ABSTRACT
I am pleased to have this opportunity to comment on the three foregoing chapters by Gar Alperovitz, Robin Hahnel, and Daphne Greenwood and Richard Holt. As I understand my role, it is to serve as a provocateur rather than a standard discussant. In order to serve in this capacity I have made the bold assumption that the editors of this volume knew what they were doing when they invited an Austrian economist, someone who has devoted her career to thinking about and advocating for the market order, to comment on two contributions that explicitly advocate replacing markets with some other system of social coordination (Alperovitz and Hahnel) and a third which seeks to dethrone market indicators as the sine qua non of development. The editors assured me that indeed they did know what they were doing. So, without apology, the following comments are offered from the perspective of the Austrian School. I have two clusters of questions that I invite readers of this volume to consider in their future discussions, thinking, and writing. But to make sense of these questions, I first need to put a frame around them. Each of the three preceding chapters expresses a deep dissatisfaction with the status quo, which is characterized by intolerable asymmetries of political, economic, and social power and looming environmental disaster. Each chapter also points to an impoverished intellectual toolkit as at least part of the problem, with mainstream economic understanding failing to provide the language or intellectual tools needed to think about alternative routes away from the status quo. In keeping with the Austrian tradition (see Hayek 1978a) I share with the authors these same deep dissatisfactions and agree that a new course is required (both in the world and in our theoretical perspectives) if we are to obtain the common good. When considering how best to move away from the political-economic status quo we face in the world – and here I am responding primarily to Alperovitz and Hahnel – the principal question is which path or set of paths we ought to take? When considering how best to rethink the discipline of economics so that it is competent to foster a fuller understanding of human systems beyond the narrowly economic – and here I am responding primarily to Greenwood and Holt – the question is which intellectual traditions might help in the endeavor of moving beyond the intellectual status quo of mainstream analysis. I shall consider first the question of how best to move away from the political-
economic status quo we face in the world. It seems to me that there are three possible pathways before us: (1) government restraint that reigns in markets, (2) civil society that allows for experimentation with alternative social arrangements, and (3) markets (Figure 12.1). It is important for me to say that I view the path of the market as a trajectory away from the status quo, as what I have in mind are radically de-politicized markets in which the winners and losers are not pre-ordained. I do not think that this is a path we are currently on, at least not at the highest levels of corporate power. If our authors and the reader will forgive the broad brush strokes here, both Alperovitz and Hahnel advocate some combination of the first two paths – a good deal of government restraint on corporate power, and a great deal of experimentation within civil society, including experiments in common ownership such as employee-owned firms, neighborhood-owned corporations, decentralized democratic control over municipal and social enterprises (Alperovitz), and local currency systems, producer cooperatives, consumer cooperatives, and egalitarian and sustainable intentional communities (Hahnel). Both Alperovitz and Hahnel argue that if pursued systematically, the combination of these two paths would lead to an alternative system of social coordination that moves us beyond the market order. An Austrian view begins with the same dissatisfaction with the status quo. But instead of advocating a combined path of civil society and government restraint, Austrians would advocate a combined path of civil society and depoliticized markets. My first cluster of questions, then, is which approach offers the best potential for a radically democratic society – a combined path of government restraint and civil society or a combined path of markets and civil society? Which course offers the greatest potential for not only widespread wealth but widespread wellbeing – and not just for us, but across the globe? This question seems to have fallen out of fashion since 1989 – you know, since the end of history and all. It is an abomination, I believe, if after all the intellectual effort and all the human suffering, the lesson we glean from the fall of the Soviet Empire is that the status quo is the best we are ever going to get. In engaging this question of which course gets us to the common good, I
