Markets toward Communism

It is with transactions to small to be measured and not with trying to figure out how an economy can be rationally planned that communsits should be interested in. While I believe it may be possible to plan an economy without price signals, doing so would result in a sub-optimal arrangement. Paul Mason in his latest book attacks Paul Cockshott and Allin Cottrell, the authors of Towards a New Socialism who’ve articulated a well-thought-out picture of how a planned economy could work in the 21st century. Mason writes:

[Cookshoot and Cottrell] show that to fully plan an early-twenty-first-century developed economy, it would have to be stripped of its complexity, see finance removed competely, and have radical behavioural change enforced at the level of consumption, workplace democracy and investment.
Where the dynamism and innovation would come from is not addressed. Nor how the vatly enlarged cultural sector would come in. In fact the researchers make a strong case, that because of its decreased complexity, a planned economy would need fewer calculations than a market one.^[1]

While it is certainly possible that such an economy could function, the idea of giving the state control over so much our lives, along with increasing the justification for increased survelliance is troubling (as to properly plan the economy information about workplaces must be captured and sent back. Certainly the argument can be made that under neoliberal capitalism we experience similar survelliance – however moving from one tightly controlled mode of organizing to another does not seem to be a step in the right direction.

This failure to articulate a truly radical alternative to capitalism does not mean we should give into to the death sentence neoliberalism gave to us, that “there is no alternative”. Assuming that planned economies are the be all and end all of the left ignores very real economic developments that oppose the logic of capital. A few ambitious projects have even removed the possibility (outside of absurd state authoritarianism) for capitalist markets to exist in certain areas. It is to this that we should turn.

The Commons

While in our modern political discourse we rarely see mention of common property (property which is owned by neither the state nor private interests, but by a collective who make use of that property or resource and self-regulate its use), such forms of ownership occur frequently throughout history, and can still be seen today. Common ownership is therefore not a radical new form of management, but something humans have used successfully in the past to negotiate resource and property use for centuries all across the world.

My concern here however is not the common ownership of land, but more flexible goods that can change hands much quicker. The most obvious example in this regard is information commons, whose existence is the result of an explosion in cheap networked computing technology. These information goods exist entirely thanks to volunteer labor and finances. Wikipedia and Linux are the two most prominent examples having supplanted capitalist attempts to commodify the spaces they now occupy.

This radical new way of organizing and coordinating goods and services has made visible what can be considered the baseline communism of society. We’ve gone from me being allowed to use your pen at work without having to pay to the best encyclopedia the world has ever seen, as well as producing a trove of free software, the only requirement for its use being an internet connection and some hardware to make it work.

As impressive as such a system is, you cannot just translate these principles into physical space. The nature of info-goods aligns very neatly with common ownership, as there are effectively no issues regarding coordination, damage to the commons, or conflict arising between the custodians over how a resource should be used. Physical goods and services however are subject to these limitations, which means we’ll need to apply different organizational methods than the those used to create the info commons.

Thankfully there exists a fairly substantial literature on how to manage common physical property. Elinor Ostrom, a Nobel economist, has done serious theoretical and empirical study into the management of common resources when compared to private or public (state) ownership. Common ownership of resources like forests, fields or fishing grounds has been shown to be a more effective form of management than having a single owner or bureaucratic regulatory apparatus. Rules regarding the commons are not defined by a private entity or policy from a distant state. Instead, individuals who use them come together and collectively decide on a set of rules that govern how the common should be ran.

This self-governance is superior to the alternatives, as it enables flexibility and adaptability based on the needs of those closest to the resource. In comparison, individuals using a resource owned by either a state or a private entity have to petition and negotiate with that entity to have rules and regulations changed, and may be unable to do so easily due to being in a relatively weak bargaining position, whereas with common property they can just petition their fellow users for a change. Ostrom explains why ownership based on this principle is more effective:

[Common pool resource] institutions that use this principle are better able to tailor their rules to local circumstances, because the individuals who directly interact with one another and with the physical world can modify the rules over time so as to better fit them to the specific characteristics of their setting. ^[2]

The sharing economy that has emerged as a result of cheap portable networked computing is a fantastic example of commons creation. Thanks to networked technology we now have the possibility of transport commons, housing commons, and more. Of course as it stands now, such platforms are controlled by capital, but this situation is inherently unstable. In the last few years we’ve seen a worldwide backlash to the predatory aspects of how such platforms function, with states stepping in to regulate what was once largely unregulated space (for better or worse).

