I was linked to this talk by someone who would fit within the label of anarcho-communist back in April of 2016 but didn’t get around to it until a few months ago. It was an interesting talk and not one I disagree with on all fronts, but at the same time I had many criticisms.
The following is my notes, slightly re-worded into essay form. I don’t claim that this essay will be the most in-depth response to Parecon critiques of market economies, just that it’s a response to the ones I saw in this specific talk by Robin Hahnel.
As y’all may or may not know, I come from a left-wing market anarchist perspective, generally. So my viewpoint of markets is different of that from, say, anarcho-capitalists but also different than anarcho-communists. It’s more comparable to the individualist anarchist and mutualist traditions within anarchism.
Within that framework I think my responses to these objections from Hahnel are slightly unique and worth denoting more publicly. My hope is that they will spark more discussion and interest over what markets can and cannot do and lead to both a moderating and a radicalizing of viewpoints.
Ideally, market advocates and Parecon folks can both admit where market failure could happen while radically challenging the extent to which it currently and genuinely happens under capitalist and governmental societies.
But I’m getting ahead of myself…
The Two People You Meet in Markets
According to Hahnel, there are two types of people when it comes to markets:
The best policy, saying we just need to get the politicians out of the market place, no regulations, no control of the market
It doesn’t in fact turn out well for us or environment.
I have three responses to this separation of people:
- Policy is a generally applied word here but what does it mean concretely? The idea that we could have one centralized way of interacting with markets doesn’t appeal to those who think that markets should be free from governmental regulations or control. And this is very different from saying there shouldn’t be any regulations or controls. After all, people within communities could still come up with consensus-based guidelines in order to better resolve problems and disputes.
- The fact that current capitalist markets aren’t being regulated by governments and that this doesn’t turn out well for anyone isn’t a point against markets unless we conflate markets with capitalism. But a market is just a system whereby people are allowed to trade goods through selling, buying and haggling, etc. There’s nothing in the definition of a market that tells us what the means of production and its role in the larger economy has to be. This is why there is a historical precedent of folks who even call themselves “market socialists” (as Hahnel himself points out) for example.
- The environment and the rest of the economy (and indeed individuals within that economy) are certainly hurt by regulations from time to time and often in disastrous ways. Whether regulations involve the patent process which stalls the much needed development of medicine or they involve the ways in which licenses keep poorer individuals out of the market from competing with well-established players. There are many reasons to be skeptical of regulations that don’t involve thinking the environment is an expendable factor when it comes to economic efficiency.
What’s so Great about Democracy Anyways?
Hahner doesn’t really get into what “democracy” means which is unfortunate because it has many connotations. He also doesn’t discuss what it takes to design an economy to begin with. Typically, designing an economy, or at least the one in the US, revolves around institutions and institutions that are often tied to the government in some way, especially corporations.
Hahnel and I likely agree that this is an unfortunate scenario but I also suspect we disagree on the solutions to it. Hahnel may favor something much more like democratic planning within a given locale that gives much more power to decentralized nodes than centralized ones. I’m sympathetic to this approach to an extent but I also think there’s a danger of centralizing control within localities and mostly relying on social capital, instead of material capital.
I also agree with William Gillis that anarchism is, at its core, a scale-independent proposal and that we need anarchic communities to be much more than localized efforts. Our lives should be bigger than the communities we are born in.
Within that spirit it seems limiting to me how many anarcho-communists want to focus our anarchism on communities instead of individuals. How all of the neighbors should know their other neighbors. Everything needs to be a potluck, a gathering, an ice-breaker between human beings. There’s parts of me that enjoy the anonymity of loose-communities that are sprawling and (dare I say it) cities, that have positive qualities to them that anarcho-communists (and especially anti-civ folks) are much inclined to disparage.
Some people don’t want to know their neighbors, bake them cookies or share in the common good and I think any self-respecting anarchic order should respect that. Which isn’t to say that Hahnel or people who’d describe themselves as anarcho-communists wouldn’t want to respect it as a right but I think as a cultural norm it’d be implicitly (maybe even explicitly) discouraged in subtle or not-so-subtle ways.
These points are somewhat tangential to Hahnel but I do feel like they speak to the Parecon idea of centralizing democracy within communities.
