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Privatization of Services, the "Free Market" & Democracy

By Noam Chomsky at May 10, 2005

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Privatization of "services" (water for example) is both for corporate profit and for undermining democracy. In both cases, virtually by definition. Thus such privatization removes matters of crucial public concern from the public arena, where the public can in principle play a role (and sometimes does), to private tyrannies from which the public is in principle excluded. That's an attack on democracy, by definition. Just how the goals of profit and undermining democracy enter into particular decisions probably varies, and would be almost impossible to determine, because hostility to democracy is so deeply engrained that those who make the decisions could well be unaware of what they are doing, even though it is entirely on the surface. Not unusual… …The justification is that it is more profitable, at least as long as people shut up. Period. Water is in fact a luxury by state capitalist moral standards -- and the term "moral" is the right one. The market theories of Ricardo, Malthus, etc., were quite clear on this: people have no rights other than what they can acquire on the market. If they can't survive, "go somewhere else" -- which they could in those days, as the population was being removed or exterminated in the US and other former colonies. These economic principles were declared by the founders of modern economics to be as certain as those of Newton. It's true that sometimes the public is too stupid to understand the elementary logic. Thus in the 1820s, when market principles were imposed in England, the army was spending much of its time putting down riots, which pretty soon led to Chartism, labor organizing, and other dangerous attempts to introduce working democracy. And since the science is more supple than Newtonian physics, it was able to shift to more social democratic principles. Same in Bolivia. When people demonstrated their incapacity to comprehend that your children have no right to drink water if you don't earn enough, there was a virtual revolt, army massacres, and overthrow of the government. Sometimes people are just too stupid, and can't comprehend Newton's principles. We don't have to go to Bolivia to understand the point. Take the US, where we live… … As noted in … last week's Gallup poll… health care is the leading financial concern for the population, and only an "astounding" 6% of the population think it's working (quote from Gallup analyst). Majorities (often large, depending on how questions are asked) think the government should guarantee health care to the population -- even that it is a high-ranking "moral issue" (far above those trumpeted in the doctrinal system). It's no secret that the US has far and away the most inefficient health care system in the industrial world, with far higher costs and among the poorest outcomes. It's hardly coincidental that it is the only system that is privatized to such an extent, therefore introducing massive bureaucracy, supervision, paper work, subordination to big pharma, and other factors that raise costs and reduce performance. And it is leading to a major fiscal crisis: to the marginal extent that Social Security faces a eventual fiscal crisis, it's largely due to escalating health care costs. But the system is untouchable. When polls tell us that 2/3 of the population want a national health care system, as elsewhere, the press reports that government involvement of any kind has "no political support" -- which is true, on the prevailing elite assumption that the government is to be run by financial industries, etc., with the public irrelevant. Why is the system untouchable? Because in fact it is working very well for the privileged. Health care is effectively rationed by wealth, and if large parts of the population can't afford seriously needed health care -- as is the case -- that simply doesn't matter. Also, the inefficiencies contribute to private gain. So what's the problem? Health care is no more a luxury than water, at least by human standards. But by state-capitalist standards, values are quite different. There's much prating about Bush's "moral values." We determine values by actions, not pretty words, which are cheap. The values are transparent: shine the shoes of the rich, stuff their pockets with cash, and let the rest fend for themselves. Free market theory -- which is to a large extent irrelevant to the economy anyway -- tells us nothing about adjustment of market to needs. There was a very weak argument to that effect in Adam Smith, who based his (rather nuanced) approval of markets on the principle that under conditions of perfect liberty, markets would tend towards perfect equality. But the assumptions are so radically remote from reality that the argument would be irrelevant even if it were sound. It's rather like the recent proof by Harvard's president (so his supporters in the press report) that relative absence of women in academic sciences can't be the result of discrimination, because discrimination can't exist. Easy to prove: in a market society (which we are, by doctrinal fiat), if some group were subjected to discrimination, they could be hired more cheaply, and the institution that hires them would therefore out-compete its rivals. QED.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 19, 2005 09:52 AM
"Remuneration for effort and sacrifice means that we try to reward people for how hard they work." In prinicple I understand where you're coming from. I would even argue that individuals who perform necessary but unrewarding jobs like driving garbage trucks should be rewarded MORE than people who engage in more interesting activities, who are in part compensated by job satifaction(Granted this may be a moot point in Parecon if you don't think someone should be driving garbage trucks as a profession) However, how do you qualify "hard work"? A not so good worker may have to work harder to accomplish the same task that his/her more capable colleagues perform with relative ease. The slower worker may also sacrifice more in terms of leisure time, anxiety and so on. It seems absurd that you would reward a less capable worker more simply because he/she "works harder" and sacrifices more.While I think there should be support for those who are less capable,--instead of just firing them as it is done now,--remuneration should be based on outcome. I suggest further postings on parecon should be made in Albert's new blog if it's ok with you. That seems more appropiate.

