skylien,
It is not solved like that. “Who gets it” is the wrong question.
The right question is “how do we best deal with this brick shortage? Is there an alternative, some other way to provide housing? Why did we have a shortage in the first place, can this be solved?”
It is a systematic approach. It doesn’t work on the same principles as capitalism.
A bit more on democratic deliberation:
As an example, imagine you own a business and produce good X. This can be done in two methods, A and B. A is cheap and efficient and the best investment decision from a profit perspective. B is better for the environment, but leads to a reduction in profit. What is your incentive to choose B? Your business being small in comparison to the world economy as a whole, you choosing B would have no measurable affect on the environment; it would be like spitting in the ocean. Even if you are an environmentalist and care for nature, the rational thing would still be to choose method A.
And every other individual is thinking the same thing. So the sum of your individual and subjective choices is A. Even if everyone agreed to choose B for the sake of the planet, every individual would have an incentive to cheat, since doing so would give one a huge cost advantage (possibly also reasoning that since everyone else is sticking to B, their choice of A isn’t going to do any measurable harm).
If there was a market for environmentally friendly products, you’d have an incentive to seem as environmental as possible, not be it, because profit is still the main motive, and “eco-friendliness” only a means to an end. Ecologically grown produce is big business today, and ironically at least as harmful to nature as regular farming due to the huge industrial scales.
But if we had collectively made an objective decision with the good of all in mind, we would have chosen B. If the outcome hoped for is a minimization of environmental harm, this method is the only rational.
Perhaps objective collective desire is a poor choice of words. The “collective good” would describe it better, perhaps. But it is more than “the most good for most people”, it is also a consideration of the whole planet and the whole of humanity. In my example, everyone choosing A does result in the most good for the greatest number of individuals given a capitalist society, as it maximises wealth. Each individual can then choose to do whatever maximises their subjective utility with said wealth. With a notable exception; the utility gained from having clear air, water, and any number of other collective goods. So it is also the poorest choice for mankind and the planet as a whole, despite seemingly being the best for all at the individual level.
The choice of B is in no way a sacrifice, it is the best choice even for the individual, if one considers the whole picture. Choosing A leads to wanton ecological destruction and is a bad choice, again even on the individual level. It’s just that this is not realised if one takes an individualist approach to the problem - or rather one may realise it, but still has no incentive to do otherwise. Since everyone else is looking out for themselves and chooses A, the environmental damage will occur no matter what. The reasonable thing for me to do is to take A as well, and at the very least make a profit; minimise my losses. Again, everyone is thinking this!
I realisee that it is ultimately unknowable what the best option is, but that does not mean that for any given scenario with finite choices it is not possible to deduce which would be the most prudent.
@ Apfel
That is not an answer, that’s a dodge. You would not accept such an answer from an ancap.
And you really believe you can convince anyone of Ancom if your answer to any simple and clear question is “Oh no worries, we will manage that in an appropriate way, so that everyone will be happy” ?
This seems quite trivial to you but only because you’re entirely unfamiliar with the actual economic definition of “relative disproportionalities,” and the historical setting under which this term emerged. You see, in an attempt to explain economic depressions economists were divided into essentially two separate general schools of thought.
On one side, you have economists like Malthus and Keynes who claimed that this phenomenon was due to capitalisms propensity to produce so-called “general gluts.” On the other hand, economists such as J.B. Say, and other various “Austrian” economists claimed that the notion of general gluts is entirely absurd and instead pointed to relative disproportionalities. In other words, the problem wasn’t that too many consumer goods were produced in general, but rather that too much of a particular type/class of consumer good(s) were produced at the expense of all other consumer goods (the same is true, of course, for capital goods, which the Austrians de-homogenize and disaggregate). This is why the Austrian theory of cycles is rooted in the notion of mal-investment rather than over-investment.
