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"[..] Exchange, as practised by people for about the last 100,000 years [..]" We know that exchange is just one more activity that humans do, but, historically

"[..] Exchange, as practised by people for about the last 100,000 years [..]" We know that exchange is just one more activity that humans do, but, historically, in the thousand of years context, it was not fundamental. We could argue that in the palaeolithic the social organization had little to do with markets. We could argue that in the neolithic, the social organization was, in most cases, hierarchical and top-down. So, the implicit assumption of markets as the 'natural state' of human organization has not real basis. Even money is an invention of the state. The idea that markets are powerful tools don't need to be defended. It's the idea that markets know what is better for us what many reject. It's like saying that we should just start the lawnmower and leave it to decide what to cut. Then, when we don't like the garden, we have to accept it's for the best, because if a better garden was possible is what we would have.

ue_ 10y ago
Markets in the capitalist sense, with people having to sell labour-time for wage in order to survive to a market of bourgeoisie is also a recent invention, a little over 200 years old. There's no reason to think it's the 'natural state' of humanity as some people have said. Edit: Clarified what is being sold.
- drdeca 10y ago
  Can you use words more associated with some other ideological group to describe what you mean by, e.g. "bourgeoisie"? When trying to convince people who are of a differing ideology of something, I think it is often useful to use the terminology they are familiar with, and to use their shiboleths. Speaking to people in the language of their group probably often makes them more willing to take your ideas seriously. Like, you use the term "labor-time", which probably makes perfect sense to the people who already agree with the ideology you are promoting, but for people who don't already agree (who are the people you are presumably talking to), they likely don't already have "labor-time" as a clearly understood concept that they recognize as important. If you want them to recognize the idea of "labor-time", you might have to convince them that it is an important concept.
  - ue_ 10y ago
    I think I can manage to do that, though I don't really want to 'convert' people to any particular ideology, not even the one I subscribe to. I just wanted to comment with my perspective, which is a Marxian-inspired (though not necessarily Marxist) view. >Markets in the capitalist sense, with people having to sell labour-time for wage in order to survive to a market of bourgeoisie is also a recent invention, a little over 200 years old. There's no reason to think it's the 'natural state' of humanity as some people have said. Who are the bourgeoisie? The bourgeoisie are a class of people, the necessary prerequesites are roughly that they firstly own the means of production (i.e capital and land; machinery is of course also included in this), everything required to make commodities aside from the key component of human labour (unless embodied in 'dead labour', as machinery). The second requisite is that they pay for labour time in order to add value to the products that are made. The bourgeoisie are actually a minority, as the majority of people do not employ others nor own capital (they may do one of these two, but their conjunction, which is necessary to be considered bourgeois, is rare). Those who own stock however do not count as bourgeois, as this is 'fictitious capital'; they do not exploit others, though they do benefit from the exploitation. What is labour-time? Labour-time is what a worker has available to sell. It is not labour itself, but rather the capacity to perform labour. For example, a capitalist (i.e a memeber of the bourgeoisie) would purchase a certain amount of sugar. Sugar is measured by the kilogram. In the same way, in order to produce a commodity, say candy for example, he will purchase some labour-time. Labour-time is measured by the hour. He will pay for a certain number of hours. Of course the amount he pays for is also related to the quality. Just as he may pay for poor or good quality sugar, he will pay for poor or good quality labour-time. What are wages? Marx defines them in Wage Labour and Capital as follows: "The exchange value of a commodity estimated in money is called its price. Wages therefore are only a special name for the price of labour-time, and are usually called the price of labour; it is the special name for the price of this peculiar commodity, which has no other repository than human flesh and blood." Workers, the majority of whom must sell their labour-time for a wage (by paying the wage, the capitalist has provided the labourer with a certain amount of meat, of water, of rent etc.) are referred to as the proletariat. They often have very little else to sell other than their productive capacity. Self-employed people may, depending on the situation, be counted as bourgeoisie or proletarians, though there is roughly