Against haggling: woolly thoughts on the pre-industrial mode of production

A description of trade among Australian hunter-gatherers from David Graeber:

In the 1940s, an anthropologist, Ronald Berndt, described one dzamalag ritual, where one group in possession of imported cloth swapped their wares with another, noted for the manufacture of serrated spears. Here too it begins as strangers, after initial negotiations, are invited to the hosts’ camp, and the men begin singing and dancing, in this case accompanied by a didjeridu. Women from the hosts’ side then come, pick out one of the men, give him a piece of cloth, and then start punching him and pulling off his clothes, finally dragging him off to the surrounding bush to have sex, while he feigns reluctance, whereon the man gives her a small gift of beads or tobacco. Gradually, all the women select partners, their husbands urging them on, whereupon the women from the other side start the process in reverse, re-obtaining many of the beads and tobacco obtained by their own husbands. The entire ceremony culminates as the visitors’ men-folk perform a coordinated dance, pretending to threaten their hosts with the spears, but finally, instead, handing the spears over to the hosts’ womenfolk, declaring: “We do not need to spear you, since we already have!”

This prompted a comment from Daniel Davies that it seems a lot of work to organize an orgy every time I want to buy a blanket.

souk-fes-moroccoI thought of this in Morocco recently while Lu was haggling for rugs in (orgy-free) Moroccan souks. Continue reading “Against haggling: woolly thoughts on the pre-industrial mode of production”

Communism as sharing

A third attempt to make sense of primitive communism, contra David Graeber.

David Graeher, Debt: the first 5,000 years, chapter 5:

I will provide a rough-and-ready way to map out the main moral principles on which economic relations scan be founded, all of which occur in any human society, and which I will call communism, hierarchy, and exchange.

Yours truly, here, July 2009:

The ancestral communist mode of production survives within both capitalism and socialism like mitochondria within an eukaryotic cell.

Graeber’s endorsement of my threefold way is not exactly a ticket to academic respectability. It’s not that Graeber is Velikovsky-crazy, it’s that he’s careless. (I once bought some Nordic walking sticks in Switzerland of the Leki brand. They came endorsed by Reinhold Messner, who had taken them on several of his 8,000m solo climbs in the Himalayas: an extreme climbing genius counting very gramme of his kit. That was worth knowing, crazy or not.) However, Graeber shot himself in one foot with his marvellous description of the origins of Apple:

… founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other’s garages

He shot the other foot with his theory that the one-sided US seigniorage that comes from issuing a reserve currency (not a fiction, this) is a form of tribute maintained by fear, in turn made credible by military adventures like the Gulf wars. This would come as news to the US’ largest creditor, the government of China.

For academic work, you should really go back to Graeber’s sources. However, this is a blog, and I’ll cite Graeber’s book because it’s a genuinely original attack on economic orthodoxy from the unexpected angle of anthropology, and taps a wealth of interesting research on human societies from ancient Mesopotamian temple complexes to Australian aborigines.

So we agree on a threefold classification of types of economic organisation, simultaneously present in many societies including our own (Graeber’s “all” is a needless stretch):

  • Graeber: communism, hierarchy, exchange
  • Me: communism, socialism, capitalism.

Our differences on the latter two are superficial. It’s possible to imagine a Walrasian village exchange economy without money and concentrations of capital, but Graeber himself shows that this is an economists’ myth. Actual exchange or market economies have money, debt, and wealthy intermediaries. My use of “socialism” to describe say the hierarchical internal workings of General Motors is provocative, since I think we may as well retire the term from its appropriation by the obsolete Soviet-style command economy and use it for something more durable, but tastes differ.

On communism, our takes are genuinely different. Both are, I now think, mistaken.

Continue reading “Communism as sharing”

Communism II : love it or leave it

The communism you know and love.

In an earlier post I argued that we should retire the word communism from its appropriation by Karl Marx for the bogus slogan “From each according to his ability, to each according to his needs”. This is fundamentally self-contradictory and does not describe even an imaginary system of economic organisation. So what shall we use the powerful word for?

You could say: communism is what the proto-Church of Acts 2 and (radical) communes have done from time to time, the pooling of all assets within a group for internal administrative reallocation. Fair enough. But that is something pretty unimportant, small-scale, and usually short-lived; an interesting cultural sideshow like polyandry. Further, such schemes don’t really represent a fundamentally distinct category of organisation. They reflect a command method of allocation – socialism – applying an allocation criterion of complete priority to consumption welfare – radical benevolence. We can have socialism without benevolence and benevolence without socialism. For my money, we should reserve the word for a genuine third way to capitalism and socialism.

Rhesusx2.jpg

There is one, and it’s the ancestral one of primates: gift exchange. By this I mean the provision of goods and services to others on the basis of an informal, uncoerced, non-contractual expectation of reciprocal non-monetary reward, immediate or delayed. The paradigm for humans is sex, since we don’t have coats thick enough to need daily bug removal. There is an awful lot of this back-scratching around, though it is definitionally excluded from national income measures.

A reckless table below the fold.

Continue reading “Communism II : love it or leave it”

Communism I : forgetting about the Gotha programme entirely

Marx’s slogan “From each according to his abilities, to each according to his need!”, ironical or not, describes the contradiction of welfare economics not a scheme of economic organization, and should be dropped as the definition of communism.

There’s a nice spat going on between Robert Waldmann and Brad deLong over Marx’s 1875 Critique of the Gotha Programme. Specifically over this celebrated slogan:

From each according to his ability, to each according to his needs!

They disagree whether this is meant ironically or as a real, if remote aspiration. Whatever, the slogan has been taken ever since as the definition of communism, realistic or not. I submit it’s no such thing.

Capitalism and socialism denote possible ways of organising an economy. Communism should be an alternative, third way, shouldn’t it? But the two parts of Marx’s slogan refer to different, and incompatible, things.

  • To each according to his needs is a welfare criterion for optimal allocation of consumption goods: to maximise the welfare of a group, equalise the marginal utility of consumption of each member. The distribution of consumption utility functions does vary a bit, but not much, so the optimum is likely to be pretty egalitarian. Bryn Terfel surely appreciates singing more than I do: he should get the better hi-fi, but I should still get the cheaper one.
  • From each according to his ability is a criterion of efficient production, or resource extraction: to reach the optimal production frontier of a group, equalise the net marginal disutility of each member’s input. Talents and other endowments vary greatly: since I can’t even sing in tune the ratio between Terfel’s musical productive abilities and mine (a large number to 0) is infinite, and I shouldn’t be asked to sing at all. Equality of marginal sacrifice will therefore be reached at very different marginal and average quantities of goods and services. The better endowed should put in much more overall, whether it’s plumbing, music, or cash.
  • The two distributions are not just different, they are very little correlated. The optimal distribution and production maps will bear practically no relation to each other.

    You can design institutions that will approximate either goal: centralised rationing for efficient distribution; property and competitive markets for efficient production. But not both. You can’t have a competitive market system to reach your Pareto-optimal production frontier, then confiscate the proceeds and allocate them benevolently: it’s a fantasy. The two goals are incompatible. Any feasible system – capitalist, socialist, communal, customary – either abandons one goal, or compromises. The slogan describes the fundamental contradiction of welfare economics, not a solution to it.

    The point is perfectly illustrated by the two texts that Marx cobbled together from the Acts of the Apostles, describing different phases in the very early Christian Church.

    Continue reading “Communism I : forgetting about the Gotha programme entirely”