My only point, though, is that Keynes, unlike Marx, provided an explanation as to how the economy recovers from depression, how it remedies and extinguishes the general glut (inventory adjustment mechanism, for example). Marx, on the other hand, provides no adequate explanation, and in fact, any attempt to provide one will logically contradict his theory of accumulation of which the law of the declining rate of profit (where the rate of profit falls in perpetuity) is a key component. It’s hard to imagine a recovery, much less a boom, when the rate of profit continuously falls, but I will return to this issue shortly.
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Again, it’s not entirely clear that you actually understand Marx’s major argument, which revolves around his major dialectic (forces of production vs relations of production) and the internal contradiction of capital accumulation within the capitalist system. It is this contradiction which must, according to Marx, inevitably lead to capitalism’s demise (an “inexorable law of nature”).
In short, Capitalists transform their surplus value into investment which will first manifest itself as increase in total variable capital, even if the intension was to increase the supply of constant capital. This (a) elevates wage rates and (b) competition forces capitalists to employ cost-cutting, labor-saving machinery. In other words, they are forced to reduce the “organic composition of capital” (replace variable capital with constant capital, also known as utilizing economies of scale). At the same time, though, this process necessarily diminishes the very source of surplus value (variable capital) that they require. This process is perpetual and self-reinforcing; the capitalist’s attempt to protect their own profit necessarily leads to the continuous and steady destruction of profit, until the capitalist system and class destroys itself.
This is, in a nut shell, Marx’s theory of crisis. My point is that this leaves no room for actual business cycles, which refers to a repeating and cyclical process by definition. Now Marx does mention the role of finance and credit cycles (the creation of “fictitious capital”) which can, in the short-run, elevate profit rates, but this hardly explains why there are entire decades of relative undisturbed economic growth and frequent jumps in the rate of profit.
So my question to you, again, is this: where does Marx actually explain how the capitalist system recovers from depression, and how does this fit into his theory of crisis and the so-called “logic of capitalist accumulation?”
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What’s interesting, though, is that Marx assumes a state of perfect information and competition in both the economy of “simple” and "expanded reproduction.” Unfortunately for Marx, holding such assumptions necessarily eliminates the very possibility of earning surplus value through exploitation. In other words, under such conditions, capitalists must elevate average wage rates towards the marginal product of labor. As I’ve already mentioned, Marx explicitly states that investment will first manifest itself as an increase in variable capital (higher demand for labor), even if their intension was to increase the total supply of constant capital.
But there are a few questions I like to ask various Marxists that frequent this forum from time to time. I don’t want to discuss the tenability of Marxian conclusions until you at least attempt to substantiate Marxian premises (which have been refuted time and time again). If your framework is correct then you should have no problem answering these very simple questions:
Always making it seem as if there is a choice between environmentalism and capitalism, eh? It’s humbug, the method that is cheaper is also better for the environment, in the long term. It has to be, because the cheaper choice uses fewer, more efficient resources. In the aggregate capitalism is always more environmentally friendly because the profit motive incentivizes the use of more efficient and fewer resources. Why do capitalists use natural gas instead of coal, because they are ideologues or because it is cheaper? Environmental improvement is a natural side-effect of a free market, it does not require anticapitalistic asceticism or social engineering. If you look at the data, the most free market countries are also those with the best environment, while those that relied on socialism and social engineering to solve their problems are poor and have deteriorating environments. Environmental socialism has never actually improved the environment.
Besides, social engineers easily fall prey to environmental fads that turn out to be misguided and counter-productive a decade later. So they would waste societies resources on ill-advised projects that turn out to be based on faulty science. In fact all environmental alarms except the recent one are now considered a destructive mistake. Capitalism is efficient precisely because it restricts the ability of “objective” decisions-makers to impose their whims on society.
awesome post, Justin
Guys,
I am learning a lot from this thread, thanks to all.
Apfel,
I don’t accept either of those premises. I believe greed etc is inherent in human nature. That an economic system cannot cure one of it. And it is given a bad name. Wanting to improve your lot in life by honest means is just fine.
