"Take the most advanced case: Mondragon. It’s worker owned, it’s not worker managed, although the management does come from the workforce often, but it’s in a market system and they still exploit workers in South America, and they do things that are harmful to the society as a whole and they have no choice. If you’re in a system where you must make profit in order to survive, you're compelled to ignore negative externalities, effects on others."
“LF: So it sounds as if you might support something like the Cleveland model where the ownership of the company is actually held by members of the community as well as the workers…
NC: That’s a step forward but you also have to get beyond that to dismantle the system of production for profit rather than production for use. That means dismantling at least large parts of market systems. <<here this quote about Mondragon>>
Markets also have a very bad psychological effect. They drive people to a conception of themselves and society in which you’re only after your own good, not the good of others and that’s extremely harmful.
LF: Have you ever had a taste of a non market system — had a flash of optimism –– oh this is how we could live?
NC: A functioning family for example, and there are bigger groups, cooperatives are a case in point. It certainly can be done. The biggest I know is Mondragon but there are many in between and a lot more could be done.”
1 - https://www.counterpunch.org/2012/04/30/talking-with-chomsky...
Chomsky is smart, but not very useful because "In theory there's no difference between theory and practice, but in practice there is" - Yogi Berra
In general, his ideal end-goal world would include smaller states with more direct control by the populace, with worker-owned and worker-managed corporations, with free markets of goods and services between different corporations and different states, and of course freedom of movement. Strong environmental control would be almost implied if the people doing an economic activity were in charge of decisions and were also directly impacted by the effects of those decisions. Localizing and letting corporations be small would also put a natural cap on inequality, though democratically run states could impose additional safeguards where needed (minimum wages, estate taxes, non-discrimination clauses etc.)
I understand that workers also, at times, vote to externalize some costs, as their jobs may depend on it.
That's certainly not Anarchism, in which there are no states and no commercial corporations. And of course - no markets.
Now, as for what Chomsky supports personally - that's more difficult to say, since he's been known to support Democrats in US politics, to support a two-state arrangement in Palestine etc.
Many companies do just fine without growing to enormous proportions, being acquired, acquiring others etc.
A free market, lacking counter-pressure to maximizing firm size, favors large firms, and large firms becoming larger is a positive feedback loop. Note that this is an idealized model and there's plenty of room for counter-pressure in reality (can the large firm actually pull demand away from the smaller firm, or does the smaller firm have a leg-up in e.g. customer relations that the larger firm can't compete with?).
How do you account for that?
I also strongly suspect that they're less present, on average, in unlisted companies.
You may be right that centralization is inevitable for game-theoretic reasons.
On the other hand, I'm not sure how well game theory can model the decisions of large groups of people who participate in multiple organizations at the same time.
Definitely though, there are no examples from history of a society of democratic societies and how it might behave. Perhaps the closest examples are the ancient Greek cities and post-WW2 Europe (looking only at the state level, democratic corporations have not been tried to any large extent that I know of). In both those cases, there was no spontaneous centralization from within (i.e. one entity conquering the others), though for Europe it is still very early to tell, and there are future signs which may point to more centralization.
There are multiple ways an anarchist society might respond to a corporation growing too large: convincing its workers to split or find work elsewhere to avoid economic collapse, seizing its assets and forcibly splitting or shuttering its operations, denying it use of supply chains, of debt if the market has currency, etc. a critical aspect of anarchist societies is lack of private property and capital.
Trade unions can hold much of the power; I can’t speak to the concepts of anarchist states. In fact the idea of anarchist currency (anarchy-capitalism or market socialism, I guess?) is something I am unfamiliar with, in part because it obscures the cost in man time and effort it takes to produce a good or service—rather easy too, just consider subscription services where you pay a flat rate, or the labor it takes to get you chocolate or coffee vs how much it is valued in terms of your wages (presumably in a post-industrialization service economy if you’re on this forum). Similarly I do not know what an anarchist state is.
