ideological artificial flavor which involves some BS about coops to disguise the fact that the exact same mixed economy view is being sold. something like that.
by rootless2 on Sat May 28th, 2011 at 09:00:07 AM EST
[ Parent ]
Um - no.

The difference is that the authoritarian BS is designed to benefit a tiny section of the population. That's why it's not only BS, it's inconsistent and the "rules" change on demand. If corporate welfare benefits banks, then banks get to pretend that corporate welfare is the most economically sound in the whole history of political economics.

If someone else benefits, then suddenly it's a travesty, an outrage, a disaster waiting to happen, a moral hazard (that last one is particularly entertaining) and so on.

The so-called "left" we've had for the last couple of decades, which is really the centre right, is willing to put aside its fervently held egalitarian principles and agree with the muggings, for purely pragmatic reasons.

A real left would support co-ops because co-ops happen to be a consistent and effective way to run an economy - they run stably, they're democratic, they don't explode, and they're good at supporting economic participation - also known as "jobs."

Unfortunately we haven't had anyone with these views in power since the 60s. And they weren't allowed to do a lot when they were in power.

Basically if a democratic left was ever allowed near national policy, it would make a point of kicking the bums out. And that has never been allowed to happen.

The whole point of UKUncut, spanishrevolution, the action in Greece and Africa - and doubtless more to come - is that people have seen through the shell game now, and they're no longer content to be bullied and lied to by people with the morals of a petty thief and the pompousness of a petty lord.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat May 28th, 2011 at 10:37:58 AM EST
[ Parent ]
A real left would support co-ops because co-ops happen to be a consistent and effective way to run an economy - they run stably, they're democratic, they don't explode, and they're good at supporting economic participation - also known as "jobs."

But of course Gintis argument is that this is pious nonsense. That as much as some of us would like coops to be a real alternative to capitalist firms, they seem to not work so often and also to be easily captured by a management group - as the Comrade from Sweden's example makes clear. Perhaps there is no "real left" because we don't actually have a credible alternative to offer and all the angry signifying can't close the gap.

BTW: there is a very interesting US example of
http://newstreaming.com/about/src-companies/

by rootless2 on Sat May 28th, 2011 at 10:59:29 AM EST
[ Parent ]
What on earth are you talking about?

Waitrose, Gore-Tex, and various Euro co-ops haven't been "captured by various management groups."

And they're certainly more economically effective than corporate welfare queens like Boeing.

But do please keep waving your concern trolling around in the vain hope that it's going to persuade someone.

If nothing else, It's a useful education in how not to do rhetoric successfully.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat May 28th, 2011 at 11:20:25 AM EST
[ Parent ]
the Left would rule the world.

The same 5 examples over and over.

by rootless2 on Sat May 28th, 2011 at 11:33:39 AM EST
[ Parent ]
Those examples happen to utterly demolish your point.

Where's your proof that ¨all co-ops become managementised?¨

You have none. You pulled that ¨fact¨ out of your ass, stated it as reality, and hoped no one would notice you were bullshitting.

Is it harder to start and run a co-op than a corporation? Undoubtedly. Co-ops are unserious and don't follow the proper capitalist respect for class hierarchy, so banks and VCs are inherently biased against them.

But that's a damning and flameworthy indictment of the uselessness of banking, not of co-ops as a viable business model.  

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun May 29th, 2011 at 09:52:52 AM EST
[ Parent ]
They don't demolish anything. Obviously we all know about examples - Gintis even mentions the hoary example of Mondragon  and clearly, you didn't bother to read before lecturing. And nobody said "all co-ops become managementized" - that's something you made up - or "pulled out of your ass" to use your own phrasing.

I'm sure capitalism is shaking in fear at the continued existence of an upmarket grocery store co-op, though, so I await the revolution ASAP.

by rootless2 on Sun May 29th, 2011 at 10:20:18 AM EST
[ Parent ]
"Not work so often" would rather imply that they barely work at all - in spite of evidence to the contrary.

Whether the product is up-market grocery sales, bicycles, or off-shore wind, the point is the same - the co-op model can work in spite of a hostile environment, and will work even more successfully in a supportive one.

Since your primary point is that "the left has no alternatives" you have no credibility on this. The left does have alternative narratives, and has done for decades.

What the left has lacked is the political muscle and media air cover to put those alternatives into practice against power structures that use violence, lies, intimidation, infiltration, propaganda, and noobs posting on message boards to make their points for them.

The last time the left had that muscle to change the culture we had state pensions, state healthcare, massive investment, and the welfare state.

On the next iteration we'll have more of the same, and sustainable participatory finance and business as well.