All those sweat shops with the uzi guards will close down because slavery is unprofitable. Can you please show me a photo or something of these places? I have seen videos of workers protesting the closing of the so called sweat shops they work in. I would like to see the other kind.
There are poor in capitalist [=wealthy] countries, sure. But it is not the system that makes them poor. The system provides them with a way out of poverty. And the standard of poverty is very different in a poor [=socialist] country than a wealthy country.
Others have answered your environmental concerns better than I did.
Think I have exhausted my possible contributions here. May continue at some point rebutting Robbo’s critique of Capitalism. Was in the middle, and had to rest a bit from the effort. 'Twas like trying to unravel a very tangled length of string. Greta excercise, but not easy for me.
Will keep following the thread for sure.
Thanks Smiling Dave,
I wanted to push the thread back on topic. They can whine about Capitalism all they want but it isn’t going to solve the ECP.
skylien,
Yeah, sorry that is the best I can do. That is the bes anyone can do on such vague premises. If you want me to give a “real” solution, pose a real question. “Brick shortage” is too vague; what the solution is depends on why the problem exists, i.e. the context.
Again, we deny Cartian rationalism. We deny that there is any one optimal solution that can be applied to any problem, at any time, in any place.
We also are in favour of democracy and deliberation. I could give you an excellent answer, but that does not mean that it would be the solution used; that would be up to the people affected. There is no one method or approach either, it all depends on the circumstances.
A rational mind ought to be able to acknowledge the limits of rationality; to again parahprase Neurath, that is the chief triumph of rationalism.
EmperorNero,
There is not “always” a choice, but the choice does come up. If you produce something, you inevitably affect the environment in some way.
“the choice that is cheaper is also better for the environment, in the long term.”
No, sir, this is humbug. It is demonstrably wrong, and not logical in any way. But even if I where to accept it as true, you would still need to argue as for why everyone would think in the long term, rather than the short term. Anarcho-capitalisms inability to future generations into account has already been demonstrated; so what exactly is “long-term” to you?
In the aggregate capitalism is always more environmentally friendly because the profit motive incentivizes the use of more efficient and fewer resources
“Efficient” does not mean that said resources are the ones best for the environment, or used in the best way. “Efficient” is in fact an empty term, the meaning you give it valid only within the context of a capitalist economy.
Furthermore, it has been empirically shown that reductions in resource cost do not lead to less resources being used; they lead to more stuff being produced.
I know that capitalism is not “evil”, damage is not done on purpose like the bad guys in Captain Planet do. Capitalism is fully capable of producing results that are environmentally sound. But if, and only if, there is a profit in it somewhere. And the question still remains if said result was the most sound theoretically possible, or just the most sound that still gave profit?
Why do capitalists use natural gas instead of coal, because they are ideologues or because it is cheaper
A better question is, why do they not use geothermal, wind or solar energy? Or invest more in fusion research, which has lately showed promising results?
There is, yet, no profit in it. I’m sure they’ll jump on it when they can make a buck.
Also, I see everyone seems to have rehearsed their arguments against socialism and liberals so well that they ignore that I am neither. The environmental damage done by the USSR and other such economies was horrid. This is why I reject that system.
Anarchism, again, rejects Cartian rationalism on which social engineering is built. You are now arguing against an anarcho-communist, not a communist or socialist. Using the same arguments against me as against those people makes as much sense as if I used anti neo-classical arguments against you.
Smiling Dave,
In anarcho-communism, greed would not magically disappear. We would change society such that there would be do incentive for greed, no need for it. It would be trancended.
I know this is difficult for you to grasp, but anarchists believe in cause and effect. We do not believe in some intangible “human nature”; we believe that people respond to their environment. There is a mountain of evidence in favour of this view, and none what so ever for this undefined “human nature”, that is somehow depended neither on genes, environment, upbringing, culture, or incentive and motivation.
What exactly is this “human nature”? Or, rather, how would you falsify it?
