A long time ago, David Shemano wrote: > Before I address your points, I want to say this is one of the most fruitful > discussions we have had and perhaps gets closest to what the key issues are > that separate us, explain why I am not a socialist, etc.<
I'm glad to help. It helps me clarify my thinking. me: >>> IMHO, I answered this already, but let's give another answer. The >>> question is about the ability of the "political actors"... >>> to "make better predictions and >>> decisions than the academic economists." I have three points: >>> >>> 1) I can almost guarantee that after the fact, it will turn out that >>> the political actors will often make the wrong decisions, not just for >>> the nation as a whole but even for their own political-economic >>> careers. This is not just because of the incompleteness of >>> information, the uncertainty of the future, the complexity of the >>> reality they face, and their personal incompetence, but also due to >>> old-fashioned venality. David: > Fine. Personally, I doubt incompetence and venality have much to do with it. > I assume most politicians are generally well-intentioned people doing the > best they can..< I'd agree that they're mostly "well-intentioned," but they most often wear ideological blinders. For example, Calvin Coolidge probably _believed_ that "the business of America is business" and that if business prospered it would be the best for the nation and the world. >>> 2) Unfortunately, we have no choice. The interconnectedness of our >>> socioeconomic system makes decision-making for the collectivity (such >>> as the nation as a whole) not only absolutely necessary but also >>> unavoidable: the decision not to do anything is just as much a >>> decision to do something. So even if we see politicians make the >>> ever-fashionable "let business [especially campaign contributors] >>> decide what we should do" decision, it's still a collective decision >>> and (following point 1) most likely to be wrong. David: > Yes, choices have to be made. You say that it is necessary that choices be > made "collectively," which you then equate to "politicial." However, I > think you are making a fundamental assumption by equating collective with > political, which I think goes to the heart of the issue.< There's no generally-accepted definition of "political." Instead of engaging in a fruitless argument about definitions, let's hope that there's general acceptance of the meaning of "dictator" and talk about an example. Suppose that some business wants to pollute the air with toxic chemicals in order to make a profit. These chemicals hurt and indeed shorten the lives of those who breathe the polluted air. Case 1: If that's all that happens, the firm is making a collective decision; it's making a decision for all of us (or as a libertarian friend once said, "trespassing on our lungs"). The firm is acting as a dictator (with respect to this decision), making collective decisions _for_ us. Case 2: A democratically-elected government decides to set up an Environmental Protection Agency and (going against the spirit of the last 8 years or so) decides to enforce anti-pollution laws. Then, if it's doing its job, this EPA would act as a dictator vis-à-vis the polluting firm. (Even with "cap and trade," the EPA would be imposing rules on the polluter.) But it would likely be acting as the dictated party vis-à-vis the voters (though perhaps not very well). A big problem here is that the government could escape democratic control, becoming an independent dictatorial force. There are two obvious responses here (in addition to that of maintaining the _status quo_). One is for people to force the government to submit to their collective will (as advised by independent experts). This would get us back to case 2. The other would be for the firm and its allies to get rid of the damned dictator or find out how to get it to submit to their collective will. This gets us back to case 1. If the status quo is maintained, it's a different case. But I don't see why the government would act as an environmental dictator just for the heck of it. It's more likely to respond to the pressure from the people or business. Most likely, the "dictator" role of the government would involve job security for the EPA bureaucrats. As the history of civil service rules and their absence suggests, that can be a good thing (look at Bush's Department of Justice!) The inefficiency of bureaucracy seems an inevitable cost of doing business (as corporate leaders know, from their experience with their internal hiearchies). Alternatively, the EPA could become a full-scale kleptocracy (though this seems unlikely to me). In that case, it's acting like an unrestrained business firm and so this gets us back to case 1. Case 3: we could go down the Coase route. If they can get beyond all their coughing, wheezing, and degenerative diseases, people have to somehow get together to negotiate with the offending firm to get it to stop the polluting. Suppose they can get beyond those pesky transactions costs and confront the firm. Then following