The fact that the so-called centrists are going to have to be elbowed out of the way to make that possible is an unfortunate but temporary inconvenience.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun May 29th, 2011 at 10:48:08 AM EST
[ Parent ]
Actually, what it appears "the left" has is an over ample supply of self-righteous vanguard mentality and an even larger store of excuses for failure.

You couldn't elbow a centered package of organic Hampshire lambchops aside.

by rootless2 on Sun May 29th, 2011 at 10:59:28 AM EST
[ Parent ]
And you'll be posting a diary with detailed proposed solutions of your own soon?

No, you won't, because you're only here to concern troll, and undermine the idea of the left as a viable and valid political movement.

You have no solutions, no proposals, no constructive criticism, no new ideas, no facts, no insights, and no innovation to offer - only misdirection, huffing and puffing, and clumsy rhetoric.

So - good luck with that.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun May 29th, 2011 at 12:35:57 PM EST
[ Parent ]
truly a hapless rejoinder. The left of "fall into line or be denounced as a troll" is history repeating itself, first as authoritarian parties and then as a ridiculous social club.

Go find someone else to bully about the right way to speak, I'm not in the market.

by rootless2 on Sun May 29th, 2011 at 01:00:54 PM EST
[ Parent ]
Gintis' argument is, however, drawn on evidence that mostly says that coops are not as good at extensive, material intensive growth as commercial corporations, since that is the dominant form of growth over the past fifty years.

This suggests that he is refighting the last war rather than fighting the next. Being good at extensive, material intensive growth is not going to be as handy a trait to have over the next fifty years.

And indeed, the "markets" that most of the very poorest low income nations need are not the "license for corporations to run amok" so-called "markets", but rather well regulated local food markets in agrarian producing areas, supported by grower cooperatives to maintain local roads to the markets and run credit unions and government job guarantee health clinics, schools, and agricultural proving fields and extension.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun May 29th, 2011 at 09:35:16 AM EST
[ Parent ]
Gintis has three points. The first is that coops are organizations within the market system. We don't seem to be able to think outside markets anymore. The second, which I think is more dubious is the Bowles/Gintis argument that coops tend to be poorly capitalized and thus cannot e.g. invest in R&D or capital intensive new ventures so tend to be hammered by better capitalized non-coops. And the third point, implicit, is that people have been advocating and pushing coops since Robert Owens if not before and yet they remain very much in the unusual oddity class.

I'm not particularly persuaded by his second point, but the 1st and 3rd are strong and the 3rd does bolster the 2cd.

The counter to these, which is something I find really absent from most economics, is that the dominant form of economic organization in the world, the big corporation, is a grotesque monstrosity. Galbraith seems to have thought about this some, but Gintis does not seem to understand how these bureaucratic firms operate.

by rootless2 on Sun May 29th, 2011 at 10:47:36 AM EST
[ Parent ]
Yes, my point was focused on his #3, since I do not think his #2 is all that persuasive, especially absent #3, and wrt #1, markets are institutions, how they affect power relations depends on how they are allowed to be used.

Instead of asking why co-ops are a rarity, ask why commercial corporations are so ubiquitous, and an environment of normal headlong quarter on quarter economic growth with stagnation and downturn a relative rarity is clearly part of that ~ the idea that the same advantages apply in a condition of growth primarily occuring in technological efficiency waves and so growth being less common than stability is just an untested speculation.
 

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun May 29th, 2011 at 07:22:05 PM EST
[ Parent ]
But it seems obvious why commercial corporations are so ubiquitous - they are like armies. What appears to be inefficient brutality is intrinsic to their success. It occurs to me that one of the handicaps of coops is that they are in a lot of ways purer market organizations than corporations. Corporations derive a great deal of power from the class cohesion of managers across multiple industries and even nations.
by rootless2 on Sun May 29th, 2011 at 08:04:58 PM EST
[ Parent ]
... obvious, but at one time fiefdoms were ubiquitous and commercial corporations rare or non-existent ...

... the entire historical period in which they became ubiquitous has a common feature that is unlike all the periods before that when they were not, and which we know is a temporary feature which will not be true for most of the rest of this century.

Whether that is a coincidence or a dependence is something that will be put to the test.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun May 29th, 2011 at 08:38:54 PM EST
[ Parent ]
Well, one thing economists don't seem to get is that modern multinational corporations are very different to the industrial corporations of the 1700s or even 1900sin terms of control, sources of capital, organization etc. The ground is shifting under our feet even if it doesn't seem like it. The process of metrics for example, changes white collar work in those companies into something much more akin to being on the line.

And what I'm taking from Gintis is not that the current mode of economic organization is secure, but that the easy answers "progressives" have come up with may not be all that adequate. I could have read that passage from Klein and just nodded last year, and now I'm wondering whether it really has any substance.

