market capacity socialism

some sensible centrism

State capacity libertarianism is an attempt to make capitalism as strong as possible, in part by building up the state’s ability to create and enforce markets and other public goods on which capitalism depends.

Obviously, I have my differences with SCLs, but they’re good opponents to have.¹ In the interests of being a better opponent myself, here are four ways that I think selectively freer and better-operating markets would aid the “socialist sectors” - state-owned enterprises, cooperatives, and commons - of the economy.

Taking only these gets you a rather technocratic, sensible, center-by-center-left policy (except where the sensible technocratic policy is also radically to the left of the Overton window, as in immigration policy.) However, they are complementary to a project of greater state and cooperative running of the economy.

general supply side progressivism stuff

I’m not going to spend a lot of time on this because it’s thankfully gaining a lot of traction, but to repeat:

1. Immigration controls destroy massive amounts of wealth, and most (but far from all) of the wealth they destroy is that of poor laborers who would benefit from moving from a lower-productivity to a higher-productivity area. Free movement of labor should be embraced as far as it is politically feasible to do so.

2. Housing should be easier to build for similar reasons. Let the labor flow and agglomerate.

3. Build more nuclear reactors (or make it easier for firms to do the same.) They aren’t as cheap or safe as solar, but they’re more reliable, and they’re much safer and greener than fossil fuel plants.

Some interested parties would be marginally worse off from these reforms; those parties should be simply bought off.

prediction markets

I wrote a post about this:

prediction markets as a substitute for capital markets

The tl;dr, though, is that prediction markets aggregate information similar to that aggregated by stock markets, without requiring private ownership of capital. (Ownership of some kind of stakes is required, but not ownership over firm governance.) This would enhance the decision-making capacity of states and other non-capitalist entities.

easier funding of cooperatives

Cooperatives are both more just and more efficient than the standard capitalist firm. Is this a suspicious concidence? No, it’s just that cooperatives, for obvious reasons, can’t attract funding as easily, so they expand, form, and reproduce less.

I wish I knew more about industrial banking so that I could give some good suggestions for this! Alas, I only have fairly obvious ideas. In order from less in the spirit of this post to more, some ways to accomplish this would be:

1. simply taxing traditional capital at higher rates

2. funnelling taxes on capital towards a general fund that goes towards cooperatives

3. prioritizing cooperatives (that accept funding) in the investments of a social wealth fund

4. establishing industrial banks focused on cooperatives (this could be done proactively by unions with significant pension funds)

5. weakening protections (regulatory or, perhaps, institutional) firms may place against “hostile takeover” by employees

6. making it easier for existing capitalist firms to move in a cooperative direction, for instance by

   1. relaxing restrictions on issuing preferred or otherwise non-voting shares, especially when employees own significant amounts of common stock

   2. allowing capital income from rent on one’s employer to be non-taxed (like health insurance) up to where one would own an “equal” share

7. creating markets for hostile takeover by employees; in particular

   1. creating some kind of “shadow stock market” where employees can secretly indicate that they’d put some x amount of money into buying stock and triggering when enough do so (and means by which non-indicating employees could be brought into the plan), in a sort of dominant assurance contract

   2. allowing outside corporate raiders to sign onto such an escrow, on condition that the common share they purchase be converted into preferred shares or bonds upon employee-led hostile takeover

8. dropping most employee protection (safety, &c.) laws from cooperatives, since these are justified mainly by the employer-employee power imbalance

commoditizing our complement

Going with aggressive antitrust + deregulation in other respects should lower prices, which makes government more efficient when government is the customer.

And government contracting is notoriously corrupt, much more so than the state on its own or the private sector on its own. Sometimes the answer to this is vertical integration: rather than creating a trough for sweetheart deal parasites, the state should just do the thing.

But if it’s not, bidding should be taken at a level high enough for meaningful market depth; and big contractors should be broken up. Antitrust + deregulation in general should help with this.

1. In my ideal world, all economic liberals would spend their energy on technocratic Pareto-enhancing reforms and all cultural conservatives would spend their energy demanding schools teach heavier courseloads of the Western canon.