Transkribering
Extra material – A sit-down after the debate with Andrew Kliman and Per Bylund
[Speaker 1]
We're meeting here, this is the day after the debate, to wrap up a few loose ends and hopefully to have a more relaxed back and forth discussion and not be confined to 15 minute talk limits or anything like that.
And our hope is maybe to find some common ground and to hone down where the differences lie between libertarianism and marxism and between professor belands uh... philosophy and politics and economics and professor climates What were your, now that it's the day after, what are your just general thoughts on the debate and are there things that you wanted to have said but didn't have the time to, or were there things that confused you, or just, you know, general impressions?
[Speaker 2]
Um, well I was pleased to see so many people turn out and I uh... learn you know i've learned that's unusual and uh... you know i think it's a good thing that uh... people are looking from outside of the standard uh... constraints of politics in the standard lines of debate being a participant uh... and in particular uh...
being in a debate libertarianism which uses a whole different language and comes at things from a whole different vantage point. It was very hard for me. So I was focused, you know, very definitely on what I had to do. And I couldn't sort of like absorb the general scene. So I think the audience and the people viewing Get Home probably have a better feel for what happened than I did.
[Speaker 3]
I think I share that view. And the structure of the debate sort of didn't help clarify either because we started with 15 minutes each sort of expressing our standpoints, our positions. And I think we were both cut off because we wanted to continue talking and explain some. I went through maybe three quarters of the notes that I had, which left a lot a bunch left to talk about after that, but then you had already responded and then I wanted to respond to you.
So we sort of started just going part of the distance and then responding to our parts or partial arguments. I would have wanted to see a little more back and forth to just for clarification to show where we agree, because I think there is a lot that we do agree on, especially on the injustice of contemporary whatever you want to call it, the system.
And we have differences with respect to how to solve it and also what a free society is about, which is the topic of the debate. So I think a little more back and forth would probably have helped and maybe a little more time, but I mean, you can always give academics more time because they always need more time, right? Even if you had a month each, you'd probably still say, there was certain things that I didn't have time to say, right?
[Speaker 2]
Yeah There are people like that. I tried to do it in 15 minutes. I mean, I think my opening remarks Maybe I went in like 30 seconds over but I got to the end of what I wanted to say you can always go on but what you need is a continuation of debate more and more You know, so it would have been nice if it had gone on for six hours But you know, you can't do that. So maybe there's other ways in which You The two of us or other people can be involved, you know, maybe not in person, which is always exciting, but you know, there is Skype and so forth.
[Speaker 3]
Yeah, I totally agree with that. And I think both of us were representatives of sort of systems of thinking, systems of thought. So they're not really susceptible to just boiling it down to a one-liner. It's not party politics where you can just say, free stuff for my people or whatever it is they promise each other all the time. So we can't do that. We have to express.
[Speaker 2]
I'm going to be putting out a line of expropriate the expropriators bumper stickers.
[Speaker 3]
Well, I might actually buy one of those, depending on the price. No, but I'm serious, because in party politics, on the news and whatnot, you have like three seconds and you need to get your message out and then you get another three seconds and you need to use the same slogan, because the only way of actually reaching people is to use the same slogan over and over and over again. Whereas what we were talking about was two very different perspectives and the way that perspectives that usually do not get a place and do not get well, definitely do not get time on air. And so we needed to start from scratch and explain the differences and the similarities.
[Speaker 1]
I agree. So what do you think those differences and similarities were?
[Speaker 2]
Well, you know, I thought about this because during the debate, to the end. I'll tell you what I think you were getting at. You can tell me whether I'm right or wrong. You start from a certain set of ethical principles, then you say what procedures embody these ethical principles, and then you can get down to cases. Because I start from, substantively, what I want to see. And to me, that doesn't seem to be in the middle. It's just I'm starting from somewhere else. Is that what you would regard as correct?
[Speaker 3]
Well, I think it is correct. I don't think that's what I was necessarily talking about during the debate. But I think you're absolutely right in that because we have different starting points in our argumentation. The problem I had was... the discussion about the means of production. Maybe I don't understand you correctly, but what do you actually mean by the means of production? But to me, any means of production that is not pure labor or land, virgin land would be created.
