Past, Present, and Future Markets
Past
In all of the market economies prior to capitalism markets were embedded in society and existed primarily to serve the needs of those societies. It was shown by the preeminent economist Karl Polanyi that in those previous economic systems market relations were less important that social relations, reciprocity, and community obligations. Whenever markets did attempt to rise to power then society pushed back. Such push-back is evident from a 14th century document in which profitable merchants were described as “Man-haters” who were opposed to the common good.
Present
In capitalism private investment (i.e. capital) mediated through the financial market utilizes the labor and retail markets to increase itself. This increase is a necessity because capital is by its very nature expansive. When allied with the power of the State then capital successfully forces the disembedding and ascension of market relations from society resulting in capital achieving and maintaining social dominance. Society and culture now must serve the market.
Future
Since capital enters the economy through the financial market in a post-capitalist economy the financial market would be replaced with non-capital mechanisms of investment. This absence of capital would not mean the end of the other markets. Markets, such as labor and retail, would continue to exist but would evolve to take on new roles and functions in society.
There’s much we can’t know about the evolution of markets in a future economic democracy. But one thing we can say with confidence is that with the absence of capital then we should expect to see a re-embedding of markets into society. Markets would return to their historic and natural role of serving society rather than forcing society to service them.
4 comments:
If this mechanism of public investment was democratically accountable (and hopefully it would be), would the people not then require it to make the best possible use of the tax money that they are forced to pay into it? In that case, might the taxpayers require it to be... profitable? To show evidence of actual growth? It could easily become a state controlled version of the very same financial market.
And on the other end of the scale, in the absence of private investment, would we then have a situation where no idea could attract investment without support from the politicians controlling the only available investment source?
Thank you for your comment, John.
My next series of postings that I have planned involve introducing several examples of existing non-capitalist models by which to build a non-capitalist investment system. In addition, the series will offer some proposals of what such a system might include. I will strive to incorporate your questions into at least one of those future segments.
If the economy is like every other system in the universe, it has emergent properties. The more entities involved in the system, the more complex the system, and different properties emerge. Like all complex systems, whenever anyone tries to impose order on it, it falls apart and dies (thus the deaths of almost all the communist countries to date). What we now call emergent properties, Adam Smith called the Invisible Hand. Certainly the economy will change as we change the entities in it, and add entities to it. But we have to allow it to naturally evolve if we want to have the most creative, productive, and value- and meaning-creating system.
Excellent points, Dr. T. If you notice I didn’t propose touching the retail or labor markets, just the financial markets. With the removal of capital and the financial markets then the other markets would evolve just as the various markets evolved after slavery and the slave market were outlawed. Post-capitalist markets should be allowed to evolve naturally.
And I’m glad you mentioned Adam Smith for capitalists forget that he was opposed to corporations (“joint-stock companies” using his language).
Thanks for your comments.
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