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"The capitalist system of coordination by trade seems to be largely populated by indigestible lumps of socialism called corporations." - David Friedman I've al

"The capitalist system of coordination by trade seems to be largely populated by indigestible lumps of socialism called corporations." - David Friedman I've always liked this quote. The incentives inside corporations and the way things are organized is totally different than the surrounding free market. It's all centrally-controlled, five-year-plan stuff. Sometimes that makes the corporation really efficient, sometimes not (in the case of giant companies who get whooped by small startups). I guess when we have "the high res society", free markets populated by smaller and smaller companies will replace intra-company politics in places where it's more efficient.

jerf 17y ago
One key difference is that each individual lump of "socialism" (not the best word but it will do) is replaceable, and each of them can and will die while the larger capitalistic system will survive. Moreover, should one unit become particularly abusive, it can be punished without wrecking the whole thing. Another is that even if most people choose hierarchy because it works, you remain free to try something else. (Within reason. I notice publicly traded companies do have some constraints on their organizational structure which do tend to force you towards hierarchy whether you like it or not.) In a truly socialist society, there is only one unit: The government. This unit can not be replaced when it fails, because it will admit no replacements. It can not be punished, because it is the punisher. All units grow old and decrepit, the government is no exception, and when it happens, you just get stuck. The problem is not socialism, hierarchy, or "any" centralization. It's in promoting one unit to the top (be it "government" or "corporation") and breaking all mechanisms for replacing it in the misguided impression that the system has attained and will forever keep perfection. (When the real trick to creating a sustainable government and maintaining freedom is in concentrating on how to make it easy for a certain amount of replenisment, renewal, and change to occur without the whole thing breaking.) Following up on this and indirectly replying to some other threads, it is rather disgusting to pin "fascism" on some social conservatives at the very moment that social liberals are trying to convert our medical system to fascism, have taken a lot of steps to make our automotive industry fascist, and are generally favoring huge centralized financial systems with all the power located in companies where the line between "company" and "government" is increasingly hard to find. If the conservatives are calling for fascism of various stripes, which for the sake of argument I'll accept without question, the liberals are doing it. Right now. Maybe it'll get undone once the crisis is past... but what are the odds?
- tome 17y ago
  In a truly socialist society, there is only one unit: The government. This unit can not be replaced when it fails, because it will admit no replacements. It can not be punished, because it is the punisher. I don't want to insult your intelligence (and perhaps you're using a different definition of socialism to most people in Europe) but you do realise that socialism is not incompatible with democracy, right? Most Western European countries have had at least one socialist government in the past few decades, which has been punished (elected out of office) when the citizens considered it to be failing.
  - lutorm 17y ago
    Those are not socialist governments, they're social democrat governments.
  - jerf 17y ago
    Governments all have varying degrees of centralization and socialism; the word "truly" in the phrase you quoted is not mere rhetorical flourish, but a critical word. Nothing stops you from democratically electing a government that gathers more power to itself. The US just did, after all.
- jhancock 17y ago
  "In a truly socialist society, there is only one unit: The government. This unit can not be replaced when it fails, because it will admit no replacements. It can not be punished, because it is the punisher. All units grow old and decrepit, the government is no exception, and when it happens, you just get stuck." I find the above a bit odd. Take the U.S. as an example. We have 50 states which can operate somewhat independently. They get to copy each other's successes and avoid each other's failures when run correctly. We get to vote to replace government leadership: that is, helping it run more correctly. So it is replaceable, including changes to constitutions.
  - lutorm 17y ago
    That's because the states are not truly socialist societies...
radu_floricica 17y ago
I think this shows the strengths of a free market. Corporations survive because (and only when) they're more efficient then average. So The market can tolerate and even encourage pockets of very different organisation - but only when this is overall benefic for the system.

jerf 17y ago

One key difference is that each individual lump of "socialism" (not the best word but it will do) is replaceable, and each of them can and will die while the larger capitalistic system will survive. Moreover, should one unit become particularly abusive, it can be punished without wrecking the whole thing. Another is that even if most people choose hierarchy because it works, you remain free to try something else. (Within reason. I notice publicly traded companies do have some constraints on their organizational structure which do tend to force you towards hierarchy whether you like it or not.) In a truly socialist society, there is only one unit: The government. This unit can not be replaced when it fails, because it will admit no replacements. It can not be punished, because it is the punisher. All units grow old and decrepit, the government is no exception, and when it happens, you just get stuck. The problem is not socialism, hierarchy, or "any" centralization. It's in promoting one unit to the top (be it "government" or "corporation") and breaking all mechanisms for replacing it in the misguided impression that the system has attained and will forever keep perfection. (When the real trick to creating a sustainable government and maintaining freedom is in concentrating on how to make it easy for a certain amount of replenisment, renewal, and change to occur without the whole thing breaking.) Following up on this and indirectly replying to some other threads, it is rather disgusting to pin "fascism" on some social conservatives at the very moment that social liberals are trying to convert our medical system to fascism, have taken a lot of steps to make our automotive industry fascist, and are generally favoring huge centralized financial systems with all the power located in companies where the line between "company" and "government" is increasingly hard to find. If the conservatives are calling for fascism of various stripes, which for the sake of argument I'll accept without question, the liberals are doing it. Right now. Maybe it'll get undone once the crisis is past... but what are the odds?

tome 17y ago
In a truly socialist society, there is only one unit: The government. This unit can not be replaced when it fails, because it will admit no replacements. It can not be punished, because it is the punisher. I don't want to insult your intelligence (and perhaps you're using a different definition of socialism to most people in Europe) but you do realise that socialism is not incompatible with democracy, right? Most Western European countries have had at least one socialist government in the past few decades, which has been punished (elected out of office) when the citizens considered it to be failing.
- lutorm 17y ago
  Those are not socialist governments, they're social democrat governments.
- jerf 17y ago
  Governments all have varying degrees of centralization and socialism; the word "truly" in the phrase you quoted is not mere rhetorical flourish, but a critical word. Nothing stops you from democratically electing a government that gathers more power to itself. The US just did, after all.
jhancock 17y ago
"In a truly socialist society, there is only one unit: The government. This unit can not be replaced when it fails, because it will admit no replacements. It can not be punished, because it is the punisher. All units grow old and decrepit, the government is no exception, and when it happens, you just get stuck." I find the above a bit odd. Take the U.S. as an example. We have 50 states which can operate somewhat independently. They get to copy each other's successes and avoid each other's failures when run correctly. We get to vote to replace government leadership: that is, helping it run more correctly. So it is replaceable, including changes to constitutions.
- lutorm 17y ago
  That's because the states are not truly socialist societies...

radu_floricica 17y ago

I think this shows the strengths of a free market. Corporations survive because (and only when) they're more efficient then average. So The market can tolerate and even encourage pockets of very different organisation - but only when this is overall benefic for the system.