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August 26, 2005

three possible goals for the left

In Norway last week, it occurred to me that the left in modern times has taken three distinct paths, each with a different goal:

1. Reduce alienation. Marx's essential idea was that people should be able to conceive creative concepts and then implement them in the real world. Since individuals cannot realize impressive ideas by themselves, such creativity must be cooperative. In a capitalist system, some people conceive ideas and different people carry them out, and both kinds of people (i.e., capitalists and workers) are constrained by market competition. Therefore, everyone is alienated.

I think there is some truth to this diagnosis; but the main socialist and communist solution--workers' collective ownership of factories and farms--has been largely disastrous. Workers are much less alienated in a Tayota plant than in a Soviet one. If there is a strategy for reducing alienation, it probably involves some combination of the small, voluntary co-ops and land trusts described at community-wealth.org; plus policies to support parenthood (which is relatively unalienated labor), and a dynamic entrepreneurial sector.

2. Increase equality. There are strong theoretical arguments in favor of more economic equality than we have in the USA. My favorite argument goes like this. We are capable of producing enormously more value per hour of work than our ancestors did, not because anything that you and I have achieved ourselves, but thanks to an accumulation of knowledge, technology, and social organization. If you are born to parents with education, capital, savvy, ambition; and if they care about you; and if you live in a nice neighborhood in a developed country; and if you have reasonable genes and luck, then you can benefit hugely from the accumulation of progress. If, however, you lack most or all of these advantages, then you will capture little more value from your work than people did 3,000 years ago. This is unfair.

Therefore, if some beneficent being with superhuman power and intelligence (and an inclination to meddle in our affairs) showed up on earth, it would redistribute goods in a much more equitable way. However, in our actual circumstances, there are some big barriers to redistribution. First, in a country like the United States, the median citizen has enough wealth that he or she is not too enthusiastic about redistribution, which might only benefit those further down the ladder. Citizens of poor countries have even less political leverage over us than our own poor have. Second, redistribution probably reduces economic productivity; and we Americans are deeply committed to prosperity and progress. Third, any political power (e.g., a party or a state) that is capable of greater redistribution is also capable of self-dealing and corruption. As I've noted before, textile workers in Taiwan and Hong Kong earn 10-20 times as much per hour as textile workers in China and Vietnam--two countries where a Communist party monopolized power in the name of equality. Those parties now make their own elites rich by blocking independent unions, a classic example of corruption.

These skeptical arguments don't prove that we have the balance just right in the US in 2005. The standard measure of inequality has increased very substantially since 1980, which suggests that we could do somewhat better.

3. Improve Externalities. That's not a phrase that belongs on a bumper sticker or in a political speech. Nevetheless, the left has made the most progress since 1960--throughout the industrialized world--by mitigating certain negative externalities. An externality occurs when some people have a voluntary exchange that affects other parties who didn't consent to their agreement. The externality is the effect on the third parties. It can be positive: for example, a new downtown store can benefit me even if I never shop or work there, by lowering crime, beautifying my city, providing jobs for my neighbors, contributing taxes, attracting visitors, and so on. An externality can also be negative, and the usual examples are environmental. For instance, smoke can blow from a factory into the lungs of people who never consented to receive it.

The mainstream environmental movement accepts a system of private ownership and free exchange (notwithstanding problems of alienation and inequality), but objects to negative externalities and favors regulation--along with public education and tax breaks--to reduce these problems. This strategy has the great political advantage that it accepts the basic status quo of a market system. It has at least two big disadvantages: it cannot deal with all problems, and it sounds relentlessly negative. The cumulative effect of the environmental movement, for example, has been to suggest that the natural world is deteriorating because of the side-effects of human behavior. The world is getting worse, in short, and all we can do is to mitigate the decline.

But a strategy of improving market externalities can be made positive (as I argued once in a narrower post on environmentalism). In fact, most of the good things in life are positive externalities that arise as side effects of market transactions or as the public effects of people's work in voluntary associations. Much of ethics consists of acting so that one's externalities are positive. We could even define the "commonwealth" or the "commons" as the sum total of our externalities, the negative ones subtracted from the positive ones. Then the question becomes: What combination of regulations, opportunities for collaborative work, and moral education can best enhance the commonwealth?

Posted by peterlevine at August 26, 2005 01:20 PM


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