5 ms·

Part of the mythology of western capitalism (as it is practiced) is that it's 100% market based. But as you've noticed, it's actually a whole bunch of centrally

by cstross 16y ago

Part of the mythology of western capitalism (as it is practiced) is that it's 100% market based. But as you've noticed, it's actually a whole bunch of centrally planned hierarchical petty dictatorships bumping and grinding like boulders in a sea of small businesses like sand grains. Sometimes one of the small businesses will swell up and become a boulder, and sometimes a boulder will crumble. The main advantages of the market seems to be that failure is usually localized and containable -- although we came frighteningly close to a widespread meltdown in 2008 -- and, arguably, markets are better at promoting information flow and responding to new demands (although I suspect the growth of IP law and the existence of trade secrets counteract this to some extent). But it's worth noting that the mean life expectancy of a publicly quoted corporation is around 30 years -- and the USSR made it through just over seven decades.

iwr 16y ago
The difference is that companies are voluntary associations of individuals. A government is a monopoly of force and justice; it can exert its authority even on those that have not explicitly (via a free contract) agreed to it.
- cstross 16y ago
  Today that may be so; but prior to 1914 it was possible to move around anywhere in Europe (including the UK -- excluding the Russian Empire) without a passport or identity documents, and pretty much legal to settle anywhere. While the cost and difficulty of moving back then was greater than it is today, states had very porous borders and it was practical to vote with your feet (as in fact my grandparents did). The first world war put an end to the old order and made nationality non-discretionary -- and we're still dealing with the fallout today (as witness the permanent floating founder visas thread on HN).
  - arethuza 16y ago
    I remember that from the start of Niall Ferguson's The War of the World - in 1913 the world looked quite a bit like it does today (at least from a "globalization" perspective).
- JabavuAdams 16y ago
  Free contracts are a fiction. Everyone has obligations that tend to reduce their freedom. The ones who think they don't are called psychopaths. In personal development, an early stage is to understand that you can be independent. E.g. you can choose how to act and how to react to the outside world. A higher level of development is to realize that we're inter-dependent. No man is an island. There will always be constraints on our options. I don't like it, but I'm getting used to it. There is no absolute freedom, and there are no truly free contracts.
berntb 16y ago
Creative destruction, as in the Austrian school, should be a major factor. Think evolution of organizations, economically inefficient ones die. People learn (in the Lamarckian way, too) what works best at the present time. Also... To quote an argument from your blog, there are many tens of millions of people needed to keep our civilization working efficiently (some specialized jobs might only have a few dozen practitioners, according to you). And to keep up with research and new methods, in every decade a large percentage of all those jobs will be totally different. Centrally planned system just can't touch that -- they can't even avoid traffic jams with a few million cars! (And those cars aren't [yet] genetically and culturally programmed to optimize their behavior individually and in groups.. and change a lot culturally every generation.) Own petard, etc. :-) Edit: A bit clearer, hopefully. Non-native language.
elblanco 16y ago
If you look at global markets the same way, the fall of the Soviet Union was also remarkably localized, it's just that the Union and its Satellite states covered so much of the planet.
- JabavuAdams 16y ago
  At that scale, this starts to be an abuse of the word "localized". If you look at anything from far enough away it seems insignificant. Scale matters. Most of the time when companies in a market system collapse, very few people starve or die.
ramanujan 16y ago
But cstross, the Soviet Union shot you and your family in the back of the head if you tried to leave! And there were entire agencies devoted to getting persecuted minorities out of the USSR, including Sergey Brin's parents. It is not exactly comparable to what happens when you leave a company (the occasional Ballmer chair throwing fit notwithstanding).
- face 16y ago
  The Soviet Union shot you and your family if you tried to leave? Huh, that didn't happen to me or my family. Or any other person I know. I guess it's popular to spout bullshit like that though.
  - ramanujan 16y ago
    Your family might have been part of the nomenklatura. But it is pretty indisputable that they gunned down Soviet Bloc defectors trying to escape. The Soviet Union was a prison state. http://en.wikipedia.org/wiki/List_of_Soviet_and_Eastern_Bloc_defectors http://en.wikipedia.org/wiki/List_of_Soviet_and_Eastern_Bloc... Soon after the formation of the Soviet Union, emigration restrictions were put in place to keep citizens from leaving the various countries of the Soviet Socialist Republics,[1] though some defections still occurred. During and after World War II, similar restrictions were put in place in non-Soviet countries of the Eastern Bloc,[2] which consisted of the Communist states of Eastern Europe.[3][4] http://www.nytimes.com/2010/06/18/opinion/18beckerman.html http://www.nytimes.com/2010/06/18/opinion/18beckerman.html Most in the group were pessimistic about their chances — but none more than Mr. Mendelevich. He felt sure they would get caught, but to his mind, a group suicide was preferable to a life of waiting for an exit visa that would never arrive. Even a botched attempt, he figured, would at least attract the eyes of the world. Early the next day, as the plotters walked onto the tarmac, they were, indeed, caught. The K.G.B. had known of their plan for months. And the two leaders were later sentenced to death. But Mr. Mendelevich was also right that their desperate act would make their demand for free emigration impossible to ignore. Now largely forgotten, this planned hijacking, and the Soviet government’s overreaction to it, opened the first significant rip in the Iron Curtain, one through which hundreds of thousands would eventually flee. With great drama, it undermined Communist orthodoxy. After all, if the Bolsheviks had built the perfect society, why would any well-adjusted citizens want to leave, let alone risk their lives to do so? The essential weakness of the Soviet Union was exposed: to survive, the regime had to imprison its own population. This would be the beginning of the end. Jews were understandably at the forefront of the emigration battle. Even as they were forbidden to exercise any kind of Jewish identity, they also had no option to assimilate in Soviet society. Their internal passports were stamped “Jew,” a word that three generations after the 1917 revolution signified little more than their status as outsiders. Many had come to feel that their existence inside the Soviet Union was untenable, that the only way to escape this paradox was to move away. But the doors were firmly shut; those who requested permission to leave were refused and then ostracized. The push to emigrate, which had begun in the early 1960s as an underground movement, had grown by 1970 into an open campaign. Letters to the United Nations were signed by hundreds of Soviet Jews. Only a few months before the hijacking attempt, the Kremlin had called for a public relations counteroffensive that would paint Zionism as “a vanguard of imperialism.” A large press conference was arranged with “acceptable” Jews, including the prima ballerina Maya Plisetskaya and the comedian Arkady Raikin, vowing loyalty to the Soviet Union and denouncing Zionism as expressing “the chauvinistic views and racist ravings of the Jewish bourgeoisie.”
arethuza 16y ago
Excellent - you've made my day - one of my favorite authors replying to a comment of mine on HN (pity it took me 8 hours to notice!).
alan-crowe 16y ago
Large companies are not total systems. The auditors and the setting of accounting standards are external. The police, courts, and law making are external. In the 90's big companies developed the technique of paying the big accounting firms for consultancy work which subverted the independence of the auditors and paved the way for Enron. The accounting treatment of leases and uncancellable suggests that there have been similar "successes" in subverting the setting of accounting standards. Elsewhere we see big companies having sufficiently close ties to political power that they can subvert the police and the courts and even the law making process. This also ends badly. I don't see any prospect of researching how large companies work and then turning that into a blue print for socialism 2.0. Large companies seem to be viable because of a separation of business and government that is fundamentally incompatible with the common ownership of the means of production.