And that requires a long process. And it's also a path dependent process where you build off of the capital that already exists and the means of production that already exists. And then saying that, well, we need individual property. Well, you also need to explain where this property comes from, where the means of production comes from, and how it is generated. And that's what I meant by halfway, because just saying that, okay, stop it right now and just divide it, and then we'll continue.
[Speaker 2]
Oh, okay. I'm actually not talking about dividing. I'm not talking about, you know, dividing, right? I'm talking about... that people have, or not that they do have, but we need to return to a situation in which people have the means of production that they need to make a living for themselves. So that they don't have to go selling themselves to somebody and being under that somebody's control or else starve.
Okay. But I mean the same thing by means of production that you mean. And yes, most means of production are themselves produced. So, But, you know, that passage from Marx that I read at the end of my opening remarks where he says the expropriators are expropriated and we're gonna have a return to individual property, he said it's not a return to individual private property. That was his view.
It's not gonna be a return to individual private property, but it's gonna be based on the land held in common and, you know, common... ownership and control of the means of production, but the point is individuals will own and control this, you know, the vast majority of people. you know who are cut off from that right now separated from any means of production of their own any ability to gain a livelihood on their own that will no longer be the case that that was what he was I think arguing there.
[Speaker 3]
Okay but how do you define that because that's what I'm struggling with what is a livelihood is it just survival or is it survival with an iPhone or where do you draw the line what exactly is individual property? because you can't go back to it unless you know that. I mean, survival could mean just a bare minimum of calories and nothing more, right? But you could also have a very productive society where we have buses and cars and iPhones and whatever.
And is that more than we need then in your opinion? Or do we need that as well for a survival? I mean, what do you mean by that situation where we're satisfied, I suppose?
[Speaker 2]
Are you I'm not sure what you're asking me. Are you asking me do I favor a high technology, high productivity, growing productivity society where we have more stuff or to go back to previous agrarian low consumption time? Is that what you're asking?
[Speaker 3]
[Speaker 2]
Okay, well again, individual property does not mean private. Okay? So what does it mean fair? I'm not sure what you mean by what is fair individual property. I mean, you know, look, no... Socialists that I know of have has ever been against individual ownership and control of possessions, you know and like, you know You you control your own toothbrush and nobody else does you know and you live in your own house if you want to live in A house, you know or apartment or whatever?
The issue has always been about the means of production as you define them you know, should they be such that certain people can keep other people from using them? And that's all I'm saying is, no, everybody has to be able to have access to them so that at whatever level of, you know, consumption they want to achieve, whatever rate of growth they want to achieve, they have these means of production available to them.
[Speaker 3]
So does that mean then that you have the right to lose the means of production? destroy them no but that means also that you cannot make any investments like an entrepreneur because the future is uncertain maybe your investments are wrong or they turn out to be wrong or maybe it doesn't work out you're still thinking of
[Speaker 2]
private property whereby you're excluding somebody from the property well you have to while you're using it no actually not Not if we're working in common.
[Speaker 3]
But we're not in agreement with every investment that happens, right? Or do we need to be in agreement with every investment that we do as humankind? I don't understand, how do you... achieve progress at all in your society? I mean, I guess that's the core of the question.
[Speaker 2]
Okay. Well, I mean, in any society that you want to have like more stuff, you know, you want to build towards the future, not just have a stable level. I'm actually, you know, very open personally. I'm not Marx, okay? So, maybe he wasn't open and I'm more open to like the idea that we should, you know, have a... you know, simpler way of life, you know, if that's what people want, I don't have any real problem with that. But if people want to have, you know, continual economic growth, in any society, you got to decide, you know, are you going to consume more now, or consume less now and devote resources to the future? I think that society can, you know, I mean, it's not that society makes a decision, but the individuals in the society can make a decision for the whole society.
[Speaker 3]
But what does that mean in practice? I mean, I don't follow that leap.
[Speaker 2]
[Speaker 3]
Between what you said about acting and then... Society. I mean, in order to use the means of production in a certain way to invest them, you change them as well. You may combine them, you may at least partially destroy some of them, right? In order to achieve something that you imagine would be valuable to others or yourself.
[Speaker 2]
By destroy you mean like you take wheat and you turn it into flour? Maybe.
