(Part 1 of a series on Political Economy I am writing on this blog)
What is “Economics”
Before discussing the broader concept of political economy, we should ask ourselves if we understand what “economics” actually is. At its core, economics is the study of scarcity and the choices agents make when presented with scarce resouces (including time, material resources, etc). In other words, it is a study of preferences and distribution.
Moreso than studying what “individual rational agents” might do or how aggregates of such agents might act, more fundamental than studying efficiency, equilibriums, money, etc., economics is about the distribution of labor (in terms of both time and productivity) and material resources in such a manner as to fulfill some goal (fulfilling citizen needs, maximizing profits, providing national defense, etc.) or, more commonly, multiple competing goals. The fundamental elements of production are labour-time and resources and economics studies how we distribute those resources to produce the goods and services needed to acheive our goal(s).
What puts the “Political” in “Political Economy”
If you’ve taken an economics class, you may have heard the fantastical tale of a valiant man by the name of Robinson Crusoe who is stranded on an island alone and must decide how many hours a day to devote to sleeping and how many hours a day to devote to farming coconuts! (of course, these are the only two things he is allowed to do. Otherwise Zeus will smite him. Or something. I don’t know, stop asking questions)
Such a thought experiment is obviously deeply detached from our reality. In an attempt to build a concept of a “rational agent”, I fear economics has veered so far off course as to be borderline useless in many cases.
A return to understanding how economics is grounded in our political world is the key to making economics a useful discipline. For instance, we need to understand how property norms are established and enforced, who sets the goals of production (and how these are set), etc. All of these are political questions, and yet they have profound impacts on economics; in fact, no study of economics is complete or useful without answering these questions (and the answers vary from situation to situation).
This series will tie into questions of motivation and preferences for supposedly “rational” agents (I will not be getting into debates over whether people are “maximizers or satisficers” or other such nonsense as those debates are boring) but I aim to focus on more fundamental issues than that in future posts.
So, we understand that politics are fundamental to any study of economics. Now, I believe the two most fundamental political questions relevant to economics are the questions I listed earlier about property norms and competing goals of production. Exploring these will give us a more solid grounding for political economy which will allow us to get to the most important concept for a post-liberal understanding of political economy.
Who Decides Who Gets to Own What (and What Does “Own” Even Mean)?
I am loath to give anarkiddies any credit, but one thing they do understand is that the State imposes property norms and enforces them through its legitimated violence. Anarchists unfortunately fail to understand that there will always be a “State”, leading to their nonsensical claims for “abolishing hierarchies” (more on this later).
So, some “higher”/sovereign entity (call it the “state” or whatever else suits your fancy) establishes the “property norms” and enforces them. But what are property norms and how do they relate to other concepts such as capitalism vs post-capitalism (and other modes of production)?
I believe Joseph Singer presents a phenomenal and succinct definition of property norms and connects them to the moral-political background all economics is embedded in (emphasis my own):
“The relation between property and sovereignty is contested. The protection of both persons and property are two core government functions. These functions come into conflict when the exercise of a property right harms others. How do we determine when that exercise is legitimately viewed as a self-regarding act that does not affect others, and when such an exercise does harm others and thus comes within the legitimate sphere of government regulation? Property norms help answer this question by orienting us in a moral universe through background understandings that define legitimate interests. Norms orient us, first, by telling us who is an owner with regard to any particular entitlement in a resource, and second, by telling owners when they are obligated to take into account the effects of their actions on others. In so doing, property norms define which externalities we must pay attention to and seek (if possible) to prevent.”
(Joseph Singer, “How property norms construct the externalities of ownership”, Oxford Scholarship Online)
The sovereign/state/government must determine what these property norms are and it does so based on moral concerns. I will argue property norms are divided into three categories (ownership by rite, ownership by initial productive use, and ownership by persistent productive use) and also divided between private and personal property. So, I will briefly examine each of these.
The Different Ownership Criteria
- Ownership by Rite: Ownership by Declaration from the Sovereign/State/Government.
- Ownership by Initial Productive Use: You own something once you have productively used it once, so long as no one else has used (or, more accurately, used and claimed) it before.
- Ownership by Persistent Productive Use: Very similar to the previous criteria but with a major difference: to maintain ownership, you must consistently use whatever you are using (how this works with different kinds of property, such as land vs capital, will be dealt with in a future post(s))
Difference Between Private vs Personal Property
Private property is a designation given to property that is used as a means of production to produce goods for exchange (in other words, it is a concept that exists in capitalism and would not exist in post-capitalism). But if we abolish private property and its capitalist-labourer relationship (and, by extension, abolish commodity production, capital accumulation, and the primacy of wage-labour), does that mean no one can own anything? That the laptop I typed this piece on is actually “the community’s laptop?” That seems unfair. And it is. There is another form of property: personal property.
Personal property can include anything that isn’t used as a means of production; so, no, the dirty commies are not coming for your toothbrush (unless you’re brushing other people’s teeth with the same toothbrush for a price…then…uh…we need to have a talk…). A good way of understanding personal property is anything you persistently use for personal (aka non-business uses). A possible question to ask regarding this would be: “what if I’m a freelancer and I work from home and use my laptop for both work and personal uses?” Such questions will be answered in further posts as we get closer to building a functional post-capitalist system.
Why Are We Producing This? And Who Gave You the Right to Decide Why?
As Singer’s earlier quote implies, the determination of property norms by the Sovereign/State/Government, at whatever level this occurs (local vs federal vs etc.), has to do with the goals of production.
What do we need? Do we need materials to build a navy? Perhaps we need to replenish a national stockpile of personal protective equipment for healthcare workers to stay safe during a serious medical emergency?
What do people want? Do people want new cars or phones, more movies in the cinema, online vs in-person shopping, etc.? And what are legitimate things to want? We don’t allow individuals to attempt to build bombs in their garage or gain access to deadly pathogens or chemicals, hence the regulatory state.
All of these decisions are either directly made by, or delegated by, the Sovereign. If they’re delegated, that doesn’t mean the real authority has left the Sovereign (which is usually the State); it simply means that, for a time, the Sovereign permits others to make choices. Even in Capitalism, this holds; the Sovereign still exists, directly determining (or delegating the right to determine) the goals for production and expressing this through property norms, regulations, and even systems like money itself.
So Where Does This Leave Us?
Obviously we have made a series of arguments that propose a radically different viewpoint on the theoretical backing of economics. We have addressed property norms and sovereignty, but we need to take the next step forward and engage with another system typically considered to be fundamental to economics: the market (or, perhaps, systems of exchange more broadly). That will be the topic of the next post. And then as time progresses, we will continue to develop our understanding of property norms and reach our discussion of the ingenious system that makes capitalism work: money.