The anarchist idea could be falsified by finding a property in humans that has 1) always existed in humans, no matter the time or culture 2) that every single human shares
Search google. Search youtube and see with your own eyes. This is fact, not socialist propaganda. People are abused. No argument in the world can change oserved fact. Please stop denying observation so that your belief in capitalism can persist. I once believed in what you do; I abandoned it when I found the facts spoke against it. To keep claiming that sweatshops are OK after doing your research makes your faith in capitalism a religion.
Not paying people is quite profitable. This is why we had slavery, this is why we still have it. Please argue for why I, as a capitalist investor interested only in profit, would pay people more rather than less?
I didn’t ask for The Optimal solution. I am asking for a reasonable and fair solution. I also don’t see what the history that leads to that situation changes about the nature of the problem → Too few bricks for too many people asking. But if you want a history: Last years demand was only one person because it was IN to build houses of wood. This year’s demand increased to 10 people for bricks. If this is not enough for you, why don’t you set the stage?
justintempler,
See one of my previous posts.
I’d love to get back to the ECP. But first I need you to read Robs article again, AnarchistFAQ’s rebutall of the ECP (focusing on the anarcho-communist view) and chapters 9 to 11 of The Market ( http://thepiratebay.org/torrent/6343752/John_O_Neill_books_(The_Market__Markets__Deliberation_and_Envir )
or this summary if you can’t be bothered to read 3 chapters: http://thepiratebay.org/torrent/6285761/Concerning_the_Economic_Calculation_Problem
Then I need you to expain why none of those answers show that a decentralised non-market economy could be possible. Not desirable or likable, not able to give your personally 15 cars. Possible.
skylien,
I guess in this situation we would have to build hoses out of wood this year as well. Just like we’d do in capitalism.
How we decide who gets to one brick house is irrelevant - I don’t see why “richest guy gets it” is a better idea that “first guy who wanted one gets it” or “guy who contributes the most to society and/or is most well liked gets it” or “draw straws”.
Point is that it would not be enough. Clearly, someone made a grave mistake here - looking only on last years statistics and not acutally asking people, or even looking at the statistics of previous years or other communites. This person or these persons would be removed from whatever position they had.
Not that an economic system which only considers the previous years production and doesn’t ask people is anarchist - like I said I anarchism people participate in the decisons that affect them.
Mises,
Depends on who you ask. Some say it must be global. I myself believe it doesn’t have to be; national borders do not matter. What is important is that enough resources and people are avaliable.
If the anarcho-communist area lacked some resource, some kind of trade deal would have to be struck with neigbouring countries, or people would suffer. Either option makes it not true anarcho-communism.
So…question:
Is this one of those things that will supposedly only work if it’s implemented on a global scale? Is “socialism in one country” (or commune) a possibility or would any difficulties it encountered simply be blamed on economic sabotage by external capitalists?
It’s kind of hard to have a serious discussion about the economic calculation problem with someone who doesn’t even understand what profits are/represent. Ask yourself:
This
Thanks. I honestly think that all debates with communists, Zeitgeist, and Venus Project people could be distilled to this very simple premise. Most of the proposals come from psychosis-level megalomaniacs with disturbing visions about what humanity is, or grand plans (with “interlocking components”) about how it ought to be. I learned not to take them seriously a long time ago.
I hope you don’t mind discontinuing that tangent on environmentalism. It would not have led anywhere anyways. As for the ECP, economic calculation in “anarcho”-communist societies has been discussed around here plenty, you can find discussions via the search function. The short story here: It would be central planning with miniature states, but economically it would be state-capitalism. Small-scale communes can not benefit from regional division of labor and thus it would mean local self-sufficiency and subsistence poverty. The democratic system would be artificial and could easily break down in the face of economic troubles. And anarcho-communism is a contradiction, if you don’t have markets you either have state planning or starvation.
Capitalism is not based on greed. It is based on giving people what they want so you get what you want. Calling it greed it one half the picture, and distorted.