[Speaker 3]
It could also be building a new factory for a new type of good. Oh, you tear down the previous factory. Well, you tear down the previous factory, but you also, you fix those resources in that factory. Maybe that factory turns out to be completely useless because people don't actually want what you produce. Right. Then, then you have lowered the value of those means of production.
[Speaker 2]
[Speaker 3]
And they're stuck there until someone actually invests work to remove them.
[Speaker 2]
Whoever it is, whether it's private property or communal property or whatever, or just people working on their own, Robinson Crusoe, I mean... mistakes happen. Sure.
[Speaker 3]
Yeah. Well, I'm glad we agree on that. But I sort of thought you would agree on that. But that's the thing. Because in a free market society, you would have private property of the means of production, which means individuals in a decentralized fashion make these investments. But these investments are for profit, sure, but they're also tempered by the threat of loss. So, it's not just hot-headed whatever. But if it's communal property, doesn't that mean that the loss is actually distributed on everybody? So, if I act using communal property... Absolutely.
[Speaker 2]
It's a much bigger responsibility, you know, because you're not only screwing yourself over if you make a bad decision, but everybody there, you know, we're all screwing ourselves over. So,
[Speaker 3]
what mechanisms do you have? Because then you have a society-wide moral hazard problem.
[Speaker 2]
Hmm. Can you see why the... How is there a moral hazard? Because you're not passing the risk onto somebody else.
[Speaker 3]
Well, you are, because all the opportunities that would have been there had you not fixed those resources in a certain type of production, you can't pursue those anymore because you've used those resources. I mean, the resources are scarce, right? Yeah, sure. So if I take 50% of all the resources, let's say, and I build a new factory to produce something that I think will be valuable, maybe I asked community or whatnot, and it turns out that no, people don't actually want that stuff or it's the wrong color or something weird like that. then the value of those resources would be less, I mean the use value of them. Sure, sure, sure. And then society will suffer because of that.
[Speaker 2]
Sure, but you know, in other words, you would not be initially taking that action on behalf of society, you know, as if, you know, without other people agreeing to it. I mean, if it's communal resources. in some way, shape or form, the community has to agree to this in the first place. So the community decides to take the risk and the community decides then to bear the consequences.
[Speaker 3]
So, do you need a direct democracy or something like that to decide on what projects to pursue?
[Speaker 2]
I'll tell you, I think it can probably be a mix. And I think you can have a plan without a planner at some level. I mean, you're going to need conscious planning probably at some level, but algorithms, you know, can be used and a lot of information can be garnered through computers and so forth. Are you familiar with an idea by a couple of non-Marxists named Michael Albert and Robin Hannel, Participatory Economics, or PARICON?
[Speaker 3]
[Speaker 2]
Okay, well, I'll just run through this briefly. This goes back to the socialist calculation debate. And you know, somebody was able to show in a certain very stylized way that you could have supplies and demands balanced if you had a free market with an auctioneer.
and then in the nineteen whatever twenties or so forth what was actually over a period of time uh... to into the thirties some people came along and said well you could do the same thing get the supplies and demands to balance throughout society with the central planner And then I guess in the 80s, whenever these guys did it, maybe the 90s with the participatory economics, they said, ah, okay, so you got your auctioneer or you guys got your central planner, but we don't like any of these.
You can have a decentralized communal kind of process that does the same thing through iteration, trial and error, you know, by computer algorithms. You can get the supplies and demands to balance. I mean, I kind of like that because I'm very worried about bureaucracy. I'm very worried about some people having special knowledge and special control so they can rig the system. And if you don't have actual people running aspects of what you need to coordinate supplies and demands, the less you have of that, the better.
[Speaker 3]
I definitely like the algorithm. uh... example better than the central planner But it's still the case that in order to make supply and demand meet, we're still talking in the future, because production always takes time. And any production process takes a different amount of time than another production process. So I'm thinking about the example by the sort of solution that was offered by Taylor in 1929 about list prices, and sort of having central lists with prices.
