Free market: rights-based or policy-based?

Looking at debates between members of the far left (anti-capitalists) and capitalists over the last couple of years, I have noticed that the arguments advanced by capitalists in favour of the free market seem to fall into two distinct categories.

The first is the category of rights-based arguments, where basically the argument is that humans have the right, for whatever reason, to own, trade and use property, and to contract with any other consenting party on whatever terms and for whatever purpose (property rights and freedom of contract, respectively). These rights may be restricted, but what is essential is that they are there.

The second category of argument is that of policy-based arguments, which basically entails an argument that, for whatever reason, the free market is the most practical and convenient system of exchange, distribution etc. One of the most well-known policy-based arguments is the "incentive" argument; that the free market provides an incentive for people to work hard and improve their lives, whereas communism
doesn't. There are many more such arguments, however.

What I want to discuss is this: which one of these categories captures the essence of the system? Which one is more important? Would a leftist have to effectively debunk both kinds of argument in order to prove his case against capitalism, or is one enough (and which one)?

One thing I have noticed is that advocates of the free market will put forward one of the two kinds of argument mentioned above, and once that is refuted by an opponent the advocate will then attempt to "defend" his original argument by making the other kind of argument. This is not logical, and instead the necessary inference is that the advocate has conceded his first ground of argument.

I'm sure a similar analysis can be made of leftist arguments, but as leftists don't seem to subscribe to any conventional view of rights this may be more difficult.

China is one of the best examples of state control we have at the moment or used to be anyhow but can you imagine them having to control everything without a market of any kind? I'd say there's almost always a mixture of one and another kind you've mentioned above in any economy but I suppose you have to characterise an economy from a broad point of view.

Just having been in Singapore and sniffed the air around there I would imagine from that snippet that that society was almost a Command one but used the free market to get its commanding done if you can imagine what I mean.

Aspects of pre-industrial or pre-20th Century culture exists there still and is tailored for a modern society. They would cook and eat in public restaurants on the street for example, now those public restaurants are all housed in shiny foodhalls. Same idea but a bit more control over hygiene, tax, quality etc.

The free market and capitalism will always exist in large or small pockets in society.

There is no way for any government to effectively control an entire economy and because of that, the market will always play a role in every economy as it is the most effective way of allocating resources to needs and wants. The logic of free-market capitalism allied to a liberal democracy with a well-established rule of law is enduring. The protection of private property is the government's most important task. Without effectively protected private property, the economy, and society with it, will crumble.

Ard-Taoiseach wrote:

There is no way for any government to effectively control an entire economy and because of that, the market will always play a role in every economy as it is the most effective way of allocating resources to needs and wants. The logic of free-market capitalism allied to a liberal democracy with a well-established rule of law is enduring. The protection of private property is the government's most important task. Without effectively protected private property, the economy, and society with it, will crumble.

That's a very bold statement. Back in the days of the feudal system of tenure when land was the basis of social status and relationships then this was clear. But if property rights are still the very basis of society today, it is certainly not as directly evident. With the end of subinfeudation and the subsequent collapse of the feudal land "pyramid", the concept of property rights became more individualist and different individuals' property rights became less dependent on one another. The rise of the free market cemented this fact. I'm not sure if it can still be said that property rights are still the underlying basis of society. There is more to be said on this topic but I've thought enough for today I think.

Ard-Taoiseach wrote:

There is no way for any government to effectively control an entire economy and because of that, the market will always play a role in every economy as it is the most effective way of allocating resources to needs and wants. The logic of free-market capitalism allied to a liberal democracy with a well-established rule of law is enduring. The protection of private property is the government's most important task. Without effectively protected private property, the economy, and society with it, will crumble.

I agree with counterclockwise, that's bold, way too bold!
It sounds very much like the end of history argument....in a universe with Boltzmann brains the market's imperviousness is a petty thing.

As any student of history and imperalism under capitalism would find, the liberal democracy cant is long redundant but even today the most successful proponent of capitalism is the authoritarian Chinese model. Likewise with the neoliberals and Freidmanites wet-dream having to be enforced under Pinochet and similar gaps in democracy being a requirement to shore it up elsewhere...one could go on to the dichotomy between our 'democratic' (or polyarchical) states and the market.

But then again there are alternatives to to the market* which are not top down and in many ways mimic the bottom up nature without the bad side effects. Meanwhile within capitalist economies democracy in alliance with technology will continue to grow to outstrip the quaint everyday brutalities of the market place.

