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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Thursday, November 08, 2007

Chapter Six Draft

Chapter Six: Agency and Incentive Problems in the Large Organization

8 Comments:

Anonymous martin said...

Most of our discussion of information problems in the previous chapter assumed, for
the sake of simplicity, the absence of opportunism (i.e., it assumed the existence of
individual subgoals that conflicted with maximizing the organization's goals). We
considered mainly the costs of transferring and aggregating information that result from
human conceptual limitations, and not those that result from strategic concealment of
information in order to derive rents from private knowledge.


You probably mean something like absence instead of existence.

November 09, 2007 5:32 AM  
Blogger Kevin Carson said...

Thanks, Martin. I'll fix it as soon as I can.

November 09, 2007 10:59 AM  
Anonymous P.M.Lawrence said...

Now I'm catching up with your chapters in no particular order, I may have found something similar in chapter 3, "The regime of legal privilege described above, predating the corporate transformation of capitalism, took the form primarily of unequal exchange on the individual level, whether it was the sale of labor-power on disadvantageous terms in an unequal labor market, or the purchase of goods on equal terms because of patents, copyrights and tariffs" (emphasis added).

There are probably others, and you probably need the help of a practised editor to get your point across when you are too close to the jargon as well as for typos (only people who don't need to be told would understand "information rent", and even those who understand it might not get quite what you had in mind if they find an alternative sense).

November 09, 2007 10:20 PM  
Blogger Kevin Carson said...

Thanks to you, too, PML. I should get both of those fixed sometime today or tomorrow.

You're probably right about the editor, but I'm afraid that's out of my price range. Scraping up a few hundred $$ to get it into format for on-demand printing is about as big a dent as I can handle.

I hope to mitigate the as much as possible, when I put the text into final form, by doing a "cold" reading after it's sat awhile to look for typos I missed earlier. In the process, I'll examine the economic and org theory terms more critically and include definitions if they're not self-evident from the context.

I also plan to remedy one of the defects of MPE by including a name index (a subject index is beyond my skills).

November 12, 2007 11:09 AM  
Anonymous P.M.Lawrence said...

I would certainly be interested to know what the money, man hour and calendar time numbers are for the publishing you're doing, i.e. investment and returns, if it isn't too personal.

November 12, 2007 9:56 PM  
Anonymous Foreign Mutualist said...

Kevin:

Sorry. I know this topic is not related to this chapter, but I need your help

My point now is Social Security versus mutualist pension funds.

We all agree that mutualist pension funds are better managed, more efficient and more "popular"/committed than public Social Security, but the problem is: Which level of uncertainty can be accepted by workers in this field?

Is there any technical instrument to make possible at the same time mutualist private management of the pension funds and the minimum security about pensions that workers need? (May be some kind of private management and public guarantee?)

Do you know where could I get information about these technical possibilities, if there is any one?

Thank you,

November 13, 2007 7:20 AM  
Blogger Kevin Carson said...

PML,

My current writing work schedule is a bit like that of the subsistence farmer you describe. It varies from week to week depending on my mood and energy levels, and what else is going on. During the past six or eight weeks, when I've been working on the new chapter drafts, I probably average 30 hours a week. During slow periods, it might be as low as eight hours a week.

I don't recall exactly how it was writing MPE, but probably about the same--a rough average of 20 hours/wk. Over a two-year period, that's maybe 2000 hours research and writing time. I've made enough in sales to recoup the outlay for publishing, with a few hundred bucks in addition. I'm guessing the return on labor is around 10 or 20 cents/hr. I'm doing it mainly for the psychic returns, obviously.

FM,

You're asking about something way outside my area of competence. I don't even know that much about insurance mutuals, and I definitely don't know much about the nuts and bolts of Social Security. But what you describe--mutual control combined with some level of government financing and guarantees--sounds like a sensible transitional measure.

I'm guessing any mutualist transitional program would involve radical decentralization to local communities, with federation and an interlinked computer accounting system to allow for 1) easy portability from one local pension system to another and 2) the use of central reserves to guarantee local funds. The ultimate goal would be to decouple it from mandatory participation and financing and transform it into a true mutual--perhaps coupled, under the administration of a legacy body descended from a directly democratic local government, with health services, unemployment insurance, and the like. I've already suggested how low health insurance premiums might be, if service delivery were based on cooperative clinics staffed by an American "barefoot doctor" (an independent nurse or PA), or an MD on retainer on the old "lodge service" model, and focusing primarily on low-tech care and generic medicine. And in a community where most goods and services were produced locally and cooperatively, with self-employment and trade through local barter networks, and the financing of social insurance took place in that social context, it seems likely it could be done for a reasonable fraction of total income.

November 13, 2007 11:43 AM  
Anonymous P.M.Lawrence said...

FM, KC, you should consult the work of Meir Kohn, particularly The Capital Market before 1600. Bearing in mind that unmanaged risk grows exponentially, and faster than interest, and that fees for managed risk will tend to grow to match, the best strategy is probably what was done then - postpone retirement arrangements until you stop work, then use your savings and cashing out of your capital to buy immediate annuities from different uncorrelated sources, rebalancing them occasionally yourself (with the help of your family and friends); these sources were then municipalities, but could well be mutual in future, and of course this presupposes that you are not over-burdened (say by being forced to "save" for retirement or by unemployment without independent means) and you can build up savings and/or other capital. I would suggest annuities that terminate a few years after death (a "tail"), or that give a lump sum on death. Old Testament practice, which is assumed in the Parable of the Prodigal Son, was that a family had an otherwise inalienable patrimony - an inheritance of land or privilege - that could be released to the heirs early on the understanding that the heir would thereafter support the retiring parent. Combine all this with separate family-based health insurance coverage - really reinsurance of an excess beyond what family and local mutual support can provide (see the Amish for the extreme case of no outside coverage as everything is handled internally).

There are huge transitional issues, because simply changing would leave everybody just coming up to retirement in the lurch from not having had a chance to accumulate in advance. I look into these questions here. That's in an Australian context, but taken together with the following article it should still illustrate the general area.

November 13, 2007 4:49 PM  

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