13 ms·

I thought Chomsky's quote was interesting. "Take the most advanced case: Mondragon. It’s worker owned, it’s not worker managed, although the management does co

I thought Chomsky's quote was interesting. "Take the most advanced case: Mondragon. It’s worker owned, it’s not worker managed, although the management does come from the workforce often, but it’s in a market system and they still exploit workers in South America, and they do things that are harmful to the society as a whole and they have no choice. If you’re in a system where you must make profit in order to survive, you're compelled to ignore negative externalities, effects on others."

macspoofing 7y ago
It's easy for anyone to take potshots from the sidelines, but surely Chomsky sees the economic, and humanitarian disasters that non-market based systems ALWAYS result in. What's the alternative here?
- ianleeclark 7y ago
  The quote there seems to have issues with the profit motive, not market systems.
  - wuliwong 7y ago
    In my mind a "market systems" implicitly includes prices which means there would then be profit and loss. I could imagine a market of 100% barter and no generally accepted currency but I do not think that is what most people mean when they use the term "market systems." There is a lot I'm unaware of, possibly market systems without prices is one of those things?
    - ianleeclark 7y ago
      > In my mind a "market systems" implicitly includes prices which means there would then be profit and loss. Why does a price necessarily include a profit or a loss? This is a self-referential belief: my price includes a profit or loss because a prior price includes a profit or loss which would earlier ... etc, etc.
      - macspoofing 7y ago
        >Why does a price necessarily include a profit or a loss It includes a profit or a loss because you need to eat and provide for yourself. If you're making chairs but the cost of materials is larger than what you sell those chairs for, how are you going to provide for your family? If you want to save up for a house or a car, or family vacation, how are you going to do that if you don't sell your chairs with a surplus (i.e. a profit)? A market-based system necessarily implies a profit motive.
        ianleeclark 7y ago
        > If you're making chairs but the cost of materials is larger than what you sell those chairs for, how are you going to provide for your family? This is the "self-referential" thing I was referring to. You're entering into this thought experiment with a pre-defined conception of how an economic mode of production must operate. You're presupposing the profit motive.
        macspoofing 7y ago
        Feel free to suggest an alternative. The one that comes to mind is Communism (and its many flavours), and we've seen what a humanitarian and economic disaster that turns out to be.
        ianleeclark 7y ago
        Political economy is a wide field with something for everyone. Consider it a choose your own adventure.
        macspoofing 7y ago
        Right. So no actual alternative.
    - macspoofing 7y ago
      >I could imagine a market of 100% barter and no generally accepted currency Even under a barter system, there is an intrinsic profit. If you're a farmer, after you feed your family, what's leftover is the surplus (i.e. profit) that you use to trade for other essentials. The difference that matters between a currency system and a barter system is that bartering is less flexible (if someone doesn't want your apples for their furniture, you're not getting that furniture) - but the same forces apply.
    - kiliantics 7y ago
      Profit is what's left over after all costs are taken out from the price, including labour costs. Profit, by definition, is what the capitalist gets to keep for having done nothing but owning the capital that was used to generate the profit. So like when Bezos makes $4M+ per hour, it's not a wage because he is not working for it, he could be sleeping or shitting and he would make the same money. He gets that just because it's his name on all of the capital that generates this profit. The actual work is being done by the many people working for amazon, peeing in bottles in fulfillment centres because of lack of breaks and whatnot. They get paid very little, so there are low costs, so there is great profit to line Bezos' pockets. Since co-ops like Mondragon need to compete with companies that are run like Bezos' in order to survive, they are under pressure to do similar things in their management structure, even though they want to share all "profit" with all workers, since all workers are owners (which is why it's not really "profit" for co-ops, since there are no non-working capitalists that earn it). Therefore, it is the profit motive, rather than the market system, which forces co-ops to act in ways that are inconsistent with their mission statements (worker control, fair pay, etc.)
      - tathougies 7y ago