Here's a good counter-argument.
http://www.iese.edu/en/files/6_40628.pdf

by rootless2 on Sun May 29th, 2011 at 09:28:22 PM EST
[ Parent ]
... of progressives have less substance to them than they first appear to have ...

... is an awfully easy critique.

And much of the changes to what corporations "can do" are not changes in the organization or intrinsic capacities of corporations, but rather a matter of regaining permission to do things that at one time had been revoked, up to and including the one time revoked but increasingly regained right of hire and operate a private army.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun May 29th, 2011 at 09:56:48 PM EST
[ Parent ]
What i had in mind was the emergence of professional management that migrates between companies, and the ability of top management to walk out of the company with vast fortunes not based on any investment of their own, the imposition of systems such as 6Sigma and the measurement of white collar work, the internal financialization of even industrial companies, the shift of stock ownership to mutual funds and other investment vehicles, the deep and ongoing involvement in the political process via professional lobbying and in shaping public culture via marketing

These companies don't look like 1850s manchester textile companies.

by rootless2 on Sun May 29th, 2011 at 10:21:56 PM EST
[ Parent ]
But almost all of that was present in the 1929 radio companies, in only superficially different guises. The one obvious exception being that upper management was tied to their companies, by virtue of being coterminous with the owners.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 29th, 2011 at 10:54:36 PM EST
[ Parent ]
if that were the only difference, it would be a big one.
by rootless2 on Mon May 30th, 2011 at 10:24:00 AM EST
[ Parent ]
The ability of top management to walk out of companies with huge fortunes is no new capacity, but an old capacity regained, combined with the separation of formal ownership and executive control that underlay the 1920's Wall Street stock market boom.

I have no idea why 1850's Manchester textile companies would be considered state of the art for 1850's corporate development, when so much of the development of the corporate form and the separation of formal ownership and executive control is occurring in the railroadification of the US.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon May 30th, 2011 at 12:20:30 PM EST
[ Parent ]
Really? I thought it would be obvious why 1850s Manchester textile factories would be brought up in a discussion about left economics.
by rootless2 on Mon May 30th, 2011 at 01:30:20 PM EST
[ Parent ]
Oh, Gintis critiqued left economics as well as progressive economics?

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon May 30th, 2011 at 04:05:06 PM EST
[ Parent ]
maybe you could clear up the difference between "progressive" and "left" for me?  
by rootless2 on Mon May 30th, 2011 at 05:02:36 PM EST
[ Parent ]
Hopefully not, since clearing up the difference requires pretending away the ambiguities in the terms.

right vs left is clearly a political dimension, with the ambiguity cleared up when its made clear what political arena and what time period in that political arena we are talking about. "left economics", as "right economics", is economics in service of the political requirements of the left coalition as opposed to economics in service of the political requirements of the right coalition.

progressive is vis a vis conservative or traditionalist, with the ambiguities being judged as progress against what criteria and progress of what, so "progressive economics" is a double entendre at least, possibly a treble entendre, with one reading "progress in understanding the material provisioning of society", and a second reading "economics that is useful to those who consider themselves political progressives" (with multiple criteria possible for political progress meaning that the second meaning could easily be two or three partly contradictory meanings).

And of course, liberal vis a vis authoritarian is ambiguous in terms of who is being liberated from what authority, so that those who are freeing commercial corporations to exercise power over citizens can imagine themselves as "liberating" the owners of the corporation from state authority, even as the citizens being oppressed by corporate power may themselves wish to be liberated from corporate authority.

Near as I can tell without investing more effort than was available to me today, Gintis is not meaning "progressive economics" in the sense of progress in the discipline of economics away from an uncritical application of a traditional toolkit under a traditional unit of analysis toward being a science of the material provisioning of society, but is meaning the much easier "progressive economics" in the sense that it is a synonym for "left economics", which is a falling off a log analysis, since placing a social science at the service of the immediate political ends of some political faction implies that there will be less there than meets the eye.

My comment was just an arch reminder that reading "progressive economics" as being synonymous with "left economics" implies that what Herb is aiming at is the intrinsically easier target.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue May 31st, 2011 at 02:27:07 AM EST
[ Parent ]
   "But of course Gintis argument is that this is pious nonsense. That as much as some of us would like coops to be a real alternative to capitalist firms, they seem to not work so often and also to be easily captured by a management group - as the Comrade from Sweden's example makes clear. Perhaps there is no "real left" because we don't actually have a credible alternative to offer and all the angry signifying can't close the gap."

    Oh, of course, that would be Gintis's argument; but it wouldn't be yours, would it?  You'd disagree with Gintis, wouldn't you?  

