Re: Mixed economy??? - Was: Gintis:TINA 94 05:54:04 am

[Herbert Gintis <gintis@xxxxxxxxxxxxxxx>]

Trond says:

>Now what IS a "mixed economy"??

	I mean an economy with both a strong competitive market sector
and a strong interventionist state in a democratic political system.

>As I see it this term is used for two different purposes:
>
>1) To describe a non-bureaucratic humane and grassroots-controlled
>   market economy (more on this below). That is Gintis' purpose, no?

	No. I do not mean this at all. I mean what is out there in the
real world--a bureaucratic state, market economy, democratic political
system.

2) As a positive-sounding whitewash term for modern capitalism,
>   frequently used by right-wing social democrats to pacify voters alarmed
>   by the steady march to the right of the party leadership.

	The voters are the ones making the 'march to the right' the
only viable option for any party that wants to stay in power, Trond!
Moreover, social democracy is practically a thing of the past, Trond.
We may mourn its passing if we want, but we gotta move on! We gotta
find out why it's dying, correct its errors, and move on.

>Now to what we SHOULD mean by the term "mixed economy", if it is intended
>as a positive term. I believe the following points should be important
>for such a society:
>
>-	Goods and services distributed mainly via the market, but
>-	Publicly financed health, education, pensions etc.

	Thank you, Trond!

>-	Employee ownership/control of plants and businesses (the Mondragon
>	model?). Cooperative agreements between businesses encouraged, large
>	scale corporations discouraged. Small is beautiful.

	There are severe technical problems, having to do with risk-bearing
	and the institutions that allocate capital, with employee owner-
	ship. Sam Bowles and I have been working on this for several years
	now, as have Bob Rowthorth, Hugo Pagano, Louis Putterman, Avner
	Ben-Ner, and others. The viability of worker ownership depends on
	the capital intensity of the industry. We need MANY COMPETENT
	ECONOMISTS working in this area to help work out these problems,
	and we need popular movements dedicated to implementing
	small-scale alternatives.

>-	Direct democracy to a large extent (here we have something to learn
>	from the Swiss). Extensive use of computer networks here. Education
>	for active participation in society paramount.
>	
	I think there are terrible flaws in direct democracy, the most
	important being the inability to form reasonable coalitions of
	groups with diverse needs, and the lack of expertize of voters
	(all voters--you and me included). I think we need a better
	system of electoral accountability--I am working on this issue
	now, at least a little bit (since I have to give a paper on the
	subject in January...).

>-	Where direct democracy is not practicable, privileges and high wages to
>	representatives should be banned.

	This is the opposite of the case, I believe. Representatives
	should be rewarded for doing well and punished (by losing
	office) for doing poorly. This means paying them well with the
	threat of nonrenewal (we call this 'labor market discipline through
	contingent renewal).

>-	Non-commercial mass media, controlled by the public, not by the
>	advertisers.

	Could you tell me why you would like this? I am certain people
	would never vote for it. Controlled by the public? How? What
	is wrong with the current system? I know in France and England,
	before they had commercial radio and television, the fare was
	pathetic. I could conceive of an alternative to advertizing
	(I don't know what it is), but not of competition on the basis
	of viewer/listener support.

>-       Strong consumer, anti-monopolist and environmental protection
>	in the form of NGOs but also state-sponsored agencies.

	Yes.

>-	Strong restrictions on cross-border capital flows. Some restrictions
>	on free trade. Democracy without control over cross-border capital
>	flows is simply impossible.
>
	I am not sure how important this is. Jerry Epstein and I have argued
	that it's not very important--we have an empirical article coming
	out in Review of International Political Economy next year, and
	there is a chapter on our forthcoming edited volume (Macroeconomic
	Policy after the Conservative Era--Camb. U. Press, 1995). But it's
	not a critical issue one way or the other.

	So in short, Trond, I suspect that we have few substantive
disagreements, despite the whirlwind of words....

Herb gintis@xxxxxxxxxxxxxxx