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Re: Privatization of Services, the "Free Market" & Democracy

By Bauerly, Mtbrad at May 18, 2005 22:13 PM
Good debate guys(I assume). While I find myself agreeing with the arguments of Frederic, I still find major faults in parecon. It seems to be too ridged of a plan, too precise in detail, for any human endevore. It does offer some good critique s of many of the concerns voiced by pro-market idealists. I see it as one of many needed examples of the ways in which allocation of resources and division of labor could appear in a post-capitalist world. I beleve we need many more. I think we should resist creating a cult of parecon though, instead holding it up as one possible alternative. Just as Marx offers good critiques of capitalism, Albert offers good rebuddles to many concerns of pro-market ideoligists. Having multiple possible ways to approch these complex problems is the best solution to the inevitable problems that will arise post-capitalist markets. A strict dogmatic paracon ideology will restrict the possible social evolution to something that works even better.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 18, 2005 10:56 AM
Federic, It has been a stimilating discussion but I must go to bed now. I think you are missing the point of my biology analogy(perhaps deliberately since you're too smart to take such a literal interprtetation) Coevolution is a paradigm from biology but it provides much insight to any complex system. I will respond to you tomorrow when I have the time. While I disagree with something you say, I am quite impressed with the skill and passion with which you argue your case. I mean it. Good night.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 18, 2005 10:32 AM
"He forthrightly defends specialization of labor, just not specialization of labor that creates rigid hierarchy. You're simply not responding to parecon." The devil is in the fine print. Based on what you say he seems to think the emergence of rigid hierarchies is a function of the type of division of labour. Can you clarify what type of specialization would lead to rigid hierarchies and which kind would not? Is it acceptible if some people drive garbage truck and some people perform brain surgery? I, on the other hand, think division of labour has no *intrinsic* connection to social hierarchies. For example, in Cuba a doctor makes less than a secretary in a foerign company. I know a woman who quitted being a doctor(takes a long time for the government to approve) to take courses in microsoft offic in the hope of becoming a secretary. I am not saying whether such a situation is desirable,only to demonstrate there is no intrinsic correlation between specialization and social status. PS Going to an earlier point. Not all workers think it is empowering to take on managing. Some(most?) folks just want to work, get paid and go home.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 18, 2005 10:08 AM
"Let's just take my dad, working under a capitalist firm as a manager. He programs, does macro-code tasks, does managerial tasks with people below him and represents his team with people above him. Now, I would alter the managerial aspect, but it's clear that he does different things in one workplace." But still, your father has a primary function. He takes on those other duties only to the extent they are related to his primary function. For example, a programer may serve the roles of manager and coordinator if he is working on a team project. But he doesn't moonlight in HR or payroll(if his company is complex enough to have those depeartments) Now you seem to be arguing the company can get rid of HR and payroll altogether and have the programmer taking on those jobs on a regular basis. That is qualitatively differnt from the situation you described. PS. For the discussion to be relevant I assume a sufficiently complex organization which DOES have full time managers. Otherwise the point is moot. In a one person operation you're the CEO and the toilet cleaner and everything in between.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 18, 2005 09:31 AM
"Okay, but I'm arguing going even further and saying that markets should be allowed only as a freedom concession and not to handle anything important.I don't even want markets to be the PRIMARY mode of allocation." "Spontaneous" markets would not evolve "naturally" into the primary mode of allocation as you fear except in very primitive societies(here I part with Monbiot). You yourself have provided a very compelling argument why that is: externality. Large scale markets require considerable planning and coordination from organized sources(state, government or "collective") Considerable hidden effort and resources are required to keep the machine running in an apparantly self perpetuating fashion. The hidden costs of such interventions make up the bulk of exteranalities. This is the economical version of the second law of thermodynamics. Large scale markets are indeed "designed". It won't exist if the political power that be does not feed and groom it. You don't have to go out of your way to "disallow" it. Contrarily, even with a lot of coercions you won't be able to eliminate the spontaneous markets. Albert's Quixotic quest to eliminate all markets results from confusing different kinds of markets and their ecology. P.S Interesting you see "freedom" as a concession. I think freedom is the leftist's goal.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 18, 2005 09:09 AM
"Markets are not designed for fun, they are designed (poorly, in my opinion) for business." Are all markets "designed"? At least localized markets appeared spontaneously throughout history. I think *some* forms of market are "natural" institutions. Your choice of word is telling. Parecon is an entirely designed system. Albert approaches social change like an engineer with his supersition in grand designs and planned micromanagement. The biologists' appreciation of evolution, subtle variations, adaptation and complex interactions between organisms and their ecology is sorely missing in his way of thinking. As noted earlier, his unreasnable confidence for such an ambitious "grand design"(parecon) indicates he has little understanding of complexity. (continued)

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 18, 2005 03:58 AM
"..There's no coercion or violence involved. Very simple: Because doing so violates the rules of the economy, which is roughly that people are honest. Without it, the economy doesn't work. " I did not argue against rules and policing. In fact I have been insisting on strong regulatory regimes. But what kind of rules are reasonable? Beyond which point do they become intrusive and authoritarian? The point is not that people are basically honest. But what degree of dishonesty can a society sustain and therefore deemed tolerable. Parecon seems to have a very low limit. Parecon appears to require a lot of micro management which is invasive and moreover, unrealistic. Parecon also strikes me as an overaching project of social engineering even more than an economical system. A lot of rules in parecon are not just aimed at preventing concrete harm, but by eliminating the human traits(learned or born is not the issue here) which MAY produce such harm. To me this cross the line to totalitarianism(though Albert claims people woild comply voluntarily so massive coecions would not be required but I think he is either naive or dishonest)

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 18, 2005 03:28 AM
"But that bears almost zero resemblance to running an entire economy on the principle that I get ahead by making you get behind" When did I say we should turn the whole economy to the market? I have repeatedly stressed the point that a society with a market is not the same as a society governed by the market.But repudiating the latter does not necessarily mean eliminating the market. If the bingo example is silly it is because your denunciation of the market is so silly to begin with(sorry, I don't mean to be rude). You argued not against concrete harm of a small dose of market(recall I mentioned lawn sale), but on the MORAL ground that it encourages greed. You also repeatedly asserts that even small market MAY snowball because of the incentives it provides. I don't think I am out of line in my example as all your moral(puritanical IMO) objections to the market apply. (continued)

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Re: Privatization of Services, the "Free Market" & Democracy

