People live in an artificial binary where they believe communism and capitalism are the only two economic systems in the entire world.
I’ll be bold and say it outright: communism is a fundamentally broken idea and sucks balls, and so is capitalism, but both in similar-yet-different ways.
Communism is faulty economics and fails to differentiate between man-made capital and god-given land and natural resources, grouping both as “the means of production”. The problem with this is land and capital have very different properties. Where land (and natural resources) cannot be created and are zero-sum, capital must be created and is not zero-sum. Communism blatantly ignores this and has a zero-sum view on capital, meaning it suggests policies that fail to effectively produce new capital, and thus fail to effectively produce new wealth and prosperity. Further, when the state takes monopolistic control over land and capital (in addition to its existing monopoly on violence), it concentrates far too much power, which is why communist countries keep on becoming brutal dictatorships.
Capitalism, on the other hand, also fails to differentiate between land and capital, but in a different way. Instead of socializing both, it privatizes both, allowing massive rent-seeking and exploitation as a result of monopolization of land and natural resources. It also often willfully ignores that negative externalities and other market failures actually make society, on the net, poorer and less prosperous. Further, this concentration of wealth into the rent-seeking, monopolist class grants them more political power to make it even easier to rent-seek, further concentrating their own power and wealth.
What I want instead is a Georgist system that correctly identifies this distinction between land and capital, and then uses economically proven policies that respect the inherent differences between land and capital.
Capitalism v. communism is certainly a false dilemma. There are other alternatives such as Georgism as you noted. I would go further and advocate a Georgist economic democracy where all firms are structured as worker coops. Similar to the problem you identify with capitalism in that it fails to treat land and capital differently, the mainstream of Georgist thought fails to differentiate labor from capital in an important respect. Labor can’t factually be transferred unlike capital @196
I agree that I think worker coops elegantly solve certain problems (notably the principal-agent problem), but they also have certain drawbacks. Notably, they have more difficulty raising funds, they tend to be more risk-averse, they tend to be more growth-averse (people don’t like to dilute their own stake within the company with more people, but this means they don’t typically scale as easily or quickly to benefit economies of scale), and they tend to pay worse than hierarchical companies (counterintuitive as that may seem at first if the whole goal of market socialism is to have workers get more of their value back).
So is the solution to just throw our hands up and say, “Screw it, nothing we can do but let hierarchical organizations win”? Not quite. We still do see plenty of successful coops, notably in the form of credit unions. We also have unions and syndicalist solutions. We still have minimum wages (which are supported by most economists, as it turns out you can raise minimum wages a certain amount without raising unemployment because there’s often a non-zero amount of monopsony power in the labor market).
Further, I do think a Georgist system would empower labor much more than now. Without a housing crisis (thanks to LVT and YIMBYism), with a citizen’s dividend, with quality public education (education has positive externalities and thus deserves a Pigouvian subsidy), with more jobs (thanks to more economic growth and less rent-seeking), and with public works projects (essentially Pigouvian subsidies for things like environmental cleanup), I think labor would have much more bargaining power with employers.
For instance, the professional class right now gets good pay and generally good quality of life , despite rarely having unions or worker coops, precisely because they have high negotiating power with prospective employers.
My inclination is to strive for a more Georgist system, encourage unions, use minimum wages and government spending technocratically, and then see if more is yet needed.
The challenges you mention don’t really refute the main arguments for worker coops, inalienable rights theory, even if they were unsolvable problems that couldn’t be solved no matter what other changes were made. Economic democracy aims for workers to get the positive and negative fruits of their labor in property rights terms not value. This is based on the tenet that legal and de facto responsibility should match. Capitalist firms don’t satisfy this basic tenet. They are thus illegitimate @196
People live in an artificial binary where they believe communism and capitalism are the only two economic systems in the entire world.
I’ll be bold and say it outright: communism is a fundamentally broken idea and sucks balls, and so is capitalism, but both in similar-yet-different ways.
Communism is faulty economics and fails to differentiate between man-made capital and god-given land and natural resources, grouping both as “the means of production”. The problem with this is land and capital have very different properties. Where land (and natural resources) cannot be created and are zero-sum, capital must be created and is not zero-sum. Communism blatantly ignores this and has a zero-sum view on capital, meaning it suggests policies that fail to effectively produce new capital, and thus fail to effectively produce new wealth and prosperity. Further, when the state takes monopolistic control over land and capital (in addition to its existing monopoly on violence), it concentrates far too much power, which is why communist countries keep on becoming brutal dictatorships.
Capitalism, on the other hand, also fails to differentiate between land and capital, but in a different way. Instead of socializing both, it privatizes both, allowing massive rent-seeking and exploitation as a result of monopolization of land and natural resources. It also often willfully ignores that negative externalities and other market failures actually make society, on the net, poorer and less prosperous. Further, this concentration of wealth into the rent-seeking, monopolist class grants them more political power to make it even easier to rent-seek, further concentrating their own power and wealth.
What I want instead is a Georgist system that correctly identifies this distinction between land and capital, and then uses economically proven policies that respect the inherent differences between land and capital.
Hot damn someone with a reasonable and intelligent take, thank you
Capitalism v. communism is certainly a false dilemma. There are other alternatives such as Georgism as you noted. I would go further and advocate a Georgist economic democracy where all firms are structured as worker coops. Similar to the problem you identify with capitalism in that it fails to treat land and capital differently, the mainstream of Georgist thought fails to differentiate labor from capital in an important respect. Labor can’t factually be transferred unlike capital @196
I agree that I think worker coops elegantly solve certain problems (notably the principal-agent problem), but they also have certain drawbacks. Notably, they have more difficulty raising funds, they tend to be more risk-averse, they tend to be more growth-averse (people don’t like to dilute their own stake within the company with more people, but this means they don’t typically scale as easily or quickly to benefit economies of scale), and they tend to pay worse than hierarchical companies (counterintuitive as that may seem at first if the whole goal of market socialism is to have workers get more of their value back).
So is the solution to just throw our hands up and say, “Screw it, nothing we can do but let hierarchical organizations win”? Not quite. We still do see plenty of successful coops, notably in the form of credit unions. We also have unions and syndicalist solutions. We still have minimum wages (which are supported by most economists, as it turns out you can raise minimum wages a certain amount without raising unemployment because there’s often a non-zero amount of monopsony power in the labor market).
Further, I do think a Georgist system would empower labor much more than now. Without a housing crisis (thanks to LVT and YIMBYism), with a citizen’s dividend, with quality public education (education has positive externalities and thus deserves a Pigouvian subsidy), with more jobs (thanks to more economic growth and less rent-seeking), and with public works projects (essentially Pigouvian subsidies for things like environmental cleanup), I think labor would have much more bargaining power with employers.
For instance, the professional class right now gets good pay and generally good quality of life , despite rarely having unions or worker coops, precisely because they have high negotiating power with prospective employers.
My inclination is to strive for a more Georgist system, encourage unions, use minimum wages and government spending technocratically, and then see if more is yet needed.
The challenges you mention don’t really refute the main arguments for worker coops, inalienable rights theory, even if they were unsolvable problems that couldn’t be solved no matter what other changes were made. Economic democracy aims for workers to get the positive and negative fruits of their labor in property rights terms not value. This is based on the tenet that legal and de facto responsibility should match. Capitalist firms don’t satisfy this basic tenet. They are thus illegitimate @196