16 Nov 2006

Inefficient?

Out of interest Derek, how do you deal with the usual criticisms levelled by critics of green economics/socialist economics? ie, that without competition and the incentive of self interest as the driving force of production, production would become inefficient and the quality and range of goods would drop off over the medium to long term?

I wondered if you had any pithy answers to these objections. I usually find myself blathering for too long when I try to address them. I'm sure you are much more experienced at fielding these sorts of questions.



Excellent and important question....in our economy goods and services are produced because we make cash out of doing so or are told to do so by the state.

While states can be democratised and markets embedded in society, we need to think about other ways of running the economy.

The crude principle should be that something is done because it is intrinsically worth doing, ecofeminists point out that the real life and death stuff of looking after kids, elderly relatives, much subsistence agriculture is done largely by wome for free because it is needed. The high paid stuff like working in the city, running mcDonalds is only done because of cash reward.

Music used to be about non cash motives, creative arts motivation is not for cash, so in a sense if we see a merger between work and art we will move in the right direction. With the net increasingly music is going to be free and people will perform because they like doing so.

Open source is a good example of where people doing stuff for free because they enjoy doing so produces better results than paid work.

So there is plenty of evidence to say that incentives in terms of it needs doing and it is enjoyable get things done.

however we need to come up with solid transition methods or the free rider problem will mean that the shitty jobs will not be done or rather continue to be done with those with the least economics power.

A modest non utopian start would be to revive and extend mutuals and cooperatives, they still work within the market so face pressure but are at least owned by those who run them.

Open source needs to be extended and defended.

Central planning works quite well for rail, post office, etc and certainly a big expansion of council housing is necessary but I agree with Jim a centrally planned economy looks inefficient, inflexible and undesirable.

Capitalism though I don't think so.

This is all discussed in my book Babylon, so do me a favour and get your library to order a copy.

Libraries are part of ecosocialism as well.

Incidentally competition is not universal in the market, most markets are dominated by a small number of large firms. Tescopoly is often the rule.

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