Hahnel also denotes the rise in the mainstream for “singing the praises of markets”, that
there are louder voices, more voices and while I wish this was true, it’s not. Those voices are often conservative ones and not ones who have any serious interest in removing government regulations so we can have freed markets. They want the removal of certain governmental regulations so that their favored corporate interests can gain favor in a captured market.
The so-called “market failure” that Hahnel tries to assert are part of an inherent problem of markets themselves isn’t very convincing, as the economist David Friedman has persuasively argued. Friedman’s arguments depend on a particular interpretation of what a market failure is like, he defines it as:
…a situation where individual rationality does not lead to group rationality. If each individual makes the right decision, the group make the wrong decision. In the pure case, every individual ends up worse off than if each of them had made a different decision.
Friedman argues (and I agree) that market failure is a real issue but it’s an issue of both markets and government and even individuals and groups on a general scale. The prisoner’s dilemma is an example that Friedman cites of that last part and isn’t one that’s typically discussed by conventional economists. But then, as Friedman points out, most economists aren’t libertarians, much less anarchists.
And when it comes to governments, they have more than their fair share of “market’ failures (which is more generally a rationality problem):
A voter who takes the time and trouble to figure out who the best candidate is and vote for him is producing a benefit for everyone else in the country, at least if “best” means best for everyone.
He has no control over who gets that benefit. The rational voter is producing a public good. Rational ignorance is the underproduction of that public good.
Rent-seeking is another example Friedman uses and it’s one I’ve highlighted as well to show that government can often be inept at controlling market economies. More often than not, the people who are up at top use their power to benefit themselves as much as possible. They’re partly able to do this because the political means allow politicians to subsidize the costs of their action and making “their” citizens pay for them. One of the most obvious examples is sending out American citizens to fight wars for the people in congress and the military industrial complex.
But Hahnel wouldn’t likely be persuaded by these points because he seems to think we have markets that are ruled by non-interference. This is a common claim from liberals and even some anti-authoritarian leftists of varying stripes, but it strikes me as immediately implausible given the existence of intellectual property, licenses and corporate subsidies which are all prime examples of governmental intervention.
And even if it were true, it’s clear that the “non-intervention” aspect of markets favor those who are the richest, the ones at the top and those who the most well-connected are. That’s certainly not a free market, but, well, that’s the point.
Markets and Capitalism: Natural Allies?
Hahnel makes the point that when we look at the markets that exist now we see that they are inefficient, produce a wide-range of harmful externalities, increase inequality and substitute meaningful freedoms for trivial ones.
I don’t think Hahnel is completely off-base here. I think when we look at present day markets we can rightly perceive many of these things. We can look at things like income inequality that spurred Occupy Wall St. We can see the disparities of power and access to capital between workers and bosses, etc.
When we look at present day markets we can see a lot of environmental damage comes from corporations such as the infamous BP Oil spill years back. There’s a lot of smog in cities like Los Angeles and Salt Lake City that are the byproducts of corporations and their wasteful operations. There’s also the many pipelines that destroy people’s homes, the environment and disrupt communities.
And when it comes to trivial freedoms as opposed to meaningful ones, we can look to Voltairine de Cleyre’s arguments about thing-worship in her The Dominant Idea:
We dabble in many things; but the one great real idea of our age, not copied from any other, not pretended, not raised to life by any conjuration, is the Much Making of Things, – not the making of beautiful things, not the joy of spending living energy in creative work; rather the shameless, merciless driving and over-driving, wasting and draining of the last bit of energy, only to produce heaps and heaps of things, – things ugly, things harmful, things useless, and at the best largely unnecessary.
But this overzealous production of Things, of externalities, of perpetuating inequities that are far-reaching within society are aspects of capitalism and not necessarily markets. And no, this isn’t just a semantic point.
It’s important that when we look at the historical development of marketst, they are impacted by the development of ruling classes seizing markets for themselves and also for those who tend to hold the most capital.
And as you’d imagine these two groups tend to overlap, a lot.
This makes it vitally important to me that advocates of anti-capitalist markets distinguish ourselves from market anarchists who may or may not nebulously support or at least passively dismiss the issues that Hahnel is rightly bringing up. The actual problem with Hahnel’s analysis isn’t the substance but the framing. He sees this as an issue with markets but that’s only because he conflates markets with capitalism.