And then when shortages and surpluses arise, you just adjust the prices. And you could have an algorithm to do that. But the thing is that when you have a shortage or a surplus, it's already too late to adjust those processes. And even if you adjust them accurately when the new production actually is finished, well, you're going to have a different problem because preferences have changed and you have discovered new materials and new means of production have developed and so forth. By the way,
[Speaker 2]
that's why the auctioneer thing is completely ridiculous. Because the Valraisian auctioneer... operates before anything takes place and all decisions are made and all trades are made not only for like right now but for the whole indefinite future of humanity. They're all made right now so we have to know you know what we would be willing to pay for something that hasn't yet been invented you know or why would we pay well because we're gonna be dead you know hundreds of years but we want to pass on an inheritance to you know.
and perhaps do something six months a year in advance so that you're not trying to calibrate the supplies and demands while the activity is going on but ahead of time.
[Speaker 3]
Well, I don't see how you can do that. I mean, I totally agree with you with the Valrathian auctioneer. That's why they have the assumption about perfect information, not about the present but about the future. it was
[Speaker 2]
[Speaker 3]
Yeah and there's no uncertainty so why bother with any of the real problems really. But I mean the thing is with six months or twelve months well those could be pre and post the iPod for instance which changed people's behavior completely and their needs and wants and what they wanted to see and what they were looking for right so I don't think you can plan because you don't know what's gonna happen Or at least that's the case in the market system where you have all these decentralized production decisions where entrepreneurs are competing for satisfying people's wants.
[Speaker 2]
Well, you can plan, you can't be immediately responsive in such a situation. Well, of course you can plan. You can plan. You know, so yeah, I mean, you don't know that the iPod is coming in two months. So, you know, you don't have a demand for iPods and you know, right, but okay, you know, six months a year, whatever it is, you're able to incorporate that. So, you know, a little patience doesn't hurt.
[Speaker 3]
Sure. But I mean, I'm not saying no one should ever plan. Right. I think it was Hayek. I'm not really a Hayekian, but I think Hayek said that, well, it's not about planning or not but it's who plans. Like is it a central planner or is it a community planner or is it each individual planning for himself. So it's not about planning or not. It's about where does the planning take place. Is it the individual or is it on a sort of aggregate level.
[Speaker 2]
I think you need both. For instance, you know, if you want to talk about producing consumption goods you need to know what the individual people want because a lot of consumption, you know, is going to be individual. Okay, so you need to know that when you talk about like work, you know, you definitely need like what kinds of work do people want to do, what are they willing to do, all kinds of questions like that.
When it comes to investment. because you're talking about the allocation of society's resources that needs to be thought of on, I think, on the social or societal level I was told last night that in Swedish there's a big difference between social and societal so it has to be on the societal level
[Speaker 3]
But how do you do that? Because an individual entrepreneur can choose to bear the complete risk of a venture by not having any slack resources at all. Investing 100% in this new thing that he or she thinks is the future, right? And he or she will also bear the loss of that. Or he or she can choose to have a bunch of slack resources and say, well, okay, I'll just tweak this if it doesn't pan out.
But on a societal level, You don't have the trial and error process. You don't have all these different decisions being made. So how do you choose how much of the resource, how much of the means of production to use as slack in...
[Speaker 2]
[Speaker 3]
There's only one decision maker for the community. And that's the problem.
[Speaker 2]
Why is that? Why is there only one individual decision maker?
[Speaker 3]
[Speaker 2]
Okay, sure. Thank you. So in other words, in both cases, there are a range of options. And there is a decision that has to be made regarding what is the best from among those options. So either an individual makes it and bears the risks or the community.
[Speaker 3]
Yeah, but that's a simplified problem. You might see a certain number of options that you can choose from. I might see a different number of options to choose from. And Martin might see a different number of options. The question then is, how do we choose from these options? Well, they're subjectively assessed. And I might believe in option two, which turns out to be a complete lie. the book.
[Speaker 2]
Diversification is good, okay? Not putting all your eggs in one basket is good and that has nothing to do with private property or communal property or anything like that, okay? So I mean I think it would be really dumb. I mean if people in the future want to lock themselves into something very non-diversified, they can do that. I think it would be dumb.
[Speaker 3]
So you just poll the community first to see what options they want to be considered? No, I mean, I think you would need people... I don't see the decision process...