Regardless, the idea is founded in large part on the concept of mutual aid. There is certainly plenty of research into how mutual aid tends towards or away from stability. A quick google search turns up this, for instance: https://halshs.archives-ouvertes.fr/halshs-00275386/document
I agree, but I believe a firm past a critical mass of size can defend against all of them, and defense breeds the resources for further defense.
> convincing its workers to split or find work elsewhere to avoid economic collapse
Unlikely if the firm's size lets it offer better life than alternatives
> seizing its assets and forcibly splitting or shuttering its operations
Hard if a firm's size grants it the ability to challenge monopoly on violence
> denying it use of supply chains, of debt if the market has currency, etc.
No longer possible if the firm is large enough to have vertical integration
How do you figure? This implies the compensation is different from other "firm"s.
> Hard if a firm's size grants it the ability to challenge monopoly on violence.
How do you figure? Monopoly typically implies private property.
> No longer possible if the firm is large enough to have vertical integration.
How do you figure? Monopoly typically implies private property.
Well the traditional linguistic connotations of possession certainly persist. Here "seize" simply means take control of.
To be clear, I'm criticizing the notion that small worker-owned / worker-managed corporations and a free market are an inherently stable structure (because free markets will favor consolidation). I'm not against large worker-owned / worker-managed corporations, and I think they could be a significant improvement on the ecosystem of shareholder-owned corps we find in the US.
As I see it, open source technology IS the great decentralized of power. We just need people to build Good open source software.
My personal passion (which I poured a lot of money into) was qbix.com and intercoin.org . That’s also why I reached out to Andrew Yang back in early 2018 when he announced running and met him in May 2018. We agreed my company would build https://yang2020.app to support his campaign, and he would help introduce us to mayors of cities that want UBI locally (he knew a few dozen, like Michael Tubbs of Stockton, although since then Michael has not been a fan of Yang’s approach for various reasons).
I believe in UBI + Gift Economies / Collaboration as the best system, better than socialism or capitalism. But we have a while to get there.
Yang is trying to boil the ocean by going for UBI on a national level. I believe the future is in decentralization, and I talk about it extensively. I think UBI can be done via cryptocurrency on a local level. We can also do voting this way. I’m writing a piece about this at the moment, very apropos of the recent fiascos.
Printers, Email, Blogs, the Internet have replaced large corporate and state gatekeepers we used to have (newspapers, cable channels, telephone companies, printing presses etc) and costs went down to near zero. Technology decentralizes power.
We can have towns and cities run decentralized:
Solar power networks (resilient to EMPs and carrington events)
Mesh networks (better than cellphone networks)
Social networks (chat, events, appointments, everything that fb does but w local servers)
I’m trying to build the software to run on these networks (https://m.youtube.com/watch?v=pZ1O_gmPneI)
PS: sorry for all the links but honestly I am passionate about this stuff and need to illustrate it instead of talking. A video is worth a thousand words. To mitigate the shilling I will say that TimBL’s solid and MaidSAFE * IPFS and others are also working on decentralizing power
I would have agreed with that statement at one time. Now I'd qualify it to read "Technology can decentralize power." Unfortunately, it can also do the opposite. I'm at a point now where I'm torn on the question of whether or not technology inherently tends one way or the other. But in either case, I'm now convinced that human nature is much more a factor in the centralization / decentralization of power than technology.
In that system, there are no stock holders demanding ever greater returns, those doing the work are always completely in control. They can choose to do "just enough" to live a good life. Or they can choose to focus on the more fulfilling aspects of their work, and not on the profit.
In that system, it's easier to pass regulations that prevent the worker cooperatives from externalizing, because the survival pressures aren't nearly as intense.
But it's not top-down centrally managed.
Enforced by a central top-down bureaucratic organization.
In this hypothetical world would you let foreign companies motivated by profit compete in your country that only has worker co-ops? Or would you have a closed down market, similar to North Korea that only Approved Co-ops would be allowed to work in?
Under your standard, all regulation is "top down bureaucratic driven". In practice this has not proven to be incompatible with market driven economics. Not that libertarians don't scream about it anyway.