By Mikefrancismclaughlin, Hafiz at May 17, 2005 22:27 PM
This is to the realpc blog of May 14. (Whatever that's supposed to mean. Is realpc a computer?) I found your comment on Marx incorrect: “Even Marx didn't try to engineer a system -- he predicted that capitalism would evolve into communism (but of course he was not good at predicting).” I have read Marx (in the original German) and know that he was pretty good at ‘predicting'. Most misconceptions on Marx' predictions are due to mistaking the abstract model of capitalism with which he worked and the real world of innumerable variables, like wars, social programs, and the like. There is an innate contradiction in your thinking when you assume the fallacy of engineering systems and the fallacy of Marx' predictions, for the problem of engineering systems is at the root of your misunderstanding of Marx' predictions, i.e. the inability to work with an abstract model of society (which is the only way to study society in a ‘rational' way) and to take into account any deviations from this model. How do you know that his prediction of capitalism evolving into communism is not valid? If Soviet Russia was communist (which it wasn't) then his prediction was right. If not, which is the case, then we are still left with capitalism, a system still evolving and changing, i.e. human existence has not ended, the book is still open, the present is not the end of history.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 15, 2005 22:29 PM
I have no problem with worker initiated, bottom up management and public owenership of key economical sectors. These are not my problems with parecon. As noted parecon goes far beyond that and seems very rigid. There are many alternatives between the current system and parecon. "However I do not agree that the American public is powerless. I also do not agree that eliminating free markets is the solution." The "free market" is already eliminated and it is not viable in any case. The American public is not completely powerless. In theory gov can impose restrictions on corporations and attach strings to handouts(as noted this is inevitable so far as a large chunk of your economy is privately owned by concentrad capital). But 1) your government represents the interest of oligarchy, the game of election is structured to ensure that will be the case. 2) "Globalization" further disempowers local authorities in relation to capital. It enshrines capital perogative and locks in governmnet impotence. Even if a gov. wishes to reign in corporate excesses in public interest it may be in too vulerable and dependent a position. This process must be opposed when we stil have time.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 15, 2005 22:05 PM
"Why don't companies practice these ideas if, as claimed, they lead to greater productivity and job satisfaction? If it really worked, I think it would have caught on, but it hasn't" Because empowering workers threatens the power of management. It is naive to think that productivity is the only consideration in shaping organization structures. When faced with two competing alternatives to improve productivity, management almost always choose the way that erodes control from the shop floor even if it is inferior. This fact is well documented even in mainstream labour history. Mainstream scholars don't use incendiary words like "class war". But this is exactly what it is. (to be continued)

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 15, 2005 16:11 PM
"Typically the hierachy of professions is arrayed in order of significance to the powerful rather than "intrinsic" worth and importance" No one knows or agrees on the "intrinsic" worth of any profession. Jobs that seem fun and glamorous attract lots of people, so the competition for those jobs becomes intense. A tenured position teaching literature or art history would attract hoards of applicants. In other words, the supply is much greater than the demand so the value decreases. I don't see anything wrong with that, or how parecon could do it better. "Economical decisions that affect the citizens in the most profound ways are made by unaccountable, concentrate private wealth." I agree that our current system results in dangerous concentrations of wealth, and therefore power. However I do not agree that the American public is powerless. I also do not agree that eliminating free markets is the solution. Another thought about parecon: ideas about enlightened management and worker participation have been around for decades. Why don't companies practice these ideas if, as claimed, they lead to greater productivity and job satisfaction? If it really worked, I think it would have caught on, but it hasn't. Most companies work like the US system -- most decisions are made by authorities and the public has no direct vote. However, any of us can get involved in the law-making process, and anyone can run for office.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 15, 2005 08:33 AM
"For example, corporations should not get special treatment and bail outs from the gov" realpc It is not so simple. Even forgeting the incesteous relationshop between gov and private wealth the current economical configuration compels gov. to bail out corportations. Only difference is how much string is attached to the bail outs. A truly "free" market is not viable because of violent boom and bust and the intense pressure of short term survival. Under the general premise of a market economy the question is how to intervene most effeciently. Corporate bail out is a very inefficient way to cushion the economy. But it is necessary as long as a big chunk of our economy is privately owned. Corporate decisions and profit margins impact on the health of the whole economy This is the crux of a leftist crique to capitalism. Economical decisions that affect the citizens in the most profound ways are made by unaccountable, concentrate private wealth. As long as this persists we are under corporate blackmail one way or the other. PS The role of small business is exaggerated. They are economically secondary and often depend on corporate or government clients.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 15, 2005 06:10 AM
"Social hierarchies have little to do with and quite independent of specialization and division of labour per se" and "Typically the hierachy of professions is arrayed in order of significance to the powerful rather than "intrinsic" worth and importance"

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 15, 2005 05:49 AM
"A complex society, whether termites or information-age humans, must be organized hierarchically"realpc That depends on what you mean by "hierarchy". I would agree that in a procedural sense but that sort of "hierarchies" do not have to translated into social "hierarchies" of differential power and privilege. Social hierarchies in have little to with and quite independent with specialization and division of labour per se. Typically the hierachy of professions is arrayed in an order of significance to the powerful. Thus a coporate lawyer gets paid a lot more than a literature professor because the former is more important to concentrate capital.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 15, 2005 03:56 AM
"And murder will emerge "very innocently" under even the most totalitarian control." I hope you're not equating selling a few junkets with murder. Rhetorics aside, murder is not a widespread crime even in a violent society such as the U.S. You need a lot more resources to monitor economical transactions then you would for murders. Even the IRS knows that can't be done. "Mike's response, though, is that that market will be difficult to set up and not especially worth it to participate in." I am all for options. As I said before if participation in the market is semi-voluntary that would take away the coercive aspect of it. "Anyways, the parecon can tolerate, say, farmer's markets or yard sales or bazaars, it just doesn't use markets to plan major economic decisions." Is that your view or Albert's? It seems contradicting to what you said earlier.Afterall, even farmer markets and yard sale rewards greed and other undesirable behviour and the whole society may unraval according to what you said earlier. What do you(or Albert) consider "major economical decisions"? I think we can agree that things such as public utilities, natural resources and the like shouldn't be in private hands, how about neighbourhood restaurants? Book stores? Companies that employ less than 50 people?

