How cute, today’s socialists are worried about Pareto optimality.
Indeed, Hayek’s argument shows that long-run monopolies cannot emerge in free economic systems. But what’s your point?
Anarchism of any variety has a basis in the same foundation as the individual labor cooperative; horizontal organization is preferable to hierarchical organization and is in fact more consistent with Hayekian principles (as the likes of Prychitko has realized, for example), than capitalism (the existent variant) is due to the distributed and tacit knowledge forgone by the orthodox capitalist firm, the structure of which is hierarchical and authoritarian in nature. Anarchist communism specifically seeks the maximization of Pareto optimality through decentralized planning (for the aforementioned knowledge benefits) and the communication of production and consumption signals through workers’ and consumers’ assemblies, respectively. It is true that many anarcho-communists have rather poorly defined conceptions of the function of communism specifically, compared to say, market socialists, and fall into the trap of proposing abstract and vague “general meetings,” which would probably simply be reversions to central planning.
This is more-or-less agreeable, although it should be clarified that not all workers at cooperatives are owners. It is, by all extents and purposes, a firm with multiple owners, but not all workers are owners. Most cooperatives in Spain, for example, have many non-shareholding/owner low-wage workers (mostly, to work the machinery).
Never been through logic class, Emil? Try advancing an argument next time. 
Capitalism is currently characterized by “central private sector planning” of sorts (consult the likes of Munkirs’s The Transformation of American Capitalism, for example), as well as centralized planning in the individual corporate firm, which means that distributed and tacit knowledge is lost. Hayek identified this loss as a deficiency of central planning. As Theodore Burczak illustrated, it’s ultimately socialism that is able to eliminate this centralized structure through utilization of decentralized workers’ ownership and management, and it is therefore more consistent with Hayekian principles.
A worthy observation, I’d say. I’ve come across many overly enthusiastic socialists who believe that the ESOP is akin to the labor cooperative. While those of us who are libertarians must inevitably look to Spain because of the anarchist social revolution, it should also be noted that currently existing “cooperative” movements in Spain are not far different than other utilizations of various ownership schemes that fail to incorporate democratic management and ultimately ape the status quo. Mondragon is an example; it’s not a socialist-minded federation by any means,
I don’t think it’s fair to say that “capitalism is currently characterized…”, as if a square is turned into a triangle you wouldn’t say, “the square is currently characterized…”. Not a perfect analogy, but one that still stands. Capitalism, in the purest theoretical sense, has probably never existed (well, within the range of written history, at least), but it is not fair to say that mercantilism is today’s capitalism. That would be akin, I think in your perspective, to us calling the Soviet Union that era’s socialism.
Concerning Hayek, the difference between central planning on the level of the firm and the level of the State, is that while the former is subject to profit and loss, the latter is not. It is far to say that in a capitalistic society, a firm that is less efficient than another due to having too large a bureaucracy, or too much centralization, would be subject to loss that would either force it to change organization, or would close it down. I’m not sure what your own ideal of socialism is, but it seems as if our vision of capitalism and your vision of socialism converge on very similar paths (and, furthermore, it seems that the difference is largely in the terminology; one or the other is afraid of dropping the wrong word).
So, society won’t always get what it wants because of efficiency, and efficiency won’t always be maximized because society has to get what it wants?
The real socialists considered Pareto optimality as “perfectly disgusting by any ethical standards”. Nevermind the fact that it’s purely a theoretical construct used for Walrasian general equilibrium welfare analysis (presupposes cardinal utility).
Your own spurious definition of “capitalism” can mean whatever you want it to mean. Lucid language allows for meaningful debates, while obfuscation takes us nowhere–which is your goal.
One would have to be entirely ignorant of Hayek’s argument in order to reach this nonsensical conclusion. Decentralization, markets, accurate prices, and capital allocation/structuring doesn’t eliminate failures, it just eliminates structural and systemic failures. It turns individual failures into information signals, which other actors, the competitors, must absorb and take into account. Furthermore, individual failures free up scarce resources to those who are more capable at economic calculation and at servicing the needs of consumers.
It’s hard to respond to this since I don’t know what you mean when you say “socialism.” Co-ops competing with other co-ops and corporations cannot, in anyway, be considered socialism. Banning corporations and replacing it with “democracy,” does not lead to an equalization of remunerations; it would merely assure the efficiency of congress for every single firm.
It’s extremely satisfying to see that Mises and Hayek’s arguments from the late 20s has forced pseudo-socialists into this very curious position. There is no economic doctrine supporting your claims, and you’re forced to retreat from Marx, Sraffa et al. It’s wonderful really.
Capitalism is the only system which has ever existed. Capital was, and always will be, the source of wealth. The accumulation of capital requires sound money, free markets, decentralization, and therefore a functional price mechanism. There has been, however, varying degrees of interventionism, but interventionism is non-economic in nature, and requires some sort of markets to leech upon. Pure government ownership is the destruction of an economic system–not an alternative. When private ownership is unknown there can be no operative form of societal organization.
What I said wasn’t directed to you, or really had anything to do with what you said. [^o)]
When someone is wrong they should be corrected. You were clearly wrong.
