Sunday, July 29, 2018

Socialist economics part 1

On further reflection, I want to push back on Frederik deBoer's conception of socialism. deBoer is, of course, free to define these terms as he pleases: I don't claim he is mistaken, since there really isn't a matter of fact at stake; instead, I claim there are more useful definitions of socialism. deBoer's defines socialism thus:
The term “socialism” refers to an economic system in which human goods are removed from the market mechanism and currency exchange and are instead distributed based on need. To socialize an industry means to remove its products (whether medicine, education, housing, etc) from the market model and instead establish some means through which need is assessed and filled without the expectation of reciprocity. Socialism does not change who pays for necessary social services but replaces the very system of exchanging currency for goods entirely. A socialist viewpoint recognizes the impossibility of moral reform from within capitalism. [emphasis added]

The biggest problem is that this definition is vague. First, what is "need"? Do I need anything other than a mud hut, rice and beans, a straw mattress and blanket, a tunic and trousers? Yes, I probably do need more, but although I live frugally, I have a lot of stuff I definitely do not need, and I like having that stuff, and I don't want to give it up. So what do we do about the stuff we don't need but just want? And what precisely are the "some means" to allocate stuff? And what precisely are the "market mechanism" and "currency exchange"? I'm an economist, and I've read my share of Marx, but I don't fully understand either of these terms.

Second, deBoer does not tell us why we would want to replace the "very system of exchanging currency for goods." deBoer seems to imply that this "very system" is what's wrong with capitalism: that if we just replaced this very system with just about anything else (so long as there's no "expectation of reciprocity"), we would fix the problem that is capitalism.

And what about reciprocity? Marx does not abandon reciprocity even in his thousand year goal, "From each according to his ability, to each according to his need." I suspect that deBoer means some sort of direct, immediate and personalized reciprocity (if you don't pay full price up front, you don't get medical treatment), but the issue of reciprocity remains important.

Of course, it would definitely be nice if there were enough stuff that any reasonable empathetic adult could just take whatever they wanted, but if that were the case, we would have no need of any means at all to assess need. And if we restrict socialism to just the provision of needs rather than wants, however socially determined, then why would social democracy, a.k.a. welfare capitalism, not be sufficiently socialist?

I do not think that the system of exchanging currency for goods in itself is per of a problem, much less the fundamental problem of capitalism. So long there are not enough goods for everyone to simply take whatever they want, we have to use numbers to allocate production and consumption, and "currency" literally is nothing but numbers, numbers used to allocate production and consumption. Unless you advocate abandoning using arithmetic in the production and allocation of goods, you have currency.

It's easy to read Marx's charge that capitalism reduces all social relations to the cash nexus as a condemnation of cash. However, I read Marx differently: the key phrase is "reduces all social relations". The problem is not the "market" (another unacceptably vague term), the problem is the totalitarianism of the market. The problem is not that I must somehow exchange currency for stuff, the problem is first that at the limit, I have to dedicate every waking moment, I have to dedicate every choice, to obtaining and managing currency. And, of course, the second problem is the terms of obtaining that currency: Most people have to rent their humanity to the bosses to have enough currency just to live. It's not the currency that matters, but how currency is used as a means of domination and control.

Even as the most basic "ground floor" definition, I think we need more than deBoer's economic definition of socialism. Stay tuned for part 2, where I offer what I think will be a more useful definition.

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