This is the same thing, just a different shape.
The comment you selectively quoted ends with "But it's not top-down centrally managed.".
A complex interconnected system will adapt in unforeseeable ways, causing novel externalities for which we have no built up immunity. Ask a soviet.
We can pursue self-organization that pursues escape from the pathological patterns of profit driven production without advocating for, striving for, or tolerating a totalitarian, bureaucratic nightmare. See, e.g., https://thenextsystem.org/start-with-worker-self-directed-en...
I think this is a bit simplistic or at least too optimistic. The pressures of being listed on the stock market are such that management is more or less compelled to pursue short-term goals.
Indeed in the very long run a lot of corporations are harming themselves by harming the environment, impeding innovation etc. but in the short run firing people, cutting R&D budgets, digging up more coal, oil etc. can be very effective. And shareholders really only care about what your profits are gonna be in the next few quarters, not so much about what's gonna happen decades down the line.
Now, here's an interesting thing to consider. You bring up coal and oil - both industries that are on the way out in the long term. Would it be wise for shareholders to push these companies to invest in R&D to improve their long-term capabilities? No, if coal and oil are on the way out, then the best financial strategy would be to run the companies into the ground as you slowly liquidate them, ideally so that there's nothing left on the very day that fossil fuels are no longer needed. In that case, short-termism is the best strategy.
All in all, putting lives at risk was a good move for Boeing, and they'll surely do it again.
In any case, such judgement is only clear in hindsight (that is, calculating effectiveness implies a time window over which effects are to be tabulated).
Most charitably, the executives perhaps felt they were making judicious, acceptable tradeoffs that would maximize business outcomes over the time horizon they were concerned with - periods measured in quarters or years or even decades.
How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window? What happens when a black swan occurs and significantly drives down the effectiveness of prior decisions (which until then had been deemed quite effective)? Are profits clawed back?
If the judgment was really only clear in hindsight then no power structure could have altered it. What's clear only in hindsight to a CEO is clear only in hindsight to a union boss, or a collective, anyone else.
>How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window?
The corporation is already incentivized: in exchange for thinking about long-term profits, it is rewarded with long-term profits. However, executives often have different goals than the corporation they're supposed to represent. If you could figure out how to better align the interests of executives with their corporations, you would see more effective profit-seeking, which would include less killing due to blunders but more killing due to tobacco-industry style exploitation. Giving executives the freedom to put their own interests first (the source of next-quarterism and next-bonusism) is necessary if you want to give them the freedom to pursue ethical goals. You either trust them to make the right decisions or you don't.
>Are profits clawed back?
Yes! That's what happens when something causes you to lose money.
Shareholders?
> If you want to start a non-profit aerospace company, nobody is stopping you.
Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself.
The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets.
> Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself.
My point is to contrast a system where everyone is forced to be a non-profit or co-op (@jp555's hypothetical), and our system, where you are free to be a non-profit or co-op, if you want to. If you can't raise capital or hire top-notch employees under that structure, then that's a problem with the non-profit/co-op organization, not a shortcoming of our economic system.
If you want to just completely change the conversation, and hyperfocus on the individual, then you're free to do so, but I don't want to be brought along for the ride. You responded to a comment concerning Boeing, not some fresh-faced up-and-comer of your own creation.
In practice, powerful corporations have enough influence over the government that regulating them in that manner isn't possible without flipping the whole system on its head (i.e. removing the profit motive that drives monopolization and cost externalization).
Penalizing the behavior sounds like a top-down solution to me. Government decides it's bad, then government sends the police to come get you if you do it.
I dump some chromium waste on my property, pretty soon this "government" is saying it's bad and sending police to come get me saying that "the green goo is making people sick". I hate that top-down big gubmint telling me what I can and can't do!
I refuse to employ black people, pretty soon there's a top-down big gubmint telling me that's "discriminatory" and "violates labor laws"! What's next, telling a man what he can and can't do with his own business!?