In some cases this is done to protect business models that were threatened by the sharing economy (hotels and taxi services), while in others it has either intentionally or unintentionally enabled “platform cooperatives”— web services that enable laborers and customers to connect without a predatory middleman looking to make profit off the transaction. The minimal startup capital required to set up a competing service to something like Uber or Airbnb, provided of course you limit the scope of your service to a highly local area, may also help to usurp these corporations.

Such platform cooperatives suggest something similar to traditional visions of socialism, in which workers own the means of production and labor as they see fit. Of course, under capitalism such a vision is limited by the artificial scarcities imposed by the state. The stress the precariat suffer under still exists even if they no longer have to pay royalties to a multinational. However, the fact that platform cooperatives can exist under capitalism means we can go beyond old socialist workplace arrangements towards something even more radical.

The efficiencies enabled through networking individuals to one another, plus relatively low-cost computation, means that possession itself can now be distributed efficiently and cheaply. Useful objects and equipment that sit idle most of the time can, if hooked up to a network of willing participants, see much more efficient usage. Consider cars. Even ignoring the environmental side effects and the fuel efficiency issues, we still use them in horribly uneconomic ways. Cars are expensive and require unnecessary infrastructure so as to accommodate inefficient usage; having only one person per car means traffic congestion and many blocks worth of space devoted to parking in our cities.

Ridesharing programs have somewhat addressed this issue, but they don’t go far enough. Autonomous vehicles are one place to look for further increases in transportation efficiency. For reference, a study published in 2014 estimated that the city of Singapore could reduce the number of cars on its road by 2/3rds by adopting autonomous vehicles.^[3] Additionally, according to a report by the firm RethinkX, the price of being part of an autonomous, on-demand electric vehicle pool will be $1,700 USD a year, compared to the upkeep of a single internal combustion engine vehicle at $9,000 USD. Per-user costs per mile see a drop from 65 cents to 3 cents. Carpooling within this on-demand network can reduce this cost to the user even further.^[4]

This communism then is not a centrally planned economy, but rather a collection of alternatives to the cash nexus in which utilization is meditated through a networked platform which allows for extremely efficient utilization of resources, for dramatically lower cost, with far less friction than a large corporate or state bureaucracy. Such potential was summarized neatly by Cory Doctorow in a recent essay describing the ideas underlying his latest novel, Walkaway:

Owning a lawnmower isn’t material comfort: having one to hand at the moment that you need it is just as good—better, because you don’t have to waste garage space on idle lawnmowers. Coordinated efficiencies could reduce the number of lawnmowers (and other comforts) by orders of magnitudes without reducing our access to them. We could have better lawnmowers, magically turning up at their needful moments, ready to be handed off to their next users when they’re finished. Collectivized Zipcars for everyone and everything! This is the answer to John’s questions about grappling with abundance: abundance is a function of what we have, divided by what we want, multiplied by how well-distributed things are. … This isn’t a novel about 3D printing our way out of scarcity, it’s a novel about the pointy end of the abundance triangle—coordination, the least science fictional corner—stretching out into an impossible isosceles.

Fully automated leisure communism isn’t binary: there are intermediate stages of automated comfort we can seize.^[5]

Of course, this particular method of distributing of resources may not work for everyone. Regions which are economically deprived, without sufficient public trust, or that have poor network connectivity will find it more difficult to set up these platforms than New York City. On the other extreme, there may be those who refuse to partake in this networked communism for ideological reasons. However, I believe the majority of people will adopt such platforms simply for economic considerations. You don’t need everyone on board to get the benefits of splitting the cost between hundreds or even thousands of actors, just a substantial minority.