Hahnel also contends that the argument about markets is that if we leave things to “market processes”that things will run smoothly in an economy. But this argument misses the fact that the “market process” isn’t some unnameable and invisible force.
Contrary to what economists suggest via the “invisible hand”, the “market processes” are actually us. We are market forces. And while it’s true that the outcome and consequences of complex market systems in societies today are hard to map out that doesn’t make them as abstract as both libertarians and leftists like to think.
And yes, I’m not going to let libertarians off of the hook here. They’re one the reasons (along with conservatives, to be fair) why Hahnel is making this argument and using this framework to begin with. We’ve treated market processes as completely impersonal and invisible transactions. But market processes can be incredibly dynamic in how they work along social lines.
As Charles Johnson argues in his article Markets used to be Celebrations:
In classical Athens, the open market, or agora, was famous as a place for conversation, company, and positive human interaction. In medieval Europe, the market fair was a festive occasion, which drew people together from throughout the country.
Markets were seen not just as places to meet the needs of the day; they were places to meet people, places to interact with each other on a positive and mutual footing, and places that were central to the best and happiest experiences of social life, and the most distinctive local institutions, entertainment and culture.
Socrates’ life work was not speaking to people in the assembly, or the temple, or the academy, but in the marketplace.
The “invisible hand” is just the outcome of millions of tiny different day-to-day economic interactions between people. Sometimes those interactions are positive and sometimes they aren’t but either way we can study trends, pool data and do research instead of wholesale condemning markets, as Hahnel would have us do.
Around the 10:00 minute mark Hahnel starts talking about markets providing Pareto outcome and says that:
If there are no externalities, if there’s perfect competition, if there’s perfect knowledge, if all of the markets are in equilibrium.
This quote made me think about the work of Steve Horwitz who has, in turn, cited Israel Kirzner and his book Competition and Entrepreneurship :
What we mean by competition, Kirzner argues, is not the perfectly competitive market of mainstream economics, but instead the process by which people constantly engage their entrepreneurial alertness to see new and better ways of doing things that others have not seen before. Much of his book is devoted to explaining how this Austrian conception of competition as a “discovery procedure” (to use Hayek’s phrase) is more helpful than the very different conceptions of competition and monopoly used by many economists.
Which is just to say there is at least some discussion about how to best portray the markets that libertarians support. Not all of us find the discussion of “perfect knowledge” and “perfect” competition compelling.
And more to the point, I tend to see markets as heading towards but never quite achieving a Pareto outcome. I don’t think there’s any way for markets to be “perfectly” run in any meaningful way, but I do think there are ways to approximate the equality we may want out of market processes.
That being said, Hahnel does somewhat defend the use of these assumptions in the theorem he’s criticizing. He points out that we all make assumptions, assumptions never fully pan out like we want them to and they’re still needed to have assertions.
Hahnel then revises the theorem by including the key words “only if” as in, “only if there are no externalities will we achieve Pareto outcome”. But he also criticizes the theorem (at least implicitly) for saying almost everything about efficiency and nothing about fairness, which for Hahnel is an important part of a just society.
And while it’s true that the theorem doesn’t say anything about fairness does it need to? And are efficiency and fairness necessarily mutually exclusive traits? What does fairness mean? This brief aside raises more questions than answers.
Nevertheless I agree with Hahnel that “efficiency” (whatever that may mean) doesn’t and likely shouldn’t be the only trait of markets that should matter to us.
Lastly, Hahnel briefly mentions 2008 and the US housing crisis as a demarcation of markets failing. But this reference point doesn’t make any sense given that the housing crisis was caused by governments and corporations, not markets acting in free ways.
Are Externalities a Sufficient Argument Against Markets?
One of the big topics Hahnel uses to criticize markets are externalities, which Hahnel illustrates here:
When a buyer and a seller get together and make a decision, a car producer produces a car, a car buyer buys the car, they negotiate a price, we produce the car, we consume the car … but what if there are other people out there who are affected by the decisions they come to? If there are, we call those people external parties and we call the effects on them … external effects.