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 15, 2005 02:39 AM
"My fundamental argument is that people shouldn't be REWARDED for cruelty, greed, or vile behavior. I think markets do so" Would old people be prevented from playing bingo in parecon because it encourages "greed"? There are different types of "greed". You may be "greedy" enough to take some free stationaries from your office, but that doesn't mean you would go swindle little old ladies even if you can. You sound like the law and order conservatives who says that a kid who breaks a window should be severly punished or he will become a murderer some day. Human behaviour is more nuanced than that.Not all "greed" are the same. It is not the job of any "collective" to dicatate morality. If the collective insists on stamping out every potential for small trangressions we are in big trouble. They are not so strict even in Iran. At first I was enthusiastic about parecon. But I lost interests after reading a few articles. Albert is too "all or nothing" to be a nuanced thinker. He systematically underestimates or ignores complexity. Maybe this is why he is so confident. In mathematics one learns that knowing how to solve a problem "in principle" is often useless. The beast of complexity may render the solution totally intractible. People who works with qualitative arguments often don't appreciate that sort of things.The idea that you can use computers to tract every transaction is so laughable that I won't even comment. (to be continued)

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 14, 2005 23:43 PM
bwong, I agree with many of your arguments against parecon. "You said it requires too much effort to police the market(which I disagree) but it requires even more resources to eliminate the market." Very true. "In a complex society some kind specialization and division of labour is necessary." Absolutely. A complex society, whether termites or information-age humans, must be organized hierarchically (or, more accurately, in a tree structure). All software developers know that although a simple program doesn't need to be well-organized, a complex system must be divided into modules and organized into a tree structure. Otherwise, the complexity becomes mind-boggling and the system cannot evolve or expand. Our industrial and technological society depends on specialization. Sure, we can just go back to the stone age. Maybe there will be a nuclear war that ushers in a new stone age. But then civilization will just evolve again and in a few thousand years there will be specialization, hierarchy, inequality, free markets, and parecon pipe-dreams.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 14, 2005 23:13 PM
"Participatory self-management can delegate, can create task forces and subcommittees, can have consensus/66%/50%/plurality rule, can do whatever is necessary, the only criterion is that it must apportion influence to the degree that actors are impacted" If that is the whole story how is it different from a (ideal) representative democracy? Again I think you neglect to lay out some key points. In parecon everyone takes turn being on the commitee. But in any complex organization (government departments or corporations) committees usually only make big picture dicisons. You still need an army of managers/bureaucrats for implementations and "on the ground" decisions. Where do you get these managers from? Since Albert doesn't believe in specialization( as my citation from you in my last post proves) you can only have workers of other stripes doing managerial jobs on the side(or having managers doing other jobs on the side) I don't think I misunderstood by saying Albert's solution is to get rid of managers.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 14, 2005 22:45 PM
" Let's say you have a more complex workforce. You could develop technology and training to empower workers to deal with the new complexity, or you could create managers to do the job.." Basically a guy would drive a garbage truck in the morning, do brain surgery in the afternoon and sign cheques in the evening.It is a caricature but I can't think of other ways to make this sound respectible. In a complex society some kind specialization and division of labour is necessary. But having different functions does not have to result in rigid hierarchy. I don't have a problem with professional managers perse. The key is to whom they are accountable. Currently managers are accountable to concentrated capital(in Leninist states they are accountable to the state apparatus or the party) I don't see why you can't have professional managers who are accountable to the workers(and be part of the collective) instead of having everyone managing together. Many people I knowe prefer to be left alone to do their work, which they are good at. The prospect of being part of the managing team would not be empowering or appealing at all. In the same way I don't think everyone is interested in holding political office even if given the chance.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 14, 2005 22:18 PM
"Oh, no! He only asks for what most people have nowadays with their banks! Do you know often I use cash versus just sliding my check card? " It is disingenious for you to sound as though Albert is just advocating e-cash, along the line of credit cards. Albert is clear that "unplanned finanical transactions" would not be allowed. Your bank analogy is fatally flawed because you won't have a bank account in the first place. So how did I misunderstand by saying that currency would be abolished? It is not clear if even unplanned bartering would be allowed. If I give you math lessions in exchange for a cabinet that would be a market. If I exchange my private lessions for other items with other clients soon I will be able to use these surplus items to exchange for other goods and services, etc. What kind of coercive power and totalitarian tactics the "collective" must employ to plug all the holes? You said it requires too much effort to police the market(which I disagree) but it requires even more resources to eliminate the market.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 14, 2005 21:56 PM
"Markets are like a vicious animal. They may have a better bite than a more domesticated pup (though I don't believe that's the case), but to restrain them requires so many dogpounds and leashes that it's always trying to break that it's just not worth it." Not worth it? According to whom? In Monbiot's last rejoinder to Albert, he argued quite convincingly how a "black market" will emerge very innocently even under the most totalitarian control. The point is that it is a very natural process. You argued that there is a difference between " "punishment" and witholding incentives. That to me is just playing with words. Consider another homely example. Some people become obess from over eating ice cream. An pareconish solution is to ban ice cream for all people because SOME may overeat. Now you may call this prevention instead of punishment. But being a skinny guy and never overeat I sure feel this is a punishment if I have a craving and can't get my vanilla cone. As I said before, I find Albert's attititude appallingly paternalistic. (to be continued)