by cstross 16y ago

iwr 16y ago

The difference is that companies are voluntary associations of individuals. A government is a monopoly of force and justice; it can exert its authority even on those that have not explicitly (via a free contract) agreed to it.

cstross 16y ago
Today that may be so; but prior to 1914 it was possible to move around anywhere in Europe (including the UK -- excluding the Russian Empire) without a passport or identity documents, and pretty much legal to settle anywhere. While the cost and difficulty of moving back then was greater than it is today, states had very porous borders and it was practical to vote with your feet (as in fact my grandparents did). The first world war put an end to the old order and made nationality non-discretionary -- and we're still dealing with the fallout today (as witness the permanent floating founder visas thread on HN).
- arethuza 16y ago
  I remember that from the start of Niall Ferguson's The War of the World - in 1913 the world looked quite a bit like it does today (at least from a "globalization" perspective).
JabavuAdams 16y ago
Free contracts are a fiction. Everyone has obligations that tend to reduce their freedom. The ones who think they don't are called psychopaths. In personal development, an early stage is to understand that you can be independent. E.g. you can choose how to act and how to react to the outside world. A higher level of development is to realize that we're inter-dependent. No man is an island. There will always be constraints on our options. I don't like it, but I'm getting used to it. There is no absolute freedom, and there are no truly free contracts.

berntb 16y ago

Creative destruction, as in the Austrian school, should be a major factor. Think evolution of organizations, economically inefficient ones die. People learn (in the Lamarckian way, too) what works best at the present time. Also... To quote an argument from your blog, there are many tens of millions of people needed to keep our civilization working efficiently (some specialized jobs might only have a few dozen practitioners, according to you). And to keep up with research and new methods, in every decade a large percentage of all those jobs will be totally different. Centrally planned system just can't touch that -- they can't even avoid traffic jams with a few million cars! (And those cars aren't [yet] genetically and culturally programmed to optimize their behavior individually and in groups.. and change a lot culturally every generation.) Own petard, etc. :-) Edit: A bit clearer, hopefully. Non-native language.

elblanco 16y ago

If you look at global markets the same way, the fall of the Soviet Union was also remarkably localized, it's just that the Union and its Satellite states covered so much of the planet.

