Have you guys come across the Post-autistic economics (PAE) site?  Le Monde
Diplomatique reviewed what seemed a "revolt" from French Economics students
against othodoxy a year or so ago - and it has spread from there.  At
http://www.paecon.net/.  I confess I enjoy the newsletters.

Chris

> -----Original Message-----
> From: Discussion forum for environmental ethics.
> [mailto:[log in to unmask]]On Behalf Of Gus diZerega
> Sent: Saturday, 3 November 2001 9:55 a.m.
> To: [log in to unmask]
> Subject: Re: Local Environment
>
>
> on 11/2/01 11:30 AM, Steve at [log in to unmask] wrote:
>
> > More clarifications:
> >
> >
> >> Yet there is a deeper problem than this.
> >>
> >> The market works as well as it does because it simplifies
> >> relationships via
> >> the price system.  That is the chief means for internalizing a
> >> great deal of
> >> otherwise disparate information.  Problem is that when a system is
> >> dominated
> >> by institutions biased in favor of seeking money values over all
> >
> > False.  The other values are represented via the consumer's
> > preferences.
> >
> This is the tried and true economist's approach to eliminating tough
> problems by defining them away.   Choice is context specific.  I suggest
> taking a look at Mark Sagoff's Earth's Economy and his discussion
> of Mineral
> King valley - an example that I have replicated in every class I
> have taught
> that touches on these issues since reading his book years ago.  People
> always choose in contexts - that is partly why in my view
> Rawlsian "choice"
> is no choice at all.
>
> Once I was a libertarian and believed the consumers' preferences argument.
> No more.
>
> >
> >> others -
> >> corporations - decisions will tend to be limited by the rate of
> >> interest,
> >> which is geared to a very different time scale than ecosystems.
> >
> > I am not sure how this is different than the problem with
> > externalities.
>
> If you define externality broadly enough it is one - but one that
> cannot be
> internalized since it determines how investment choices are made in the
> market.  Internalization - if the term is to be kept - must take place
> outside of pure market institutions.
> >
> >
> >> (Prices
> >> tend also to remove things from one context of relationships - a
> >> natural
> >> community for example - and place them in another - that of
> >> commodities
> >> where all value is instrumental.)
> >>
> >> While the rate of interest reflects human time horizons, individual
> >> choices
> >> balance those horizons and many other values, in different ways
> >> with
> >> different people.  Hence, human scale decision contexts are more
> >> complex,
> >> able to take more varied values into consideration, than can
> >> corporate
> >> decisions at such large scales that rates of $ return and the
> >> interest rate
> >> trump all other factors.
> >
> > Interest rates are not set by corporations alone.  Consumer choices
> > will influence the interest rate as well.
>
> Yes - and I neither said nor implied that corporations set
> interest rates (I
> mentioned individual time horizons).  But corporations certainly react to
> them.  The overall pattern of saving and spending sets interest
> rates (plus
> the Fed).  Corporations are a part of this pattern.   This point does not
> affect my argument.
> >
> >
> >> The point is that all systems of social cooperation have systemic
> >> biases
> >> that are not necessarily the same as the individual value
> >> preferences of
> >> those who act within them.  The systemic biases of the market are
> >> linked to
> >> what maximizes money acquisition because people who may be
> >
> > False.  The participants in a market are in the market for different
> > reasons.
>
> There are some subtle issues here, so I will go slowly.
> This second sentence (but not the first) is true.
>
> > Consumers are in the market to maximize their welfare.
>
> This sentence is true by definition.
>
>
> > Thus, the aquisition of money is only of secondary importance if
> > that.
>
> True for normal consumers, but not for the corporations that arise in the
> process of serving consumer needs and desires.
>
> > If a consumer can increase his/her welfare while reducing
> > his/her income then all the better.
>
> Yes - but then they will have fewer market resources and be less able to
> influence market processes.  This is my point that what counts for a
> resource - a means of serving a need - for a human being is not
> the same as
> what counts for a resource in pure market institutions.  In the lack of
> perfect fit here are embedded all sorts of problems ignored by market
> economists in general.
>
> See, for example, diZerega, "Market Non-Neutrality: Systemic Bias in
> Spontaneous Orders" Critical Review, 11:1, 1997.  You can also find the
> article on my web site under "Politics" by going to www.dizerega.com
>
> > Corporations are in the market
> > to maximize profits, or at least this is the typical assumption.
>
> That is also my assumption.
>
> Note your rebuttal focuses only on consumers, not the context in
> which they
> act.  But my argument focuses primarily on the context.
> >
> >> successful in
> >> their own eyes but choose values other than money maximization will
> >> be at a
> >> disadvantage in terms of acquiring market resources with those who
> >> seek only
> >> such values.  Some people are in this latter category.
> >
> > They are at a disadvantage only as a result of their own choices.
>
> Yes.  So?
>
> > Further, I am not sure how they are at a disadvantage.
>
> Try arguing that those with less money are as able to influence the market
> as those with more, all else being equal...  Those with less money may be
> happier, they may be wiser, but they will have less impact on the
> market as
> a whole.