    It's just that you sound so much like you're a tout for Gintis--especially when you seem to align yourself in "implying" that you subscribe to a view which has it that " as much as some of us would like coops to be a real alternative to capitalist firms, they seem to not work so often and also to be easily captured by a management group - as the Comrade from Sweden's example makes clear. Perhaps there is no "real left" because we don't actually have a credible alternative to offer and all the angry signifying can't close the gap.

   I have a different theory.  There is a "real left," and you are dedicated to its character assassination. By my theory, you consistently employ dishonest techniques which include shilling for dishonest arguments against real left-wing opinion (pretending to mildly criticize them).  You cite as worthy of our time and attention those who declare themselves so, so sorry that "we can't do better than Krugman," and who allow as how it's such a gosh darn shame that co-ops just don't really work.  In fact, co-ops work fine when they're allowed to.  You, however, aren't interested in their having a reputation for effectiveness.  You're dedicated to, in your puny way here, trying to discredit what is an emintently creditable idea.

   You don't approve of Krugman or Stiglitz or Naomi Klein.  They're just not something-or-other enough for you; and yet, they're at once the best of the lot and the best of a heart-breakingly small lot.  There should be more like them and it would help significantly if there were.  But, instead of championing all that is worthy about their work, you denigrate everything about them and meanwhile after damning them with faint praise, you tout the likes of Gintis here, with faint damning.

   As character-references for leftist opinion go, I'd rather take my chances with Rush Limbaugh and Bill O'Reilly than with you.  

  May every passing innocent reader who chances here beware of taking you as an actual advocate of left-wing principles.

   You specialize in diversionary sterile arguments, time-wasting nonsense, fatuous representations of respectable views which are actually worthwhile--as this thread so well shows.  You're a spoiler, pissing in the village well and then complaining about a shortage of potable water.

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Sun May 29th, 2011 at 01:32:53 PM EST
[ Parent ]
boring.
by rootless2 on Sun May 29th, 2011 at 02:47:10 PM EST
[ Parent ]
Yes, in so far as I have not seen a leftist government do a radical push for co-op's or other forms that would give power directly to the workers. Closest the swedish soc-dems came in 44 years of consecutive power (no, I am not counting the break in the summer of 1936) was a program to grant stock power to the unions, administered by union bosses.

Most what they did accomplish in ways of building movements that were controlled by those working in them, was accomplished while in a harsh opposition role. I think the need and desire to build organisations went away as they began to see state power as the main mean, held by party elite for the benefits of party elite.

Maybe soc-dems and commies were both wrong. The important thing is not wheter state power is conquered by elections or by force, but that state power forms the parties into being another owner instead of a mean to get power of the means of production into the hands of the proletariat.

So what then? Maybe back to the 19th century also-rans anarchists and utopian socialist. Maybe study why some co-ops does not get captured and combine with new organisational models such as those Chris pushes.

But it appears to be a Gordian knot. If the state is conquered by socialists, it eats the socialists. And if the state is not conquered by socialists, it also tends to eat the socialists (back in the 1930ies, when Coop was better functioning and dangerous, they had a thick file at the security service).

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sat May 28th, 2011 at 03:34:59 PM EST
[ Parent ]
The old left had the problem that its roots were industrial, so there was a tendency to think of "jobs" and "worker participation" in centralised, large-scale, industrial terms.

That was partly the legacy of Marx, for whom the "means of production" were industrial.

There are signs it's starting to ease, and there's a hint of a tendency towards diversification and more free and organic forms of participation.

What's missing on the left at the moment - at least in the UK - is the usual need to move beyond oppositional theatre (e.g. UKUncut) towards demanding seats at the policy table for all issues, not just single-issue campaigns.

That may be starting to happen in Spain. We'll see.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun May 29th, 2011 at 10:55:08 AM EST
[ Parent ]
That was partly the legacy of Marx Engels, for whom the "means of production" were industrial.

FIFY.

(I'm increasingly convinced that what most Marxians represent as Marx's views are as much an unkind caricature as what most Liberals present Adam Smith's views to be.)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 29th, 2011 at 06:52:17 PM EST
[ Parent ]
Kind of. Marx did the abstraction thing, but given the time in which he was writing, he also mentioned "industry" rather a lot.

And when most workers were industrial workers, it's not totally surprising that (say) the Soviets and the Maoists) turned him into a kind of angry patron of worker-deified industrial revolution.

If there's a lacuna in Marx, it's exactly that absence of realistic post-industrial alternatives.

There's not a lot of nature in Marx. There are people, and there are machines and resources, but he knew nothing about eco-systems or symbiotic embedding, so they're not included as original Marxist concepts.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun May 29th, 2011 at 07:31:41 PM EST
[ Parent ]
Much of the time what American "liberals" say when they say, "I believe in some of what Adam Smith said, but I also believe in ..." is a better representation of what Smith said in the second half than in the first.

