parecon and capitalism

>
> "Capitalism is a zero sum system in which to get
> ahead one must trample others."
>
> Capitalism is not zero-sum. Every transaction in
> a free market is mutually beneficial, or else it
> wouldn't take place. "Beneficial" is defined by
> what free agents choose to do, so it's a bit of a
> tautology, but it's still meaningful. "Free"
> implies symmetrical information and amortizable
> transaction costs, which don't always obtain. So
> you can argue about how to improve information
> symmetry and lower transaction costs. You can

Yeah . . . when "beneficial" means "being barely able to eack out
survival", I'm not sure how meaningful the term is. Sadly, that's the
way it is for most people in the world. . .

> also dispute the above reasoning. But Michael
> Albert instead gives us...
>
> "You must ignore the horrible pain suffered by
> those left below or you must literally step on
> them, pushing them farther down. In capitalism,

I don't see what's so unreasonable about this?

Most of us do this every day . . .I'm ignoring a lot of pain right now,
and having a great time chatting on an e-mail list.

If I really wanted to not ignore the pain, I might have to start
boycotting all sorts of essential pleasures in life, like Tropicana
Grapefruit Juice (Coke subsidiary), the computer I'm working on (which as
Monz pointed out awhile ago, uses materials in the chips whose extraction
is a big factor in the massive genocidal war in the Congo), etc. etc. etc.

> //
>
> "In a Participatory Economy for those who can
> work, remuneration is for effort and sacrifice."
>
> Uh-oh.
>
> Despite that the essay presents Parecon as
> something new, I'm having a hard time seeing any
> difference from plain-jane socialism.
>

So?

1) The emphasis in Albert's theory is on "participatory". I.e.
-- bottom-up democracy. In that way, it would be significantly different
from "socialism" as we've come to know it. . . which is mostly "command
economy" where a a few officials at the top decide what's good for most of
the people.

(If that sounds familiar. . it shoudl . . .after all, our "free market"
system works out that way in many ways. . . )

2) Aspects of socialism in countries like Sweden, Norway, etc. work
very well, from all that I've heard. For example, health systems.

And don't give me that "long lines" argument. Yawn!! There are
plenty of laces in Canada where there are no long lines, and on the ohter
hand, . . . have you been to an emergency room in our glorious "free
market" health system in New York City? I'd call waiting for 6 hours a
"line" situation . . . .
Perhaps there will always be lines. . . but at least in the one
case, everyone gets health coverage.
In the other case. . .here. . . well, I am a proud member of the
40 millioni un-insured citizens.

> If you want to renumerate effort, you need a
> way to measure effort. How do we do that?

Does capitalism do a better job?
Do CEOs really put in 5000 times more effort than janitors? (I may have
low-balled that number. . . )

Because of that kind of inequality, billions of people are in misery
around the world.

I'd say capitalism is such a MASSIVE failure at this, that almost anything
would be better.

Now, you'll say, "well look at what things were like in the USSR. . "
Well, in many ways, they sucked. Albert argues, rightly or wrongly,
that this was mostly because the system there was still essentially
top-down, as opposed to bottom-up.

Still, I knew folks from Eastern Europe (Bulgaria, specifically), who
were horrified at the poverty in the USA. Especially, since, when they
first arrived, they were part of it.
They've probably switched to being regular Patriots now, but when they
were first here, we had many arguments, where I tried to defend life in
the USA against what they thought was clearly a better general existence
in Eastern Europe. I couldn't believe that someone was arguing this way,
but they were serious about it.

> "values" in
> Parecon. Some of which are quite admirable.
> Such as everybody having "a say in decisions in
> proportion as we are affected by them". But how
> do we achieve these values?
>

Well, in that particular case, it depends on the decision being made.

There are a lot of examples in the book.

But to take a contemporary example, if WALMART wants to build a superstore
in a community, it should be up to the community (perhaps on a yes-or-no
majority rules basis. . . or perhaps on a 2/3 majority basis, since the
effects would be rather large), not WALMART's vast lobbying $$$, to decide
whether the store arrives in town.

> The answer in all cases seems to be: with
> democratic councils. In Parecon, councils define
> the jobs. But how do they know what jobs are
> needed? Are they creative enough to invision new
> jobs?
>
> Historically, democratic councils have been
> miserable at aggregating information. They
> haven't been able to measure or adjust to
> conditions quickly or completely enough to manage
> prices.

This may be true.

However, in many ways, capitalism has the same problems.

If a new kind of screw is needed, then yes, capitalism is great at coming
up with it: someone sees an opening, makes the screw, a few people get
insnely rich, and other people get subsitance-level jobs.

But there's lots of "information agreggation" that capitalism sucks at.

Corporations care mostly about profit, and by extension, the costumer
often gets treated well (IF they are informed. . . )

However, a corporation is just too crude a social mechanism to take other
factors into account: like environmental effects, the standard of living
of its workers, and so on. It just doesn't care about those things.
Whatever's cheapest. Only a few rag-tag laws prevent things from
degenerating into a situation even more horrible than what we've got.

> Raise your hand if you feel like you could implement
> one of these.

Elements of "parecon" can be found in, for example, worker-occupied
factories in Argentina.

I also think that, while still a far far cry from anything Albert
imagines in his book, Howard Dean's "Democarcy for America" or whatever
the cheezy title is, is a step in that direction also.

> > "Capitalism is a zero sum system in which to get
> > ahead one must trample others."
> >
> > Capitalism is not zero-sum. Every transaction in
> > a free market is mutually beneficial, or else it
> > wouldn't take place. "Beneficial" is defined by
> > what free agents choose to do, so it's a bit of a
> > tautology, but it's still meaningful. "Free"
> > implies symmetrical information and amortizable
> > transaction costs, which don't always obtain. So
> > you can argue about how to improve information
> > symmetry and lower transaction costs. You can
>
> Yeah . . . when "beneficial" means "being barely able
> to eack out survival", I'm not sure how meaningful the
> term is. Sadly, that's the way it is for most people
> in the world. . .