a 'middle' class of those artisans or self-employed workers who are viewed as bourgeois-in-potential, petit-bourgeoisie. These are not very common, especially in the world where corporations employing economies of scale with many employees (proletarians) can quickly outpace the individual labourer or group of people in an equal partnership (e.g a co-operative). I contend that this division of society is an example of class conflict, initially developed out of violence and coercion. It may be compared to a serf/peasant and a landlord in feudal times. Or even a slave and master in ancient times. It is within the interests of the proletariat to overthrow this system. Why do I refer to a capitalist as 'exploiting' the worker in the exchange of labur-time for wage? For this, look no further than the profit after goods have been sold. If things are traded at equal [exchange] value, the capitalist will end up with some amount of profit. This is the amount left over after accounting for: parts to fix wear and tear of machinery, the object of labour (e.g land and material) and worker's wages. I contend that this profit originates by result of surplus labour. That is, extra labour which is performed on the job by the worker. The worker is not paid for the amount of value he creatos or imbues a product with, he is paid simply by the hour. The value of a product does not become apparent until the very act of exchange, it can only be predicted. In short, I am trying to say that the wages which are given to the worker have no relation whatsoever to the value of the products being made (this value arising out of labour). The amount the worker is paid is only the bare minimum required for the worker to keep working. Too little and the worker stops. Too much and the worker will start to invest and buy his own capital, moving into the class of bourgeoisie. The value which the worker creates is therefore not returned to him in the form of wages. The worker, like a machine or amount of sugar, is used up, exploited. Exploitation isn't a bad term, it refers to using something up for what it is useful for. At the risk of this being an insufficient explanation, I would like to recommend two resources: firstly, "Exploitation of Labour"[0], a chapter written by Itsurou Sakisaka as an introduction to Marx's masterpiece Capital. The second is An Introduction to the Three Volumes of Marx's Capital by Michael Heinrich. For a more general idea, Marx has provided materials in pamphlet form. Wage Labour and Capital is one such document. It can be found at the marxists.org website. I hope this helped clear my opinion up so that others can understand it. [0] https://www.marxists.org/subject/japan/sakisaka/exploitation.htm https://www.marxists.org/subject/japan/sakisaka/exploitation...
- xixi77 10y ago
  You are right, but the arguments above and in Hayek are really relevant for all kinds of markets. PS: it is nice to see an actual Marxist! :) Even though I disagree with them on most things (really just LTV, but you can't really take that one out, can you), they deserve my respect for having an actual theory, and for having genuinely progressive goals. Too much of the left wing is occupied these days by people with muddled, vaguely regressive ideas who have obviously never heard of historical materialism.
  - ue_ 10y ago
    >really just LTV, but you can't really take that one out, can you Marx wasn't a proponent of the LTV, he critiqued previous formulations of it and then made his own contributions to the theory that some aspect of the value of a commodity is determined by the amount of socially-necessary labour time applied to create it. Although I'm still learning myself, I haven't rejected it outright. If I recall correctly, some work conducted by Cockshott showed validity of the LTV as a good indicator for the prices about which changes in supply and demand cause fluctuations of the UK market. I can't find it at the moment though unfortunately. I think it's a real shame that sometimes points I make are downvoted without explanation. I try to be civil, though many people feel the need to downvote and not explain. I'm not going to refer to specific comments I've made, but I'm noticing that even bringing up the theory of exploitation or alienation is enough to gather downvotes. Is HN a libertarian forum? I didn't think so.
    - xixi77 10y ago
      Nope, as a kinda libertarian myself, I don't think this a libertarian forum at all, judging by all the hate for things like sharing economy and such. I think a lot of people (on all sides really) just react to keywords instead of thinking about the content :( And yes labor input determines cost, and in equilibrium cost and value are the same, and would be correlated in the data -- but reasoning from cost imo amounts to putting the carriage before the horse, and leads to all kinds of shenanigans with the "socially necessary" component...
- dragonwriter 10y ago