Finally, we have issues of centralization and information processing. Ostrom has stated that common ownership scales poorly, resulting in nested commons in which delegates are chosen to represent a particular commons on a larger scale, so as to manage the additional complexity. Such measures may be a necessary evil for large scale operations, be they in the physical world or in information. However, we want to reduce their necessity as much as possible in the short-to-medium term.

This where market principles become vital to the functioning of such a communism. Yes, you may be able to join a resource common for very little cost and enjoy the goods or services it provides, but if there are no reasonable alternative there exists great potential for abuseddd. While this is not a certainty, its best we head off this problem as early as possible. Market-like options such as free exit and choice add a whole new dimension to how this communism might better serve our needs. Rather than one big commons which resembles something like a state in all but name, we instead have a polycentric network of commons exchanging information and resources in an adaptive manner, driven by the bottom up decision making of those involved.

Zero Marginal Costs

Such an approach to communism raises two issues: free riders and exclusion. Maybe we can build an automated ride sharing commons which only costs the individuals using it a thousand dollars a year and can absorb the occasional free rider, but perhaps other attempts at building commons will be forced into exclusionary behavior to remain economically viable?

Obviously, being exclusionary for economic reasons cannot be considered full communism. However, there is a fairly direct solution— bringing the labor required to maintain the common resource close to zero. A hypothetical transport commons twenty years ago versus the ones possible today are significantly different in how they would treat free riders, due to automation decreasing the labor costs for operation, maintenance and fueling. Continuing automation can therefore further reduce the labor costs required, allowing for the establishment of more expansive resource commons that can be more open in who they let use the resource.

If we want a communism that is inclusive of as many as possible we want labor requirements to be as low as possible. Reducing costs is a difficult process. The various uses of new technologies, especially as they interact with complex human individuals, is not immediately obvious. Prescribing ahead of time how a particular technology should be used is dangerous. If we want a communism that is fluid and adaptive to our needs and to unexpected developments, we need a form of entrepreneurial discovery.

Markets would be an extremely effective tool at lowering prices to the point where creating communism through common ownership is realistic. The organic, mutating nature of markets in their drive to achieve a competitive price encourages endless flexibility and experimentation in the pursuit of profit.^[6]

However, as they stand today they are quite ineffectual, having been captured by the state long ago. But they could, if freed from their constraints, be repurposed for liberatory ends. Kevin Carson described how a market freed from state interventions in the form of upholding artificial scarcity and suppressing competition could result in radically different social outcomes:

The natural effect of unfettered market competition is socialism. For a short time the innovator receives a large profit, as a reward for being first to the market. Then, as competitors adopt the innovation, competition drives these profits down to zero and the price gravitates toward the new, lower cost of production made possible by this innovation (that price including, of course, the cost of the producer’s maintenance and the amortization of her capital outlays). So in a free market, the cost savings in labor required to produce any given commodity would quickly be socialized in the form of reduced labor cost to purchase it.

The same is true of artificial scarcity of land and capital. As David Ricardo and Henry George observed, there is some rental accruing on the natural scarcity of land as a non-reproducible good. … principled libertarians are all in favor of abolishing this artificial scarcity and — at the very least — letting market competition from vacant land drive down land rent to its natural scarcity value.

We favor, as well, opening up the supply of credit to unfettered market competition, abolishing entry barriers for the creation of cooperative lending institutions, and abolishing legal tender laws of all kinds, so that market competition will eliminate a major portion of total interest on money.^[7]

Market discovery of new approaches to solving economic problems rewards enterprising individuals and at the same time paves the way for a more expansive and inclusive communism; markets and networks would discover new ways to bring goods and services to what is effectively zero-cost, at which point distribution begins to operate according to communist principles. Decentralized polycentric commons can manage the distribution, creating a higher economic baseline for everyone in society, free of charge. Furthermore, entrepreneurial discovery, scientific innovation and cultural progress can occur without the economic limitations that demand individual submission to the cash nexus. Such drives, no longer restrained by state intervention or economic deprivation, are now harnessed to move directly towards the post-scarcity future that full communism requires.