[Speaker 2]
I think you would need people who were involved in, you know, thinking through various options, getting opinions, soliciting them by all kinds of means. And now we've got really sophisticated big data ways of doing this that I know nothing about. Okay. You know you come up with what you regard as a feasible set of options Maybe they're you know people who think differently so they would vote for like certain, you know kinds of Ways of thinking and you get some sort of representation, you know you might Then just like say, okay, so we've narrowed it down to You know this that the other four or five things, you know You and you might take a referendum on that, or you might do so by representative means. I mean, let people figure it out. It's not my job to tell people how to live.
[Speaker 3]
Yeah, sure, but how long does this process take? Because if you have private property, you decide over your property. You can take a long time if you want to, but you might actually lose the opportunity. But if you poll the whole community and then you have a referendum if you think it's necessary and then you think about this other stuff. Yeah,
[Speaker 2]
I don't know. I mean, that's a really important point and I think that people will have to grapple with that. That if, you know, sometimes it's better to act. you know, not to delay things even though, you know, you might make a somewhat better, more precise decision, you know, if you take your time. I mean, I face this every time I go shopping.
You know, I can study, you know, all of the options and look at the unit cost of everything, you know, or I can just like, hey, my time is worth more than this and grab something off the shelf. And I'm the kind of person who does the latter. So, you know. I like quicker action in some respects than being quote efficient. Because for me efficiency is efficiency of time mostly.
[Speaker 3]
Okay, but I mean I can see how this would work if you hold people's wants and needs constant. Yeah. and they're satisfied to the same extent and in the same specificities basically throughout this decision process. But in a market society, people change their minds, people satisfy a certain need which gives rise to other needs and then they just re-evaluate their situation, which means when you start production now and when you finish it, even if it is tomorrow, you're going to be satisfied. Consumers might behave completely differently. Sure,
[Speaker 2]
this is the iPod issue all over again. Yeah, yeah it is. And my answer was, you know, a little patience doesn't hurt. So, you know, you all of a sudden, I mean, this is an actual example that I read whereby this philosopher, well he calls himself a Marxist, but he thinks that like... China today is a socialist society, market socialism. So he's not a true Scotsman? He's... I'm kidding. He has a very different conception of what socialism is than I do.
I think China is a state capitalist society, a market state capitalist society. capitalist society. But anyway, David Schweiker does not like this idea of participatory economics and he goes, well, you know, this doesn't really work because, you know, hey, you know, every once in a while, you know, I'm gonna fry a piece of bacon with my eggs and, you know, what about if I just like, gee, I want to eat an avocado. Well, excuse me, you know, that kind of attention to your own whims.
and sacrificing the interest of all of us, because you decide, gee, I just cannot wait for this avocado or this occasional piece of bacon, because all of a sudden, it's like, I need to get it, so what am I gonna do? I'm gonna go bid up the price so I can get this piece of bacon. A little bit of patience doesn't hurt.
[Speaker 3]
Okay, well, maybe you think so, but maybe they're really eager people, or maybe there are people who would die if they don't get this bacon. I mean, literally die, not just say it. So what about those people? Or are you saying that, no, the community should be composed of individuals with the same time preference and the same sort of preferences? No, no,
[Speaker 2]
I think that people need to understand. I mean, if it's not possible to have a society where everybody has their own means of production, you know, and we live with, you know, communal means of production, if it's not possible to have that, Okay. And at the same time, give David Schweikert his damn piece of bacon, then most of us come before his piece of bacon.
It's really important that people not have to either starve or subject themselves to the domination of one or another employer. That really, to my mind, is more important than his avocado when he wants it or a piece of bacon. But this is only a question of how quickly these decisions can be drummed up, thought about, put into effect. conceivably if this is a big issue for society, people can devote resources to try and speed up the process in ways that we haven't even imagined.
[Speaker 3]
You mean if there's like a bacon riot or something like that then?
[Speaker 2]
Well I hope there wouldn't be a bacon riot but I mean, no I mean you know, I mean yeah I mean people can say we want things to go quicker because we want to be more responsive to changes on our whims. Okay fine.
[Speaker 3]
I can see the argument if you have at least a relative abundance of the means of production and of resources, but if they're scarce or if you make them scarce through an investment, I don't quite see how you can do that with community decisions. So for instance, if you dedicate a large portion of the resources to a very time consuming or long production project.