How was I wrong? You basically agreed with me, and then added a lot of superfluous information. You should read and understand what you critique, before you make the critique. I said:
Capitalism, in the purest theoretical sense, has probably never existed…
Bolding is mine. You said:
There has been, however, varying degrees of interventionism…
The only thing you were doing was splitting hairs, and missing the context in which the sentence was written in. My point that you can’t call today’s mercantilism capitalism still stands, which was the context in which that sentence was written. You have this obsession to prove everybody wrong, and by doing so you either split hairs or you draw a straw man. I’m sorry, it doesn’t strengthen your argument, nor does it make you particularly approachable. In this case, you clearly misunderstood what I said.
Edit:
You said, to Leviathan:
Your own spurious definition of “capitalism” can mean whatever you want it to mean.
This was, to some degree or another, basically what I said (and you decided to take out of context, for I’m not sure what reason [to prove something, maybe?]).
This is incorrect. You’re confusing “capitalism” with complete lassaiz-faire and/or anarcho-capitalism. Lassaiz-faire has existed, and exists today, but not “in the purest theoretical sense.”
Don’t be so sensitive. People come here to talk. If I wanted to hear “shut up” I would stay after school and debate my lunatic professors.
That’s what it was! You’re the modern day Mises! Here’s the truth: it seems like you’re needlessly conceding the point to leviathan, namely the “capitalism has never existed” nonsense.
So this is a cooperative of capital owners? Are the farm laborers members of farming cooperatives?
Okay, so you agree with me then? To be honest, I have no idea what you’re on about. Capitalism without interventionism has never existed, and to me capitalism in the “purest theoretical sense” exists without interventionism. I never said that Capitalism, in the sense of capital accumulation, trade and the division of labor within a governed society with interventionism never existed.
There you go again, Ensuric, trying to prove a point (although, I’m not sure what point). I am not conceding any point to Leviathan (although, I prefer to approach him with respect, given that if I outright deny his opinions [which would be incorrect of me to do so from an intellectual stand point, in any case] then he is less willing to listen to what I have to say; I, of course, expect the same vice versa, and so far he has. It’s a debate tactic; you make minor concessions to give them an incentive to continue reading what you have to say); capitalism, in the sense that Rothbard or anarcho-capitalists describe it, has never existed for the simple fact that there has always been interventionism. Nobody denied that capital accumulation is not the source of wealth. That wasn’t even mentioned; it was some superfluous argument that you added to your original response to me, for God knows what reason (as if I didn’t know what the source of wealth creation was, given all that I’ve written on these forums, and on my blog, on the topic).
You were splitting hairs, and ignoring the context in which the sentence was written.
You should read Socialism After Hayek its a trip! While accepting many of Hayek’s arguments the author makes his Marxist ideals painfully clear. He never really counters Hayek’s “Knowledge Problem.” And with his solution of worker-owned democratically-controlled firms basically ignores all the problems associated with them (such as those put forth by Klein and Prychitko).
Wonderful. My comments were extremely clear, and I explained why I chose to respond to you. If you think you can control what people say on this forum, or that you have the right to put in place some “don’t speak unless spoken to” decree, then you’re sadly mistaken.
Thanks, that sounds hysterical.
I can only speak from my own experience as a farmer in Castilla-La Mancha (well, my family are the farmers, but since I’ve lived there and helped them working on the land I have a decent idea of what is going on), and so I don’t know if there are communal farming societies in Spain. The farmers, themselves, are private land owners, and we work for our own profit. Then, you have to sell your harvest to processing centers (i.e. wineries, oil presses, et cetera). There are cooperative and “private” processing centers.
The difference is not in the way that it’s organized, just the way that it was founded. Let’s say that at the beginning of time there was a private winery, and farmers thought that the owners took too much of a profit from the farmers’ grapes. So, the farmers, lacking enough capital on an individual basis to build a winery of their own, decide to unite capital and distribute ownership between the providers of said capital. The result is a cooperative. Individual farmers who did not contribute capital can apply for membership, but it sometimes works the same with “private” companies (in the end, they are all private). The membership is pretty much like a Costco card; you get perks.
The difference might be that the cooperatives are subsidized (I am not completely sure), so what the cooperative can offer you is sometimes better than what a private processing center can. My family belongs to a wine cooperative, but until this year (I’m not sure if we switched; I moved out of Spain, so I am no longer up to speed) we sold our olives to a private olive press.
I guess there are “communal” incentives to form be a member in the cooperative. The wine is not the cooperative, but is “yours” (all contributing farmers can claim that the wine is theirs), and this wouldn’t be true with a private firm. I guess that is a form of intellectual property (well, not really, but you get what I’m saying). But, at least our wine cooperative resembles more of a private enterprise, than anything communal.
That’s not what I said at all, Ensuric. Please, stop straw manning me.
I said if.
You could go down this route. I don’t see why you would, but okay. Again, this is why I responded to you, if you must know.
I’m not sure how you could misinterpret that post you quoted as an attempt on my part to tell you to “not speak unless spoken too”, but that was not the intention at all. I was stating my position that what you quoted had nothing to do with what you said, and then later extended my position to include the fact that you were splitting hairs for no apparent purpose other than to discredit the post (and, I’m not sure for what reason).
What I said wasn’t directed to you…
This had to be clarified, as the response was directed at Leviathan, and so was written within the context of Leviathan’s post (which I quoted) and within the context of what I was trying to say to Leviathan.
Because, I have experience debating with people that disagree with me, and those people have told me that they close their minds when you question their intelligence, because they no longer perceive you as reasonable. And, given that I would feel the same way, I can sympathize. I’m sure a debate class would tell you the same thing.