August 21, 2017 at 12:46 pm #537
AnCom & Entrepreneurship
Below is an offshoot of a conversation with @jacob and @empifur (both representing AnCom). I think a specific economic ‘blindspot’ for AnCom is the lack of a theory of entrepreneurship. This post is looking to explore this… There are just two AnCap questions below, one at the end of each section (for anyone interested in responding).
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AnCom Claim: ‘Usury’ is the activity of ‘charging’ for using a ‘capital investment’ (or ‘capital good’ such as a bread machine) that the person who ‘owns’ (at least in their own eyes) the capital good charges another person for using that capital good. The reason usury is ‘wrong’ is that the person who brings a bread machine into existence makes money without putting in any work.
AnCap: Isn’t there work involved in bringing a bread machine into existence?
AnCom: Yes, of course.
AnCap: Isn’t this worthy of compensation in the eyes of AnCom?
AnCom: Yes, of course.
AnCap Question #1: In bringing the bread machine into existence, what part of it’s creation is worthy of compensation? Is it just the hours spent working on it, or is there anything else they contributed in the process of bringing the bread machine into existence that is deserving of compensation?
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AnCom Claim: AnCom believes that an absentee landlord steals from tenants who live on (and/or work) land which the landlord holds title to because the landlord does nothing in exchange for rent other than refraining from ejecting the tenant from the land they hold title to.
AnCap: I just want to double check that the word ‘nothing’ is correct in the above? (AnCom does not believe a landlord does anything in exchange for that rent?)
AnCom: No landlord (or anyone, for that matter) ‘can’ do anything in exchange for ‘rent’ because ‘rent’ is/are the fees paid in exchange for being loaned the use of capital that one has already accumulated in the form of land or a house or a bread machine.
Now, of course, a lot of landlords today charge not only this ‘rent’ described above, but also for ‘the effort to maintain the property’. Colloquially, we call both of these fees together ‘rent’.
AnCom asserts that charging ‘rent’ in the former sense is not okay, but providing a service in exchange for capital is acceptable (i.e., ‘rent’ in the latter sense).
The relationship between an absentee landlord and a tenant can’t conceivably be a ‘free’ exchange because the landlord has only ‘profit’ on the line, and the tenant has their ‘housing security’ on the line.
AnCap: What does the landlord use to pay for the landlord’s own ‘housing security’ if not the ‘profit’ from renting the resources? (Aren’t they both putting their ‘housing security’ on the line, thereby making it plausibly voluntary, or no? Why/why not?)
AnCom: Well, presumably, if the landlord is able to rent out a property, if their lack of profits actually got to the point of endangering their ability to keep a roof over their head, they could kick the tenants out and live in their property. The landlord undeniably has more options than the tenant. Beyond that, if nothing else, the landlord/tenant relationship is one engendered definitionally by virtue of the landlord having capital and the tenant having at least less if not none, and, by virtue of nothing but that inequality, the landlord extracts money from the tenant.
Where AnCom and AnCap part ways is in the belief that landlords deserve compensation specifically for allowing people to live on land that the landlord claims to ‘own’ (or allowing people to use a bread machine they ‘own’). It is this ‘appeal to property ownership’ to defend compensation that AnCap accepts while AnCom rejects it. However, both accept the ‘appeal to useful labor’.
I know of no way of disentangling the two sources of income (the part given as payment for labor and the part given as fee for using property).
In today’s world the income property owners gain from ‘entrepreneurship’ is only a fraction of their total income, while most of their income is a result of their claim of ownership over various resources.
AnComs believe that without legal and social recognition of private property, people could only gain an income by trading useful labor (or the product of their labor) for the same.
AnCap: What exactly is ‘entrepreneurship’?
AnCom: ‘Entrepreneurship’ is ‘People who are willing to take a risk on something new that might not pan out but which, if it did, would help the community’. Furthermore, in AnCom, there would be a ‘safety net’ that ‘people who are willing to take a risk’ could fall back on — they wouldn’t have to worry as much about whether a good idea is also capable of allowing them to make a living.
