ThoughtStorms Wiki

Context : OnMarkets

Markets don't exist in a vacuum. They are embedded / situated in civil society.

Some constraints on markets :

  • PropertyRights : what things count as property, and what are your rights to give, exchange, aggrogate, borrow, lend it? (See also HernandoDeSoto, IntellectualProperty, PropertyModules)
  • Bankruptcy rights : if you borrow and can't repay, who is responsible? Lender equally culpable? MoralHazard etc.
  • How is misfortune ameliorated? (See also TheEndOfInsurance) NOT a market issue but a pragmatic, political decision outside markets
  • Trust ... how is it maintained? Always an appeal to government to back-up agreements in law? (OnTrust)

You might want to see DavidBrin's speech to the LibertarianParty convention, esp; this section Markets do not arise out of natural law. If they did, there would have been more markets in the past. I'd rather look at markets in a completely different way - as ingenious human constructs.'' – BillSeitz

Yep, very good. Thanks. I think I can agree to about 90% of that.


See also :

Another Rant

Pulling together some ideas on a reply to Evan over on the Utopia Design Tribe :

(This version, slightly improved on original posting.)

Markets are always embedded, by which I mean they exist in a wider political context which sets certain preconditions.

For example :

  • what things count as property? And how can "items" of property be delimited? (Do we include land, companies and shares in companies, options and futures, ideas, debts, people etc?)
  • What things count as crimes against property and what things don't? In other words, what rights of access and exclusion apply to various pieces of property. (For example, even if an idea is property, is it "fair use" to time-shift TV programs? Can I hunt rabits on my neighbour's land? Can I fly over it in a balloon? Can I paint (and sell) watercolours of it? Are you stealing if Monsanto's GeneticModification invades your own crops?)
  • what are the limits of market power and responsibility? A good example here is "bankruptcy". Under what conditions are you allowed to go bankrupt and escape debts you've incurred? Which is also to say, what extent is the lender also partly responsible for bad debt?
  • What, if any, provision will be made for those who are unable or unwilling to succeed in the market? Will they starve or will something be done to take care of them?

Now we should note 3 things about the answers to these questions :

1) Apart from the last, the questions absolutely have to be answered in order for a market to exist. You can't trade property if you can't define what it is. You can't have a legal notion of debt (and hence investment) without defining what happens when debtors can't repay.

2) These questions cannot be answered within the market or by the market. They are parameters which define how the market will work.

3) So the only way these questions can be answered is by political decisions being made.

Those political decisions need to be implemented through some kind of social / political power, and probably some institutions which can wield that power.

Now, we don't need a NationState as conventionally understood. Decisions can be enshrined in anything from the code of Hammurabi, to communal votes within the local commune to rules layed down by central banks given a mandate by government given a mandate by a US-style election.

For the decisions to be binding, they must be backed up by some kind of political force. Now that can range from coercive threats of violence, through to entrenched cultural conventions (you must do this because that's the way it's always been done), through to social pressure (no one will talk to you if you break the rule), through to appeal to sense of justice (for example, I've never tried to avoid paying my taxes because I believe the WelfareState is a good idea, and it's part of my self-image as being a decent person that I contribute to it. I don't pay my taxes because of threat of force by the state. I'm coerced by a softer persuasion.)

Any viable utopia still needs decisions about the parameters of the market. And will still need institutions to maintian those decisions.

Now, I call myself a "socialist". Because I believe we should make those decisions with a broadly egalitarian bias. We should parameterize our markets to produce results that benefit and include everybody. And because I think property should be defined pragmatically to that end.

To be more specific, I sometimes call myself "DecentralizedLeft" or a "utopian socialist" but "left anarchist" is a reasonable alternative. What all these titles are trying to get at is I'm always sceptical of the institutions which will wield this political power. And to try to ensure it never gets abused or repressive - or even that it becomes so rigid that society stagnates - I think we need a plurality of more local institutions, each with a little bit of power. Each with some influence on the others.

But what I don't believe is that we can do without this level of political institutions. The market doesn't stand on it's own.

My problem with "right-anarchists" or "anarcho-capitalists" is that they generally tend to view property laws and other parameters of the market as unquestioned and unquestionable "givens". They want to minimize political power except where it defends the current property and market system. But they don't want political power to have any explicit role in defining those rights or their limitations. Instead we're to unquestioningly accept the market parameters we've been given by tradition.

: This isn't strictly true, of course. Rich corporations are always trying to tweak the system to their own advantage. (Eg. extension of CopyRight) Some right-libertarians, to their credit, do oppose this.

As an example. I think the nation state as we understand it is going to lose a lot of it's power. And that's potentially a good thing ... if we can put in place a larger number of smaller, more local institutions to replace it. I think there's a good chance that these local institutions will share my bias towards notions of "fairness" and "justice" of distribution. Certainly more than large, impersonal states. (I think that, because I think the values of fairness are very deep within our culture because they've been necessary in small tribes and villages for tens of millenea.)

OTOH, I'm very afraid of a nightmare alternative scenario, where the current definition of market ossifies. Where decisions about property, instead of getting distributed down to more local institutions, actually perculate up to international bodies like the IMF / WTO that aren't democratically accountable and are strong compared to weak national governments.

If this happens during the decline of the nation state, we'll find ourselves in a position where the state has become nothing more than the protector of property rights which are far, far harder to question and change. This strikes me as the world that right-anarchists and libertarians are hoping for. (Maybe compare EmpireThinking for a variant interpretation of this scenario.)

See also :

Contrast :

  • PrivateLaw for attempts to do a lot more by the market


1) Looks like BillSeitz:MarketEconomy is going to be developing a response by deriving the "natural" form of the market from first principles.

This reminds me of InformationalistReductionOfCapitalism and the discussion with Darius on MovingToTheRight, which might be interesting here. Although I don't think any particular market parameters are "natural" some might be easier to implement on the underlying substrate we understand through GraphTheory etc. For example, OneWayLinks are probably necessary to make any large viable network / system. So we can't ignore this constraint.

Aside : Don't know why we have to use emotional terms like "hate" though. I'm critical. I think there are problems with all market-characteristics (purchase, rent, interest). Not necessarily in the abstract ideal, but given the particular BillSeitz:ConText of the world we live in. So I think we should have a go at fixing them. Is this "hate"? (See also : OnContext, HackerSocialists)

2) Point 6 in the Roderick T. Long article (See PrivateLaw) that markets evolve contemporaneously with social / legal apparatus is well made. And intended to defend against the idea that government sanctioned legal property is necessary for a market. I'd agree but don't think it can be extended against all extra-market social agreements.

See also :

  • RawlsVsNozick maybe?