encourage us to get beyond the quips, “oh you’re just naive if you think that markets could ever be de-politicized – end of conversation.” Or, for our part, “you’re just naive if you think that government can be trusted to serve anyone other than the power elite – end of conversation.” Don’t get me wrong, these are important points of critique, but if we let the conversation end here, we play right into the hands of our common adversary: those who want to call this the end of the road; those who want to remain at the status quo. The second cluster of questions has to do with this interesting common ground between us – this middle ground of civil society. I invite a pluralist conversation around the question, “what is the best way to think about this voluntary sphere of human interaction?” Again, if you will forgive the broad brush strokes, both Alperovitz and Hahnel portray civil society as an arena in which human creativity flourishes, an arena in which we can experiment with new social, economic, and political arrangements. I think I am safe in assuming that both also see the market as potentially threatening to this sphere of human engagement – inappropriately intruding upon civic space by transforming communal relationships into commercial relationships. If this characterization is accurate, it is reasonable to suggest that government restraint aligns well with civil society, as government can help in blunting the intrusive effects of the market mechanism where it does not belong. An Austrian view of civil society would agree that civil society is an arena in which human creativity flourishes; an arena in which we can experiment with new social, economic, and political arrangements. But an Austrian view would emphasize that it is the voluntary character of this sphere of human interaction that gives it its creative force. The discovery that unfolds within civil society is born of civic freedom and therefore more naturally aligns with the market order, not government restraint. Yes, I agree that markets can be an intrusive force, but my sense is that generally we can trust the robustness of civil society to resist and counter with non-market solutions where market intrusions are not welcome. In this pluralistic conversation about civil society, I encourage us not to overly romanticize the concept in either our theoretical or empirical analysis. Civil society is certainly not devoid of power dynamics. But this common ground of civil society is worthy of our mutual attention as it is a context in which we can talk productively about the common good. On the one hand, scholars on the radical Left do not trust corporate power to offer a way toward the common good. And as I said, there is good reason to be suspicious of this power. Austrians, on the other hand, do not trust the state to offer a way toward the common good. And given the track record of state power in the twentieth and now twenty-first centuries, I think the skeptics are justified in our suspicions. But we ought not let our respective concerns keep us from moving the conversation beyond the status quo. Let us begin our conversation in this sphere of voluntary interaction we call civil society and see how far this path takes us. As Greenwood and Holt’s chapter suggests, a crucial step in advancing such
a conversation is for us to critically examine the ways in which the intellectual tools and rhetorical styles of our discipline have shaped this conversation in the past. As an Austrian economist, I could not agree more. As Lavoie and I argue elsewhere (Lavoie and Chamlee-Wright 2000), our discipline has rendered itself relatively incompetent on questions of culture, power, and non-market social coordination via the narrow formalism of mainstream economic theory, the emphasis on aggregation in mainstream empirical analysis, and the exclusion of qualitative methodologies from standard economic training and practice. Greenwood and Holt wisely point to institutional, feminist, post-Keynesian, and environmental economics as providing the intellectual tools we need to expand our conversation. I would suggest, however, that classical liberal scholars in general and Austrians in particular have been engaged in this conversation for a good long time and have much to contribute. Adam Smith’s Theory of Moral Sentiments marks the classical liberal tradition as one that takes seriously the ways in which the market order and the moral order intertwine with one another into a complex interdependent human system. In their quest to point out the limiting nature of the neoclassical frame, and their efforts to ask questions that are relevant to the human condition Greenwood and Holt could not find a better ally than Austrian economist F.A. Hayek (1973, 1978b, 1984, 1988). Contemporary Austrians have carried on this tradition in the areas of comparative economic systems (Boettke 1990, 1993), economic development (ChamleeWright 1997; Storr 2004; Beaulier and Subrick 2006), post-war and post-disaster reconstruction (Coyne 2008; Sobel and Leeson 2007), and the study of social capital (Chamlee-Wright 2008). Critiques of the political-economic status quo in the world and the intellectual status quo in the discipline have been at the center of Austrian economics discourse since its origins. Given this long and continuing intellectual history, it would seem prudent for a pluralist conversation aimed at expanding the economic discourse beyond the formalism, aggregation, and quantitative emphasis characteristic of the mainstream discourse, to include classic and contemporary Austrian scholarship as part of that conversation. Further, given the long history Austrians have had in promoting individual liberty as the pathway to human flourishing, such a voice is critical in any serious conversation about advancing human well-being.
