Theme: Incentives

THE MARXIST SOLUTION WILL ALWAYS FAIL BUT AS AN ALTERNATIVE…

The Marxists insist on repeating an impossible solution dependent on employee participation in the firm under the presumption of employee interest and competency. Which even in the one unicorn firm they use as an example, we find the theory fails.

In part this is because any and all distortions of the economy by interference of the state in firms causes externalities that negate the benfits they seek to obtain. By capturing the financial sector (because the state is both the issuer and the insurer) the state, the firm, and the people have identical interests.

The present discord is because the state, the financial sector, the firms, and the people – especially the left – have conflicting interests. For example, immigration would directly reduce redistributions, and the financial sector would lose all political influence, restoring political influence to the competition between the people and the firms (industry).

So instead of tying employees to the profitability of non-durable firm we can tie citizens to the profitability of the durable polity – w/same consequences for the financial sector.

The firm isn’t profitable or stable enough, and employees never competent enough, and incentives not political enough to achieve redistribution via firm rather than as shareholders in the state. But capturing the parasitic financial sector for redistribution is trivially easy.

So I disagree slightly with the 1599 proposition and instead suggest that the problem was the failure of the British state to capture the banking industry given its role as insurer of last resort. There was no reason after fiat script to maintain the figure 8 financial sector.

Marxists are obsessed by and distracted by a world economy that no longer exists, positing a community that doesn’t and cant exist, and incentives and knowledge that doesn’t and can’t exist under a geostrategic order that ended twenty if not thirty years ago, and was squandered.

The only ‘firm’ of consequence is the polity, and without the empirical operation of that polity, and the least possible friction of its economy, the incentive of the workers is to reduce adaptability of firms vs decreasing the rent-seeking of both peers and state.

In this sense, citizens have a positive incentive if treating the state as a firm, but a negative incentive if treating firms as the state. We cannot ever limit the demand for human adaptability. We can only pay the cost of it. There are no regularities any longer.