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There is however a link between centralisation and distributive outcomes in the sense that the former is necessary to ensure certain forms of the latter. If for

There is however a link between centralisation and distributive outcomes in the sense that the former is necessary to ensure certain forms of the latter. If for instance the democratic companies in your thought experiment were somehow structurally less competitive in the market than companies led by a single CEO (I'm not suggesting this is the case, just using it to illustrate), then in a decentralised system the CEO-led companies would outcompete the democratic ones and naturally come to dominate the market. It would hence not be possible to bring about the distributive outcomes of a market dominated by democratic companies without some centralised force capable of granting the democratic companies some advantage over the CEO-led ones. In short, if a decentralised economy necessarily leads to greater concentration of wealth/power (again, I'm not suggesting it does), then people arguing for a more even distribution of wealth/power must necessarily also argue for a more centralised economy.

nhaehnle 13y ago
I liked your comment, thank you. I don't quite agree though, because I get the feeling that you're not really talking about centralization of the economy, but about the centralization of power. True, enforcing a decentralized economy in which company decisions must be legitimized by employees' votes requires a centralized power. However, the same is true for almost every kind of economy that has any hope of functioning at all. For example, our non-democratic companies of today rely on workers not simply seizing the means of production for themselves. Why don't workers in, say, a car company not decide one day to shut out the owners? The most immediate explanation is that they have been conditioned by society not to do that. But it's important to keep in mind that our economy relies on the existence of a centralized power that would ultimately lock those workers up in prison if they decided to kick the owners out. It's easy to miss this fact because of status quo bias, but ultimately, it seems that every stable form of societal organization ends up relying on some form of centralization of power. This all comes to a head in your last paragraph. If the premise of that paragraph is true, then the people need not argue for a more centralised economy. They can stay with a decentralized economy, but they must argue for some action by centralized power.
- logicchains 13y ago
  That's a good point. I think however that proponents of economic decentralisation would argue that it requires 'less' centralisation of power than economic centralisation (assuming centralisation of power can be quantified). How is this so? Classical liberals argued that the fundamental duty of government was protecting its citizens' lives and property rights from each other and from foreign aggressors. This would largely take place through the courts: if someone attacked you, or stole your property, or rose up and took over your factory, you could sue them, and the State's only role would be enforcing the court's judgement. This thus would lead to a relatively decentralised power structure, with most power lying in the courts via their interpretation of the constitution / 'natural law' (a bit like English common law) and the executive having relatively little influence. From this it follows that arguments for any economic structure other than "an economy the structure of which is purely determined by what occurs when the State only protects property rights" necessarily require more centralisation of power, as the State would be required to do more than just protect property rights. Assuming that by some intrinsic property that "an economy the structure of which is purely determined by what occurs when the State only protects property rights" is likely to be a more decentralised one, then arguing for a centralised one thus entails arguing for greater centralisation of power. Of course, this ultimately depends on the exact form the property rights in question take, but I think it's reasonable to suggest that for any particular set of rights, a State based solely around defending those rights would involve less centralisation of power than one based upon ensuring the existence of a particular economic or social structure. 'Victimless crimes' are an example of this: they wouldn't exist in a purely rights-based legal system as there'd be no parties whose rights were violated by these activities, so such things as the immigration department and the departments required for the war on drugs simply wouldn't exist.

nhaehnle 13y ago

I liked your comment, thank you. I don't quite agree though, because I get the feeling that you're not really talking about centralization of the economy, but about the centralization of power. True, enforcing a decentralized economy in which company decisions must be legitimized by employees' votes requires a centralized power. However, the same is true for almost every kind of economy that has any hope of functioning at all. For example, our non-democratic companies of today rely on workers not simply seizing the means of production for themselves. Why don't workers in, say, a car company not decide one day to shut out the owners? The most immediate explanation is that they have been conditioned by society not to do that. But it's important to keep in mind that our economy relies on the existence of a centralized power that would ultimately lock those workers up in prison if they decided to kick the owners out. It's easy to miss this fact because of status quo bias, but ultimately, it seems that every stable form of societal organization ends up relying on some form of centralization of power. This all comes to a head in your last paragraph. If the premise of that paragraph is true, then the people need not argue for a more centralised economy. They can stay with a decentralized economy, but they must argue for some action by centralized power.

logicchains 13y ago
That's a good point. I think however that proponents of economic decentralisation would argue that it requires 'less' centralisation of power than economic centralisation (assuming centralisation of power can be quantified). How is this so? Classical liberals argued that the fundamental duty of government was protecting its citizens' lives and property rights from each other and from foreign aggressors. This would largely take place through the courts: if someone attacked you, or stole your property, or rose up and took over your factory, you could sue them, and the State's only role would be enforcing the court's judgement. This thus would lead to a relatively decentralised power structure, with most power lying in the courts via their interpretation of the constitution / 'natural law' (a bit like English common law) and the executive having relatively little influence. From this it follows that arguments for any economic structure other than "an economy the structure of which is purely determined by what occurs when the State only protects property rights" necessarily require more centralisation of power, as the State would be required to do more than just protect property rights. Assuming that by some intrinsic property that "an economy the structure of which is purely determined by what occurs when the State only protects property rights" is likely to be a more decentralised one, then arguing for a centralised one thus entails arguing for greater centralisation of power. Of course, this ultimately depends on the exact form the property rights in question take, but I think it's reasonable to suggest that for any particular set of rights, a State based solely around defending those rights would involve less centralisation of power than one based upon ensuring the existence of a particular economic or social structure. 'Victimless crimes' are an example of this: they wouldn't exist in a purely rights-based legal system as there'd be no parties whose rights were violated by these activities, so such things as the immigration department and the departments required for the war on drugs simply wouldn't exist.