        And laborers generate a profit when their cost of living is below their total wage. At that point the cost of producing their labor (food, water, shelter) is below their revenue.
        kiliantics 7y ago
        That is not a profit because it is not generated from capital. "Cost of producing labour" is not just food/water/shelter/etc. it is the literal time you have to give up in order to perform the labour. Someone who owns capital gets the profit which the capital generates at zero cost or time spent.
      - macspoofing 7y ago
        >Profit, by definition, is what the capitalist gets to keep for having done nothing but owning the capital that was used to generate the profit. No. That is a dishonest distortion. If providing and owning capital is such a nothing, why don't you try it and see how easy it is. Capitalization carries with it immense risk, which Communists conveniently ignore. Whereas the labourer gets a salary regardless of how the business performs, the one who capitalizes does not have this privilege. I've seen first hand how much work and how difficult it is to start and run a business. You only need to look at bankruptcy stats to see how many businesses fail and take down all the capital that was invested. It's not very pleasant to run a business, sink your life savings into it, only for it to go under with your savings and years of life. >So like when Bezos makes $4M+ per hour, That is another dishonest distortion. Bezos does not make $4M+ per hour. He holds stock in Amazon that rises in value at that rate (Amazon's actual profit is on the order of 2% after close to two decades of 0 profit). The value of stocks stems from the fact that there are people who are willing to buy it at that price. This carries risk, because this willingness by others to buy the stock is subject to many factors, and it can go down to zero. Again, if you think it's easy, feel free to dump your savings into Amazon stock and see how easy it is for you to live of that or even make a good return - though I'm sure in your fictitious communist reality this would mean you would make millions without doing anything!
- orthecreedence 7y ago
  > What's the alternative here? Look into libertarian socialism if you're actually interested.
  - macspoofing 7y ago
    In my early 20s I got really into all those boutique political theories. Our world is big and complicated, and these marginal and fringe ideas have never been actually tested at any reasonable scale. Anarachism-flavours tend to be universally terrible because they pre-suppose unnatural behaviour on people and in practice will devolve into some flavour of top-down collectivism.
    - orthecreedence 7y ago
      You think capitalism is natural? And is top-down "individualism" better than top-down collectivism? Also, there are real-world examples of libertarian socialism, like the Zapatistas and Rojova. Not ideologically pure, no, but certainly not authoritarian shitholes or capitalist dystopias.
MagnumOpus 7y ago
While of course companies that operate in a non-market system and could take into account negative externalities, such as systemically important PRC or NorK SOEs, would never exploit workers or create bad working conditions - at home or in South America...
- coliveira 7y ago
  Exploiting workers is a negative externality.
  - rayiner 7y ago
    No. A negative externality is a cost to a transaction that's not borne by one of the parties to the transaction (and thus cannot be priced into the transaction). "This job really sucks" is not an externality -- that fact is priced into what the worker demands in payment for performing that job. "Building this factory will incerase the risk of Terry down the street getting cancer" is an externality -- Terry is not a party to the transaction and cannot demand payment as compensation for the increased risk.
    - chishaku 7y ago
      This textbook response doesn't address what often happens in reality. Wages don't always capture the true costs of production. The public burden of the coal miner who gets lung cancer can be viewed as a negative externality. Indeed, many labor protections in the US seek to specifically address this type of externality.
      - tptacek 7y ago
        No, it doesn't address the phenomenon that the grandparent comment was concerned with (worker exploitation). But it doesn't claim to. It simply, and correctly, establishes that worker treatment isn't an externality. "Textbook" definitions have nothing to do with it.
        7y ago
jp555 7y ago
Is the alternative 100% top-down central-managed solution to ensure no externalization happens ever? In theory that's appealing (especial from the view from Chomsky's academic ivory tower), but then in practice every time it's been tried it hasn't worked well at all. Chomsky is smart, but not very useful because "In theory there's no difference between theory and practice, but in practice there is" - Yogi Berra
- tsimionescu 7y ago
