Democratic Planning and Market Socialism

* Article: Democratic Planners and Market Socialists: Can we be friends now ? By Robin Hahnel. 1997

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Summary

From the reading notes of Michel Bauwens, 2006:

Markets, to a certain point, may efficiently allocate resources, but they generative inequities, such as:

- 1) differences in ownership of capital

- 2) different human capacities

- 3) differences in deviousness: the market wipes out the less devious

- 4) differences in luck

Market socialists therefore generally propose measures to:

- 'equitize' initial endowments

- intervene a priori to avoid inequitable outcomes

- correct inequities a posteriori through redistributive taxes, transfers, and insurance

I. What about market inefficiencies ?

Positive is that markets push producers to increase the value of goods and services, and diminish the unpleasantness of getting the goods.

Negatively, it pushes producers to 1) externalize costs and 2) appropriate benefits.

Adam Smith coined the concept of the 'invisible hand' to denote the positive aspects. E.K. Hunt and Ralph d'Arge coined the concept of 'invisible foot' for the negative maneuvering behaviors.

Usually , the benefits go to clearly identified producers and consumers (f.e. car producers and consumers), while the cost of externalization are distributed and widely unequal, making reaction difficult.

RH notes that this feature would apply even in a perfect market of equals.

However, in the real world of unequal economic power, the most effective profit maximizing strategy is usually of the second maneuvering kind, i.e. reslicing the economic pie at the expense of the weak, of nature, of future generations.

II. Why Markets Undermine the Ties that Bind

Hahnel posits:

- a. markets undermine social ties

- b. markets subvert economic democracy

- c. commercials values undermine equitable cooperation

He further states that:

- capitalism is not satisfying essential human needs for the majority of the people on the planet

- it is not satisfying the need for self-managed meaningful work that educated people want

- neither the need for community, dignity, justice

- it devours the environment

- and fosters conflict