Then you don't have a lot of resources left for other things. So can you make such a huge commitment in that type of community? Or would you never, do you think, I mean in your opinion, do that simply because the risk is too great?
[Speaker 2]
Well, I think I agree with the underlying point here is that your willingness and ability on As you grow, you're going to be willing to devote more resources towards building up the future. But yeah, it depends on where you're starting.
[Speaker 3]
Right. And just for the record, I think we agree that large scale, huge investments as they're done today would probably not be done in either of our societies. I mean, if I interpret you correctly, they probably would not be made in sort of community Marxist based society. And I think in a free market, the markets would be a lot more decentralized and would be community based as well, which means.
you would invest in very different things you wouldn't you would actually have uh... economies of scale to the extent that you do today cuz because the government or the state is actually subsidizing uh... huge scale production through free transportation free roads and things like that so so the production today is optimized for huge production whereas in the in the free market where you don't actually extract wealth from some and give to others uh... you would you would have a smaller scale production. Okay,
[Speaker 2]
this is very interesting because I have never heard from a certain camp that I think you represent a willingness to sacrifice efficiency.
[Speaker 3]
I'm pretty sort of overproduce simply because transportation is so cheap and because these huge corporations don't have to bear their own costs. They can rather put those costs on taxpayers and smaller businesses.
[Speaker 2]
But you did mention economies of scale, which means that it becomes cheaper to produce per unit the bigger the scale of production is. Yeah,
[Speaker 3]
we're probably with some… I mean, there's probably some horizon to that. But it also depends on the optimization of the technology. And the optimization of the technology is skewed for the simple reason that transportation is over cheap.
[Speaker 2]
Right. But let's take something like steel production. I mean, steel is produced at a lower cost per unit when you've got big rolling mills and not backyard furnaces. Okay. So... I mean, when I say community, I don't necessarily mean, you know, a thousand people, five thousand people, you know. It could be a very large community. Now, I live in a city, you know, New York City, where I personally like way, it's just like, I'm, I can't stand it.
It's just way too many people all living together. But that's a personal preference. People might want to, you know, keep doing that and have like, you know, the kinds of lives that we have now that are just like kind of very fluid and you kind of like in contact with everybody all at once. And the community doesn't have much of a community feeling if that's what want, you know, so be it. I personally would prefer not to live like that. But I don't see any problems with large scale production per se.
[Speaker 3]
Yeah, I mean either. I mean the problem on seeing society as it is today or the economies as they are today is the state. And because of the state, there is an implicit subsidy for really large scale.
[Speaker 2]
I think you're saying that, you know, taxation incentives, subsidies, favor... large-scale production even when they would not be efficient otherwise? Yes.
[Speaker 3]
Okay. Where they would not be economically efficient. They could be technologically efficient.
[Speaker 2]
They could be technologically efficient. Okay. And what do you mean by economically efficient?
[Speaker 3]
Well, because very large-scale production as it is today. might benefit from subsidies. A good example would be railways, they're already there, or roads that are built by government and so forth. Whereas in a free market, well, those roads would not be built by a government because there would be none. And these businesses would have to cover that cost themselves which would mean that it's probably cheaper to have smaller scale production in several places rather than just one big.
[Speaker 2]
[Speaker 3]
[Speaker 2]
I don't translate because, you know, there's like all kinds of meanings of efficiency and economics and I didn't know like which one you were referring to. Yeah,
[Speaker 3]
[Speaker 2]
Yeah, you meant skewed prices. Okay, so where are we at here?
[Speaker 3]
Yeah, that's a good question. I think we agree that there is at least some production in society as it is today is too large scale. and that those investments would not be made either in a free market society or a Marxist society. I think that's where we started.
[Speaker 2]
Last night I had problems and I still have problems with talking about a Marxist society. It's not quite the you can't describe a society by the name of a person, right? Or even the name of a body of thought.
[Speaker 3]
[Speaker 2]
No, you're doing the same problem. I mean, it's the same problem. You're doing the same thing.
[Speaker 3]
[Speaker 2]
but it's a communal association of free individuals who have individual property. We typically call it socialism. Problem is other people call it socialism. I really think this is a matter of individual's preferences.
