Responses to Mike Ballard and andie nachgebornenen below. Original comments substantially trimmed for conciseness.
Mike Ballard wrote:
> Yes, it seems to me that the very existence of capitalist commodity production
> with a view to profit assumes alienation:
However, my question is not about "capitalist commodity production with a view to profit," but whether class inequality can arise out of free exchange without the use of force.
That is the question that always seem to be evaded, or the answer shrouded in incomprehensible allusions and mystification.
[...]
> Seems to me that history has shown that an exploitive class always emerges from
> forms of minority ownership of commodities produced for sale, no matter the
> good or bad intentions of those minorities who become rulers.
That is the opposite of every account of primitive accumulation I have ever heard, if you can either explain the logical basis for the transition from "minority ownership of commodities produced for sale" to becoming rulers with out employing force at any point along the way, or provide an example, that would be very much appreciated.
andie nachgeborenen wrote:
> I assume your question, Dymtri,
>> can you logically explain to me, preferable in the language of
>> classical economics, how an exploitive class can arise out of free
>> exchange without resorting to force?
> is a practical one.
Indeed. It is a very simple question.
> Theoretically, using the terms of
> neoclassical economics, John Roemer has given a
> mathematical proof of the proposition.
> Given an
> initial state of differential ownership of productive
> assets, Roemer shows that exploitation, defined as
> transfer of embodied labor from one class to another
> (he uses idealized agents as stand-ins for classes),
> follows.
Well, before we go much further can we try to establish if this definition fits?
Can exploitation be defined as the "transfer of embodied labor from one class to another?" And can this be mathematically isolated?
[...]
> I can set forth the argument in more detail if you
> like.
While extending a logical premise with a mathematical proof can be interesting, the logical premise must be defended first, otherwise all the mathematical proof proves is that the the prover can do math.
[...]
> But I think you are asking not whether it can be
> mathematically proven that free exchange can generate
> exploitation, however defined,
Well, more than generate exploitation, but can create and sustain an exploitive class. This is a key difference, as in any individual transaction one side can be ripped off by the other, but this will simply wash-out in the broader economy and individual raw-deals can not be the basis of class formation.
> but a more rooted question. Your real question is whether
> markets by themselves, without capitalists, generate morally
> problematic results, including the problems (or some
> of them)associated with exploitation (of the poor by
> the rich) in capitalist society. Am I correct?
Not really, my question is not a moral one, but an economic one,
As neither commodities nor Capital can capture any more than reproduction costs in the context of free exchange, how can an exploitive class emerge and sustain itself without force?
This is the key question in establishing wether markets are a component of Capialism or of Socialism.
Whereas Capitalism is the practice of raising the price of Capital by withholding it from labour, so therefore free exchange is incompatible with Capitalism.
Whereas Socialism is defined as an economic system where the workers own the means of production, and whereas free exchange delivers Capital and commodities at cost to labour, so therefore markets are compatible with Socialism.
Is anybody interested in logically refuting the above syllogisms?
> Although (as people here may know) I don't see any
> practicable alternative to large scale marketization
> and commodity exchange even under socialism
Yes, I agree.
> (a proposition I am NOT going to debate),
As I believe that free exchange is the very essence of Socialism, I will be happy to debate this.
> I agree with
> Mike B. that markets pose risks to any socialist
> project. A few points in plain language:
>
> 1. Markets involve winners and losers, that's how they
> work.
But this is not true.
Sure individual transactions can work out better or worse, but this evens out as both actors in each trade are getting what they want.
Markets only involve winners and losers when one side has the the ability to coerce the other side into an unequal exchange.
> The incentives are carrot and stick. Successful
> enterprises make profits, unsuccessful ones go bust.
Yes, and this is how market feedback informs enterprises to improve and generate more wealth.
The human risks of this process can be Socialised without abandoning the market. Enterprises feel no pain.
Further, "scientific management" can fail too, and moreover, as it operates as a monopoly, there is not even a control to evaluate whether it is failing or succeeding.
> That means that markets tend, systematically, to
> create inequality.
Sorry, but that does not add up. You are assuming unequal exchange, which is not the nature of markets, but rather the nature of hierarchies.