AnCap: If the ‘safety net’ of AnCom eliminates the ‘risk’ to an individual of trying something new, would it be accurate to say that there isn’t really ‘entrepreneurship’ in AnCom since ‘willingness to take a risk’ is a defining characteristic of ‘entrepreneurship’?
AnCom: AnCom might dampen entrepreneurship, but it certainly does not eliminate it. While some ‘risk’ is inherent in entrepreneurship, ‘risking your ability to continue living’ is not inherent in entrepreneurship. Simply because the specific risk of losing the ability to continue living isn’t present, it does not follow that there is no risk in AnCom.
AnCap: What, then, is the ‘risk’ that the community enables one to take?
AnCom: One risks burning ‘social capital’ – one would ‘lose face’ (or reputation) if one’s venture failed, and the community would be less likely to allow one to engage in new ventures in the future.
AnCap Question #2: So the risk inherent in entrepreneurship is dampened (but still exists) in AnCom. What is the incentive to be entrepreneurial (and/or innovative) in AnCom?
October 20, 2017 at 3:52 pm #641
1) Working out exactly what part of that labour is worthy of compensation is either a pedantic philosophical issue, which is a thing that I enjoy but suspect that you don’t want me to pursue, or a policy issue, in which case it must needs be shaped by the particular context in which we are asking that question, and so can’t be answered here. If I were to give an answer off of the top of my head, I’d say that, if you’ve assembled a bread machine then, great, you’ll be paid for your labour, and then we’re square. If you’ve made a new kind of bread machine, then you’ll be paid for your labor, both physical and intellectual. There is never a point, however, at which we assign to you some sort of ownership over all future iterations on that bread machine– that becomes usurious.
2) People like being innovative. People like doing new things. When their basic needs are provided for, people seek to self-actualize, and that usually involves innovation and risk-taking as a means of self-expression. Alternatively, in the case of medicines, for example, people care about things. People want to create new treatments because they have loved ones who have succumbed to disease. Even beyond this, though, we can still recognize intellectual and creative and emotional (such as the emotional labour necessary to take a risk with your life to try something new) labour as labour (which we do a very poor job of doing now), and compensate for that appropriately– the difference is that we never grant ownership rights in any semblence of perpetuity for labour that you do, either in terms of being able to use that labour to buy property which generates usury, or in terms of using that labour to create patents which generate usury, nor in terms of owning a company which generates usury.
October 22, 2017 at 3:18 pm #651
Question 1: “AnCap Question #1: In bringing the bread machine into existence, what part of it’s creation is worthy of compensation?”
Anarcho-capitalists don’t accept the LTV dogma, so the question is irrelevant. The relevant question to the ancap is: Who owns the bread machine? The owner is entitled to make as much as he can from his resource – no limit. It is valid ownership which makes the machine “worthy of compensation”, along with the buyer’s (the worker wanting to use it) desire to use it. Empifur, you seem to misunderstand the issue. It is not about IP (intellectual property) as you seem to think with your (quite true) comment that “There is never a point, however, at which we assign to you some sort of ownership over all future iterations on that bread machine.” Ancaps and ancoms agree that IP is not legitimate.
Question 2: “So the risk inherent in entrepreneurship is dampened (but still exists) in AnCom. What is the incentive to be entrepreneurial (and/or innovative) in AnCom?”
I’m not so sure about the first claim. Perhaps the risk of getting oustracized from the commie group, or e.g. never getting laid again by anyone in the group, is more of a risk than losing a little money. Ancoms tend to believe that (the admittedly lesser incentive of) peergroup approval would be enough to create new Thomas Edisons and Steve Jobs. I think a much greater problem is the collectivist decision-making process. Many/most entrepreneurs did something that virtually everyone else thought would fail. They were considered crazy by their peers. In ancap, they can capitalize it themselves, or convince one or a few rich people to capitalize it, or even crowdfund it to find others crazy visionaries in cyberspace. A democratic collective generally can’t decide on toilet paper; convincing a collective to subsidize a risky venture seems quite unlikely.