Yes. Regulation from a central source of authority is what a top-down model is. I'm not sure what your contention is here.
"I don't like Erik Satie or any of that stuffy, high falutin' classical stuff."
In both cases, the writer is unwittingly saying very little about the subject and very much about their ignorance.
Governments on the other hand have a monopoly on violence, so I am more wary of handing them power over the choices I can make in my life.
https://en.wikipedia.org/wiki/Battle_of_Blair_Mountain#Battl...
If you're in another country working for a U.S. corp you're in much worse shape. Coca-Cola can murder you for forming a union in another country and get away with it!
In both cases, borders matter.
If you really want to judge him on his real-world solutions, then take at look at Michael Albert's Participatory economics that he's been supporting for a while : https://en.wikipedia.org/wiki/Participatory_economics
But according to me, what Chomsky lacks in his analysis is some hegelian stuff, so I'd recommend to go further and dig some Slavoj Zizek and Deleuze and so on..
I mean that I find him too theoretical - His thinking is all very smart and appealing but useless in practice.
Fake easy-solutions are good to make you feel better before work, but it prevents you from going into deep thinking from which real solutions may emerge.
Wages don't always capture the true costs of production. The public burden of the coal miner who gets lung cancer can be viewed as a negative externality.
Indeed, many labor protections in the US seek to specifically address this type of externality.
This is my point. Ignoring concerns of worker exploitation and focusing on textbook definitions comes off as dismissive, even if that wasn't the intent.
Similarly, your comment comes off as dismissive which highlights the importance of the context that I added.
Worker exploitation does result in negative externalities, even if the exploitation itself is not an externality.
Worker exploitation does result in negative externalities, even if the exploitation itself is not an externality.
I don't understand why would anyone think that it can. This is not just my opinion but an opinion of famous capitalists (for example Buffett or Soros).
Free-market evangelists tend to strongly favor the property rights solution. But one of the interesting things about the property rights case is that it seems to fall apart when both the responsibility and cost are diffuse. Probably the best example would be climate change. It's impossible to address with property rights because there would be so many plaintiffs and so many defendants that attributing who did what would be impossible. Climate change is the ultimate externality.
It's all kind of insane.
True.
> That's what the government is for.
False. Government can't solve the problem of externalities either, because government is even more at the mercy of the perverse incentives that create them than free market participants are.
There is no "solution" to the problem of externalities, if by "solution" you mean some system we can put in place that will magically prevent them from happening or from doing harm. The only way to deal with externalities in general is to remove them wherever possible, by enforcing property rights and minimizing transaction costs.
Do you enjoy the the benefits of the Clean Water Act and the Clean Air Act?
In your view, does government at least partially solve the problem of some negative externalities?
(Based on your bio, I assume you're in the US.)
I like having clean water and clean air. That's why I have air filters in my house and don't drink tap water.
> does government at least partially solve the problem of some negative externalities?
Government can certainly change incentives in ways that will, at least temporarily, reduce particular negative externalities. But to say that "solves the problem" implies that, once that particular government solution is put in place, we can stop worrying about that particular negative externality and move on to ther things. I do not think that is the case.
I'll assume this is a joke.
> we can stop worrying about that particular negative externality
I'm not sure who said this. In any case, we're all in agreement that the government plays a key role in addressing negative externalities.
It's not.
> I'm not sure who said this.
I'm not sure what "solved" means if you still have to keep worrying about the negative externality.
> we're all in agreement that the government plays a key role in addressing negative externalities.
I don't think our agreement is as broad as you seem to think it is.
I've been enjoying this quote for a week:
"If you think the economy is more important than the environment, try holding your breath while counting your money. - Guy McPherson"
Only a distributed system like capitalism rises to your bar of "magically prevent[ing]". Centralization is not magic, but when it works, it works. I prefer distributed systems too, but when it's hard to make the right incentivizes, we shouldn't throw in the towel.
Surely the parent post doesn't use a definition of "solution" that trivially invalidates their point. I think you are projecting your own preference for distributed systems as an inevitability.