Hahnel uses this example because it’s easy to see on a macro scale what a potential externality could be: environmental damage. Individually the buyer and seller are only thinking about themselves and their own costs and benefits. And according to mainstream economics this is the rational thing to do.
But this “rational” action on the micro scale becomes a much bigger problem on the aggregate when others start copying these patterns. Then we are faced with issues of pollution and environmental damage. It reminds me of the Kantian idea of considering to ourselves, “what would happen if everyone did this?” and if it’s unworkable then you should at least reconsider.
What are defenders of markets to think about this?
Well first off, the framework presumes individuals only think for themselves but that doesn’t seem plausible given the rise of eco-friendly cars. The widespread adoption and marketing of cars like the Prius seem to point against the idea that market actors will never think outside their own individual good.
But even if they didn’t, as with market failures, people will always be externally affected by the decisions of people. And so it’s the level of which that makes the difference, not the fact that it happens that’s the issue.
For example, we can easily imagine that folks might use social media and community organizing to socially and economically punish a local car dealership which has been shown to contribute to local environmental issues on a notable level. On the other hand, I can understand arguments that it could be difficult for the entire community to be perpetually knowledgeable about these local issues.
But at the same time being knowledgeable about local and economic issues is becoming easier thanks to social media and so community organizing really only takes a handful of people these days. So just having a few people in a community passionate about a given issue can result in a multiplying effect of many more people becoming similarly passionate. Especially through modern technology such as sites like Facebook, Meetup and organizations starting their own sites.
None of which is to say that the issue of externalities within markets when it comes to environmental affair is a simple matter. Nor am I arguing that it’s handled very well right now with corporations profiting off the real concerns of environmental groups. But it at least gives us reason to doubt that externalities can’t be dealt with.
The other problem when we talk about things like green house emissions is that we can’t very well measure out future harms to imagined people, much less develop large scale economic policies based on such unstable prediction models. We can very well say that global warming is real and certain things contribute to this phenomenon but measuring out the particular harms on a global scale and using that as a way to decide justice seems like a model fraught with potential issues.
There’s also the fact that in recent years automated and electric cars have become more and more mainstream. Now, I can’t blame Hahnel for not addressing this since he gave this talk in 2012 where Tesla wasn’t as prominent as they are today.
But either way, it seems like markets (even capitalist markets) can innovate, given enough time, around these externalities. Which bodes well for markets that are rid of the capitalist consequences that Hahnel rightly criticizes.
In addition, I think the economists in question who are using the theorem about optimum outcome and externalities are actually wrong that market processes don’t take into account externalities. It’s true on the individual level but perhaps the collective “invisible hand” level is more up for debate. In any case there are ways for markets to learn, just like people learn and use our mistakes to better operate as I’ve pointed out through eco-friendly cars, electric cars and automated cars.
The rise of automation in cars would particularly affect our gas emissions because wed need far fewer cars than we have now. If every family had an automated car (which is admittedly ways away) then it seems a less necessary to have multiple cars and it also seems likely that highways would be less congested.
A lot of that is speculation, but I don’t think it’s very unlikely that any of that could happen with the rise of automation in the car industry. Which is already happening with popular services like Uber (which I have my criticisms of).
Moving forward, Hahnel comments that perhaps we could discover that the “free market” has made 1% “too many cars” but what does “too many cars” actually mean? And how do we decide this, presumably without markets?
Obviously Hahnel supports Parecon economies but he doesn’t actually offer any compelling alternatives to markets throughout the presentation, which is perhaps the most glaring issue in his talk. I’m aware that he discussed it in other places but since he doesn’t do so here, there’s not much for me to grapple with.
Hahnel thinks that market supporters have a presumption that maybe markets do have externalities but thinks that these externalities are small and mostly unimportant. But it’s worth mentioning that this presumption is mostly floated around by people who don’t actually believe in freed markets but rather some sort of corporate configuration of what we already have. The idea that we don’t have externalities in current marketplaces or that the ones that currently exist are small ignores so much social context that I’m unsure how seriously it should be taken.
All actions have externalities to one extent or another, especially in complex economic systems, whether market run or not and people who support markets should embrace that by also embracing anti-capitalism and anarchism. This way we can embrace both the worst of markets and the best of markets and try to clear a way towards the best of them.
As is most economies aren’t actually controlled by markets, certainly not free ones..