- This reply was modified 2 months, 4 weeks ago by Hogeye.
October 31, 2017 at 11:57 am #692
1) I didn’t realize that AnCap was so strongly against IP in principle, so that was useful to hear, thank you. However, I think that my point still stands, and is defendable on other grounds. Specifically, I would contest the idea of “valid ownership,” and what that consists of. As an AnCom, and as elaborated earlier in the thread, I don’t really buy the idea of property rights and prefer to rely on the notion of possession rights, which necessarily precludes the extraction of usury from resources. My understanding of the AnCap position on this subject is that “but if I made it, why should I not be entitled to do what I will with it?” Here, my response is similar to the response that I make in discussing “Aggression” with Bookman in an adjacent thread. Basically, the conception of “Here is a thing, I made it” is, like the AnCap conception of aggression, far too simplistic and ignores a lot of social (and natural) forces which we ignore only at our own peril. For example, suppose there is a farm. I work the farm and grow some wheat. I did this alone, with only my own labour going into this. However, in growing this wheat, I made use of land resources. I suspect that we might disagree on whether or not land can be owned (and I am curious how you would justify ownership of land since noone can take responsibility for the creation of the land so how does that come to be owned?) but even glossing over that point, the success of my crop is highly dependent on my neighbors not engaging in behaviour that reduces my access to quality water resources from upstream, or on them having windbreaks on their land to prevent my topsoil from all blowing away, or on there not being wicked fertilizer runoff from their plot on to mine… etcetera. We cannot so easily extricate this kind of production from the broader environment and community in which it occurs. Alternatively, if we’re not talking about farming, this idea of ownership becomes even foggier: To create, say, a car, requires not only labour but also one hell of a lot of mineral extraction, which, again, it is unclear to me how it comes to be that anyone has the right to give away mineral rights to be exclusively owned for a person so that they can claim to own everything that goes into the car exclusively. Even beyond that, to actually operate the car requires polluting literally everyone else’s atmosphere, and I am very unclear on how that right comes about? All of this is to say that for these reasons it makes more sense to me to root ownership in the community rather than in the individual, who can only possess, and for this reason, it is unclear to me why “owning” the bread machine makes one “deserving of compensation” on that basis. Does that make sense?
Also, just out of curiosity, if AnCap doesn’t locate value in labour, where is value located? This is something I’m actually unfamiliar with and so eager to hear what you have to say about.
2) I can’t necessarily speak for all AnComs on this point, but I would articulate it differently. Peer-group pressure may or may not be enough to produce people like Edison or Jobs– we don’t have any data on that front, and so we can’t necessarily pass judgement, but we don’t have much data on a lot of things that we assert would make the world a better place,Ancom and Ancap alike. That said, you are relying here on two assumptions that I think break the idea from the start, and which need to be addressed: First, you assume that a community-based society wouldn’t have it in itself to have a different set of norms from those that we have now (which say that zany, out there ideas shouldn’t be supported bc they aren’t profitable). My experience in various collective living situations is that when people feel like they trust and know each other more, they are in fact much /more/ willing to support each other in endeavors that seem a little zany, but which they’re passionate about. Second, however, whether or not that is true, you seem to be asserting that having people like Jobs and Edison around is important and good without ever demonstrating that. I think that Jobs and Edison made new things which is cool and all, but which don’t necessarily make people happier, which is the metric that I would rather use for success. I think that the data is fairly clear that advances in certain fields, like medicine, sustainable sourcing of energy, restoration ecology, etc. do lead to to happier people, but that the work of “inventors” does not necessarily so… Even if it’s possible that that kind of behaviour would be minimized in an AnCom world, so what?
December 18, 2017 at 11:47 pm #853
A. What part of a bread machine’s creation is worthy of compensation? This can be answered as either a pedantic issue, or a philosophical issue, or it is a policy issue in which case it would be shaped by the context in which it occurs and so can’t be answered here. Suffice to say, those who assemble and/or make new kinds of bread machines will be paid for both their physical and intellectual labor.
