The hidden systems

Posted by – May 11, 2010

What economic system do you live in? For readers of this blog, the answer is probably some blend of market capitalism, corporatism and socialism. It is defined by your interactions with the state: sometimes it gives you resources or subsidises your choices, sometimes it expropriates resources and taxes your choices, sometimes it does neither. All of the time it arranges things for the benefit of powerful institutions.

But that’s far from being the only economic counterparty you have (unless the state is completely socialist) – the state is only special because it has the violence monopoly, so in theory it can dictate anything it wants. In a free market system, you also have a counterparty in your employer, in the customers of your yard sale, in people who trade stocks with you (or your pension scheme) and so on. These are all market systems themselves, and free market theorists like to call the free market system “natural” because it seems to occur wherever there’s no coercion.

Margaret Thatcher famously said that there’s no such thing as “society”, but only individuals. That sounds like a rather pointless truism, but I suppose she had in mind something like the small-scale economic arrangements I listed in the previous paragraph, which are all free market and (supposedly) show by their existence that humans are inherently meant to operate in free markets. However, it seems to me that one of the most significant economic arrangements has been omitted here – that of families (ostensibly families are important to conservatives, but I think Thatcher may have been an exception). Families, it occurred to me, are instances of neither free markets nor coercion, and typically operate under some some kind of socialist syndicalism. For many or most people they’re also more significant than any other economic arrangement in their lives.

Let me address some obvious criticisms of that idea. Firstly: are families really both free and non-market? Most libertarians I’ve talked to would probably say that they are free markets, because they’re arrangements people freely choose in their own best interests. And if they don’t freely choose them, well, then it’s a system of oppression. I’m not unsympathetic to that viewpoint, but it strikes me as a rather too coarse a distinction.

If you’re a child in a family, the family supervises your life and determines your best interest for you, rather like an ideal communist state. But you probably don’t hold that against them (or you do when you’re a teenager, which is probably the brain’s way of saying that it wants to get out and control its own resources and make its own babies). Or if you’re married to someone, you may very well feel like a hostage, staying in an unpleasant situation for the kids, out of memories of love or because you don’t want to lose status or be poor. A libertarian might say that that’s still free choice, because you chose to get married and can choose to get divorced, but again, that doesn’t quite capture the entire situation. And even if only physical coercion counts, plenty of people in marriages still experience that or the threat of it.

If we accept for the sake of argument that families aren’t a form of coercion or instances of free markets, what are they? At first I thought that they were some form of socialism, but that’s not true for all families at least. Some families have a Soviet-style implementation where power is concentrated and one or both parents (or plausibly grandparents) decide for the benefit of all. Some have a more syndicalist system where everyone gets some kind of say in everything. Some hippie families have probably even tried anarcho-syndicalism. Some families live under despotism, where one person rules for his own benefit. In fact a market system family is one I haven’t really ever seen. Could it work? What other systems are there?

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