Capitalism does not need property rights.
I disagree.
You're out of step with what is argued in academic circles.
Capitalism can work without property rights on a small scale in which information about market participants is readily available.
Are you arguing against your contention?
This is one way in which the tragedy of the commons can be overcome without private property. Robert Ellickson describes social norms among ranchers evolving to facilitate trade, negotiation, adjudication, etc in spite of the law.
Is it still capitalism? No. Capitalism avails actions as individuals independently of the actions of other individuals. Arrangements between individuals for transactional purposes doesn't entail capitalism per se. Capitalism is individual risk taking for gain without cooperation. To the extent one has cooperation with other individuals, to that extent capitalism is lessened, or anti-capitalism, socialism, is enhanced. You have to understand the very abstract and general concept in the nouns I used above. I know you won't do that, but I can try to warn you. For example, a corporation is an individual.
But in a sufficiently complex economy of millions (and in the future, billions) of participants, information is hard to come by.
True, but that has to do with education and the world wide tendency to invent myth based on emotion or superficial evaluation. It was said, by none other than Samuelson, that the stock market predicted, discounted, nine out of the last five recessions.
Thus, legally recognized property rights and enforceable contracts become important to keep widening the sphere of market influence.
Nothing has been said about the degree of efficiency available in the forms of capitalism. In stability, the pure form is most efficient. In instability, like in war, the command form is more more efficient. According to John Gill, the Nazis were the most efficient society the world ever knew. They got things done. That includes the form of capitalism Germany maintained during the period of Hitler.
In the words of F. A. Hayek,
From the first establishment of trade which served reciprocal but not common purposes, a process has been going on for millennia which, by making rules of conduct independent of the particular purposes of those concerned, made it possible to extend these rules to ever wider circles of undetermined persons and eventually might make possible a universal peaceful order of the world.
I could hardly disagree since he was my teacher. He points out what has been stated earlier in this thread. The rule of law brings about an environment that stimulates economy and stimulated economy reinforces rule of law. The question becomes what happens when external forces change economy or rule of law? Does capitalism itself change? The core tenets don't change but the form does.
Social norms provide these "rules" on a small scale among neighbors; laws are necessary to provide them on a large scale among strangers.
What I'm trying to convey is that a society can be almost lawless and still capitalism will work. It can't be completely lawless because then the society self destructs so there are no people left. Further, social norms don't actually provide the rules. The rules come from the past like from Hammurabi, the Ten Commandments, etc., that stopped prevailing "social norms" which were destructive to individuals and society. Social norms are just that, norms for people to interact socially. Commerce is independent of social considerations, i.e., how people structure superfluous interaction. You don't need ever talk to anyone to survive. |