  > Markets in the capitalist sense, with people having to sell labour-time for wage in order to survive to a market of bourgeoisie is also a recent invention, a little over 200 years old. It's significantly older than that; "capitalism" was described and named by socialists over 250 years ago, but labor markets of the type you describe are much older (the transition from feudal to capitalist economies began several hundred years before "capitalism" was named by its critics.)
  - ue_ 10y ago
    I was under the impression that the large-scale market with massive commodification, worthy of talking about in terms of a distinct class of bourgeoisie as owners of capital was a phenomenon beginning around the mid 18th century. But I think nevertheless my point remains - it is by no means the 'natural' state of humanity (as if being a natural state would be an excuse for such a societal structure anyway).
nickik 10y ago
> So, the implicit assumption of markets as the 'natural state' of human organization has not real basis. I would agree. I don't think such a general statement is valid. > Even money is an invention of the state. This I highly disagree with. I think the evidence is quite clear that money was independently arrived at both by state and by trade. It depends a bit on how you define it, but I think no other conclusion is possible. > It's the idea that markets know what is better for us what many reject. I don't understand who is making that argument.The hole point of Hayek is that you can follow your own goals and as long as you are in a market structure you will be helped in doing so. If with 'us' you mean a state by democratic rule then the matter gets more complicated because its not at all clear that the outcome of the democratic process is a better 'aggregation of wills' then a market process.
- RobertoG 10y ago
  Of course, you are right that it depends on how you define money. Money as debt, that I would argue is the modern conception of money, as opposite to an asset (like cigarettes in a prisoners camp or gold), comes from the state. For examples of this I would recommend the book "Making Money: Coin, Currency, and the Coming of Capitalism" by Christine Desan. Also, accounting (and maybe even numbers and writing!) were invented initially as a way as registering debt in Mesopotamia by what today we would call 'the state' >> It's the idea that markets know what is better for us what many reject. >"I don't understand who is making that argument." I don't understand what you say here. Maybe I misunderstand, but it's not the whole point that markets deliver better solutions for everybody that any kind of central planning? I'm not sure how what I mean for 'us' is difficult to grasp. Human societies?
  - nickik 10y ago
    The modern conception of money is that something is the a good of exchange and a good of account. I would argue both of those have been invented independently both in various decentralized ways and by a state. You can also keep accounts in your head. The concept stays the same if you write it down or not. If the notes you are circulation are IOUs for that good then that does not change the underlying concept. > Maybe I misunderstand, but it's not the whole point that markets deliver better solutions for everybody that any kind of central planning? Markets come about as soon as you have property rights. Property rights come about in many ways (I have other comments in this thread making this point). When you of course go impose a property rights solution on a society then that is of course a form of central planning. So I would say again, you can have both, you can central plan a market, but not all markets are centrally planed.
etqwzutewzu 10y ago
I remember one thing in "Se questo è un uomo" (If This Is a Man) by Primo Levi. In Auschwitz camp, where money, trade and basically private property rights were abolished and where they tried to destroy all what makes people human, Primo Levi mentioned there was always trading. More than that even some informal "stock exchange". Every object (food, cigarettes, shoes, etc) had a price and it was fluctuating based on the laws of supply and demand. This makes me think how exchange is deeply engraved in human nature.
- clydethefrog 10y ago
  This could also be an argument from the opposite side. In a dehumanising place only a market of self-interest survived. People only cared about themselves and would not share any food or other products unless they got something for it.
  - mafribe 10y ago
    This argument suggests that everybody has the same preferences, which is ... a daring assumption. For example sharing your meat with a vegetarian isn't exactly useful.
    - coldtea 10y ago
      Your argument suggests that people could still have the luxury of "preferences" in a setting like Auschwitz, and even exchange stuff that they didn't particularly like. It's not like they served different courses for various tastes there...
      - mafribe 10y ago
        The existence of trade is a strong indication that preference and choice was still available -- for why bother exchanging things otherwise. I suggest reading the R. A. Radford paper that I linked in another answer, it's really fascinating.
- mafribe 10y ago
jasode 10y ago