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 14, 2005 15:23 PM
"Parecon is extremely different from communism, but if you don't like it, why not come up with something else?" Social systems are not engineered by one person, they evolve. Even Marx didn't try to engineer a system -- he predicted that capitalism would evolve into communism (but of course he was not good at predicting). (bwong) "Albert's solution to prevent managerial domination in parecon is to eliminate mangers altogether(run by refernda?) To address inacurate pricing Albert's solution is to abolish of currency. I can't take him seriously." I agree. And instead of currency he has a computer system keeping track of everyone's earnings and expenditures. So what if it isn't on paper? It's still an abstract value system; it's still money. It's a big chore to get through all the long-winded parecon PR and no, I have not read every word. Is Albert ever concise? I don't have a great plan for the universe. I would like to see our free market economy (no need to use the hated "c" word) evolve in certain ways. For example, corporations should not get special treatment and bail outs from the gov. If the CEO fails to run a corporation efficiently, as it is now, there are no consequences. Just start over and leave all the debts to the taxpayers.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 14, 2005 05:33 AM
"will allow some ..invest that little extra But, even small doses of inequity with markets a in a little more productive capital, pass it to their children.." This is preventable through inheritance tax and limiting private ownership of productive assets. The notion of "inequality" also deserves more comment(will do later) "All it takes is one to drag down the level for everybody. And that's why I don't like markets." You are exaggerating. So because there are a few anti- social types,--since you think most people are intrinsicaly good,-- your solution is to treat everyone as potential criminal? I don't think you even believe in this. "But the market, no matter how small and no matter if everybody in it is a saint, intrinsically gravitates towards managerial domination and inaccurate pricing." Managerial domination is not unique to markets. Leninist vanguards are also managers. Managerial porogative arises from complexity, not any economical system perse. For modern capitalism, the "managerial revolution" is rather recent. Owners used to call the shot. Albert's solution to prevent managerial domination in parecon is to eliminate mangers altogether(run by refernda?) To address inacurate pricing Albert's solution is to abolish of currency. I can't take him seriously. I will respond in more detail. The word limit and 1200 second rule are frustrating

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 14, 2005 02:37 AM
"Why commit yourself, especially given the dearth of evidence you have at your disposal, to an outlook that says that change is impossible?" I never said that, never implied it. Change is inevitable. From what I have read about parecon it sounds as impractical as communism. I agree with some of Horowitz's criticisms, and I have criticisms of my own. "How can you even try to supress "human nature" without becoming totalitarian?" You can't.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 14, 2005 02:19 AM
"This has little to do with human nature, despite your repeated allusions to it." This is not my allusion. It is Federic's though he stops short of refering to it as such. But the substance of his argument is essentially that. "Consider markets: it may be that they are inherently detrimental, like war. " It may be. But you have to establish that analogy first. Federic certainly hasn't Albert's seems to think the current state of capitalist market as the only concivable kind of market. As noted, Polanyni demonstrated that this is factually false. Polanyni( himself a socialist) showed that Capitalism is neither "natural" nor "universal"; markets existed in many forms before capitalism; capitalism did not arise as the result of the market. His purpose was exactly to debunk the prevalent myth that capitalism is the only "natural" economical system and anything else is against human nature. Curiously Albert appears to be arguing the opposite, along with the apologists of capitalism, even though he reaches the opposite conclusion.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 14, 2005 01:57 AM
cont') All examples you offered on parecon were not parecon at all. They are "co-ops". Co-ops are a particular form of business organizations in the same way that mom and pop stores and cooperations are models of business But Parecon is much more ambitious. It is a model of organizaing society at large. The (imperfect) analogues would be parliamentary democracies or "communist" dictatorships. I think co-ops and networks of co-ops working in tendem are workable and better alternatives to the present system . If that were all Parecon is I would happily support it.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 14, 2005 01:18 AM
(cont') "First of all, I believe human nature is overwhelmingly good.." Yet you keep on arguing that market incentives, EVEN IN SMALL DOSES, would turn a "normal" person into a predator. This argument assumes, implicitly, that when presented with the choice between economical gains and other incentives most people would inevitably choose the former. I understand this is your(and Albert's) basic argument against the market. Whether you call this "human nature" or other names, the point is the same. This is the same premise of capitalism. The only difference is the capitalist argues that human nature should be allowed to express itself regardless of the consequence to others while you reach the opposite conclusion, that it has to be supressed at all cost. I don't share this premise. But if I do your conclusion is frightening. Parecon says we should amputate what YOU percieve as human nature for "greater good". How can you even try to supress "human nature" without becoming totalitarian? I find the idea that you have to "protect" individuals from the *temptation* of behaving badly(not actual bad deeds) very paternalistic. I wonder what other unwholesome activities parecon seeks to eliminate in the name of "democracy". (to be continued)

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 14, 2005 00:36 AM
"So you'd almost certainly agree that a corporation that chose to be nice would be destroyed not because of "human nature" but because the incentives and roles in the system" Only if paricipating in the market is the only means of survival. But that doesn't have to be the case as long as society allows other options. You are again confusing market and capitalism which allows unlimited accumulation of wealth and deploying that wealth to rig the game. Neither is intrinsic to the market. Corporations are a recent phenomenon. There have been markets in all kinds of societies without corporations or corporate like entities. (to be continued)

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 13, 2005 22:38 PM
Have any of the experiments lasted over 2 years, without high turnover? Are any of them complex or high-tech enterprises? The history of communes in the US shows that most fail, unless headed by a charismatic authoritarian leader.