Unequal exchange perpetuates inequality, free exchange can not.
Further, even if individual traders can do rather well under free exchange, without recourse to the force of the State to guarantee sovereign property rights, this wealth can not be used to capture surplus value, because there is no means of alienating labour.
> 2. Within enterprises, even the successful ones, there
> is a reason to think that sharp inequalities may
> emerge. First, some people have more managerial,
> entrepreneurial, innovative and other skill than
> others, some are just sharper operators. They are
> likely to be rewarded even in a democratic firm more
> than people who lack those skills, and firms will
> compete for those talented (or slicker) workers.
This doesn't have anything to do with markets. Whatever problems competitive enterprises have in dealing with the information asymmetries and "principal-agent problems" that develop with any hierarchy are only aggravated in a non-market scenario.
> Second, there are serious "transaction costs" (in the
> economic jargon) involved in relatively democratic
> firm governance that can be minimized by giving a
> managerial group a lot of power to make decisions;
Which is why it is better if workers have independent access to Capital,
thus poor management will quickly find themselves without a workforce.
[...]
> 3. In even in a society without private property,
> disparities in wealth translate into disparities in
> political power.
However these will be individuals, not a class. As without private property there is no basis for a class to reproduce itself.
> Richer firms or managerial groups can
> use their greater resources to influence the political
> process to entrench, extend, and expand their unequal
> wealth and power.
How can anyone or thing "entrench, extend, and expand their unequal wealth and power." if there is no private property?
> As we saw in the former Yugoslavia
> this can also operate between resource poor and
> resource rich regions, with the firms in the richer
> regions being richer and giving those regions more
> political power to benefit themselves.
As there is no State to stop them, people will migrate as needed.
> In the extreme
> case, as indeed happened in the FY, those privileged
> groups may act to cement their advantages by actually
> privatizing the productive assets.
Which will require them to resort to force, so once again, it is not free exchange but force which is what Socialism must provide an answer for.
> 4. Then, as Mike says, markets do promote competition
> as much as they promote cooperation. They encourage
> individualism, zero-sum winner-loser mentalities, and
> reward, not to put to fine a point on it, greed. Of
> course they also encourage cooperation, since people
> have to work together to make profits, but which way
> the balance tips is a fine question.
Capitalist "markets" are like this, yes, free exchange is not. The so-called "greed" of the marketplace is not evident when the interaction is among buyer and seller, or even among sellers. It comes about in the abstraction of the so-called Capitalist markets when the struggle is between labour and property. It's source is the theft of surplus value. Theft demeans the thieving class, while poverty and desperation demeans the victims.
This is illustrated by the fact that hunter-gatherer societies, which has almost no material wealth, considered themselves to be affluent societies, and rarely worried about scarcity, this is also born out by the high level of co-operation and solidarity in actual marketplaces (where they still exist) where buyer and seller haggle over price directly. [citations: The Gift, Marcel Mauss and Money in an Unequal World, Kieth Hart]
It is Capitalist so-called "marketplaces" characterized by alienated labour where "greed" becomes problematic.
Capitalism is incompatible with markets.
> The long and short of it is that any socialist who
> thinks that markets are likely to play a large role in
> any successful economic system has to recognize the
> hierarchical and centrifugal tendencies they create
> and think hard about how they might be counteracted
> institutionally.
Yet they do not create "hierarchical and centrifugal" tendencies, but rather destroy them by driving Capital and commodities to cost, thus denying any socially unnecessary (non value creating) labor any subsistence.
> Carrol will tell us we cannot even think about the
> shape of a future society, but this is a mistake. What
> we cannot do is imagine we can draw up a perfect plan
> and expect that it would be realized
I agree with this, I am looking for the Achilles heel of Capitalism so I can construct a Labourist mode of production, working under the assumption that political power is an extension of economic power. What sort of society will emerge once the theft of surplus value is eliminated we can only imagine, but not know.
-- Dmytri Kleiner, robotnik Telekommunisten, Berlin.
dk at telekommunisten.net http://www.telekommunisten.net freenode/#telnik