Um, what bothers me is when you've got like, you know, an anarchic, an anarchic society. Moreover, then you lay on top of the anarchy, you know, the rigging of things by special interests, like, you know, people who get economic rents from, from governments. And you just, you know, you, you got nobody like, you know, deciding that this is going to happen and you get, you know, this like urban sprawl and all these horrible problems arise and nobody's given it any thought.
[Speaker 3]
I agree with the problem. I'm not sure what an anarchic society with government subsidies would mean.
[Speaker 2]
Well, you have the underlying anarchy whereby, you know, you got like... Individuals all making decisions in their self-interest and, you know, nobody is like coordinating this and you're leaving it to some alleged individual, invisible hand. And then on top of this, you got the rigging and the special interest in the, in the Rensiki behavior that just compounds the problem. Why can't we have a public discussion of this before any of that stuff gets done? You know, and like, gee, let's look at the consequences of this.
[Speaker 3]
Well, I agree with that. And I would say it doesn't compound the problem, it actually creates the problem. So maybe that's it is.
[Speaker 2]
But that's because you probably believe in an invisible hand that...
[Speaker 3]
[Speaker 2]
Right, that's why you have to believe in it. You know, otherwise, I mean, you know, otherwise it would just be a fact. I mean... What ensures that decentralized actions undertaken by individuals, you know, only concerned with themselves, is even going to bring order?
[Speaker 3]
Well, it necessarily will, simply because you benefit yourself by serving others, by producing for other people. If they don't want to buy what you produce, then you're screwed, because then you only have the cost.
[Speaker 2]
[Speaker 3]
Why wouldn't it? I mean, what you're trying to escape is the narcissism and the egotistical, sort of short-sighted views of these people, right? Who only think of themselves, and so forth. No, no, no,
[Speaker 2]
I'm just asking how... It's almost mind-boggling to the average person who has not suffered through several courses in economics to believe that everybody is doing their own thing. to really think.
[Speaker 3]
Yeah, but I don't think people are doing their own thing. They are interacting with each other all the time. And they're exchanging things and they're exchanging ideas and they have joint ventures and so forth. And that's where the coordination emerges from. Simply because we adapt to what there is and we find opportunities where there is not. And we might pursue those.
[Speaker 2]
So the upshot is that Marx got this right where he says the order is... the end result of the disorder. Okay. In other words, the story goes that, you know, the market mysteriously, spontaneously by this invisible hand creates order. That's not what happens. What happens is there's mistake after mistake after mistake and they're continuously corrected.
So it's just like with a doctor, you know, like. Do doctors bury their mistakes? Well, that's what happens in capitalist markets. Like, OK, you've got all these pigs, and you're producing, you're raising hogs. And all of a sudden, there's the Great Depression. So how do you bring back supply and demand into balance? There's not demand.
Well, you take a big pit, and you shovel all the hogs into the pit. Or you got the Great Recession, and you got all these workers, and there's no need for them. so they live on the dole if there is a door they just start death so you've brought back uh...
[Speaker 3]
the supply of labor did to the level of the demand for labor that's not what i consider order why i don't think that there is this sort of cycle to it either and i don't think it is about making mistakes and then correcting the mistakes either i think it's about acting and then figuring out whether there was a mistake or not and tweaking it along the way And of course, if you make a mistake, you lose your capital, so someone else who didn't make a mistake gets more. So there's always this weeding out process of entrepreneurs and of the risk takers, which is where the order comes from, which is where progress comes from.
[Speaker 2]
And have you disagreed with anything I said or have you just made it sound good?
[Speaker 3]
Well, you made it sound bad. That's why I stated it in different terms.
[Speaker 2]
[Speaker 3]
Well, I don't think we're saying exactly the same thing, because you see a cycle going back and forth.
[Speaker 2]
No, I don't necessarily think of a cycle, actually. I was just saying that there's an imbalance. More supplied than demanded, more demanded than supplied, and it gets corrected by burying the mistakes.
