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Rebirth of Reason

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Post 60

Sunday, February 17, 2008 - 2:08pmSanction this postReply

Regarding Mondragon and Spaceship Earth:

One of the killer problems for both objectivists and libertarians in general has been externalities, as you seem to recognize.

We all know about Hardin's "Tragedy of the Commons."  However, simply putting something that was originally held in common - the set of all the universe not privatized - into private hands creates equal problems when the value of the private property goes negative and there is no mechanism to deal with collecting the damages from the offenders.

I note that some years ago there was a major study published by some Scandinavian economists that simply summed up the costs to everyone of various business operations.  In one case, a wetland had been turned into a business property, paved over, etc.  While the developers had made quite a bit of money on the property development and renters, etc., had benefitted, when the actual costs to the fishermen and the price of fish, due to lack of supply impacted by the elimination of the breeding grounds, was taken into account, the balance went quite far into the negative.  This study was discussed in some depth, BTW, in both the Wall Street Journal and Scientific American.

Within the realm of state governance, speaking as an agorist anarchist - FYI, the closest approximation to the balance of public and private good, one that reflects the benefit that one receives from society as well as providing a maximum of freedom to the individual to use his or her property as they see fit, is the Georgist model, in which the taxes are based entirely upon the market value of the land itself, not the improvements or any other factor.  It assumes simply that the value of land itself is only marginally produced by the immediate owner, but mostly reflects the value added by the surrounding community.  Thus, this value should be returned to the source, the community that is responsible for it.

As Spencer McCallum outlines in his "The Art of Community," this kind of balance, on a purely private basis, is found in commercial enterprises such as malls, hotels and gated communities.  There one sees a proprieter whose vested interest lies in maximizing the value of the entire community, and who thus - assuming rationality - attempts to assess what the actual contributions and costs of the tenants to the community as a whole in fact are, and bases rents and leases upon that assessment.  The last thing that such a proprieter would want to do is to drive off producers of value.  Thus, decisions are made with care and transparency, so that people can see that rationality and maximum utility are the guiding principles, and the people and businesses who may be negatively impacted can be expected to be compensated for direct losses.

McCallum contrasts this decision process against the political process by which, for example, a municipality goes through a protracted, expensive, heart-wrenching - to the property owners,  political/legal process to widen a street.

If a company such as Mondragon  - or, perhaps even better in some utopian sense, Mondragon plus Google - were to take over the planet by purchasing all the land by trading shares in the enterprise for land titles, with each person on the globe ultimately having a voting share in the enterprise, then, conceivable we could actually have a system that on the one hand, through universal participation in ownership, ensured that virtually nobody starved or went without basic necessities, and, on the other, was run on that basis of good proprietary management, which would give producers maximum opportunity to benefit from their innovations and freedom.

Just a thought...  ;-)

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