Stalin, planning and the libertarian critique

arun gswyeiu at
Sat Sep 30 16:38:56 MDT 1995

In the currently fashinable climate of valorizing the market and private
property it is not very surprising to note Chris's comments regarding the
superiority of the market, capitalism, and private property. Yet, even
within the resourcist paradigm that Chris seems to belong to, at least three
issues should haunt the supporters of the market (And I hasten to add that
I'm not saying anything very new here!) The role of power in determining
production and distribution; the impossibility of internalizing all
externalities whatever the system of property rights; and the problems
inperfect information that lead to on the one hand to hidden  information
and action entailed by all intersubjective cooperative agreements
necessitated by large scale production processes, and on the other hand to
uncertain prospects about the future valuation of various unutilized natural
products and resources.

While Chris and many other adherents of the market ethic believe politics
and power to be an infernal nuisances that prevent the selfish instincts of
humans from unleashing the full potential of the productive process, they
fail to recognize that it is indeed power and politics that even make the
capitalist production process possible. Without the state and its attendant
paraphernalia, the market as capitalists know it, will disappear. Without
the state, no perfect competition, sorry. Without power, no protection to
exchange or those who would want to engage in exchange, sorry again.

Externalities arise not just from imperfect institutional arrangements but
also from the intrinsic nature of goods, given a certain stage of
technological development. In other words, more suited to an economistic
bent of mind, some externalities are too costly to internalize through
changes in property rights. Indeed, it is possible to show that under some
conditions, open access to resources is the most efficient form of using
them, not common ownership, let alone private ownership rights.

Finally, as long as hierarchies re necessary to guide the production
process, and unless one wants to wholeheartedly embrace the single
individual model of production, hierarchies are inevitable. Secondly,
information problems will continue to pose problems to would be privatizers
owing to the impossibility of possessing the information necessary to price
various products humans use.

It is too glib, perhaps even unthinking, to suggest that all the problems of
a capitalist economy  flow from the involvement of the state in the exchange

arun agrawal

89 Trumbull Street
Program in Agrarian Studies
Yale University
Box 208300
New Haven CT 06520

Phone 203 432 3216
Fax: 203 432 5036
Email: gswyeiu at

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