>Even money is an invention of the state. The existence of money precedes sovereign governments. The only prerequisite for "money" is consumption decoupled from the instantaneous moment of the trade (aka not direct barter) and human memories to keep track of them. That form of "money" has been happening for thousands of years. The prerequisite for "currency" is any item (coins, cigarettes, hotel loyalty points, scrips, etc) that's frequently used as an intermediate store of value to obtain other items. However, a fiat currency requires a modern state to convince citizens to put faith into authorized pieces of paper instead of cattle/tobacco/yams/gold/diamonds/etc. If the citizens lose faith in government-printed money (e.g. Zimbabwe, Germany Weimar Republic), people will fall back on underground "organic money".
- ue_ 10y ago
  > The only prerequisite for "money" is consumption decoupled from the instantaneous moment of the trade This is correct, but I think it is also useful to add that a system with very wide use of money would probably also require wage labour to some extent and from that the commodification of labour. Money becomes more useful the more things are commodified.
- RobertoG 10y ago
  It's probably a question of definition, but if you exchange cattle, tobacco or gold you are not using "money". I would argue that money is an IOU, a promise of something that can be used generally, not only between the two initial parties (that would be a contract). What would be the point of calling 'money' to cattle? "That form of "money" has been happening for thousands of years. " Can you give me some examples? because I have read about it and it seems that it's not the case. At least, not in very relevant contexts. '[..] people will fall back on underground "organic money".' Actually they start using currency of other states. And it's not a "faith" thing, it's related to a real loss of value of the currency caused, in the cases that you mention, for supply shocks in the country (see http://bilbo.economicoutlook.net/blog/?p=3773 http://bilbo.economicoutlook.net/blog/?p=3773 ).
  - sigil 10y ago
    > "That form of "money" has been happening for thousands of years. " > Can you give me some examples? Nick Szabo has a great history of money paper, "Shelling Out: The Origins of Money" with some examples. http://nakamotoinstitute.org/shelling-out/ http://nakamotoinstitute.org/shelling-out/
paganel 10y ago
As a kid I grew up in a country which thought that the "market didn't know best". There were shortages of toilet paper and razor blades. Bread, sugar and edible oil were rationed. It would take another 10-15 years, as I became older and as the regime had collapsed, until I found out that Orwell had predicted the razor-blade shortages in his "1984".
- marcosdumay 10y ago
  Every country thinks that the "market doesn't know best" up to some point. It is that (non-binary) point that should be argued about, not wether that thinking happens or not. If I got your message correctly, you grew up in a communist country. Yes, those are horrible. But unregulated capitalism isn't any good either.
  - paganel 10y ago
    I didn't say that we should have unregulated capitalism, I just want for us not to throw the baby out with the bathwater when discussing about markets. History has proved that markets are indeed better than State control over economy, there's nothing binary about this. Also, look at Lenin's NEP (https://en.wikipedia.org/wiki/New_Economic_Policy https://en.wikipedia.org/wiki/New_Economic_Policy), even the guy that invented modern communism came to realize later in his life that maybe markets are not that bad. That's because Lenin was a pragmatism by definition, not an ideologist.
    - alphonsegaston 10y ago
      Well, Marx himself believed that Capitalism and its markets had to evolve to a sufficiently advanced and truly technical state in order for Communism to be possible. And there was no explicit supposition that markets themselves should be abolished, which he viewed as one of the most creative forces in human history. The problem for the early revolutionaries is that they either ignored or mistook these preconditions, and relied on authoritarianism to try and "hasten history." This obviously didn't work.
clairity 10y ago
"We know that exchange is just one more activity that humans do, but, historically, in the thousand of years context, it was not fundamental. We could argue that in the palaeolithic the social organization had little to do with markets. We could argue that in the neolithic, the social organization was, in most cases, hierarchical and top-down." ~~~~~~~~~~~ you've made a bold statement but somehow eluded an argument. how is exchange (i.e., trade) not a fundamental human activity? two people meet, one has something other wants, and vice versa. what do they do? ignore the situation? scheme about how to steal from the other? fight? or do they trade? even in a hierarchical, pre-historic society, do the two just stare each other down, groping for a way to get what they covet without harm to themselves? i might be wrong here, but might you be mistaking exchange (trade) for markets, and markets for capitalism, in an effort to strike at the underpinnings of capitalistic markets? or am i missing the crux of a valid but hidden argument?