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 13, 2005 19:41 PM
"Not only doesn't Albert ignore the complexity of modern society" He certainly does. "realpc's human nature thesis: "greed" is human nature" I have never said that. That is what certain extreme capitalist libertarians believe, and I have never once claimed to be an extreme capitalist libertarian. "I believe human nature is overwhelmingly good" People can be very good to others they perceive, for whatever reason at that time, as in some way belonging to their group. We can be, and sometimes for good reason, very cruel to others we perceive as enemies seeking to destroy us. The question is how we make the friend or foe determination, and in the contemporary world it is very difficult. But it can even be difficult within a family, or workplace. It was much simpler for tribal people. The communist revolutionaries were all "comrades" until it turned out they had different opinions on how to build an ideal society. Then the mass murders began. Parecon might work for a while in a hippie bookstore here and there, but it will not scale.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 13, 2005 08:30 AM
(cont') The Spanish civil war example may be closer, but under extreme conditions such as wars people often behave in a more altruristic way and demonstrate higher degree of solidarity. I don't know how stable that kind of structure is. " but I don't see why a market couldn't cause even small inequity to foster and lead to the same results, given the incentives it provides to people..." That sounds very close to realpc's human nature thesis: "greed" is human nature therefore even the smallest temptations must be eliminated or the perfect society would unraval. If this is true than parecon is self defeating. You can't claim "democracy" on one hand and have such deep mistrust for humanity. As said before, a market is not an isolated, entity subjected only to the law of supply and demand.It is embeded in a society. The inequality and predatory features in a market reflects the surrounding power structures. It is at best a speculation that "human nature" + market inevitably leads to capitalism. You can always prevent anti social behaviour in the market through laws (for example) "As you were commenting earlier, the market offers no such thing at least in the arena of health care if not elsewhere" Health care in my view should not be comodified(as are water, land etc), but this doesn't mean nothing should. You are confusing a market with capitalism. The mere existence of a market for some commodities does not mean that everything should be put on sale.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 13, 2005 07:52 AM
"The reason they fail is largely because the economy in and of itself does not have that information built into it. They have to acquire it after the fact.." But how exactly do you propose to have information about consumption and demand built programmed into an economy in advanced? Parecon would be extremely rigid and infeasible even if that can be done, which I doubt. It seems that Albert is ignoring the problem of complexity in mordern society. "Parecon draws from Albert and Hahnel's experience with South End Press as well as historical sources such as Native American societies, the Spanish Revolution, Mondragon, and other cooperative institutions." These examples are not parecon. A worker cooperative such as mondragon still trade with the outside world in a market and members of a co op can spend their earnings in whatever way they see fit without having their consumptions monitored as in parecon. Parecon is not an entreprise, it is an all encompassing politcial-economical system. I think you need to acknowledge that.

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 13, 2005 01:39 AM
"And if there's a way of combining the relevant features of the subconscious and conscious for a better alternative, either parecon, mindful markets, green bioregionalism, etc.?" I agree that a better alternative is needed, and hopefully one will evolve out of the present system. Parecon, as I understand it so far, sounds hyper-intellectual, ego-driven and idealistic. Like most leftist ideas, it deeply distrusts nature and subconscious (and/or super-conscious) forces.

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Re: Privatization of Services, the "Free Market" & Democracy

By Bauerly, Mtbrad at May 12, 2005 20:09 PM
Realpc, how does your analogy address the obvious differences between the subconscious and conscious parts of the brian, with one complementing the other. With the competition between competing firms. Firms compete to, which leads to excessive and inefficient marketing and multiple production of the same product. this leads to two firms working against each other. Your human mind analogy is completely different. The human mind is working for a common goal, with the subconscious acting out the things repressed in the conscious. If you applyed this to the market, you would have firms producing complement goods and filling niches only, not competing for the same dollar, this is just inefficient.

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 12, 2005 14:12 PM
The "free market' ideology is akin to saying let the river flood your house because it is the way of "nature" and any attempt to work around it MAY led to unforseen outcomes that are worse. No bwong you misunderstood on purpose. The conscious ego must be in control of the whole system (person). But itt also must acknowledge that it depends on the subconscious. People who are constantly at war with their subconscious are not going to be as effective as those who try to work with it. The subconscious is in some ways like an extremely complex computer that does all kinds of calculations for us. It has its own wisdom that the conscious ego lacks. The conscious reasoning power of the conscious ego can be admirable, but it is linear and plodding, and its access to information at any moment is narrowly restricted. The subconscious is a much bigger machine. I am not claiming to know how the subconcious mind works, just that it does work somehow and we need it. People with great faith in their conscious reasoning power (that includes most of us who are Western-educated) may have trouble hearing the wisdom of their own subconscious. I think this analogy, although imperfect, can be somewhat helpful. The market is not a perfect machine, and neither is the subconscious mine. Both are in need of intelligent guidance.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 12, 2005 11:09 AM
"Fmarkets themselves produce the mindsets and incentives to broaden and replicate themselves. History shows that markets are like viruses: they fight as hard as they can to infect societies" There are two processes at work here. "Markets" can spontaneously replicate themself. Why? perhaps most people like the convenience and varieties it offer? There is also another process where a "market" is imposed by the powerful to rip off the weak, such as the top down globalization process and the attempt to privatize healthcare. In these cases you're talking about massive concentrated wealth coupled with political power. The first kind of "market process" does not automatically lead to the second kind. Karl Polanyi argued compellingly in "the Great Transformation" that Capitalism is a violent break with history and definitely DID NOT arise naturally from the "market economies" before. Capitalist propagandists consciously appropiate the language of the "natural" market for folksy appeal. It is this wilful confusion that prompts people like realpc to think capitalism eminates from human nature. Leftists shouldn't fall for this trick(even though they reach the opposite conclusion)