Of course, no free market propaganda mill pays to get large numbers of cheap copies of Theory of Moral Sentiment reprinted.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon May 30th, 2011 at 12:22:24 PM EST
[ Parent ]
Hell, I'd be satisfied if people would actually read Wealth of Nations, rather than having it on display on their bookshelf to impress their friends (or, even worse, read abridged versions edited by people who have never read anything but abridged versions in the first place...).

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 30th, 2011 at 12:38:17 PM EST
[ Parent ]
  For a while, The Liberty Press (subsidiary of the Liberty Fund, (not far from a free market propaganda mill, though with some "class" ---now apparently defunct) )  did something reasonably close to that.

   Liberty Press, Indianapolis, 1976 & 1984

  The Theory of Moral Sentiments,  Adam Smith

   isbn:  0865970122

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Mon May 30th, 2011 at 12:48:54 PM EST
[ Parent ]
I have classic full text editions of TMS and WON, both from Liberty Press and at excellent prices. Also works by David Hume. They used to offer scholarships for best essays on libertarian subjects. If they are no longer selling their full text editions of classic works that is a loss.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jun 13th, 2011 at 12:39:39 AM EST
[ Parent ]
... but few grad schools would require dogmatic history anymore, and, indeed, I believe that where I went would no longer require it after it tipped.

The problem was the number grinding mill attached, where despite 1/2 University appointments, they had full votes in the department.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon May 30th, 2011 at 12:54:30 PM EST
[ Parent ]
..utopian socialist.

Who were these? F.Engels called "utopians" those who demanded reforms. Who had beliefs in mixed economy. He himself wanted total capitulation of markets without having not what so ever clue, how capital is allocated in the "dream" society.

Who was the utopian? Old leftist double speak and still no one in the left wants to be an "utopian." They are a hopeless case.

by kjr63 on Sun May 29th, 2011 at 11:55:57 AM EST
[ Parent ]
It is a broad (and from its origins pejorative) term for the pre-Marx and/or anti-Marx socialists.

My thoughts mainly went to the attemtps at communities to realise an alternative outside the realm of state power. But there is probably a lot more that has been downplayed by later socialists when the soc-dem/commie split became the major focal point.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sun May 29th, 2011 at 03:00:26 PM EST
[ Parent ]
I made the argument, following Polanyi, that the biggest Utopian experiment ever conducted was the implementation of Classical Economics in England in the 19th century. See WHO Are The Utopians? After all, based primarily on theory, the Classical Economists managed, with the not too surprising support of business, to convince politicians to totally restructure laws to make the society subservient to the economy -- a first in human history. In many ways this was more radical than what the Jacobins attempted in 18th Century France, and it largely succeeded. That success is the great grandfather of TINA!

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jun 13th, 2011 at 12:48:00 AM EST
[ Parent ]
But Gintis remarks make me think that we have the same thing on the left: a ideological artificial flavor which involves some BS about coops to disguise the fact that the exact same mixed economy view is being sold.

"A mixed economy dominated by large firms, which are in turn controlled by power groups internal to those firms" is, however, a fairly big tent.

There is a substantial difference, to take one example, between a political economy in which organised labour is one of the internal power groups controlling the large firm and a political economy in which that control is reserved for upper management. There is even a significant difference between the political economy in which control is reserved for upper management and one where middle management is included. And there is a very important difference between a political economy that is dominated by industrial firms, a political economy dominated by extractive firms and a political economy dominated by financial firms.

Different policies promote different sectors of the economy, and different power structures within the large, powerful business firm. And it is in my view a perfectly legitimate leftist objective to favour industry over finance (and manufacturing over extractive industry), engineers over MBAs and line workers and middle management over executives when making the rules for which firms grow large and which groups dominate the large firms.

So claiming that left and right are fundamentally identical because both subscribe to a "mixed economy" is not wholly unlike claiming that French and English are fundamentally the same, because both are Indo-European languages. The premise is true, but the conclusion does not follow.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 29th, 2011 at 06:47:42 PM EST
[ Parent ]
There is a substantial difference, to take one example, between a political economy in which organised labour is one of the internal power groups controlling the large firm and a political economy in which that control is reserved for upper management.

Isn't Germany the counter-example? DB's worldwide rapacious financial predation is built on an economy organized around industry in which organized labor has place at the table. To use the image that SKoD used above, the capitalist state has digested such mechanisms quite comfortably.