  Chomsky is anti-centralization, he is an anarchist (anarcho-syndicalist). In general, his ideal end-goal world would include smaller states with more direct control by the populace, with worker-owned and worker-managed corporations, with free markets of goods and services between different corporations and different states, and of course freedom of movement. Strong environmental control would be almost implied if the people doing an economic activity were in charge of decisions and were also directly impacted by the effects of those decisions. Localizing and letting corporations be small would also put a natural cap on inequality, though democratically run states could impose additional safeguards where needed (minimum wages, estate taxes, non-discrimination clauses etc.)
  - zepto 7y ago
    Surely you would need a lot of rules and enforcement to prevent things simply aggregating?
    - golemotron 7y ago
      That's where it falls apart. Systems tend to aggregate to seek efficiencies of scale.
      - leto_ii 7y ago
        I tend to not agree with this line of thinking. This may be the case when you subject a company to financial market pressures by listing it on the stock exchange, but I don't think it's a natural imperative. Many companies do just fine without growing to enormous proportions, being acquired, acquiring others etc.
H8crilA 7y ago
Capitalism itself cannot solve the problem of externalities. That's what the government is for. I don't understand why would anyone think that it can. This is not just my opinion but an opinion of famous capitalists (for example Buffett or Soros).
- pdonis 7y ago
  > Capitalism itself cannot solve the problem of externalities. True. > That's what the government is for. False. Government can't solve the problem of externalities either, because government is even more at the mercy of the perverse incentives that create them than free market participants are. There is no "solution" to the problem of externalities, if by "solution" you mean some system we can put in place that will magically prevent them from happening or from doing harm. The only way to deal with externalities in general is to remove them wherever possible, by enforcing property rights and minimizing transaction costs.
  - Ericson2314 7y ago
    > if by "solution", you mean some system we can put in place that will magically prevent them Only a distributed system like capitalism rises to your bar of "magically prevent[ing]". Centralization is not magic, but when it works, it works. I prefer distributed systems too, but when it's hard to make the right incentivizes, we shouldn't throw in the towel. Surely the parent post doesn't use a definition of "solution" that trivially invalidates their point. I think you are projecting your own preference for distributed systems as an inevitability. In fact, I've thought of a "'race to the top' tariffs" system, which does at least create the right incentives between nations. If you are big market (e.g. US) put tariff on the difference between the manufacturing country's externalizes tax, and your own. This holds the total punitive disincentive constant, no matter who receives the revenue. The exporting country is now incentivized to raise their externalities tax so the tax revenue goes to them rather than the importing country. So simple!!
    - pdonis 7y ago
      > a distributed system like capitalism How is capitalism a distributed system? It concentrates capital in the hands of a small minority. A free market is a distributed system, but "free market" is not a synonym for "capitalism". > Centralization is not magic, but when it works, it works. I guess we have very different definitions of "works".
mcprwklzpq 7y ago
This quote without context might give impression that Chomsky is critical of Mondragon. A bit of context around it helps to understand his point. From [1]: “LF: So it sounds as if you might support something like the Cleveland model where the ownership of the company is actually held by members of the community as well as the workers… NC: That’s a step forward but you also have to get beyond that to dismantle the system of production for profit rather than production for use. That means dismantling at least large parts of market systems. <<here this quote about Mondragon>> Markets also have a very bad psychological effect. They drive people to a conception of themselves and society in which you’re only after your own good, not the good of others and that’s extremely harmful. LF: Have you ever had a taste of a non market system — had a flash of optimism –– oh this is how we could live? NC: A functioning family for example, and there are bigger groups, cooperatives are a case in point. It certainly can be done. The biggest I know is Mondragon but there are many in between and a lot more could be done.” 1 - https://www.counterpunch.org/2012/04/30/talking-with-chomsky/ https://www.counterpunch.org/2012/04/30/talking-with-chomsky...

