Wednesday, March 14, 2007

Fed-Ex Socialism

As I noted in a comment at his blog a little while ago Chris Dillow is an advocate of a rather rare form of socialism. Here's my comment:

""This presumption illuminates the distinction between mine and Labour's leftism. Much (not all) Labour policy does regard people as passive objects. Workers need minimum wage and health and safety laws because they're incapable of fighting for decent pay and conditions themselves. They need a nanny state as they can't choose correctly how to live their lives. And workers' control of firms and public sector bodies is not even considered, because workers aren't fit to run organizations.

By contrast, my leftism rests on a view that people are capable of running their own lives."


I'm surprised you didn't have more sympathy for "What's Left"'s prevailing sense of loneliness."


Essentially his vision of the left is rooted in the idea that democratic control of capital by workers will prove more efficient than capitalist control by owners. He sees private equity as an early attempt to grope towards a replacement for inefficient traditional forms of ownership.

Now, the essential question which any economist should be asking at this stage is, if it's more efficient why hasn't it happened already? I presumed that Chris, as a socialist, would answer that workers do not have access to capital and need redistribution to get it, however, this sentence from that post suggested that this wasn't his vision:

"Could it be that capitalism - like feudalism - will die a slow death as thousands of capitalistically-owned firms gradually mutate into ones owned in more efficient - and egalitarian - ways?"


In this new post he makes it clear that he agrees with Tyler Cowen that capital is not the main bar to the wider development of co-operatives and identifies other reasons. These are mostly cognitive biases such as the "myth of leadership", status quo bias or adaptive preferences. I don't think risk aversion is compatible with Dillow's case as if workers genuinely don't want risk and would prefer capitalists take it for them then capitalism may be optimal even if less productive.

There seems some reason to doubt his thesis, as he acknowledges there are already plenty of co-ops about, surely they should undermine the popular assumption that capitalism is the only way; the existence of which seems essential to much of his logic. If people can see Waitrose and law firms demonstrating the efficacy of worker control surely they would not adapt their preferences, for example.

However, if we accept that the current co-ops are too rare to undermine these irrationalities then there is an interesting implication. If co-ops are the central objective of a left-wing economic programme, as Dillow has suggested they should be, and if he expects them to rise to dominance through competition within the liberal economic system then surely politics is relatively unimportant to the advance of socialism? Dillow's logic would seem to be a case for intellectual socialism being more of a management doctrine than a political philosophy.

The right-wing in the US often aspire to Fed-Ex solutions. Their battle to reform the postal service repeatedly failed but, in the end, the results of their failure were overturned by the advance of Fed-Ex and other private carriers. If this is the best path for socialism as well doesn't this mean all the left-wingers who are currently heading off into NGOs, pressure groups and the Labour Party should instead be heading into practical occupations and then leading the charge for the left to outcompete capital? To quietly make obsolete the enemy it failed to destroy politically.

1 comment:

chris said...

You're giving me more attention than I deserve.
In a sense, you're right that my "socialism" is partly a management doctrine. I believe that management (in the sense of hierarchy and leadership) is in many ways inferior to the wisdom of crowds.
The claim that "politics is relatively unimportant to the advance of socialism" is a fascinating one. I agree, if by "politics" you mean parliamentary politics, which is little more than a choice between two different managements.
But politics does have a place, in (at least)two ways:
1. Grown-up political discussion can be a way of encouraging people to think about possibilities and power - issues that party politics tries to cover up. Proper politics can raise consciousness, to use a hippy phrase.
2. There's a strong case for schools and hospitals being run as co-ops; whatever your view of market forces, they don't apply here. Only politics can achieve this transformation.