Coase, we could see two results (which he would see as "equally efficient" if I understand him correctly): a) The people get the firm to stop polluting and compensate them for the damages. But then they're acting as a dictator vis-a-vis the firm, stopping it from pursuing its God-given right to maximize profits in an unfettered way. Further, the enforcement of this agreement would require courts, police, etc., again requiring that the firm be dictated to. BTW, IMHO and FWIW, this process would be most efficiently done with the standardized rules and regulation of an EPA, so this case collapses into the second one. This gets us back to case 2. b) The firm gets the people to pay it not to pollute. In this case, the firm is acting as a successful extortionist: if you don't pay us, we'll undermine your health. The firm is again acting as a dictator. This gets us back to case 1. This is most likely to occur if the polluted people can't get it together to negotiate collectively, i.e., if they are divided and ruled. In sum, as long as there are these kinds of non-individualized connections between firms and people (i.e., connections that cannot be reduced to one-on-one bargaining), either the firm, the government, or the people (or some combination) end up as a dictator. If the government is acting as a dictator, it does so either at the behest of the people (case 2), in the name of business (case 1), or for its own profit-seeking purposes. The last is really a version of case 1, since the EPA is acting like a business. me: >>> 3) These conclusions also apply to so-called microeconomic actors such >>> as individual businesses, because they make decisions that affect our >>> collective fate, whether they know it or not. A business follows the >>> profit motive to mine coal and sell it to us to burn. This has a >>> collective impact in encouraging global warming with all its >>> accompanying disasters. Businessfolks are just as much politicians as >>> are the officially-recognized political actors. And in fact, they >>> spend a lot of time and money politicking (e.g., to convince people >>> that clean coal can exist and that it's okay to take the tops off >>> mountains). This is not just due to externalities (such as pollution & >>> mountain destruction) but due to the fact that the work processes they >>> organize involve miniature versions of the coercive state for those >>> people they hire. David: > You prove too much with this thinking. If businessfolks are simply > politicians, you have no good reason to prefer decisionmaking by poliiticans > rather than businessfolks. And you can't beg the question by pointing to > decisions of businesses that have collective effects you don't like, since > you appear to agree that politicians are no more likely to make correct > policy decisions than people in other institutions.< I didn't say that businesscritters were "simply" politicians; rather the point is that they make decisions for not only themselves (and those with whom they make voluntary agreements) but also for "third parties." Thus, they act like the politicians in the government, i.e., dictating to others. In terms of the example above, we can think of two extreme types of politicians: there are those who represent the people (fighting to end the health damage of the pollution) and those who represent the firms interests (fighting to maximize their individual gain). Of course, real-world politicians (of the sort that inhabits both government and business firms) usually represent a mixture of these extremes. >>> Feminists used to say (and still should say) that "the personal is >>> political." We should also say that business is political. Politics is >>> not just something that happens in specific institutions in society >>> (the state) but also something that occurs whenever there exist >>> potential and actual conflicts between people. Except in the totally >>> isolated and individualized lives of the hermits, politics happens in >>> all institutions in society. > Again, you prove too much. If we define every potential and actual conflict > as politics, then effectively everything is politics, and you have no way > explaining why "political" decisions should be made by those in government > institions as opposed to business instituions, family institutions, etc.< Everything involves politics, but everything also involves economics, culture, etc. Sam Bowles and Herb Gintis [a pen-l alumnus] distinguished two dimensions to explain this stuff: there are different kinds of practices (actions) and there are different kinds of sites (institutions). There are political actions in the "economic" site (e.g., as businesses dictate the air quality to the population via pollution or dictate joblessness on the community by shutting down the local plant) just as their are political actions in the family (e.g., mom & pop deciding which movie to go to). There are also economic actions in the "economic" site (e.g., combining ingredients to make a cake) just as in the family. (Sorry, I don't have their book, DEMOCRACY & CAPITALISM here, so I've probably