ue_ 10y ago

Markets in the capitalist sense, with people having to sell labour-time for wage in order to survive to a market of bourgeoisie is also a recent invention, a little over 200 years old. There's no reason to think it's the 'natural state' of humanity as some people have said. Edit: Clarified what is being sold.

drdeca 10y ago
Can you use words more associated with some other ideological group to describe what you mean by, e.g. "bourgeoisie"? When trying to convince people who are of a differing ideology of something, I think it is often useful to use the terminology they are familiar with, and to use their shiboleths. Speaking to people in the language of their group probably often makes them more willing to take your ideas seriously. Like, you use the term "labor-time", which probably makes perfect sense to the people who already agree with the ideology you are promoting, but for people who don't already agree (who are the people you are presumably talking to), they likely don't already have "labor-time" as a clearly understood concept that they recognize as important. If you want them to recognize the idea of "labor-time", you might have to convince them that it is an important concept.
- ue_ 10y ago
  I think I can manage to do that, though I don't really want to 'convert' people to any particular ideology, not even the one I subscribe to. I just wanted to comment with my perspective, which is a Marxian-inspired (though not necessarily Marxist) view. >Markets in the capitalist sense, with people having to sell labour-time for wage in order to survive to a market of bourgeoisie is also a recent invention, a little over 200 years old. There's no reason to think it's the 'natural state' of humanity as some people have said. Who are the bourgeoisie? The bourgeoisie are a class of people, the necessary prerequesites are roughly that they firstly own the means of production (i.e capital and land; machinery is of course also included in this), everything required to make commodities aside from the key component of human labour (unless embodied in 'dead labour', as machinery). The second requisite is that they pay for labour time in order to add value to the products that are made. The bourgeoisie are actually a minority, as the majority of people do not employ others nor own capital (they may do one of these two, but their conjunction, which is necessary to be considered bourgeois, is rare). Those who own stock however do not count as bourgeois, as this is 'fictitious capital'; they do not exploit others, though they do benefit from the exploitation. What is labour-time? Labour-time is what a worker has available to sell. It is not labour itself, but rather the capacity to perform labour. For example, a capitalist (i.e a memeber of the bourgeoisie) would purchase a certain amount of sugar. Sugar is measured by the kilogram. In the same way, in order to produce a commodity, say candy for example, he will purchase some labour-time. Labour-time is measured by the hour. He will pay for a certain number of hours. Of course the amount he pays for is also related to the quality. Just as he may pay for poor or good quality sugar, he will pay for poor or good quality labour-time. What are wages? Marx defines them in Wage Labour and Capital as follows: "The exchange value of a commodity estimated in money is called its price. Wages therefore are only a special name for the price of labour-time, and are usually called the price of labour; it is the special name for the price of this peculiar commodity, which has no other repository than human flesh and blood." Workers, the majority of whom must sell their labour-time for a wage (by paying the wage, the capitalist has provided the labourer with a certain amount of meat, of water, of rent etc.) are referred to as the proletariat. They often have very little else to sell other than their productive capacity. Self-employed people may, depending on the situation, be counted as bourgeoisie or proletarians, though there is roughly a 'middle' class of those artisans or self-employed workers who are viewed as bourgeois-in-potential, petit-bourgeoisie. These are not very common, especially in the world where corporations employing economies of scale with many employees (proletarians) can quickly outpace the individual labourer or group of people in an equal partnership (e.g a co-operative). I contend that this division of society is an example of class conflict, initially developed out of violence and coercion. It may be compared to a serf/peasant and a landlord in feudal times. Or even a slave and master in ancient times. It is within the interests of the proletariat to overthrow this system. Why do I refer to a capitalist as 'exploiting' the worker in the exchange of labur-time for wage? For this, look no further than the profit after goods have been sold. If things are traded at equal [exchange] value, the capitalist