>
> > Most
> > corporations do not care who they sell to (rich vs. poor), at least
> > in theory.
>
> True.  So?
>
> > Now if you are saying that a person is at a disadvantage
> > because of their choices their income stream is less than another
> > person who made different choices, again it is based on personal
> > preferences.
>
> The point I am making distinguishes between systemically defined
> resources -
> whether the self-organizing system be a market, science, language, or
> democracy, and resources as they apply to individuals seeking to
> meet their
> needs and desires.  This problem is hidden so long as the market
> is defined
> as a neutral transmission belt for choice.
>
> The problem begins to appear once we see that there are a number of
> transmission belts rooted in formally voluntary transactions which serve
> different values - the least controversial example I gave above
> (other than
> the market) is science.  While both are formally voluntary, science cannot
> be reduced to the market nor vice versa.  They are different systems
> coordinating different kinds of knowledge in different ways. (On
> science see
> M. Polanyi, J. Ziman and D. Hull)
>
> Being successful as a human being is not the same as being
> successful in the
> market or being successful in science.  Hopefully those
> successful in one of
> the latter will also be successful as human beings, but clearly
> one can be a
> happy human being w/out being particularly successful in these endeavors -
> and one can be very successful in them and a miserable wretched
> human being.
> >
> >
> >> Corporations, as
> >> expressions of pure market relationships, are institutionally and
> >> legally
> >> designed to seek only those values.
> >
> > Which is only half of the market.
>
> A pretty important half...
> >
> >
> >
> >> Ethically speaking, then, small scale relationships where markets
> >> are only
> >> one of many factors influencing behavior are ethically deeper and
> >> more
> >> complex than pure market relationships.  What is lost in moving
> >> from the
> >> former to the latter is not necessarily described as an
> >> externality,
> >> although in a certain sense it is.  It is theoretically invisible
> >> in the
> >> work of market economists such as Buchanan, or free market
> >> environmentalism
> >> (even though they write a lot about internalizing externalities),
> >> because
> >> they treat the market as nothing more than a means for facilitating
> >> choices
> >> and cooperation, completely ignoring the biases that accompany
> >> market rules
> >> (as they accompany any likely system of rules).
> >
> > I disagree considering that Buchanan's work looks at such things as
> > Consitutions he is looking at the rules.
> >
>
> Yes, he is looking at the rules, and much of his work there is very
> interesting.  BUT he is not looking very closely at the rules of
> the market
> insofar as they actively shape and channel the kinds of voluntary
> transactions that are made. These issues are truly theoretically invisible
> for him.
>
> It's almost as if he takes a idealized market that internalized what are
> usually considered externalities as his ideal.  Coercion of some
> for others'
> gain in government distorts away from this ideal, as do
> externalities in the
> market.  So he assumes the neutrality of the market at the very
> beginning of
> his analysis.
>
> See my Critical Review article for a detailed criticism of Buchanan and
> Viktor Vanberg on this issue.
> >
> > [snip]
> >
> >> The change of scale changes the context of choice and cooperation.
> >> It
> >> narrows some dimensions but deepened others.  That is, a small
> >> context has
> >> fewer participants, but a higher likelihood of non financial
> >> criteria being
> >> important factors in determining choices.
> >
> > Small also has its problems as well such as strategic behavior which
> > can reduce overall welfare.
> >
> Yes it does.  As I like to observe: the good thing about a small town is
> that almost everybody knows you and cares - and the bad thing
> about a small
> town is that almost everybody knows you and cares.  But the other side is
> equally true: the good thing about a big city is that almost nobody knows
> you or cares - and the bad thing about a big city is that almost nobody
> knows you or cares.  I am not arguing for a utopian solution to
> all problems
> simply by getting the scale right.  I am arguing for some clear
> thinking so
> we can give various perspectives their due rather than simply dismissing
> them.
> >
> >> Externalities will likely always be with us.  But different
> >> externalities
> >> will tend to accompany different contexts and rules for choice.
> >
> > Well this leaves me wondering why you thing a different set of
> > externalities will be preferred?
>
> Given that externalities differ, whichever set is preferred (assuming a
> choice from two possibilities) is a value judgment although not, in my
> opinion, an arbitrary one.  Consequently, first, there is NO "objective"
> ground for preferring the externalities generated by large
> impersonal market
> processes as always being preferable to those generated by other kinds of
> associations.  Economics, insofar as it claims objectivity, has NOTHING AT
> ALL to say here once we understand the kinds of externalities involved.
>
> Second, once we acknowledge that different values are served by different
> forms of association, where no form perfectly mirrors human
> desires and each
> shapes them in particular ways, we can choose those forms that best serve
> our own values.  This is called politics in the classical
> Aristotelian sense
> of discussion and decision among equals as to what would constitute a good
> way for people to live together.
>
> > It is the case that switching from
> > one set of externalities does not necessarily have to lead to an
> > overall improvement in the outcomes.
>
> But it might.
>
> Gus diZerega
> Dept. of Politics
> Whitman College
> Walla Walla, WA
>