mangled their vocabulary.) >>> Unlike group-think, the _imposition_ of consensus involves hierarchy >>> (as in academia and corporate business). Socialism, at last as I see >>> it, involves democratic rule from below. One wag summarized the nature >>> of socialism as being "the right to fire your boss." This undermines >>> and ultimately destroys the top-down imposition of consensus. >>> >>> With this kind of socialism, we'd likely see a lot of group-think, but >>> not the same kind of top-down imposition of consensus. But once the >>> problem of group-think (among peers) is recognized, however, it turns >>> out that there are democratic ways to oppose it. > Nice theory, no evidence in the real world that it is practical, stable or > produces better decisionmaking measured by any matrix you can come up with. > Ultimately, you are left to defend such socialism (lack of hierarchy, etc.) > as an end in itself, regardless of its consequences.< Put it this way, in terms of ideals to struggle for: I prefer the Rousseauean principle of democratic sovereignty (i.e., that in the end we the people are supposed to be in charge of our collective affairs) to the Lockean principle of property-owner sovereignty (e.g., that somebody's wealth makes them the boss with no obligation to the collectivity). In simple terms, the democratic principle of "one person, one vote" should have precedence over the market principle "one dollar, one vote." Or: just because Mr. X has a lot of money doesn't make him the boss of us. >>> As I said above ..., centralized economic decision-making cannot >>> be avoided when we're talking about an interconnected socioeconomic >>> system. It may easily be wrong and often is so ... The key >>> thing is to hold the political decision-makers (including the >>> businesses) responsible to the populace (the principle of democratic >>> sovereignty). > The fundamental issue. You equate "collective" with "political" with > "centralized." ... < No I don't. The first two are clearly connected: if the actions of an individual impact others, it's part of collective affairs. Most people would see that as political, but as before let's forget that issue. Does political have to be centralized? Not necessarily. A decentralized profit-seeking corporation makes collective decisions for its employees (laying them off, requiring they wear uniforms, etc.) Going the other way, we can point to a collective problem (such as helping people with life-long disabilities in a way that doesn't just shunt them off to "homes" but instead tries to get them involved in society at large as much as possible, even allowing them to become productive). A GOP lawmaker (Frank Lanterman) came up with a decentralized solution (which works pretty well when sufficiently funded): this is California's system of "Regional Centers." (The main problem besides inadequate funding that I've seen has been that different RCs have (often irritating) different interpretations of the standardized rules.) [*] >>> We the people may of course make a lot of mistakes even when we >>> actually have democratic control over the government and other >>> political institutions (including businesses). But we can learn from >>> our mistakes, especially if we don't have politicians (who elevate >>> themselves above us and try to avoid responsibility) to blame. > You have no evidence or theory why actors in political instituions make less > mistakes or learn from their mistakes better than actors in other > institutions.< No, I don't. But in the US at least, those in political institutions are usually held responsible to the people more than those in "private" institutions (firms), even though both make decisions for all of us. >>> It's true however, that I haven't been involved in running a business >>> (except the business of living). I _have_ been an employee and know a >>> thing or two about how businesses are run from that perspective. >>> >>> But your barb reminds me of the standard political hack's claim that >>> his or her opponent has never "made a payroll" or "run a business" -- >>> as if government would be run better if it followed "business >>> principles." ... Bush and Blagojevich have proven that to be a silly >>> and wrong criterion for judging politicians.... > You cannot really understand business and businesspeople until you are an > employer and deal with the reality that people's lives depend on you.< sez you. As I write on students' papers "assertion is not argument or proof." By the way, it should be obvious from the pollution example that I know that our lives depend on business. This is enough pen-l for today. See y'all tomorrow! -- Jim Devine / "Disbelief in magic can force a poor soul into believing in government and business." -- Tom Robbins [*] There's another problem with decentralization, but it's more complicated: instead of there being a standardized system of rules and services for all disorders, only those disorders which affect the interests of powerful folks (Lanterman, the Kennedys) get attention. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
