July 20th, 2009

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.


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.


You don’t like my linguistic revisionism? Forget the terminology and admit there’s something interesting about the last column. It’s quite wrong of modern economics not to take the non-traded sector seriously enough simply because it’s hard to measure. Information is the fastest growing part of the economy, even measured through the Vaseline smear of GDP; and because information such as music has zero marginal cost of reproduction, communism has a comparative advantage. But will it take over?

Not very likely. The three sectors are highly interdependent. The communist parts of the information society for instance rely on the socialist sector for education and the capitalist sector for infrastructure. The converse also holds. Large capitalist firms are internally socialist: resources and tasks are allocated by command within GE just as they are in the Pentagon. But command and hierarchy never work ideally, and effective bureaucracies oil the machine with informal networks of gift exchange. The ancestral communist mode of production survives within both capitalism and socialism like mitochondria within an eukaryotic cell. The mitochondria have a long-term billet, but can no longer survive independently like their bacterial ancestors. I don’t predict the withering away of the state or of the market: but they will become rather less important in the overall scheme of things.

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