In fact, I've thought of a "'race to the top' tariffs" system, which does at least create the right incentives between nations. If you are big market (e.g. US) put tariff on the difference between the manufacturing country's externalizes tax, and your own. This holds the total punitive disincentive constant, no matter who receives the revenue. The exporting country is now incentivized to raise their externalities tax so the tax revenue goes to them rather than the importing country. So simple!!
How is capitalism a distributed system? It concentrates capital in the hands of a small minority.
A free market is a distributed system, but "free market" is not a synonym for "capitalism".
> Centralization is not magic, but when it works, it works.
I guess we have very different definitions of "works".
There is a lot I'm unaware of, possibly market systems without prices is one of those things?
Even under a barter system, there is an intrinsic profit. If you're a farmer, after you feed your family, what's leftover is the surplus (i.e. profit) that you use to trade for other essentials. The difference that matters between a currency system and a barter system is that bartering is less flexible (if someone doesn't want your apples for their furniture, you're not getting that furniture) - but the same forces apply.
So like when Bezos makes $4M+ per hour, it's not a wage because he is not working for it, he could be sleeping or shitting and he would make the same money. He gets that just because it's his name on all of the capital that generates this profit. The actual work is being done by the many people working for amazon, peeing in bottles in fulfillment centres because of lack of breaks and whatnot. They get paid very little, so there are low costs, so there is great profit to line Bezos' pockets.
Since co-ops like Mondragon need to compete with companies that are run like Bezos' in order to survive, they are under pressure to do similar things in their management structure, even though they want to share all "profit" with all workers, since all workers are owners (which is why it's not really "profit" for co-ops, since there are no non-working capitalists that earn it). Therefore, it is the profit motive, rather than the market system, which forces co-ops to act in ways that are inconsistent with their mission statements (worker control, fair pay, etc.)
No. That is a dishonest distortion.
If providing and owning capital is such a nothing, why don't you try it and see how easy it is. Capitalization carries with it immense risk, which Communists conveniently ignore. Whereas the labourer gets a salary regardless of how the business performs, the one who capitalizes does not have this privilege. I've seen first hand how much work and how difficult it is to start and run a business. You only need to look at bankruptcy stats to see how many businesses fail and take down all the capital that was invested. It's not very pleasant to run a business, sink your life savings into it, only for it to go under with your savings and years of life.
>So like when Bezos makes $4M+ per hour,
That is another dishonest distortion.
Bezos does not make $4M+ per hour. He holds stock in Amazon that rises in value at that rate (Amazon's actual profit is on the order of 2% after close to two decades of 0 profit). The value of stocks stems from the fact that there are people who are willing to buy it at that price. This carries risk, because this willingness by others to buy the stock is subject to many factors, and it can go down to zero. Again, if you think it's easy, feel free to dump your savings into Amazon stock and see how easy it is for you to live of that or even make a good return - though I'm sure in your fictitious communist reality this would mean you would make millions without doing anything!
Why does a price necessarily include a profit or a loss? This is a self-referential belief: my price includes a profit or loss because a prior price includes a profit or loss which would earlier ... etc, etc.
It includes a profit or a loss because you need to eat and provide for yourself. If you're making chairs but the cost of materials is larger than what you sell those chairs for, how are you going to provide for your family? If you want to save up for a house or a car, or family vacation, how are you going to do that if you don't sell your chairs with a surplus (i.e. a profit)? A market-based system necessarily implies a profit motive.
This is the "self-referential" thing I was referring to. You're entering into this thought experiment with a pre-defined conception of how an economic mode of production must operate. You're presupposing the profit motive.
The one that comes to mind is Communism (and its many flavours), and we've seen what a humanitarian and economic disaster that turns out to be.
Look into libertarian socialism if you're actually interested.
Also, there are real-world examples of libertarian socialism, like the Zapatistas and Rojova. Not ideologically pure, no, but certainly not authoritarian shitholes or capitalist dystopias.