Markets are largely owned by corporations who get large subsidies from governments and who owe their cultural and legal existence to governments in the first place. The relationship between governments and corporations is a synergistic power struggle that ends up being parasitic on society in the forms of taxes and unnecessary price increases, haphazard steps taken to overcome burdensome regulations, inventory mismanagement to keep up with state-capitalism and so on.
And while it’s true (as Hahnel points out) that the American system is a system that externalizes cost on to other that’s not because of something inherent to markets. It’s because the way that capitalism works is. As Chomsky puts it, capitalism is highly adept privatizing the profits and socializing the costs on to the public. And while I agree that this is how capitalism is and has operated that’s not necessarily what markets need to do in order to function efficiently and (dare I say) fairly.
For example, we have farmers markets where people are able to grow their own produce, bring it to the market place and sell and trade it with people who are well aware they have other alternatives still might pay more to support local farmers. Or they might do it for environmentalist reasoning because the farmers don’t use pesticides in their vegetables, etc. Whatever their reasoning may be, we have ways to get around the huge externalities through decentralized market places that rely chiefly on individuals owning their own means of production.
Not by exploiting and subjugating workers, but by being able to be self-reliant and socially productive in some sense. This is what flea markets, farmers markets, cooperatives and things like the really really free market show, that markets can come in many different forms and from many different places.
Around the 26:00 mark, Hahnel discusses a few studies that have taken externalities into calculation and lays out their premises and arguments. I didn’t go over the studies themselves so I won’t contest the claims. But I will say that the figures Hahnel gives don’t tell us much about markets as a process. They really only give us a picture of the harmful effects of current markets, at best.
And when we have multiple options for the forms markets can take, that doesn’t seem like a particularly compelling reason to give up on markets entirely.
Perhaps the most baffling part of this presentation is what Hahnel says soon after:
You want to know why the renewable energy industry is “not competitive” ? Well there’s two reasons: The first is that, well, we don’t actually have free market economy, we actually have a considerable amount of government interference, we have a considerable amount of government welfare programs, actually a lot of corporate welfare programs. (emphasis mine)
If we don’t have actually free markets then what would it look like to have free markets? Doesn’t the fact that we don’t have free markets cut against Hahnel’s points thus far? Honestly, this admission is so baffling that I’m not even sure where to start with regards to how it undermines Hahnel’s case against markets.
Needless to say, at this point (nearly half-way through the presentation) I was beyond flummoxed at Hahnel’s arguments and so I only have a little more to say in terms of his comments on free competition, so let’s get to that and wrap things up.
Free Competition and How to (Not) Get There
A little before the 30:00 minute mark Hahnel tries to use the accurate observation that the trends of current markets are towards less and less competitive markets, not more. And while I don’t dispute this point it’s helpful to ask why is this?
The answer is obvious given what Hahnel just admitted about our lack of free markets. So we tend to get less competitive markets because of the government intervention that was mentioned by Hahnel himself.
And none of that proves that this is what markets must be. One of the biggest problems about Hahnel’s argument is that he does nothing to show that current or historical trends prove that this is all markets can be or have been.
Hahnel asks a logical question about the externalities within current markets: If they’re so large and demanding attention, isn’t there something we can do?
Unfortunately, Hahnel wants to implement policies, for example special kinds of taxes. One such tax he names is a Pigouvian Tax that is supposed to measure the negative externality and then tax it. The market will then incorporate this new data and use it to lead to a more efficient outcome.
But ideas like this raise far more questions than answers: How do we measure externalities in an efficient way? How do governments do this? Is there a history of them doing this successfully? Why would corporations allow this sort of law to be passed? What are the chances of such a policy actually being passed through government?
Hahnel admits that this policy intervention while theoretically correct would be very difficult to pull off given there are so many externalities. I agree with him and would add that the level of information and knowledge one would have to have to make this work is more or less impossible.
Besides that, Hahnel rightly points out that fixing one externality in one market could theoretically just offset another externality, or just create another one. There’s no way to tell how shifting this or that would play out in a market. And here Hahnel is proving why government interventions are generally frowned upon by folks who advocate free markets in a genuine way. At this point he’s almost making my own case for me about why government interventions are a bad idea.
