BC: COOPERATIVISM IN A SUSTAINABLE WORLD
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.The problem I have with articles like this is that they are premised on "capitalism" or "socialism" being the only two possible alternatives for economies to be organized. They are not. Their conclusion - capitalism is bad, therefore socialsim is good - is thus also faulty.
For the record, I am not a fan of EITHER "capitalism" or "socialism". I consider both to be deeply flawed, both in theory and in historical implementation.
My take on "capitalism": Free markets are an elegant mechanism for efficiently allocating scarce private goods (i.e., goods which can be individually consumed and from which other consumers can be excluded)amongst people - IF there are a large number of buyers and sellers with none dominant, and there are no externalities or other market failures. Unfortunately, there are few markets for few private goods where these conditions are met, which means that at least some minimal government regulation (a public good) is necessary. (Something anathama to "capitalist" true believers.) As if that wasn't bad enough, the true believers also claim that capitalism is so wonderful that it should also be allowed to take over ("privatize") all other sectors of economic activity: toll goods, common-pool goods, and even as many public goods as possible. Their vision is for the state to wither away, but not at all as Marx meant it. The problems with such an approach are manifold. The privatizing of toll goods leads to creaming off the most profitable business, and abandonding the rest of the public. The unbridled predation of capitalism on common-pool goods is responsible for Hardin's "Tragedy of the Commons", and inevitably leads to such things as the overexploitation and collapse of oceanic fisheries, for example. We are also witnessing what happens when the public sector is taken over and becomes a subsidiary of capitalist titans. Capitalism, to put it mildly, has huge problems.
So does socialism, unfortunately. It certainly makes abundant sense for governments to be run in the public interest, and to produce and provide needed public goods; this is the one thing they really can do well, if they are managed reasonably well and don't over-reach. If a little government is good, however, that doesn't mean that government control of everything is better; it is not, as we have seen over and over. The central problem with the extension of government into ownership of the means of production in the toll goods, common-pool goods and private goods realms is that this sets up a fundamental conflict of interest. One of the most important public goods that governments provide is to protect the public safety and public interest through its regulatory and police powers. However, when a government is also trying to operate the same thing it is regulating, a conflict of interest is created. Inevitably, the government-owned enterprise is initially operated inefficiently (on behalf of "the people"), and then when it starts to become too much of a drain on the government's coffers, proper regulatory oversight is neglected, endangering the public. That isn't good either.
So are those the only possible alternatives? NO! There is another way, although I don't believe it has ever been tried, and doesn't really even have a name.
What I am suggesting is that the government be confined to operate within its proper sphere: providing public goods. The free market (with regulatory oversight to assure that monopolies or externalities are not allowed to emerge) should be confined to operate within its proper sphere: providing private goods. That leaves toll goods and common-pool goods. Who is to be responsible for these? My suggestion is that these should be publicly-owned, but not government owned. This can be accomplished through some form or another of a cooperative form of organization. In the case of a larger scale enterprise - an urban mass transit system, say, or an electric or water utility - imagine these being run by a board of trustees, directly elected by the public. That last point is very important. If they are appointed by the government, then the government really runs it. It is essential that the enterprise's management be directly elected by the people who are the customers or beneficiaries of the enterprise. By doing this, two distinct feedback loops are established: the ordinary market operations of supply and demand in response to service quality and pricing, and the political operations of voter approval or disapproval for the way the trustees are running the enterprise. This is an elegant solution for the problem of finding the right balance between the needs of providing high quality and low cost service. It also gives some voice to the long-term interests of future generations, presuming that at least some voters have a conscience and are motivated by something more than maximizing their own immediate marginal utility through market transactions.
I don't know what you would call such a system, although I am tempted to call it "cooperativism" - an awkward term, but I've yet to find a better one. I'm not aware of any place that has implemented anything like this on a systematic basis - but they should. I'm also hard pressed to think of a system that would actually perform better in the zero-growth, steady-state, sustainable economy that we are going to have to have in the future.
I would argue that if toll goods and common-pool goods were cooperatively owned and operated, and if governments properly regulated markets to assure that there was no excessive concentration of power or any externalities, you would find that the degree of economic inequality would be considerably less. There just wouldn't be the scope that would allow the few to amass huge fortunes.
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By WNC Observer on TOD .. |