will end up with some amount of profit. This is the amount left over after accounting for: parts to fix wear and tear of machinery, the object of labour (e.g land and material) and worker's wages. I contend that this profit originates by result of surplus labour. That is, extra labour which is performed on the job by the worker. The worker is not paid for the amount of value he creatos or imbues a product with, he is paid simply by the hour. The value of a product does not become apparent until the very act of exchange, it can only be predicted. In short, I am trying to say that the wages which are given to the worker have no relation whatsoever to the value of the products being made (this value arising out of labour). The amount the worker is paid is only the bare minimum required for the worker to keep working. Too little and the worker stops. Too much and the worker will start to invest and buy his own capital, moving into the class of bourgeoisie. The value which the worker creates is therefore not returned to him in the form of wages. The worker, like a machine or amount of sugar, is used up, exploited. Exploitation isn't a bad term, it refers to using something up for what it is useful for. At the risk of this being an insufficient explanation, I would like to recommend two resources: firstly, "Exploitation of Labour"[0], a chapter written by Itsurou Sakisaka as an introduction to Marx's masterpiece Capital. The second is An Introduction to the Three Volumes of Marx's Capital by Michael Heinrich. For a more general idea, Marx has provided materials in pamphlet form. Wage Labour and Capital is one such document. It can be found at the marxists.org website. I hope this helped clear my opinion up so that others can understand it. [0] https://www.marxists.org/subject/japan/sakisaka/exploitation.htm https://www.marxists.org/subject/japan/sakisaka/exploitation...
xixi77 10y ago
You are right, but the arguments above and in Hayek are really relevant for all kinds of markets. PS: it is nice to see an actual Marxist! :) Even though I disagree with them on most things (really just LTV, but you can't really take that one out, can you), they deserve my respect for having an actual theory, and for having genuinely progressive goals. Too much of the left wing is occupied these days by people with muddled, vaguely regressive ideas who have obviously never heard of historical materialism.
- ue_ 10y ago
  >really just LTV, but you can't really take that one out, can you Marx wasn't a proponent of the LTV, he critiqued previous formulations of it and then made his own contributions to the theory that some aspect of the value of a commodity is determined by the amount of socially-necessary labour time applied to create it. Although I'm still learning myself, I haven't rejected it outright. If I recall correctly, some work conducted by Cockshott showed validity of the LTV as a good indicator for the prices about which changes in supply and demand cause fluctuations of the UK market. I can't find it at the moment though unfortunately. I think it's a real shame that sometimes points I make are downvoted without explanation. I try to be civil, though many people feel the need to downvote and not explain. I'm not going to refer to specific comments I've made, but I'm noticing that even bringing up the theory of exploitation or alienation is enough to gather downvotes. Is HN a libertarian forum? I didn't think so.
  - xixi77 10y ago
    Nope, as a kinda libertarian myself, I don't think this a libertarian forum at all, judging by all the hate for things like sharing economy and such. I think a lot of people (on all sides really) just react to keywords instead of thinking about the content :( And yes labor input determines cost, and in equilibrium cost and value are the same, and would be correlated in the data -- but reasoning from cost imo amounts to putting the carriage before the horse, and leads to all kinds of shenanigans with the "socially necessary" component...
dragonwriter 10y ago
> Markets in the capitalist sense, with people having to sell labour-time for wage in order to survive to a market of bourgeoisie is also a recent invention, a little over 200 years old. It's significantly older than that; "capitalism" was described and named by socialists over 250 years ago, but labor markets of the type you describe are much older (the transition from feudal to capitalist economies began several hundred years before "capitalism" was named by its critics.)
- ue_ 10y ago
  I was under the impression that the large-scale market with massive commodification, worthy of talking about in terms of a distinct class of bourgeoisie as owners of capital was a phenomenon beginning around the mid 18th century. But I think nevertheless my point remains - it is by no means the 'natural' state of humanity (as if being a natural state would be an excuse for such a societal structure anyway).