So we are going to get everyoine to give up their private property for a theory?
Would you let me go into your house and take what I think I need?
If they go home, why are they coming back? And if they come back because they have no choice, why waste money hiring guards with uzis?
If they stay there overnight, and are really slaves literally, then they have to be fed and clothed at the owner’s expense. And they will do everything they can to be unproductive. In regimes with slavery, about 90% of a slaves production had to go right back into keeping the slave alive and healthy. No society made money on slaves.
And where do those slaves come from? Are they bought? That’s another expense. Are they kidnapped? That too is an expense.
In fact , one might say that is all people do on this earth, trying to improve their situation. When the room is cold, you get up and close the window, etc. I would make bold and say you are an anarcho socialist because you think it will improve your situation [=make you feel better in some way].
Esuric,
Your questions assume an account of practical rationality that anarchism rejects. Do you know what that means? It means that those questions are only relevant within the context of a capitalist society.
Within a anarchist society they are meaningless. There is no profit. I know this is a hard concept to grasp; unlike liberals or most socialists of today we are not merely suggesting transforming capitalism. We reject all it’s assumptions and suggest a different world.
Whether or not alternative energy sources are “profitable” is not part of the consideration in an anarchist society. One would consider other properties; what is the affect on nature? How sustainable is it, i.e. can we run out of it? How much resources, energy and work are required to make it work and how much to we get out of it.
But let me attempt an answer:
Because it is cheaper. Having cheap and relatively abundant energy makes no sense - since price is a function of supply and demand, and energy is demanded in high quantity, it makes sense to have a limited supply. Then you can charge higher prices, and make more profit.
The development of new sources of energy is also a project that entails some risk - success cannot be guaranteed. Furthermore, gaining a competitive advantage is more difficult since the “fuel” is freely available. Anyone can use solar or wind energy, you can’t control the sun and wind. Natural gas, however, can be owned.
The second this changes, and alternative energy becomes more profitable, they will be pursued.
It all boils down to one thing; maximise the present value of future cash flows. Whether you choose oil, natural gas or oil is based solely on what maxes the NPV. If developing geothermal energy has a cost x (using real options valuation and thus taking risk into account) and increases NPV by y and entering a cartel with other firms on the market has a cost 0.5x (again, using rov) and increases NPV by 1.5y, the choice is clear.
To make another choice would in fact often be immoral within this system - it is not your money but the money of shareholders and debt-holders. They have given you a clear goal; maximise our wealth. To do any different would be akin to theft.
What customers want does not matter, unless it affects NPV so much that another choice becomes the better.
What happens to nature, animals, future generations, ethical considerations, etc. also do not matter, unless it too affects NPV so much that another choice becomes the better.
What is the “efficient” use of resources does not matter, unless the most “efficient” way also happens to be the one that maxes NPV.
If cheating pay off better, you do it.
If using government, by lobbying and other outright bribes, pays better you do it.
If using a resource that is expensive, will run out sooner or later, and pollutes pays better than using a clean, cheap and truly efficient one, you do it.
If there is a risk of getting caught, and then paying a fine, or losing business, you calculate the monetary cost of that risk and include it in the valuation.
The situation does not matter, the context does not matter.
While, I am trying to be fair by reading your article (which is why I haven’t commented about your article yet), I have to give my 2 cents on this claim on greed. Because I think one of the weakest arguments you can claim against capitalism is this greed topic. Greed simply means a desire to attain a good with the intention to keep it for themselves. In that sense, everyone practices this, i think your claim is on excessive greed… but then the where is the line drawn where greed is turned into excessive greed?
But even if that was the case, that one HAS to be greedy in a capitalistic system… the claim would still not be much of a negative aspect towards capitalism. I certainly do not think society will ever be perfect, whether they practice a capitalistic system, a socialistic system, communistic system etc. and to think that under a specific system, society can be perfect is such an absurd thought.