* here's just one.

http://en.wikipedia.org/wiki/Parecon

Quote :

Participatory economics, often abbreviated parecon, is a proposed economic system that uses participatory decision making as an economic mechanism to guide the production, consumption and allocation of resources in a given society. Proposed as an alternative to contemporary capitalist market economies and also an alternative to centrally planned socialism or coordinatorism, it is described as "an anarchistic economic vision",^[1]
and it could be considered a form of socialism as under parecon, the
means of production are owned by the workers. It emerged from the work
of activist and political theorist Michael Albert and of radical economist Robin Hahnel, beginning in the 1980s and 1990s.

The underlying values that parecon seeks to implement are equity, solidarity, diversity, workers' self-management
and efficiency. (Efficiency here means accomplishing goals without
wasting valued assets.) It proposes to attain these ends mainly through
the following principles and institutions:

• workers' and consumers' councils utilizing self-managerial methods for decision making,
  
• balanced job complexes,
  
• remuneration according to effort and sacrifice, and
  
• participatory planning.
  

Albert and Hahnel stress that parecon is only meant to address an alternative economic theory and must be accompanied by equally important alternative visions in the fields of politics, culture and kinship. The authors have also discussed elements of anarchism in the field of politics, polyculturalism in the field of culture, and feminism
in the field of family and gender relations as being possible
foundations for future alternative visions in these other spheres of
society. Stephen R. Shalom has begun work on a participatory political vision he calls "parpolity"......

http://www.zcommunications.org/znet/topics/parecon
http://www.zcommunications.org/zparecon/zpareconfaq.htm

(Also note that a Parecon is 'incentive compatible', which means it is designed to
accommodate individualistic or selfish people)

Pax

Could you say what happens in the Parecon framework if you find you are working for someone who is an asshole? I wonder how much the free market is also based on and driven by the less than positive incentives of fear and threat towards workers by management ? It's obviously not the acceptable or tolerable thing to do - menace or bully employees - but it happens aplenty in the current system and we pass it off as a fact of life. Sometimes its not visible but is implicit.

On the flip side to that, what happens with employees who are taking the piss ? How do you assess "remuneration according to effort and sacrifice". There are some examples of real live businesses run on that theme and it would be interesting to explore that more. Perhaps by seeing interviews with employees, managers and customers.

Auditor #9 wrote:

Pax

Could you say what happens in the Parecon framework if you find you are working for someone who is an asshole?

Well you wouldn't reallly be working for someone in a Parecon, you'd be working in an enterprise or workplace and as a worker you'd be a member of a workers' council.

However in the scenario of not liking an asshole of a colleague then actually ParEcon: Life After Capitalism has a section which 'deals' with this. ( http://www.zcommunications.org/zparecon/zpareconfaq.htm scroll down to Some Related Books or
http://www.zcommunications.org/zparecon/pareconlac.htm )
'Deals with it', as in not blueprinting but giving one of many obvious options that would also be available today.

For instance in a Parecon, you could set up an enterprise yourself or just apply to work somewhere else.

Auditor #9 wrote:

I wonder how much the free market is also based on and driven by the less than positive incentives of fear and threat towards workers by management ? It's obviously not the acceptable or tolerable thing to do - menace or bully employees - but it happens aplenty in the current system and we pass it off as a fact of life. Sometimes its not visible but is implicit.

On the flip side to that, what happens with employees who are taking the piss ? How do you assess "remuneration according to effort and sacrifice". There are some examples of real live businesses run on that theme and it would be interesting to explore that more. Perhaps by seeing interviews with employees, managers and customers.

Yes well I think it's worth remembering that such managerial incentives existed in the Soviet Union, and also within public enterprise socialist market economies such as Yugoslavia. Parecon would call it co-ordinatorism.
A tiny proportion of the population are co-ordinators who do largely empowering tasks and have their own class interests and then you have a smaller proportion, the capitalists. A Parecon does away with the need for both groups.

However most research I've seen on the subject suggests team working of a self-directed nature is more efficient and fulfilling (polls of people seem to find people have a desire for more selfmanagement in their workplaces) than alienating directed work from above.

The thing is, if we are to say this self-directed team management is a new technology or technique, then you'll find within a marketplace, employers will be loathe to use it despite it's increased efficiencies. Why? Well it improves solidarity within the workforce which is bad for profits.

