Re: Re: Re: Re: Re: Re: Re: Re: Re: Reparations and capitalist progress.

["Mathew Forstater" <forstate@xxxxxxxx>]

Read Kapp on Social Costs.  He points out that if managers have incentives
to minimize private costs, they will have an incentives to maximize social
costs.  So if managers get pecuniary bonuses or enhanced status in some way
from minimizing internal costs, which can be the case in some institutional
set-ups under state or non-private ownership, don't be surprised if there is
a pollutin or related problems.  Also, read Schumacher on industrialization,
etc.  As Jim D. was getting at, whether private, market oriented or state or
other non-private ownership, the same ideology of progress, modernization,
industrialization will lead to ecological damage, etc.  Hardin himself later
on in an article reconsidering the "Tragedy of the Cmmons" admitted that the
real issue is not what kind of property-- private, commons, etc.-- but how a
resource is managed.  What are the institutional mechanisms mediating
resource use, whatever the form of ownership?  This is the question. mf

-----Original Message-----
From: Jim Devine <jdevine@xxxxxxxxxxxxxxx>
To: pen-l@xxxxxxxxxxxxxxxxxxx <pen-l@xxxxxxxxxxxxxxxxxxx>
Date: Sunday, February 13, 2000 12:58 PM
>Subject: [PEN-L:16404] Re: Re: Re: Re: Re: Re: Re: Re: Reparations and
capitalist progress.


>Brad writes:
>>It is odd, and I do not understand, just why it was that
>>really-existing-socialism was so *lousy* at those parts of economic
>>activity where externalities are rampant and decentralized atomistic
>>decision making works worst.
>>
>>In technological development and in pollution control all of our--at least
>>my--theories predict that a centralized bureaucracy should do a better job
>>than a market in which the key outputs--low pollution, big externalities
>>from other people's innovations--aren't priced. Yet the
>>really-existing-socialist economies fell down most not at the
>>deadweight-loss-triangle-reducing activities of matching marginal private
>>cost to marginal private demand, but in these two essentially collective
>>aspects of economic life.
>
>One problem was that at the time the Stalinist growth process started, the
>image of "development" and "industrialization" basically saw pollution as a
>good sign, a symtom of  "progress" (just as under capitalism until very
>recently). The Stalinist elite rejected the pro-environmentalist types who
>took part in the Leninist phase (that Louis has reported on in pen-l)
>because the goal was _national_ economic development at whatever cost,
>favoring the urban groups that had the most power. Given the poverty of the
>country and the invasions and encirclement by the capitalist powers, one
>can understand this emphasis, though obviously the methods used to attain
>national economic development leave much to be desired.
>
>Eventually, the USSR did much better at the technical innovation side of
>things (based on years of investment in education), but unfortunately most
>of the investment in science was done in the military sector.
>
>>Makes me think we need much better theories of government failure than we
>>have...
>
>Government failure has a lot to do with who the government serves.The US
>government "fails" by allowing the distribution of income to get more and
>more unequal (except for the current cyclical equalization) because it
>reflects the balance of power in politics. The US government "fails" by
>giving free access to public resources like the TV airwaves because it
>serves those with the political power (the networks who have so much
>influence on how the government is described in the news). The US
>government "fails" by wasting billions on "Star Wars" (a.k.a. SDI,
>Ballistic Missile Defense, etc.) because of the power of the
>military-industrial complex. The US government "fails" by bombing Serbia
>because it reflects the balance of geopolitical and economic interests of
>factions of the ruling class, along with the personal interests of some of
>the leaders appointed to make decisions (such as Mad. Allbright).
>
>None of this is failure from the point of view of the interest groups. Some
>of this isn't even failure from the perspective of the ruling class as a
>whole. (The "government failure" of the old Stalinist state of the USSR
>served the interest of the entrenched Party bureaucracy for quite a while.)
>
>It should be noted that all of this is similar to "failure" by markets. The
>market process of globalization, "deregulation," "creative destruction,"
>etc. encourages widening gaps in  the income distribution. The market
>process of TV network competition encourages the rise of the number of ads
>per hour of broadcast (since the "consumers" of TV are the advertising,
>providing the "dollar votes" which drive the process). Star Wars has been
>extremely important to the arms manufacturers, as has the new kind of
>"capital intensive" war that the US has been fighting against smaller
nations.
>
>Market failure and government failure often parallel each other and
>reinforce each other, until people get pissed and fight back.
>(Unfortunately, some of this fight back is by types like Perot, Buchanan,
>and Haider.) Or like with the US Savings & Loan crisis, market failure
>(excessive risk-taking) and government failure (deregulation) reinforce
>each other until the price tag that the government has to pay to preserve
>the stability of the financial system gets too large.
>
>The point is to subordinate both the economy and the state to democratic
>control so that people can collectively make their own mistakes rather than
>having some ruling class make mistakes for them and then impose the costs
>on them while reaping the benefits for themselves.
>
>Jim Devine jdevine@xxxxxxxxxxxxxxx &
>http://clawww.lmu.edu/Faculty/JDevine/JDevine.html