JabavuAdams 16y ago
At that scale, this starts to be an abuse of the word "localized". If you look at anything from far enough away it seems insignificant. Scale matters. Most of the time when companies in a market system collapse, very few people starve or die.

ramanujan 16y ago

But cstross, the Soviet Union shot you and your family in the back of the head if you tried to leave! And there were entire agencies devoted to getting persecuted minorities out of the USSR, including Sergey Brin's parents. It is not exactly comparable to what happens when you leave a company (the occasional Ballmer chair throwing fit notwithstanding).

face 16y ago
The Soviet Union shot you and your family if you tried to leave? Huh, that didn't happen to me or my family. Or any other person I know. I guess it's popular to spout bullshit like that though.
- ramanujan 16y ago
  Your family might have been part of the nomenklatura. But it is pretty indisputable that they gunned down Soviet Bloc defectors trying to escape. The Soviet Union was a prison state. http://en.wikipedia.org/wiki/List_of_Soviet_and_Eastern_Bloc_defectors http://en.wikipedia.org/wiki/List_of_Soviet_and_Eastern_Bloc... Soon after the formation of the Soviet Union, emigration restrictions were put in place to keep citizens from leaving the various countries of the Soviet Socialist Republics,[1] though some defections still occurred. During and after World War II, similar restrictions were put in place in non-Soviet countries of the Eastern Bloc,[2] which consisted of the Communist states of Eastern Europe.[3][4] http://www.nytimes.com/2010/06/18/opinion/18beckerman.html http://www.nytimes.com/2010/06/18/opinion/18beckerman.html Most in the group were pessimistic about their chances — but none more than Mr. Mendelevich. He felt sure they would get caught, but to his mind, a group suicide was preferable to a life of waiting for an exit visa that would never arrive. Even a botched attempt, he figured, would at least attract the eyes of the world. Early the next day, as the plotters walked onto the tarmac, they were, indeed, caught. The K.G.B. had known of their plan for months. And the two leaders were later sentenced to death. But Mr. Mendelevich was also right that their desperate act would make their demand for free emigration impossible to ignore. Now largely forgotten, this planned hijacking, and the Soviet government’s overreaction to it, opened the first significant rip in the Iron Curtain, one through which hundreds of thousands would eventually flee. With great drama, it undermined Communist orthodoxy. After all, if the Bolsheviks had built the perfect society, why would any well-adjusted citizens want to leave, let alone risk their lives to do so? The essential weakness of the Soviet Union was exposed: to survive, the regime had to imprison its own population. This would be the beginning of the end. Jews were understandably at the forefront of the emigration battle. Even as they were forbidden to exercise any kind of Jewish identity, they also had no option to assimilate in Soviet society. Their internal passports were stamped “Jew,” a word that three generations after the 1917 revolution signified little more than their status as outsiders. Many had come to feel that their existence inside the Soviet Union was untenable, that the only way to escape this paradox was to move away. But the doors were firmly shut; those who requested permission to leave were refused and then ostracized. The push to emigrate, which had begun in the early 1960s as an underground movement, had grown by 1970 into an open campaign. Letters to the United Nations were signed by hundreds of Soviet Jews. Only a few months before the hijacking attempt, the Kremlin had called for a public relations counteroffensive that would paint Zionism as “a vanguard of imperialism.” A large press conference was arranged with “acceptable” Jews, including the prima ballerina Maya Plisetskaya and the comedian Arkady Raikin, vowing loyalty to the Soviet Union and denouncing Zionism as expressing “the chauvinistic views and racist ravings of the Jewish bourgeoisie.”

arethuza 16y ago

Excellent - you've made my day - one of my favorite authors replying to a comment of mine on HN (pity it took me 8 hours to notice!).

alan-crowe 16y ago

Large companies are not total systems. The auditors and the setting of accounting standards are external. The police, courts, and law making are external. In the 90's big companies developed the technique of paying the big accounting firms for consultancy work which subverted the independence of the auditors and paved the way for Enron. The accounting treatment of leases and uncancellable suggests that there have been similar "successes" in subverting the setting of accounting standards. Elsewhere we see big companies having sufficiently close ties to political power that they can subvert the police and the courts and even the law making process. This also ends badly. I don't see any prospect of researching how large companies work and then turning that into a blue print for socialism 2.0. Large companies seem to be viable because of a separation of business and government that is fundamentally incompatible with the common ownership of the means of production.