Mills in the 1950s describes an American power system in which organized labor had been tightly integrated in a subsidiary role. One does not need to be an orthodox marxist to see that the operation of a worldwide system of capitalism is a strong current, not easily diverted.

by rootless2 on Sun May 29th, 2011 at 08:14:38 PM EST
[ Parent ]
I'll note that labour's place at the table in Germany has been shrinking in both extent and importance since the reunification. Whether this is a cause or a consequence (or both?) of the increasing financialisation is an interesting (i.e. non-trivial) question.

But if our exchange over the last few days has done nothing else, it has at least motivated me to dig a bit deeper in DB and SG, since they seem to be running their own foreign policy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 29th, 2011 at 08:50:54 PM EST
[ Parent ]
ANY large organization is eventually run by the management for the benefit of management.  A casual factor is not hard to find: a large organization is a center of power - over the other members of the organization at a minimum - thus an attractor for Social Dominates.  

Whether the organization is a co-op or corporation is de minimis.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sat May 28th, 2011 at 01:05:22 PM EST
[ Parent ]
The difference is that in a well-run co-op management can be removed by the employees, pay differentials are lower, and for a co-op like GoreTex the management layer is porous, open, available to any employee with talent, and may be project-based rather than permanent.

In a capitalist corporation, executives are selected because they're already members of the executive class, not because they have proven management skills. (In fact, failing to have management skills is no handicap to a management career.)

But at - say - Waitrose - staff regularly participate in store management. There are open discussions about issues, and sometimes about strategy. If senior staff are out of line, there's instant feedback.

Apart from that then yes, there's no difference at all.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat May 28th, 2011 at 01:14:08 PM EST
[ Parent ]
I agree with him mostly.

What is i.e. "Worker's control?"

Replacing an economic oligarchy with a political oligarchy? And why there is no such companies? No one forbids to establish such companies, with "worker's control." And why do governments not distribute land to people in western democracies? Because majority does not want that. Not "left" nor right.

by kjr63 on Sat May 28th, 2011 at 08:33:48 PM EST
There are such companies. There are a couple locally.

There are very few such corporations, for a variety of reasons - not least of which is lack of start-up funding and general hostility from the ownership class, with lack of material ambition possibly running a close second.

It's likely that someone as persistent and annoying as Richard Stallman is going to have to invent an OpenBusiness model, and spend all their time promoting it.

Chris Cook has one model for this, but from what I've understood of his ideas there's no explicit commitment to worker participation and democracy.

I expect there are alternatives, but I haven't spent enough time researching this to know what they are, or how they work.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun May 29th, 2011 at 11:01:01 AM EST
[ Parent ]
The principal problem with Co-ops is that they almost invariably use genetically modified forms of Joint Stock Companies.

So firstly, they always have the principal/agency problem with management.

Secondly, they have a severe problem with access to capital, since borrowing puts the business at risk, and as with any mutual their only other source of capital - without relinquishing control - arises out of gradual accretion of surplus.

But since a worker co-op like John Lewis - not really a perfect example, because it was philanthropically endowed with assets by John Spedan Lewis at the outset - tends to distribute surplus to workers in one form or another (which is fine); and retail co-ops tend to distribute surplus to customers (the 'divi' - which is also fine) then retained surplus tends to be low.

In order to survive and thrive in the modern world, Co-ops have tended to become increasingly corporate, and the risk is that they are run by and for the management. That is less likely in a worker Co-op, but pretty much the norm in a retail co-op (eg the UK Co-ops, particularly the big ones) or in a producer Co-op eg NZ's Fonterra, or other agri-co-ops like Arla.

The management of these beasts are always on the look-out for a management buy-out/flotation etc, and sometimes the members go for the short term windfall and long term screwing which results.

The approach I have evolved - and it's probably moved on a bit since we last discussed it, TBG - is essentially to create a Co-operative of Co-operatives within an associative framework agreement.

In this model Labour works with, not for, Capital, and there is no principal/agency problem because management share the gross revenues or production with staff and investors.

See Partnership Finance

If it's not participative and democratic, then the workers don't subscribe to the agreement.

Simples.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue May 31st, 2011 at 05:59:27 AM EST
[ Parent ]
The argumet that if it is good, it would exist already is at is essens a conservative argument. Applied in a different time it could be an argument for any dominating economic model. It also supposes that politicla pressure is not brought to bear in order to benefit the dominating economic model.

Like the abolition of Yugoslavia's workers councils (that I would be interested to hear about how they worked from anyone with experience. vbo?)