macspoofing 7y ago

It's easy for anyone to take potshots from the sidelines, but surely Chomsky sees the economic, and humanitarian disasters that non-market based systems ALWAYS result in. What's the alternative here?

ianleeclark 7y ago
The quote there seems to have issues with the profit motive, not market systems.
- wuliwong 7y ago
  In my mind a "market systems" implicitly includes prices which means there would then be profit and loss. I could imagine a market of 100% barter and no generally accepted currency but I do not think that is what most people mean when they use the term "market systems." There is a lot I'm unaware of, possibly market systems without prices is one of those things?
  - ianleeclark 7y ago
    > In my mind a "market systems" implicitly includes prices which means there would then be profit and loss. Why does a price necessarily include a profit or a loss? This is a self-referential belief: my price includes a profit or loss because a prior price includes a profit or loss which would earlier ... etc, etc.
    - macspoofing 7y ago
      >Why does a price necessarily include a profit or a loss It includes a profit or a loss because you need to eat and provide for yourself. If you're making chairs but the cost of materials is larger than what you sell those chairs for, how are you going to provide for your family? If you want to save up for a house or a car, or family vacation, how are you going to do that if you don't sell your chairs with a surplus (i.e. a profit)? A market-based system necessarily implies a profit motive.
      - ianleeclark 7y ago
        > If you're making chairs but the cost of materials is larger than what you sell those chairs for, how are you going to provide for your family? This is the "self-referential" thing I was referring to. You're entering into this thought experiment with a pre-defined conception of how an economic mode of production must operate. You're presupposing the profit motive.
        macspoofing 7y ago
        Feel free to suggest an alternative. The one that comes to mind is Communism (and its many flavours), and we've seen what a humanitarian and economic disaster that turns out to be.
        ianleeclark 7y ago
        Political economy is a wide field with something for everyone. Consider it a choose your own adventure.
        macspoofing 7y ago
        Right. So no actual alternative.
  - macspoofing 7y ago
    >I could imagine a market of 100% barter and no generally accepted currency Even under a barter system, there is an intrinsic profit. If you're a farmer, after you feed your family, what's leftover is the surplus (i.e. profit) that you use to trade for other essentials. The difference that matters between a currency system and a barter system is that bartering is less flexible (if someone doesn't want your apples for their furniture, you're not getting that furniture) - but the same forces apply.
  - kiliantics 7y ago
    Profit is what's left over after all costs are taken out from the price, including labour costs. Profit, by definition, is what the capitalist gets to keep for having done nothing but owning the capital that was used to generate the profit. So like when Bezos makes $4M+ per hour, it's not a wage because he is not working for it, he could be sleeping or shitting and he would make the same money. He gets that just because it's his name on all of the capital that generates this profit. The actual work is being done by the many people working for amazon, peeing in bottles in fulfillment centres because of lack of breaks and whatnot. They get paid very little, so there are low costs, so there is great profit to line Bezos' pockets. Since co-ops like Mondragon need to compete with companies that are run like Bezos' in order to survive, they are under pressure to do similar things in their management structure, even though they want to share all "profit" with all workers, since all workers are owners (which is why it's not really "profit" for co-ops, since there are no non-working capitalists that earn it). Therefore, it is the profit motive, rather than the market system, which forces co-ops to act in ways that are inconsistent with their mission statements (worker control, fair pay, etc.)
    - tathougies 7y ago
      And laborers generate a profit when their cost of living is below their total wage. At that point the cost of producing their labor (food, water, shelter) is below their revenue.
      - kiliantics 7y ago
        That is not a profit because it is not generated from capital. "Cost of producing labour" is not just food/water/shelter/etc. it is the literal time you have to give up in order to perform the labour. Someone who owns capital gets the profit which the capital generates at zero cost or time spent.
    - macspoofing 7y ago
      >Profit, by definition, is what the capitalist gets to keep for having done nothing but owning the capital that was used to generate the profit. No. That is a dishonest distortion. If providing and owning capital is such a nothing, why don't you try it and see how easy it is. Capitalization carries with it immense risk, which Communists conveniently ignore. Whereas the labourer gets a salary regardless of how the business performs, the one who capitalizes does not have this privilege. I've seen first hand how much work and how difficult it is to start and run a business. You only need to look at bankruptcy stats to see how many businesses fail and take down all the capital that was invested. It's not very pleasant to run a business, sink your life savings into it, only for it to go under with your savings and years of life. >So like when Bezos makes $4M+ per hour, That is another dishonest distortion. Bezos does not make $4M+ per hour. He holds stock in Amazon that rises in value at that rate (Amazon's actual profit is on the order of 2% after close to two decades of 0 profit). The value of stocks stems from the fact that there are people who are willing to buy it at that price. This carries risk, because this willingness by others to buy the stock is subject to many factors, and it can go down to zero. Again, if you think it's easy, feel free to dump your savings into Amazon stock and see how easy it is for you to live of that or even make a good return - though I'm sure in your fictitious communist reality this would mean you would make millions without doing anything!
orthecreedence 7y ago
> What's the alternative here? Look into libertarian socialism if you're actually interested.
- macspoofing 7y ago
  In my early 20s I got really into all those boutique political theories. Our world is big and complicated, and these marginal and fringe ideas have never been actually tested at any reasonable scale. Anarachism-flavours tend to be universally terrible because they pre-suppose unnatural behaviour on people and in practice will devolve into some flavour of top-down collectivism.
  - orthecreedence 7y ago
    You think capitalism is natural? And is top-down "individualism" better than top-down collectivism? Also, there are real-world examples of libertarian socialism, like the Zapatistas and Rojova. Not ideologically pure, no, but certainly not authoritarian shitholes or capitalist dystopias.

MagnumOpus 7y ago

While of course companies that operate in a non-market system and could take into account negative externalities, such as systemically important PRC or NorK SOEs, would never exploit workers or create bad working conditions - at home or in South America...