Hahnel goes as far to call this idea a “logistical nightmare” and says that there’s a problem of even knowing how high to put the tax to begin with. Part of the reason why he believes this is that the market gives us no “signals” to determine how high a given tax should or shouldn’t be.
Now, I’m not an economist. Not by trade, profession or even by hobby. So I’m not going to pretend I’m an expert (or even an amateur) when it comes to questions like this. But what I can say is that I’ll presume Hahnel is right about this and treat it as a positive feature of markets. The market can’t determine how much taxes should or shouldn’t impact the economy? Good! I don’t want any taxes anyways.
Hahnel also says that any debate about policies like this would likely be won by those voices with the most amount of political sway. Which makes the idea of reform seem hopeless, luckily we have direct action.
That being said, the next idea Hahnel advocates are anti-trust movements. He wants it so that governments can help one big corporation become 300 smaller ones. This way there’s much more competition within markets.
And while I support more competition within markets, I don’t think the government is the best agency to figure that out. One of the most monopolitic organizations in the world is not likely to know much about how to create free competition among big businesses. And even if they did, what incentives would they have to put ideas like this in process? Rent-seeking and regulatory capture are powerful incentive creating phenomena that would make these decisions much harder to come by, let alone enforce in any meaningful way.
But even assuming we could do this, Hahnel himself points out that these efforts within the scheme of general regulations and new regulatory agencies often fall prey to regulatory capture as I just said. And sometimes regulations end up being crafted by (as Hahnel points out) the folks with the most political connections and thus it disproportionately benefits them.
That’s where the corporate subsidies that Hahnel recognizes come from to begin with!
Counterintuitive as it may seem, sometimes corporations want regulations to be strengthened because it helps people on top who have the economic ability to easily go around them, while the smaller businesses can’t. So it’s often the case that regulations and policy interventions make the economy less competitive, not more.
From 30:00 to 40:00 is 10 minutes of Hahnel undercutting his own proposals at almost every turn. Whether it’s taxes, anti-trust movements or new regulatory agencies or even using public distrust of corporations. The last point is undermined by the fact that corporations tend to have much more time and resources on their side when it comes to fighting regulations than the public has time to actively pay attention to them and to make sure they’re effectively enforced by the government, instead of regulatory capture, etc. getting in the way.
Hahnel says all of this and then immediately undercuts it to lead us to the notion that something “drastic” must happen to improve society. Well, I’m not necessarily against proposals that may be considered “drastic” by some. Let’s hear it.
…He wants to nationalize industries.
Hahnel doesn’t explain why such a move wouldn’t fall prey to any of the previous issues or what effects this would even have on an economy. But I guess at this point, it doesn’t really matter. The Parecon alternative(s) seem to be nothing but progressive hopes and despair with their most “radical” options being hopelessly economically conservative and protectionist.
He does explain that he’d trust “stupid government bureaucrats” over corporate officials due to the perverse incentives that those in the financial industry faces. But he doesn’t explain why those incentives would somehow go away if we nationalized them. Because politicians would be held accountable to their constituents?
How’s that working out for the US right now?
At this point I lost most of my interest in Hahnel’s talk. He starts discussing ideas about “macroeconomic stabilization” and bases it on government intervention during the Great Depression as well as Keynes. But he gives us no compelling reasons why any of these things could pragmatically happen.
I also don’t think we should just assume those things helped the economy. Again, I’m not an economist, but the picture of the Great Depression seems a lot more complicated than the government swooping in and saving the day for the economy.
The rest of the talk focuses around criticizing austerity which I don’t have much to say about and taking ideas like unions, a minimum wage and progressive taxation as checks against the market system. But there’s no substance alongside mentioning any of these tactics, just a claim that “markets hate them!” which sounds more clickbait article than compelling argument.
In addition, Hahnel makes points about income inequality that I don’t have huge issues with, just that he’s doing his usual conflation about the effects of capitalism with the nature of markets. Also, there’s this moment which is easily the highlight.
