Systemic Collectivism

Discussion

Gus Dizerega:

"Systemic collectivism is new in human experience. It has arisen largely independently of human intent, and ironically, its ideological justification is in terms of individualism. In these ways it seems very different from the collectivism Hayek criticized.

Hayek described collectivism as an ideology and the organizations used to implement it. Central to collectivism is elevating one value above all others, and evaluating individual worth in its terms. The value might be race, class, or nationality, and could easily be others, such as gender or language.

How, then, can capitalism as a system be collectivist? To understand this issue, we must distinguish between capitalism and markets. Markets describe any system of cooperation where formally voluntary exchanges are made, coordinated by signals from a price system reflecting the pattern generated by all such exchanges. Capitalism is included here, but so is a craft fair, a farmers’ market, proprietorships, cooperatives, the worker-controlled firms based in Mondragon, Spain, and other forms of economic cooperation where prices serve only as signals. Non-capitalist market economies have proven very successful, even in the context of contemporary world trade (diZerega 2014).

Ludwig von Mises wrote prices in the market are signals facilitating participants as to how and what to produce (Mises 1981 [1922], II.5.35). While conducting business, an independent businessperson can integrate many values beyond profit maximization and often these values will reduce total money profits even if it increases the businessperson’s ‘psychic income.’ Prices signal how great such a monetary reduction might be from prioritizing other values, and the businessperson determines whether the monetary cost is worth the gain. For example, Brian Gitta created a test for malaria that could change how one of the most destructive diseases in human history could be treated. He explained he created his company “to close the gaps between communities and their rightful access to healthcare” (Thomson 2019, p. 47). For Gitta prices are important signals, as Mises described, but other values than money are more important.

Capitalism is a certain kind of market society distinct from other market orders in that economic success depends on subordinating all other values to profit (diZerega 2019). The organization most typical of capitalism, and exemplifying its dominant values, is the joint stock corporation. The logic of corporate ownership replaces individuals’ pursuit of varied values with maximizing profit alone. Milton Friedman famously argued CEOs who subordinate profit to any other value are essentially robbing shareholders by using their wealth (Friedman 1962, chapter 8). In addition, corporate ownership is structured to reward anyone who, upon noticing unmaximized profits, can take the company over, replace its management, and reap the reward of more valuable shares. As more and more of an economy becomes dominated by such corporations, price signals become price commands because corporate structure penalizes prioritizing any other value. Prices shift from being signals to being commands, and those responding most quickly amass more capital at the expense of those who react more slowly or in response to other values.

In this way, as a coordination system, capitalism rewards those who best serve it by transferring additional wealth to them, at the expense of those who serve it less ably. As with the collectivism Hayek described, we find a single ideological value trumping all others: maximizing money profit. Theorists, such as Milton Friedman, arise who justify this system ideologically. But the theory is secondary to the systemic biases that push for such behavior.

Of course, individual business people with complex values motivating their actions can still exist. For many years I was one, myself. But such people must adapt to an environment increasingly shaped by organizations subordinating everything to money profit. In the process institutions traditionally not reducible to a pure business model increasingly become so, such as the news media (diZerega 2004). Many huge tech firms, such as Google, were begun with countercultural values (Markoff 2006). Despite their founders’ intentions, they soon ended up dominated by capitalist values alone (Zuboff 2019, pp 82-5).

A totalitarian state is an organization that dominates all others. In stark contrast to a totalitarian party, and the organization it creates to rule, there are thousands of corporations, often in competition with one another. It is here that we must shift from Hayek’s focus on organizations of rule, or taxis, to the larger systems within which they exist, to cosmos." (https://cosmosandtaxis.files.wordpress.com/2020/04/dizerega_ct_vol8_iss_2_3-1.pdf?)