Why are the left statist?

Chris Dillow (continues) to wonder whether the left’s “statism has, in effect, crowded out interest in non-statist alternatives.” This paper suggests not, or at least suggests that there may be other factors at work, and points the finger at the economics profession in particular.

Panu Kalmi looks at the disappearance of cooperatives from economic textbooks. He finds that books from before 1945 were characterised by “theoretical insights and careful documentation,” while more recent books “are characterised by the absence of any systematic approach to cooperatives and, at worst, provide misleading information.”

There appears to have been a systematic if accidental scrubbing from history and academic thought of cooperatives as viable alternatives.  Importantly for our discussion, there is little evidence that cooperatives have seen anything like a proportionate decline in actual economic significance, in some ways they are more prominent today. Rather, changes in the economics profession in particular and society in general may be the culprit.

The role of economist has changed from social theorist to “experts” whose role it is to specify optimal government policy. For this we may well have Keynes to blame, policy makers faced with seemingly insurmountable problems do not want to be told “its complicated.” No, they want a button to press.

Considering Keynesianism and subsequent developments in economics had to appeal to policy makers to gain influence, it is little wonder that the cooperative and other indirect forms of exerting influence and power were crowded out by more top-down policies.

Given 1) the dearth of good ideas, research and even mentions of cooperative forms in mainstream literature and 2) the difficulties such policies would meet in actually getting implemented, the reason the left remains statist appears obvious. We are all statists now.

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14 thoughts on “Why are the left statist?

  1. I would love the Non-statist left to come back into fashion. I think people like Kevin Carson are doing a great job, but they just don’t get the exposure needed to get people flocking to the cause.

    Now, me and Jock Coats are working on a little project that we hope may make a contribution to correcting this- but at this point in time, the political spectrum is, both left and right, dominated by Statist versions of ideas, suppressing libertarian ones everywhere. Conservatism is suppressing Libertarian capitalism, and the Statist left is suppressing libertarian socialism.

    1. The ebook sounds interesting, but I’m not sure I’d buy it. I’d just read DK, Chris Dillow, Scott Sumner, Bryan Caplan etc. for free.

      That cynically said, there is likely to be a space for whatever you seem to be planning from what is written on your blog.

      1. On the contrary, it would feature none of those names, and we’re planning to give it away for free anyway. It would me more along the lines of Carson, Chartier, etc, etc. No right wing libertarianism involved.

        1. Interesting! That sounds like something I’d enjoy.

          To be honest, I know your views on intellectual property so I don’t know why I’d assume you’d sell it!

  2. My standard response is one of scepticism of conventional definitions of the political spectrum and the people who claim to belong to each part of it.

    Cooperatives are a mutual ownership structure, which means they offer no immediate route to personal advancement (either through individual or group wealth or power), and as a result they become a target of supression by advocates of both the private and state ownership models.

    So it’s not statism which is crowding out non-statist alternatives, but political polarisation into supporters of national and private ownership which has squeezed out a plurality of mixed, intermediate and other models.

    And the people who claim ideological badges to fight their corner are simply fitting in with the tendency to divide by opposition rather than reconcile and unify.

    And you might argue that this is the true legacy of the generation of politics which debated privatisation, nationalisation and marketisation as exclusive ideological economic solutions to the social problems caused by inequity and inequality.

    1. “the true legacy of the generation of politics which debated privatisation, nationalisation and marketisation as exclusive ideological economic solutions to the social problems caused by inequity and inequality.”

      As you can see below, I think you may have a point.

      I would question your definition of cooperative and mutuals as organisations which “offer no immediate route to personal advancement.” The problem with many firms is that they offer immediate route to personal advancement for people who do not deserve them. Cooperatives can be as hierarchical as necessary or desirable, without the unecessary hierarchy of private and public companies.

  3. I think you’re spot on to blame Keynes. He offered the hope that simple top-down policies could maintain full employment – and this deflected interest away from market socialism.
    The trouble is, this was not only a false hope, but it also omitted any idea about inequality of power.
    The left has never really come to terms with the collapse of Keynesianism in the 70s.

    1. Thanks for your comment. BTW, I bought the end of politics and found it very enjoyable, think of me next time a mediocre royalty check roles in.

      Anyway, I think we may have a serious problem Chris.

      I haven’t been able to express this idea succinctly before, but here goes. I think you’ll be sympathetic as I suppose I cribbed much of it from you.

      In the period from 1930-1950 real economic growth was significantly below potential economic growth. The period from the 1950s to the 1970s offered therefore an unprecedented opportunity for labour and capital as real growth caught up with potential growth.

      During this period labour could demand large concessions from capital because even large concessions would not seriously negatively impact economic growth; there was a lot of low hanging fruit in Tyler Cowen’s parlance.

      During this period labour demanded and got high wages, real wages rose and the share of wages in GDP rose also. What labour did not demand was more influence over the running of the firm or stakes in the ownership of the firm.

      What worries me is that, short of another Great Depression coupled with massive technological advance, the bargaining position of labour will never be in the same position again.

      In short, political economy is path dependant and organised labour has blown its one chance to put the world on the path to more egalitarian, participatory forms of ownership, power and politics by demanding and receiving above inflation pay rises for an 1/8th of the history of industrial capitalism.

  4. Hmmm.

    “What labour did not demand was more influence over the running of the firm or stakes in the ownership of the firm.”

    Also, this meant that labour did not demand more influence over the running of the union or stakes in the ownership of the union.

    “Cooperatives can be as hierarchical as necessary or desirable, without the unecessary hierarchy of private and public companies.”

    Organisations require management to function: even co-operatives require management (not least because many people do not want to “manage”, they just want to “do”. Believe me: I work in a software firm and most developers have no interest in managing anything or anyone).

    Management requires a hierarchy to establish lines of decision-making and, most importantly, responsibility. (Ultimately, of course, the decision-making buck should stop with the shareholders who risked their money in the company (and, in a small company like ours, it does).)

    But more than this, some people would rather take the higher wages than take the equity in the firm: again, many of us were offered shares (aside from the options that we have been granted) and interest-free loans to buy them; again, very few were willing to take lower wages in return for equity.

    Fundamentally, people value different things—and not everyone values an equity stake.

    DK

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