EmperorNero,
No problem with the environmentalism debate; I just used it as an example. I feel like I’m not educated enough yet to have a serious debate there, I’d like some education in environmental economics and philosphy and systems ecology first.
Ans anarcho-communism is a contradiction, if you don’t have markets you either have state planning or starvation.
No, you can have planning without a state. This is not up for discussion. The syndicates of Catalonia are an example.
I am aware of the objections you make, and they are addressed in the books I linked to. If we are going to have a 100% serious discussion, lets turn it up to 11. Commit to it, read what I linked to. I’ve also got more such articles, written by PhDs in economics and mathematics. Read. Then address why that does not convince you. It convinced me; I found it answered every libertarian and capitalist argument I’ve ever encountered.
Smiling Dave,
1. It is based on giving people what they want so you get what you want.
This is a very idealised picture. Even most Austrians would admit it is based on self-interest and greed.
Consider that in his realm he is like a demi-god. Everything belongs to him, he can do whatever he pleases, and generally speaking he has immense wealth and power. How could giving that up and becoming just a commoner, a social class that at this point has basically nothing, be good for him? He’d probably declare you insane and have you killed.
But you know that you are right! The feudal lord may have great relative wealth, in that he has more than those around him, but little real wealth. What’s he going to do with all that money? He can’t buy a car, he can’t fly an airplane, he can’t buy a TV, he can’t get proper medical care, he even can’t go to the toilet and take a dump properly! Oh, it’s not hurting him, because he doesn’t know of it, but you do.
You know of all the great things he is missing out on, things that cannot and will not exist in a feudal economy because it is inefficient. Incapable of producing those things. You know that switching to a free market democracy would increase the total wealth in society to the point where everyone would be better off, including the feudal lord!
That is because you have switched to an economic system and a mode of production that is more efficient. As wealth increases, so do standards of living, education, science and technology… all of which increases wealth in society even further. Despite leftists usually having a thing against capitalism, Marx actually clearly stated that it was what had brought society out of feudalism, and to the point where he believed communism was possible…
Any middle class family in today’s world is far better of than the most powerful lord or king of old. They may not have as much relative wealth, but real wealth, meaning utility, the things they can do and the options available to them, far exceed even the wildest dreams of ancient rulers.
Same reasoning applies here - you are not asked to give anything up or lose anything, though it may seem like that from a certain perspective. You will in fact gain much from such a society. And no one is expenced to accept it on word alone, just like no one accepted capitalism like that. An anarchist society would have to demonstrate its superiority.
3. And if they come back because they have no choice, why waste money hiring guards with uzis?
Ask those who hire them, because it happens. Maybe they are there to keep people out, so no one finds out what goes on in those factories? To keep people from stealing?
And they will do everything they can to be unproductive.
Yeah, maybe that is why the Uzis are there.
No society made money on slaves.
This is a lie. http://www.nathanielturner.com/slaveryandtheamericaneconomy.htm
I also notice you only consider a person a slave if they are kept there overnight, ignoring their condition. This is not the definition used by human rights organisations, who consider sweatshops a form of slavery. This does not surprise me, I am aware on the libertarian definition of slavery. Some even outright support someone “voluntary” selling themselves into literal slavery.
And where do those slaves come from?
Some are bought, some are kidnapped, some are lured there with promises of actual work, some are given away by parents who can’t support them. No matter. There is a profit in it. If there is no profit in sweatshops, why do they exist? Let me guess, the government is involved?
Also:
“Human nature is a property in humans that exists because of the DNA in them. Not everyone has the same DNA, so not everyone has to have exactly the same character.”
But if not everyone has it, then it is not an universal.
You also ignore scientific data that suggests genes only “set the stage”, and that environment is what affects behaviour the most.
You also ignore that, ultimately, genes adapt to the environment. This happens both on a short time scale, see epigenetics, or on the long time scale through evolution. Meaning that, even if there was such a thing as a “greed gene”, it would only give an advantage in an environment where greed benefits one. In a different society it would not be passed on.
Stop making shit up.