nickik 10y ago

> So, the implicit assumption of markets as the 'natural state' of human organization has not real basis. I would agree. I don't think such a general statement is valid. > Even money is an invention of the state. This I highly disagree with. I think the evidence is quite clear that money was independently arrived at both by state and by trade. It depends a bit on how you define it, but I think no other conclusion is possible. > It's the idea that markets know what is better for us what many reject. I don't understand who is making that argument.The hole point of Hayek is that you can follow your own goals and as long as you are in a market structure you will be helped in doing so. If with 'us' you mean a state by democratic rule then the matter gets more complicated because its not at all clear that the outcome of the democratic process is a better 'aggregation of wills' then a market process.

RobertoG 10y ago
Of course, you are right that it depends on how you define money. Money as debt, that I would argue is the modern conception of money, as opposite to an asset (like cigarettes in a prisoners camp or gold), comes from the state. For examples of this I would recommend the book "Making Money: Coin, Currency, and the Coming of Capitalism" by Christine Desan. Also, accounting (and maybe even numbers and writing!) were invented initially as a way as registering debt in Mesopotamia by what today we would call 'the state' >> It's the idea that markets know what is better for us what many reject. >"I don't understand who is making that argument." I don't understand what you say here. Maybe I misunderstand, but it's not the whole point that markets deliver better solutions for everybody that any kind of central planning? I'm not sure how what I mean for 'us' is difficult to grasp. Human societies?
- nickik 10y ago
  The modern conception of money is that something is the a good of exchange and a good of account. I would argue both of those have been invented independently both in various decentralized ways and by a state. You can also keep accounts in your head. The concept stays the same if you write it down or not. If the notes you are circulation are IOUs for that good then that does not change the underlying concept. > Maybe I misunderstand, but it's not the whole point that markets deliver better solutions for everybody that any kind of central planning? Markets come about as soon as you have property rights. Property rights come about in many ways (I have other comments in this thread making this point). When you of course go impose a property rights solution on a society then that is of course a form of central planning. So I would say again, you can have both, you can central plan a market, but not all markets are centrally planed.

etqwzutewzu 10y ago

I remember one thing in "Se questo è un uomo" (If This Is a Man) by Primo Levi. In Auschwitz camp, where money, trade and basically private property rights were abolished and where they tried to destroy all what makes people human, Primo Levi mentioned there was always trading. More than that even some informal "stock exchange". Every object (food, cigarettes, shoes, etc) had a price and it was fluctuating based on the laws of supply and demand. This makes me think how exchange is deeply engraved in human nature.

clydethefrog 10y ago
This could also be an argument from the opposite side. In a dehumanising place only a market of self-interest survived. People only cared about themselves and would not share any food or other products unless they got something for it.
- mafribe 10y ago
  This argument suggests that everybody has the same preferences, which is ... a daring assumption. For example sharing your meat with a vegetarian isn't exactly useful.
  - coldtea 10y ago
    Your argument suggests that people could still have the luxury of "preferences" in a setting like Auschwitz, and even exchange stuff that they didn't particularly like. It's not like they served different courses for various tastes there...
    - mafribe 10y ago
      The existence of trade is a strong indication that preference and choice was still available -- for why bother exchanging things otherwise. I suggest reading the R. A. Radford paper that I linked in another answer, it's really fascinating.
mafribe 10y ago

jasode 10y ago

>Even money is an invention of the state. The existence of money precedes sovereign governments. The only prerequisite for "money" is consumption decoupled from the instantaneous moment of the trade (aka not direct barter) and human memories to keep track of them. That form of "money" has been happening for thousands of years. The prerequisite for "currency" is any item (coins, cigarettes, hotel loyalty points, scrips, etc) that's frequently used as an intermediate store of value to obtain other items. However, a fiat currency requires a modern state to convince citizens to put faith into authorized pieces of paper instead of cattle/tobacco/yams/gold/diamonds/etc. If the citizens lose faith in government-printed money (e.g. Zimbabwe, Germany Weimar Republic), people will fall back on underground "organic money".