Your ‘policy’ response makes sense: the ‘part’ of the bread machine’s creation that is worthy of compensation is the physical and intellectual labor that goes into its creation, right?
If so, the AnCom claim in question — the one from Jacob’s original post way back in the day that spurred the questions I asked before you and I ever talked — is essentially that “the reason usury is ‘wrong’ is that the person who brings a bread machine into existence makes money without putting in any work.”
My contention is that this can’t be the case, can it? One who brings a bread machine into existence does put in work (even if only intellectual work, but even that generally requires putting pen to paper, i.e., some kind of ‘labor’). The reasoning as to why usury is ‘wrong’ in the case of one making money from ‘owning’ a bread machine must be some other reasoning than this particular reasoning here, as this doesn’t add up, right? (Jacob has since acknowledged he may have tripped up in a couple spots in that post, so this may be one of the spots he was referring to..?)
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B. It is unclear to me what, in a free market (i.e., under AnCap norms), would make one ‘deserving of compensation’ on the basis of “owning” a bread machine?
Nothing. In a free market, nobody ‘deserves’ compensation for owning anything. In a free market, people are compensated for providing value to others. Owning a bread machine provides no income — baking bread for your community does. Owning (for example) a broken bread machine provides no (or little) compensation on a free market, because it provides no (or little) value to others. Does that clear that up?
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C. What is the incentive to be entrepreneurial (and/or innovative) in AnCom? Here are several incentives: it is enjoyable to some; it can be a means of self-expression; numerous immaterial motivations (e.g., curing the disease of a loved one); and good old-fashion compensation (like the compensation due for, say, physical labor).
What do you get compensated with, in AnCom? (I assumed there was no money? Is there another kind of compensation going on?)
January 15, 2018 at 5:10 pm #902
A) If I’m reading this correctly, it seems to me that you are conflating “creating” and “owning–” and, to be fair, the person who first creates the bread machine also first owns the bread machine. What I am trying to do here, though, is separate these two roles. The person who creates a bread machine, we would both agree, is entitled to something by virtue of having made that machine (where I would argue that that something is community approbation, and the ability to make bread, but if I’m taking on a softer left stance, I would be willing to grant that that something could also be the money from its sale, or wages for that labor). However, they should not be entitled to anything by virtue of owning the machine– this category is naturally limited to usury. Under the AnCom theory of possession rights, if a person has a use for as much bread as the machine can produce and possesses the machine, then sure, they can use it exclusively, but otherwise they have an obligation to let other people use the machine to make bread, and they ought not retain the right to charge other people for that use. Does this make more sense, or does this not address what you took issue with?
B) I was trying to get at a similar idea to in part A here, and evidently I failed– what I meant to convey was “why should a person be allowed necessarily to charge usury for use of a thing simply by virtue of ‘owning’ it?” but I suspect that the AnCap answer is something to the order of “whatever, they can do whatever they want so long as the other person enters freely into the contract” and so I think that this point is probably irrelevant in light of the other points which I am addressing here and elsewhere across the forum in my response. It could be that I’ve just forgottent he original context, however.
C) Various AnCom thinkers have varying philosophies. There are those that admit that money might be useful as a means of exchange and compensation. I am unwilling to stake a personal position on this, as, tbh, my understanding of moneyfree economies is limited bc we haven’t had a lot of them to study in the recent past, but I tend to be more sympathetic to the moneyfree group. In such a situation, compensation would be, as articulated above, enjoyment, self-actualization, community approbation, or changes in your material circumstances that result directly from the labour. We see these sorts of compensations being plenty for people who have their basic needs accorded for them in various instances (think, for example, of starving artists, to choose one particularly trite example), so I would reject the easy counterargument that “those things don’t motivate people to actually innovate.” I do think that it would result in much less innovation in, say, industrial processing techniques since people wouldn’t be incentivized to care about that as much but, honestly, I’m fine with living in a less industrial world, as a trade-off for eliminating wage slavery and strengthening community.
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