But that's the way it is even without capitalism. Life
is hard. Social organization of one kind or another
can make it easier. If you keep the population *density*
low, everybody can be comfortable hunter-gathering.
But as the density rises, increasing demands are placed
on specialization, etc. etc. If you don't meet those
demands, you get squalor.

There's "exploitation". For example, the chefs at the
cafe where I used to work were being exploited because
they weren't citizens and didn't have proper paperwork.
That's because the laws of this country have artificially
raised the *transaction costs* of the getting paperwork.
A pure capitalist would tell you the answer is to get
rid of those laws. Lots of people are exploited, to use
the favorite example, when they buy a used car. That's
because the dealer *knows something* about the car that
the buyer doesn't. Nobody knows how to correct this, but
establishing trust databases can help (like a website
that rates dealers). So can buying insurance (a warranty).

There's colonial exploitation. It's tough, but places
like India are showing that you can, in a few generations,
begin to rise out of it. There's also the idea of having
ex-colonial powers pay reparations. Colonial exploitation
was ultimately a problem of asymmetric information --
Europeans had technology that blew the worldview of many
other cultures out of the water, like the coke bottle in
The Gods Must Be Crazy. It wasn't military -- the Spaniards
conquered South America on not much more than willpower.
Disease was crucial perhaps. But Pizarro won at Cajamarca
simply because the natives had no idea what was going on.

> > also dispute the above reasoning. But Michael
> > Albert instead gives us...
> >
> > "You must ignore the horrible pain suffered by
> > those left below or you must literally step on
> > them, pushing them farther down. In capitalism,
>
> I don't see what's so unreasonable about this?
>
> Most of us do this every day . . .I'm ignoring a lot
> of pain right now, and having a great time chatting on
> an e-mail list.

It isn't wrong or unreasonable, it just fails to address
anything about capitalism.

> 1) The emphasis in Albert's theory is on "participatory".
> I.e. -- bottom-up democracy. In that way, it would be
> significantly different from "socialism" as we've come to
> know it. . . which is mostly "command economy" where a few
> officials at the top decide what's good for most of
> the people.

We're living in a bottom-up democracy. It turns into a
command economy real quick. The genesis of political parties,
to the nightmare of the Gilded Age. Power has a way of
aggregating itself. How do you prevent this? Laws and
charters don't work. The system itself must have feedback
loops that reinforce the desired structure. I don't think
Albert understands this.

> 2) Aspects of socialism in countries like Sweden, Norway,
>etc. work very well, from all that I've heard. For example,
>health systems.

The argument I've read and adopted is that this requires
racial hegemony. Oil money helps in Norway.

> In the other case. . .here. . . well, I am a proud
> member of the 40 millioni un-insured citizens.

And me.

> > If you want to renumerate effort, you need a
> > way to measure effort. How do we do that?
>
> Does capitalism do a better job?
> Do CEOs really put in 5000 times more effort than janitors?
> (I may have low-balled that number. . . )

Capitalism doesn't measure effort. It measures value.

> But to take a contemporary example, if WALMART wants to
> build a superstore in a community, it should be up to the
> community // not WALMART's vast lobbying $$$, to decide
> whether the store arrives in town.

I agree, but the issue here is tricky. You've got to watch
out for, say, towns in the South voting black families out
of arriving in town.

> But there's lots of "information agreggation" that
> capitalism sucks at. // a corporation is just too crude
> a social mechanism to take other factors into account:
> like environmental effects, the standard of living
> of its workers, and so on. It just doesn't care about
> those things. Whatever's cheapest. Only a few rag-tag
> laws prevent things from degenerating into a situation
> even more horrible than what we've got.

I wouldn't call that information aggregation, but rather,
ignoring externalities. Coase showed that externalities
aren't a problem if transaction costs are zero. Now,
transaction costs are never zero. So lowering them is a
great idea. How do we do it?

-Carl

--- In metatuning@yahoogroups.com, Christopher Bailey <chris@m...>
wrote:
> >
> > "Capitalism is a zero sum system in which to get
> > ahead one must trample others."
> >
> > Capitalism is not zero-sum. Every transaction in
> > a free market is mutually beneficial, or else it
> > wouldn't take place. "Beneficial" is defined by
> > what free agents choose to do, so it's a bit of a
> > tautology, but it's still meaningful. "Free"
> > implies symmetrical information and amortizable
> > transaction costs, which don't always obtain. So
> > you can argue about how to improve information
> > symmetry and lower transaction costs. You can
>
>
> Yeah . . . when "beneficial" means "being barely able
> to eack out survival", I'm not sure how meaningful the
> term is. Sadly, that's the way it is for most people
> in the world. . .

the biggest problem with capitalism -- at least in its
current huge American/multi-national form -- is that it
is totally dependent on an ever-expanding market.

of course, with the population explosion proceeding
full steam ahead, every day brings new untapped markets
... but the big problem with this is the huge waste
involved and the huge amount of trash created.

my point is that capitalism depends on keeping the
poplulation explosion going, and that's a very bad thing,
possibly the most detrimental factor in human society today.

-monz

> my point is that capitalism depends on keeping the
> poplulation explosion going, and that's a very bad thing,
> possibly the most detrimental factor in human society today.

I'll have to respectfully disagree, monz. Capitalism
doesn't strictly require growth. And growth doesn't
require bodies, only innovation. And as we both know,
we're at no risk of running out of good ideas.

-Carl