As regards employees taking the piss. Well again LAC goes into this in great detail and the more academic, "The Political Economy of Participatory Economics" - by Michael Albert and Robin Hahnel ( http://www.zcommunications.org/zparecon/pepe.htm ) includes a chapter with a mathematical model of a Parecon which highlights its efficiencies over market or centrally planned models. However in a co-ordinated model, the manager can very easily have the wool pulled over his eyes.

I'm sure we are all aware of that, where a work shy worker butters up management while getting away with doing not a lot at all!
The thing is you can only be watched so much by management, the most efficient and effective mechanism is also the most fair, i.e your fellow workers. Outside of the incentives to work and natural inclination to work, your colleagues will ensure that people pull their weight.

One aside though is that if a temporary 'leader' is needed for a task then they can be appointed and rotation could be used. Basically the system is designed to prevent power getting accumulated into a co-ordinator class like in capitalism or centrally planned state-capitalism as in the Soviet Union.

The Vancouver Parecon Collective deals with this below.

http://vanparecon.resist.ca/pareconorganizing.html

Quote :

BS: Please describe the group's structure. Are there leaders? How do meetings work? Do you use a simple majority vote or consensus? Are roles rotational or set?

CS: We operate as a collective. We try to balance and share responsibilities as best we can. But we're all volunteers. People in the collective have friend, family, school and work commitments, as well as personal and social lives and commitments to other groups. Sustaining our efforts for successful long-term social change demands that we respect those commitments. Sometimes this means that some of us are busy, sometimes for extended periods of time, and others need to take a more active role doing more work than others, but I wouldn't say that there's a leader or leaders. But I do think that there are two dimensions to this issue. One, our ability to collectively and equitably self-manage our own activities is born from the benefits or losses produced and reproduced through capitalisms class segregation. Some of us have had experience, education or work that sometimes enables better participation in the process of organizing for a parecon, i.e. better meeting, social or technical skills. These skills and the opportunity to acquire them need to be balanced. This leads us to the second layer of it; we have to self-consciously and patiently make efforts to balance all these inequities, to counter capitalisms institutional pressures to carry out the hierarchical roles and relationships of coordinators and subordinates. This means that we need to identify which tasks are empowering and which are disempowering and what the burdens and benefits of all those tasks are. We've been doing this on the fly for some time and being patient while chasing this goal. But, as mentioned earlier, we're having a retreat to address this question specifically. We'll be reviewing all our activities, looking at the empowering and disempowering roles and tasks and seeking to balance them out among our collective.

For the actual nuts and bolts of our organizing, we have regular meetings once a month and rotate the responsibilities of "meeting chair/facilitator", minute taker, agenda preparation, etc. At these meetings we discuss and allocate tasks such as handling correspondence, writing essays, book reviews and conducting interviews, organizing info tables, speaking at forums, web design and maintenance, up keep, etc. If whatever we're working on, say talks or interviews for example, demand that we meet throughout the month, we meet as much as necessary.

As to our decision making procedures and practices, I think we operate informally on consensus a lot of the time. There are a couple of on going debates that may come to head in the future in which we may have to choose which decision making procedure to use. Do we use, consensus, one person one vote majority rule i.e. 50 + 1, or do we set the voting threshold higher say to %75 because the outcome of the vote is a key defining decision for our group? Is it possible that we won't all be affected the same way for these decisions and so give some in the collective more say than others? Really, in the past couple years, we've yet to dig our teeth into these processes. We're a very young group and are still figuring out the best way to do these things and what works best for us.

Thanks for going to the trouble with all the info Pax. I'll try to study it but it'd be interesting to dialogue it out of you i.e. laziness. So management as we know it gets changed in this sort of system and a lot of issues are avoided because of the mechanisms set up to support the industry ?

Is the CLR or wikipedia for example run like a Parecon outfit and if not, could it be ?

Auditor #9 wrote:

Thanks for going to the trouble with all the info Pax. I'll try to study it but it'd be interesting to dialogue it out of you i.e. laziness. So management as we know it gets changed in this sort of system and a lot of issues are avoided because of the mechanisms set up to support the industry ?

The institutions of the economy prevent a managerial class from emerging.

Auditor #9 wrote:

Is the CLR or wikipedia for example run like a Parecon outfit and if not, could it be ?

I haven't a clue how CLR is run you'd need to ask WBS.

I'm not an expert on Wikipedia, but it certainly encourages participation and the admins are meant to only be 'janitors' but Jimmy Wales's preeminence (and an early but aborted attempt at advertising ( http://en.wikipedia.org/wiki/Enciclopedia_Libre )) means it couldn't be called a parecon, pareconish maybe!