Economy of the Socialist Federal Republic of Yugoslavia - Wikipedia, the free encyclopedia

In the 1990s, IMF effectively controlled the Yugoslav central bank. Its tight money policy further crippled the country's ability to finance its economic and social programs. State revenues that should have gone as transfer payments to the republics and provinces went instead to service Belgrade's debt with the Paris Club and London Club. The republics were left on their own to survive. From 1989 through September 1990, more than a thousand companies went into bankruptcy. By 1990, the annual GDP growth rate had collapsed to a negative 7.5 percent. In 1991, GDP declined by a further 15 percent, while industrial output shrank by 21 percent.[31]

The reforms demanded by Belgrade's creditors struck at the core of Yugoslavia's system of socially-owned and worker-managed enterprises. The objective of the reforms was to privatize Yugoslav economy and to dismantle the public sector. Instead of rebuffing the reforms, Yugoslavia was desperate and could not refuse their demand.



Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Sun May 29th, 2011 at 03:16:44 PM EST
[ Parent ]
The argumet that if it is good, it would exist already is at is essens a conservative argument.

No, it isn't. There is no law against worker co-operatives, so it's not a question about "economic model." Not a question of "political economy," just about one particular form of organisation and a no-issue.

Should all companies be "worker co-operatives?" Why, if somebody wants otherwise? I prefer liberal democracy, individual liberty.

And even if, there still would be the same finance, real estate and resource markets that would rob blind these co-operatives. Production organisation does not address the core issues of land and finance.

by kjr63 on Mon May 30th, 2011 at 07:30:35 AM EST
[ Parent ]
kjr63:

No, it isn't. There is no law against worker co-operatives, so it's not a question about "economic model." Not a question of "political economy," just about one particular form of organisation and a no-issue.

I do not think there was any law against paying your workers in Rome, yet slave labor ruled, proving its superiority over wage labor. There was probably no law against corporations in medieval Europe, proving the superiority of the feudal system. So yes, it is at its core a conservative argument.

That something is legal is only a subset of the conditions necessary for an organisational form to thrive. Just to pick an example I am familiar with: in 1931 it was not illegal to form a co-operative bank in Denmark, but in 1933 it became illegal.
JAK members bank - Wikipedia, the free encyclopedia

The co-operative society Jord Arbejde Kapital was founded in Denmark during the Great Depression in 1931. The society issued a popular local currency which was subsequently outlawed by the Danish government in 1933. In 1934 it founded an interest-free savings and loan system and a Local Exchange Trading System. Though both systems were forced to close, the savings and loan system reemerged in 1944.

Economy is politics with other means.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon May 30th, 2011 at 07:43:38 AM EST
[ Parent ]
But of course there were stunningly successful companies in Europe in the 1300s. In Genoa and Florence and Germany there were joint stock ventures, family controlled companies, and international banking corporations.
by rootless2 on Mon May 30th, 2011 at 10:27:31 AM EST
[ Parent ]
   You cite as thought-provoking" remarks and arguments by a guy who parrots talking-points found derived from  speeches offered to Federalist Society members.  

   In,

   "On the other hand, it would be nice if Klein's alternative were generally viable. Thomas Jefferson's vision of forty acres and a mule would be vindicated, albeit in a more socially organized manner. But it is not. Worker's control is a great dream (I dreamed it myself for many years), but it founders on the reality of capital diversification, which the worker-owned firm cannot handle."

      it doesn't bother you that 'forty acres and a mule' is referred to as "Jefferson's vision" when Jefferson died in 1826 and the phrase was spawned after the U.S. Civil War?

 

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Sun May 29th, 2011 at 11:22:08 AM EST

It is a plain-faced fact that poor countries that have attempted to compete in the world market place rather than shelter themselves from it have done quite well, China and India being the most prominent.

I do not know if it is that plain faced, for 2 reasons:

  1. They might be competing in a world market, but surely they are mercantilist. They are opened to exporting.

  2. Regarding "doing quite well". From a GDP perspective? Surely. But regarding standard of living, working conditions? Maybe a little bit. But working (as in some cases) 7 days a week, 14 hours a day does not seem to me as an "improvement"
by cagatacos on Sun May 29th, 2011 at 12:54:57 PM EST
To change the quote to a political frame:

It is a plain-faced fact that poor and big countries that have attempted to compete in the world market place rather than shelter themselves from it kicked out their colonial masters and re-written their position in the world trade system have done quite well, China and India being the most prominent.


Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Sun May 29th, 2011 at 03:05:56 PM EST
[ Parent ]
taiwan and korea are not big.

But the kicking out colonial masters part is clear. The fascinating the US economists of the early/mid 1800s explaining this policy very clearly.