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 12, 2005 10:32 AM
" Albert also makes convincing arguments about how even very limited markets generate a variety of negative outcomes." There are also compelling arguments that market with moderation can have good outcomes. The point is not whether something generate bad outcomes, but whether the bad outweights the good or vice versa. Even eating a moderate amount of food creates free radicals and other bad effects. Would that be an argument to stop eating? I don't find Albert's arguments convincing. "That is, we try to predict crime rates using crime rates of the past.." Every year a single company alone spends a lot of money and time on marketing research for a few products. Albert is going to do that for all products. Good luck. "if there's something better than a market, why have it at all Parecon only exists in Albert's head. It is not clear it is even viable, let alone "better". "Coercions ..it's entirely fair because those people never had rights to dominate others in the first place, just as monarchs and slaveholders didn't." Parecon will not work if people feel more oppressed by the left puritans than the "enslaving" market. Most people don't consider themselves "dominating others" by holding a lawn sale or being a slave by having a job. A market does not necessarily means private control of the means of productions. Native indians had markets though in many ways they were communal people.Prices were regulated so the zero sum scenario didn't arise.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 12, 2005 09:55 AM
"But anti-capitalists typically don't say that prices don't work.., but rather the prices that are actually set. Keynes, after all, didn't deny equilibrium but denied the capacity of many markets to reach equilibrium. Externalities et al insure that the equilibrium price is flawed as well." Interesting you brought up Keynes. Keynes' work is built on the fact that the price mechanism failed. I don't see how externalities are relevant. Keynes' solution is exactly through socializing more "costs" and thereby distorting the price indicator even further. I don't know how you can systematically incorporate externalities in the price because you can't always define "cost" in monetary terms. IMO "equilibrium" is rather meaningless in human terms.I brought that up just because Smith made the point. First, anyone who insists that equilibrium must exist is wrong. Mathematics proves even for very simple, idealized models it may not exist. Secondly, it is not clear what an equilibruim may mean. All surplus workers starving to death is an equilibrium, as is our mass extinction. Thirdly, even if the happy equiolbrium Smith envisioned eventually prevails. "Eventually" could mean the age of the universe. Without knowing the relaxation time(time required to reach equilbrium) the point is moot.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 12, 2005 08:49 AM
"commodity fetishism, externalities, adversarial roles of production that give incentives for people to horde information, etc.)" A market is embedded in a society. There are others institutions with other priorties that can reign in some of its excesses. Complex societies are rifted with contradictions and conflicting priorities. The point is how to seek a balance. Some forms of market existed since humanity enjoys surplus and I doubt that parecon can eliminate it any time soon without massive coercions. The problem you desceribed arise only when the market perogative trumps everything else and that the market mechanism becomes the SOLE allocator of resources and means of sustainance. There is a difference between a society with a market and a society being swallowed up by the market. The problem of capitalism is that society itself becomes an adjunct to the market and the logic of the market becomes all encompassing but that doesn't mean market itself should not exist. Theocracy is bad is not an argument for banning religions.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 12, 2005 08:23 AM
"But even Smith was assuming rather different things than what we call markets and anti-capitalists attack THE MARKET for these problems " One of Smith's assumptions is the availiablity of revevant and timely information of supply and demand through the price mechanism. This is a key condition to his assertion of equilbriim (a supplier would switch to a different line of production seeing that his commodity is no longer in demand) This point is heavily criticzed for being fragrantly unrealistic. This criticsm can be raised independently of the ethics of the market. Hayek argued the limitations of planning without seriously addressing the limitations of the price mechanism itself(he was with Smith presumably though apparantly without explicitly saying so) I don't know what kind of mechanism Albert has in mind. Unless Albert proposes a ration economy I can't see how the type of information in a police presinct is pertinent to supply and demand questions.The latter is dynamic and there is no master file.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 12, 2005 07:29 AM
"Mike and others are very clear that they're proposing distinct alternatives that are heavily decentralized but allow each decentralized actor all relevant information, which is something markets even at their Pretendland best don't do." It is a tall order that heavily decentralized actors have access to all relevant information. The possibility of acquiring all pertinant information of supply and demand is one of the key assumptions in Adam Smith's ideal market. This has been heavily criticized by anti capitalists as flawed. I don't know how Albert is able to work around that. Presumably even in parecon you need to worry about supply and demand or you won't know how to allocate your resources. Unless it is a ration economy(which I don't think would have a lot of appeal)

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 12, 2005 07:05 AM
"But most economists agree that the ability of humans to consciously and deliberately plan fair and efficient economies is severely limited." Economics is only a bit better than astrology. Mainstream economics is based on dogma and superstitition. The training of economists is appalling tunnelled vision. Economists are not trained as "scientists" who study and discover the laws governing economical activities. They are trained as technicians who maintain the capitalist system (to the extent that economics "works", which is very limited) The validity of capitalist claims are not results established by research, they are the axioms of economics. In order to create the false impression that economics is a "science" whose statements are timeless and objective."Mordern" economics is full of equations and mathematical formalism based on shaky foundations. Political economy and economic history are not even taught in economics departments anymore.You need to go to the philosophy and history departments to find these courses. One should not be surprised that "most economists" cannot concieve of anything outside capitalism. Capitalism is the only universe they know.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 12, 2005 06:34 AM
"We have an analogous situation with our own minds. Planning and conscious deliberation are necessary, of course, but there is a limit to what our conscious minds can handle." This is an obvously flawed analogy. Let's assume the premise that market force is like nature forces so we have a common ground. The river may flood and drown your whole town. But you can also use it for irrigation and generating hydro power with proper diverting and redirecting (planning). The "free market' ideology is akin to saying let the river flood your house because it is the way of "nature" and any attempt to work around it MAY led to unforseen outcomes that are worse. This is clearly absurd yet it is taken seriously by many economists. That goes to tell you what the opinion of "most economists" us worth. If you ask ten economists a question you'll get eleven answers because one guy later changes his mind.