One point I’ll rest this essay on is Hahnel’s criticisms of “market democracy” which he’s using to shed light on the lack of freedoms we have in market systems. But I’m not so sure that the alternative that he wants, the political market (as I’ll call it), is much better. To argue against this point I return to David Friedman, whose compared the two in his book The Machinery of Freedom:
When a consumer buys a product on the market, he can compare alternative brands. In the case of protection, he can compare how good a job different agencies do and their prices. His information is imperfect, as it is in making most decisions; he may make a mistake. But at least alternatives exist; they are there to be looked at. He can talk with neighbors who patronize different protection agencies, examine the contracts and rates they offer, study figures on the crime rates among their customers.
When you elect a politician, you buy nothing but promises. You may know how one politician ran the country for the past four years, but not how his competitor might have run it.
You can compare 1968 Fords, Chryslers, and Volkswagens, but nobody will ever be able to compare the Nixon administration of 1968 with the Humphrey and Wallace administrations of the same year. It is as if we had only Fords from 1920 to 1928, Chryslers from 1928 to 1936, and then had to decide what firm would make a better car for the next four years. Perhaps an expert automotive engineer could make an educated guess as to whether Ford had used the technology of 1920 to satisfy the demands of 1920 better than Chrysler had used the technology of 1928 to satisfy the demands of 1928. The rest of us might just as well flip a coin. If you throw in Volkswagen or American Motors, which had not made any cars in America but wanted to, the situation becomes still worse. Each of us would have to know every firm intimately in order to have any reasonable basis for deciding which we preferred.
In the same way, in order to judge a politician who has held office, one must consider not only how his administration turned out but the influence of a multitude of relevant factors over which he had no control, ranging from the makeup of Congress to the weather at harvest time. Judging politicians who have not yet held office is still more difficult.
Not only does a consumer have better information than a voter, it is of more use to him.
If I investigate alternative brands of cars or protection, decide which is best for me, and buy it, I get it. If I investigate alternative politicians and vote accordingly, I get what the majority votes for. The chance that my vote will be the deciding factor is negligible.
Imagine buying cars the way we buy governments.
Ten thousand people would get together and agree to vote, each for the car he preferred. Whichever car won, each of the ten thousand would have to buy it. It would not pay any of us to make any serious effort to find out which car was best; whatever I decide, my car is being picked for me by the other members of the group. Under such institutions, the quality of cars would quickly decline.
That is how I must buy products on the political marketplace. I not only cannot compare the alternative products, it would not be worth my while to do so even if I could. This may have something to do with the quality of the goods sold on that market. (p.69)
Hahnel argues against market democracy by citing the lack of access to doctors with indigenous communities in Oklahoma as opposed to the rich in Hollywood. But there’s many many reasons for the current state of affairs that have nothing to do with markets. Imperialism, white supremacy, cultural assimilation aren’t all uniformly products of historical markets but also of historical governments.
And it’s arguable to me that this legacy of interference in the natives way of life accounts for their current lack of access better than the abstract institution of the marketplace. That isn’t to say markets had nothing to do with any of the horrible things I’ve just mentioned, but they also hardly seem central.
I’m also not sure (as Hahnel argues) that markets actually do accurately respond to people’s intensity or desire or even what that would look like or has looked like in practice. What would it mean for a system to so closely operate in relation to people’s wants? I presume Hahnel thinks Parecon is the answer here, but he gives us no reason to consider it as a useful follow up.
It’s true that the folks in Hollywood are richer and therefore have better access in a market, but it’s capitalist markets that specifically privilege these sorts of individuals. Markets aren’t inherently a mechanism whereby those with the most material capital gain the most advantage. It’s played out like that because markets are a particular tool that anyone can grab a hold of and it’s been grabbed by governments who then and privilege capitalists over laborers, the rich over the poor, the feudal lords over the peasants, etc. etc.
But this historical process doesn’t inherently prove markets are always going to lead us to capitalism. And in fact there are many arguments against that proposition. In any case, we can’t say that it’s the case from such weak evidence, given there’s a litany of alternative factors we could just as easily point to.
In the end, what Hahnel advocates as a way towards a better world is state-socialism, whereas I want a form of anarchic socialism to lead the charge against governments, corporations, bureaucracy, hierarchy, centralization, etc.
I’m more inclined to describe myself as an individualist anarchist than an anti-authoritarian socialist or anarchist socialist, but I’m certainly against capitalism and favor much of the analysis Hahnel uses here. I just think it goes to waste on big ideas about government that won’t happen.
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