Here's James Madison in 1815

However wise the theory may be which leaves to the sagacity and interest of individuals the application of their industry and resources, there are in this as in other cases exceptions to the general rule. Besides the condition which the theory itself implies of reciprocal adoption by other nations, experience teaches that so many circumstances must concur in introducing and maturing manufacturing establishments, especially of the more complicated kinds, that a country may remain long without them, although sufficiently advanced and in some respects even peculiarly fitted for carrying them on with success. Under circumstances giving a powerful impulse to manufacturing industry it has made among us a progress and exhibited an efficiency which justify the belief that with a protection not more than is due to the enterprising citizens whose interests are now at stake it will become at an early day not only safe against occasional competitions from abroad, but a source of domestic wealth and even of external commerce.

by rootless2 on Sun May 29th, 2011 at 03:22:45 PM EST
[ Parent ]
"Progressive economics" is riddled with too much planning. Should it be coops? Big? Small? Maybe small ownership?

I would suggest a different take: instead of planning good solutions, what about avoiding bad alternatives? And then let people find their own ways.

So, for instance:

  1. Avoid massive concentrations of wealth. Make it illegal one way or the other.

  2. Avoid private monopolies. Real competition works in several domains. Private monopolies is the worst of both worlds.

  3. Be careful with too much power in the central state. As the state can be taken by special interests (see, e.g., Europe, 2011)

  4. Enforce separation of powers. Consider money and mass media powers! Have money? Then cannot have mass media. Dear Rupert Murdoch, please choose: either your money or your media empire.

  5. And so on

Regarding the rest: stop patronizing people with "the best solutions", let them find their ways. The liberal mantra of "get out of the way" roughly works as long as people do not accumulate too much power.

It might not sound good, but "progressive politics" could be defined by negatives: these are the limits, the rest is fair game.

Big is Bad.

by cagatacos on Sun May 29th, 2011 at 11:20:45 PM EST
He, this could been written by most of the 1850-1940 anarchists I have come across.

To play devil's advocate, the traditional answer from socdems or commies to 1 and/or 3 is that concentration of capital is necessary for the modern industrial society.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon May 30th, 2011 at 07:03:56 AM EST
[ Parent ]
Yes, but the advantage of the joint stock company is precisely that it separates concentration of capital from concentration of wealth.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 30th, 2011 at 10:32:22 AM EST
[ Parent ]
Dunno about advantage, but it's certainly a quality.

The key disadvantages of joint stock companies are:

(a) Concentration of Capital = concentration of control

(b) Principal/ Agency problem.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue May 31st, 2011 at 05:39:55 AM EST
[ Parent ]

To play devil's advocate, the traditional answer from socdems or commies to 1 and/or 3 is that concentration of capital is necessary for the modern industrial society.

Yes, of course. But there might be middle way: have very restricted and controlled events of capital accumulation. And shed lots of light (i.e. transparency) on them. And force them to not outlive some duration. And so forth.

But the real discussion is: how much industrial society do we need? One ipad every year, really?

Of course industrial society has some benefits: it allows use to be communicating here, for instance. And, of course, pre-industrial societies were in many cases an inequality disaster.

Then this discussion becomes extra-special if we thrown in the ongoing and increasing resource constriction of the next decades. It puts the feasibility of industrial society (especially at current levels) also on discussion.

by cagatacos on Mon May 30th, 2011 at 11:46:01 AM EST
[ Parent ]
...have very restricted and controlled events of capital accumulation.

Capital accumulation means wealth creation. That is what economies should be doing, instead of rent-seeking.

The real issue is income distribution.

by kjr63 on Mon May 30th, 2011 at 05:35:18 PM EST
[ Parent ]
One ipad every year, really?

But! But! A forever ipad, iphone and ipod would really take a bite out of the Apple and seriously piss of Mr. Market. The results on Apple stock would not be pretty.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jun 13th, 2011 at 09:12:41 AM EST
[ Parent ]
I read some of Gintis' reviews and some of the Wiki article on him. From what I can tell he manages to give Behavioral Economics a bad name. Perhaps the behavioralism to which he refers is Skinnerian Stimuls-Response conditioning. He came up in that mileiu and was born in 1940. He has his bachelors and masters in mathematics and only went into economics, at Harvard, for his PhD. One of his major areas of interest is game theory and, like John Nash, seems to have a libertarian bent. He certainly does not identify as a "progressive" or a "liberal" but, rather lamely, claims to be "non partisan" and focused on policy -- as if it was not over policies that political factions fight.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jun 13th, 2011 at 01:01:35 AM EST
"Non-partisan policy research" is standard code for "neo-liberal think-tank shilling."

Pretty much every neo-lib think-tank ever proudly displays those words on its web page.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jun 13th, 2011 at 06:35:14 AM EST
[ Parent ]
He does literally thousands of reviews, all with the same annoying slant, so I was figuring that this was his retirement gig for extra spending money.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jun 13th, 2011 at 09:09:10 AM EST
[ Parent ]


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