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Re: Privatization of Services, the "Free Market" & Democracy

By W, Bruce at May 12, 2005 06:33 AM
I can't speak for Canada or England, but here in Australia there's an element of both. The public hospital system (which is the responsibility of the states) has been run down due to staff cutbacks; and wealthier people do seek private insurance for non-essential surgery and treatment that Medicare either doesn't fully cover or cover at all. In addition to this, however, the federal government claims that Medicare is in "crisis", as there are too many people trying to use it. This "crisis", like the Social Security "crisis" in the US, is actually the result of a POLITICAL decision not to increase Medicare funding. But the government's solution is to encourage people into private health insurance, which it does through a rebate on premiums; effectively bribing people into taking up private cover, and subsidising private insurance with public money.

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Re: Privatization of Services, the "Free Market" & Democracy

By Gammon101, Bwong at May 12, 2005 05:25 AM
"And to beat the competition with lower prices and better service." Obviously you're not a businessman. To show how wrong this is you only have to look at Micro Soft, the music industry, the film industry, the publishing industry..the list goes on. A business is "successful" often because of its ability to control access and distribution. The model of a competitive market governed only by supply and demand is fundamentally flawed. It does not take into account the imbalance of power between different players and "non economical" influences on markets such as war, fiscal policy and the law, just to name a few. The question is not whether these "external" influence are "desirable", they are unavoidable because the market is embedded in a larger society. The profit motive also impeds innovations. "Capitalist takes risks by innovating" is a mythology. Most businesses survive and expand by playing it relatively safe. Sometimes a really novel idea pays off but the prevalence of breakthrough moments are highly exaggerated. Far more often market forces punish innovations since most new ideas don't work without a lot of trial and error.A "healthy" business cannot a foord to take risk regularly. The optimal strategy is to pursue the line of least resistance. The negative impact of intellectual property right on innovation is obvious.Free flow of information and free exchange of ideas are keys to inventiveness.

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 12, 2005 01:40 AM
"The point of the corporate bureaucracy is to offer the cheapest services for the highest price." And to beat the competition with lower prices and better service. Our capitalist system in the US is highly imperfect and needs a lot of work. But most economists agree that the ability of humans to consciously and deliberately plan fair and efficient economies is severely limited. I do not agree with the neocons who think privatization cures everything and brings heaven on earth. But too much conscious planning is a recipe for corruption, inefficiency, stagnation and eventual failure. We have an analogous situation with our own minds. Planning and conscious deliberation are necessary, of course, but there is a limit to what our conscious minds can handle. Most of the administration goes on subconsciously, and it has to. The complexity of even the simplest cellular and organ processes are beyond our intellectual comprehension. Then consider our social interactions -- if you deliberate consciously you can never hope to grasp the meaning of any social situation. Even if it were possible to comprehend it all, which it definitely is not. The limits of conscious reason on the individual level apply to society as well. The market is part of our social subsconscious, and we have to let it do a lot of the work for us. Intellectuals like Chomsky have complete faith in their conscious minds, but this faith is based on illusion and egotism.

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By Yurallnuts, Realpc at May 11, 2005 23:09 PM
"The reason is the inefficiency of non-nationalized health care." Your implication is that if we nationalize everything the whole economy will run more efficiently. Did you sleep through the whole 20th century?

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Re: Privatization of Services, the "Free Market" & Democracy

By Lackey, Word at May 11, 2005 19:40 PM
This seems reminiscent of the process of land enclosure in England. If a private company can make money on items previously thought to be part of the "commonwealth," then capitalism moves in on it. What I find interesting is when the scarity of drinkable water is directly traceable to industrial pollution or aquifer depletion by agriculture, production, etc. In essence, industry depleted the resource, creating scarcity and a "market" for water.

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Re: Privatization of Services, the "Free Market" & Democracy

By Mjc7373, Mcorbin at May 11, 2005 18:42 PM
Government run programs do have problems with bureaucracy also, but at least the whole system does not profit from it as is the case with private industry. Individuals in the government might but we can address those cases publicly. If a government processes become overly bureaucratic and wasteful we have the authority to fix it, but in the case of privately owned systems we have no say. I think this is the fundamental difference.

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Re: Privatization of Services, the "Free Market" & Democracy

By W, Bruce at May 11, 2005 18:28 PM
"Government-run programs . . . don't have problems with bureaucracy?" In a hierarchical, authoritarian system (such as a corporation or a government department) there's going to be bureaucracy, and problems with it; that's obvious. However, with a privatised health system, every insurance company is going to have its own bureaucracy, as is every chain of hospitals. This means needless and wasteful duplication. A public system only has one insurer and one hospital network, and only one bureaucracy for each.

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Re: Privatization of Services, the "Free Market" & Democracy

By Yurallnuts, Realpc at May 11, 2005 17:31 PM
US health care "is the only system that is privatized to such an extent, therefore introducing massive bureaucracy, supervision, paper work, subordination to big pharma, and other factors that raise costs and reduce performance." Government-run programs, on the other hand, don't have problems with bureaucracy?

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