[Speaker 3]
you know you kill off the workers kill off the hogs whatever my but i think that is a static view of it because i i don't think it is the case why don't think it is the case to begin with that they're actually in equilibrium at any time so so yes there there's a sort of a balancing trying to figure out yet where to go but that's not any person's decision that's right just emerges and the problem is that the equilibrium moves every single second sure simply because we satisfy different ones and we start producing different things, and we figure out new ways of using things. So you can't really say that we're ever in equilibrium and then we're pushed out or anything like that. It's always a discovery process. Yeah, yeah,
[Speaker 2]
I mean, if you knew anything about me, you would know that I'm known as a real non-equilibrium person. I don't think in equilibrium terms. So it's just an accusation. No. Here's, no. So when I say, supply is brought back in balance with demand. I mean as a tendential process, as a tendency, not that it actually ever reaches that point exactly.
[Speaker 3]
Right. a process that has been going on for thousands of years and will continue to go on forever probably unless we end up in star trek world uh... simp for the simple reason that there are more people there are more resources discovered and i don't mean natural resource but economic resources uh... then more goods in innovated and produced and people change their behaviors which gives rise to new behaviors and new wants and new needs and that means that equilibrium is always something that We as an economy or we as a community can aim for in the future, but we will never ever reach it. It's a moving target.
[Speaker 2]
[Speaker 3]
I mean, to refer to Hayek again, I mean, the market is a process and it's really a discovery process because we're figuring out along the way how we can use resources in better and better ways. Right. And we're figuring out, I mean, what that really means, better ways is to be able to satisfy more wants and more people's wants and more highly cherished wants as well.
[Speaker 2]
You seem surprised that I agree. You seem to think I'm a neoclassical economist or something.
[Speaker 3]
No, I mean, I would say that Austrian economics, which I would represent, is probably the only, or at least one of the two, or something like that, of the remaining classical economic schools. right even though it's based off of marginalism and so forth. But it's the same type of reasoning and I mean Marx was in that era as well. So I mean I can definitely see that and in my theory of the firm I based that partly on Marx though I didn't follow at all when he sort of followed a tangent into exploitation but his, I think his identification of the division of labor within the firm as opposed to in the market was absolutely correct. I mean I'm building off of that. So I see a lot of good things in Marx. I just don't see the society... I listened to your lecture.
[Speaker 2]
You gave a lecture at the Mises School or Institute on this. I listened to that, yeah.
[Speaker 3]
What did you disagree with? Because that would be interesting to hear. Well,
[Speaker 2]
the swipe at Marx for bad exploitation. But, I mean, you know, you can't talk about that without going back to a lot of theoretical building blocks.
[Speaker 3]
Sure, and what I did was, Marks like everybody else at that time just assumed what Adam Smith said about the division of labor and specialization. And everybody did back then.
[Speaker 2]
[Speaker 3]
Well, that and that it exists. And I think Marx was the person to most explicitly state that division of labor goes further within an organization than outside of it.
[Speaker 2]
Right. But Marx also... See, Marx understood division of labor and manufacture, hand production, as a stage in the development of capitalist production. And then he talked about machinofacture, or the modern factory, you know. And he said that that very detailed technical division of labor, you know, of like Adam Smith's pen factory, that gets overthrown with machinofacture.
[Speaker 3]
[Speaker 2]
You no longer have, you know, 19 or so people, you know, one pulls out the wire, you know, another straightens it, another cuts it. You got a machine that does everything and you got a person, you know, who's an appendage to the machine.
[Speaker 3]
[Speaker 2]
[Speaker 3]
Well, true, but I mean, there's specialization and division of labor in producing the machine.
[Speaker 2]
Oh, of course. But then even those kinds of process tend to be... characterised by how he understood machine manufacturers. So I mean, you know, like first of all, I mean, Marx says the capitalist production basically begins with simple cooperation, just drawing people together to work. And before that, like, actually capitalism begins before capitalist production with the so-called putting out system. where you had people supplying people raw materials that they would work up and then they would sell the product to that person.
So it was called the putting out system and they did textiles that way. But then the workers are brought together, then you get a later stage where you've got this division of labor and, you know, very fine division of labor, then you've got machine production. But actually in society right now, you got all of these different processes still operating.
[Speaker 3]
So, so what happens? I'm curious, but what happens after this phase of post-divisional labor with the machines?
[Speaker 2]
I don't know, you know as well as I do, you live in the same society.
[Speaker 3]
Right, but I thought maybe Marx had an idea of what would follow.
[Speaker 2]
I think Marx thinks that we have to... Now, Emmanuel is tapping his wrist to indicate that we have to wrap up.