ue_ 10y ago
> The only prerequisite for "money" is consumption decoupled from the instantaneous moment of the trade This is correct, but I think it is also useful to add that a system with very wide use of money would probably also require wage labour to some extent and from that the commodification of labour. Money becomes more useful the more things are commodified.
RobertoG 10y ago
It's probably a question of definition, but if you exchange cattle, tobacco or gold you are not using "money". I would argue that money is an IOU, a promise of something that can be used generally, not only between the two initial parties (that would be a contract). What would be the point of calling 'money' to cattle? "That form of "money" has been happening for thousands of years. " Can you give me some examples? because I have read about it and it seems that it's not the case. At least, not in very relevant contexts. '[..] people will fall back on underground "organic money".' Actually they start using currency of other states. And it's not a "faith" thing, it's related to a real loss of value of the currency caused, in the cases that you mention, for supply shocks in the country (see http://bilbo.economicoutlook.net/blog/?p=3773 http://bilbo.economicoutlook.net/blog/?p=3773 ).
- sigil 10y ago
  > "That form of "money" has been happening for thousands of years. " > Can you give me some examples? Nick Szabo has a great history of money paper, "Shelling Out: The Origins of Money" with some examples. http://nakamotoinstitute.org/shelling-out/ http://nakamotoinstitute.org/shelling-out/

paganel 10y ago

As a kid I grew up in a country which thought that the "market didn't know best". There were shortages of toilet paper and razor blades. Bread, sugar and edible oil were rationed. It would take another 10-15 years, as I became older and as the regime had collapsed, until I found out that Orwell had predicted the razor-blade shortages in his "1984".

marcosdumay 10y ago
Every country thinks that the "market doesn't know best" up to some point. It is that (non-binary) point that should be argued about, not wether that thinking happens or not. If I got your message correctly, you grew up in a communist country. Yes, those are horrible. But unregulated capitalism isn't any good either.
- paganel 10y ago
  I didn't say that we should have unregulated capitalism, I just want for us not to throw the baby out with the bathwater when discussing about markets. History has proved that markets are indeed better than State control over economy, there's nothing binary about this. Also, look at Lenin's NEP (https://en.wikipedia.org/wiki/New_Economic_Policy https://en.wikipedia.org/wiki/New_Economic_Policy), even the guy that invented modern communism came to realize later in his life that maybe markets are not that bad. That's because Lenin was a pragmatism by definition, not an ideologist.
  - alphonsegaston 10y ago
    Well, Marx himself believed that Capitalism and its markets had to evolve to a sufficiently advanced and truly technical state in order for Communism to be possible. And there was no explicit supposition that markets themselves should be abolished, which he viewed as one of the most creative forces in human history. The problem for the early revolutionaries is that they either ignored or mistook these preconditions, and relied on authoritarianism to try and "hasten history." This obviously didn't work.

clairity 10y ago

"We know that exchange is just one more activity that humans do, but, historically, in the thousand of years context, it was not fundamental. We could argue that in the palaeolithic the social organization had little to do with markets. We could argue that in the neolithic, the social organization was, in most cases, hierarchical and top-down." ~~~~~~~~~~~ you've made a bold statement but somehow eluded an argument. how is exchange (i.e., trade) not a fundamental human activity? two people meet, one has something other wants, and vice versa. what do they do? ignore the situation? scheme about how to steal from the other? fight? or do they trade? even in a hierarchical, pre-historic society, do the two just stare each other down, groping for a way to get what they covet without harm to themselves? i might be wrong here, but might you be mistaking exchange (trade) for markets, and markets for capitalism, in an effort to strike at the underpinnings of capitalistic markets? or am i missing the crux of a valid but hidden argument?