Wednesday, December 19, 2012

On the Property Rights Differential Between Capitalists and Socialists

I often see an argument crop up between individualist anarchists on the one hand, and communist anarchists on the other; the argument concerns the distribution of wealth and power that would occur in a free market system.  Individualists generally argue that this distribution would be just and equitable, or at least approximately so; communists generally argue that it is too risky that capitalistic relations may arise within this system.

Now, I've recently become somewhat (though not totally) disillusioned with the market libertarian argument, but I have an observation to make.  When these discussions occur, at least between laypeople, it appears to me that nobody ever brings up one factor crucial to this discussion:  the difference in property rights between a capitalist free market and a socialist free market.  Such a difference could mean the difference between the presence or absence of exploitative relationships.

Look, whether you think that property rights should be enforced (or not) by a system of workers' councils (or some other form of direct democracy), or by a more polycentric system, the content and enforcement of these rights is going to play a large role in shaping the economic system of your society.  The type of property rights that your society is willing to enforce is what defines which economic transactions are considered valid and which aren't.

If the sort of quasi-usufructuary "occupancy and use" property rights are the ones enforced, such a society will be more likely to discount as invalid those economic relationships in which someone has to rent out their labour to use a means of production which the employer does not use in the first place.  A neo-Lockean system, on the other hand, will be more likely to see such a relationship as perfectly valid.

Now, this clearly doesn't demonstrate that exploitative relationships won't arise in a socialist market.  The point is not to prove the left market theorist's position, but to expose what I see as an equivocation fallacy.  You cannot take the result of market transactions in a capitalist market and extrapolate to what a socialist market would look like.  The property rights — which shape the economic system — are simply too different between the two systems.

Anyway, that's my ramble for the day.


P.S.  I have, however, recently been wrestling with a physics paper arguing that, on purely statistical mechanical principles, that any free market in which one cannot exchange a value greater than their capital will necessarily produce the maximum inequality in wealth in its equilibrium stage.  The paper does give some proposals for regulations that would prevent this, and presumably a system of property rights which achieves the same thing would work as well.

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