Stalin, planning and the libertarian critique

Chris M. Sciabarra sciabrrc at is2.NYU.EDU
Sat Sep 30 18:54:42 MDT 1995

On Sat, 30 Sep 1995, arun wrote:

> 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.

	My own vision of markets -- and the vision of Austrians as well
-- does not depend upon the "selfish instincts" of human beings to drive
the productive process.  But it does depend upon a voluntarist ethos --
one in which human beings can cooperate in a voluntary manner in
producing and creating.  I do not believe that politics is a nuisance,
and I agree that the history of "capitalism" is replete with state
influences, and that the market as most capitalists have known it up
until now, would be markedly different if it were possible to minimize
the role of the state.
	Oh, and by the way, Austrians do not believe that such notions as
"perfect competition" and "perfect knowledge" are valid.  No markets or
states can guarantee either; what Austrians advocate is freedom of market
entry.  Knowledge as such is never perfect or holistic; it is fragmented,
dispersed, and "imperfect" by its nature, and because of this
fragmentation and dispersal, markets are best at communicating bits of
knowledge and information to market participants who relate this
information best to their own specific contexts.

> 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.

	Yes, and I am aware that externalities are not strictly
institutionally generated.  But currently, there is NO movement toward
redefining property rights arrangements to compel owners to take into
account those costs.  And if the externalities that are being
internalized prove to be too costly -- then maybe we'd be better off
without the development of some resources, until or unless the technology
is available to make their usage more cost-effective and efficient.

> 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
> process. > > arun agrawal > > > >

	Information problems may exist for privatizers, but the knowledge
problem doesn't go away for social planners -- in fact, it is multiplied

					- Chris
Dr. Chris M. Sciabarra, Visiting Scholar, NYU Department of Politics

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