coliveira 7y ago
Exploiting workers is a negative externality.
- rayiner 7y ago
  No. A negative externality is a cost to a transaction that's not borne by one of the parties to the transaction (and thus cannot be priced into the transaction). "This job really sucks" is not an externality -- that fact is priced into what the worker demands in payment for performing that job. "Building this factory will incerase the risk of Terry down the street getting cancer" is an externality -- Terry is not a party to the transaction and cannot demand payment as compensation for the increased risk.
  - chishaku 7y ago
    This textbook response doesn't address what often happens in reality. Wages don't always capture the true costs of production. The public burden of the coal miner who gets lung cancer can be viewed as a negative externality. Indeed, many labor protections in the US seek to specifically address this type of externality.
    - tptacek 7y ago
      No, it doesn't address the phenomenon that the grandparent comment was concerned with (worker exploitation). But it doesn't claim to. It simply, and correctly, establishes that worker treatment isn't an externality. "Textbook" definitions have nothing to do with it.
      - 7y ago

jp555 7y ago

Is the alternative 100% top-down central-managed solution to ensure no externalization happens ever? In theory that's appealing (especial from the view from Chomsky's academic ivory tower), but then in practice every time it's been tried it hasn't worked well at all. Chomsky is smart, but not very useful because "In theory there's no difference between theory and practice, but in practice there is" - Yogi Berra

tsimionescu 7y ago
Chomsky is anti-centralization, he is an anarchist (anarcho-syndicalist). In general, his ideal end-goal world would include smaller states with more direct control by the populace, with worker-owned and worker-managed corporations, with free markets of goods and services between different corporations and different states, and of course freedom of movement. Strong environmental control would be almost implied if the people doing an economic activity were in charge of decisions and were also directly impacted by the effects of those decisions. Localizing and letting corporations be small would also put a natural cap on inequality, though democratically run states could impose additional safeguards where needed (minimum wages, estate taxes, non-discrimination clauses etc.)
- zepto 7y ago
  Surely you would need a lot of rules and enforcement to prevent things simply aggregating?
  - golemotron 7y ago
    That's where it falls apart. Systems tend to aggregate to seek efficiencies of scale.
    - leto_ii 7y ago
      I tend to not agree with this line of thinking. This may be the case when you subject a company to financial market pressures by listing it on the stock exchange, but I don't think it's a natural imperative. Many companies do just fine without growing to enormous proportions, being acquired, acquiring others etc.

H8crilA 7y ago

Capitalism itself cannot solve the problem of externalities. That's what the government is for. I don't understand why would anyone think that it can. This is not just my opinion but an opinion of famous capitalists (for example Buffett or Soros).

pdonis 7y ago
> Capitalism itself cannot solve the problem of externalities. True. > That's what the government is for. False. Government can't solve the problem of externalities either, because government is even more at the mercy of the perverse incentives that create them than free market participants are. There is no "solution" to the problem of externalities, if by "solution" you mean some system we can put in place that will magically prevent them from happening or from doing harm. The only way to deal with externalities in general is to remove them wherever possible, by enforcing property rights and minimizing transaction costs.
- Ericson2314 7y ago
  > if by "solution", you mean some system we can put in place that will magically prevent them Only a distributed system like capitalism rises to your bar of "magically prevent[ing]". Centralization is not magic, but when it works, it works. I prefer distributed systems too, but when it's hard to make the right incentivizes, we shouldn't throw in the towel. Surely the parent post doesn't use a definition of "solution" that trivially invalidates their point. I think you are projecting your own preference for distributed systems as an inevitability. In fact, I've thought of a "'race to the top' tariffs" system, which does at least create the right incentives between nations. If you are big market (e.g. US) put tariff on the difference between the manufacturing country's externalizes tax, and your own. This holds the total punitive disincentive constant, no matter who receives the revenue. The exporting country is now incentivized to raise their externalities tax so the tax revenue goes to them rather than the importing country. So simple!!
  - pdonis 7y ago
    > a distributed system like capitalism How is capitalism a distributed system? It concentrates capital in the hands of a small minority. A free market is a distributed system, but "free market" is not a synonym for "capitalism". > Centralization is not magic, but when it works, it works. I guess we have very different definitions of "works".

mcprwklzpq 7y ago

This quote without context might give impression that Chomsky is critical of Mondragon. A bit of context around it helps to understand his point. From [1]: “LF: So it sounds as if you might support something like the Cleveland model where the ownership of the company is actually held by members of the community as well as the workers… NC: That’s a step forward but you also have to get beyond that to dismantle the system of production for profit rather than production for use. That means dismantling at least large parts of market systems. <<here this quote about Mondragon>> Markets also have a very bad psychological effect. They drive people to a conception of themselves and society in which you’re only after your own good, not the good of others and that’s extremely harmful. LF: Have you ever had a taste of a non market system — had a flash of optimism –– oh this is how we could live? NC: A functioning family for example, and there are bigger groups, cooperatives are a case in point. It certainly can be done. The biggest I know is Mondragon but there are many in between and a lot more could be done.” 1 - https://www.counterpunch.org/2012/04/30/talking-with-chomsky/ https://www.counterpunch.org/2012/04/30/talking-with-chomsky...