Nationalize the credit rating agencies?

[Die Neue Zeit]

http://www.salon.com/2008/04/23/time_to_nationalize_moodys/


So here’s a very specific regulatory suggestion. In-source the ratings game. Make evaluating the creditworthiness of new securities the responsibility of the Fed, or the SEC. The private sector proved itself manifestly incapable of guarding its own henhouse in the case of collateralized debt obligations tied to subprime mortgages. Why should we think they’ll do any better when the next round of “innovation” comes down the pike? And who knows? Maybe it will even be cheaper for the government to nationalize the credit ratings game than to bail out investment banks before they blow up.

http://www.lepanoptique.com/sections/politique-economie/stronger-regulations-in-financial-markets-writing-out-the-rating-agencies/


The credit agencies should be nationalized; if not possible, this task should be given to the Federal Reserve or the SEC. Under this system, each investor would pay a very small fee each time he does a transaction in a regulated financial market, thus creating a pool of funds used to run these credit agencies. The government could design a performance-based pay scheme, which would reward the best analysts in these credit rating agencies. This way the agencies’ analysts would have their incentives set correctly. This setup would be costly and not very efficient, but it might be the price to pay to prevent another 2008-type financial crisis.

http://voices.washingtonpost.com/ezra-klein/2010/04/should_we_nationalize_the_rati.html


The obvious problem is that a public rating agency might be too conservative, but on the one hand, I'm not sure that's a bad thing, and on the other hand, the market could always ignore the rating. It's much more dangerous for the ratings agencies to be paid to tell the market what it wants to hear rather than for them to be erring on the side of conservatism and forcing the market to think hard about whether the thing it wants to hear is really true.

http://www.imackgroup.com/mathematics/753149-nationalise-the-ratings-agencies/


So, the agencies are neither accurate nor merely observers – yet they bully governments around the world and make billions doing so. The obvious solution would be to take this public service into public hands. Let's have a ratings agency run by the UN, funded by pooled contributions from both lenders and borrowers. It should be the only one to have preferential access to data from corporates and countries. Let's make the ratings business a utility, rather than a semi-cartel that intimidates elected politicians and rakes in excess profits. It's time to break up the bullying double-act.

Something's brewing.

[tuwix]

And what it would change? State owned rating agencies won't take bribes for proper rating? :D

[Jimmie Higgins]

Moved to Economics.

[Brutus]

This wouldn't really change anything DNZ.

[ckaihatsu]

This is a hair-breadth away from the libertarian call to 'nationalize the U.S. dollar' (away from The Fed).

Mere formalities posing as substantive politics.

[ckaihatsu]

Also, related to this topic, we could say that the *furthest*-right a revolutionary politics would go -- into the waters of reformism, as a tactical move -- would be a call for the 'nationalization of banks', which could be better-phrased as 'the democratization of banks' or the 'socialization of the banks'.

[Vladimir Innit Lenin]

Also, related to this topic, we could say that the *furthest*-right a revolutionary politics would go -- into the waters of reformism, as a tactical move -- would be a call for the 'nationalization of banks', which could be better-phrased as 'the democratization of banks' or the 'socialization of the banks'.

Only under democratic workers' control, and even then, leave it to the reformists please.

OT: it's not a great idea to 'in-source' credit rating agency functions to governments, to rate banks that (in the UK) are largely government owned. It's the same conflict of interest that allowed the credit bubble to build the first time. Bad, bad move!

[cyu]

As long as some people are millions of times richer than others, there will be bribery that renders any organization meaningless, whether public or private.

...but it's pretty useful for distracting people from the inherent failures of plutocracy.

[Vladimir Innit Lenin]

As long as some people are millions of times richer than others, there will be bribery that renders any organization meaningless, whether public or private.

...but it's pretty useful for distracting people from the inherent failures of plutocracy.

It's not bribery that was the problem, it was that the ratings agencies were being paid by the companies to rate them, hence problems of motive.

If the government is carrying out a rating of a largely government-owned firm whose performance may be correlated indirectly (via macro-economic performance) with the fortunes of the government, then there will also be a similar problem of motive.

[cyu]

It's not bribery that was the problem, it was that the ratings agencies were being paid by the companies to rate them, hence problems of motive.


If a corporation advertises on your news network, is that bribery?

If a corporation contributes to your political campaign, is that bribery?

If a corporation decides how much product or services it wants to buy from you, is that bribery?

Personally I'd say a lot of things are bribery without being officially labelled bribery.

[Vladimir Innit Lenin]

[QUOTE=cyu;2611510]If a corporation advertises on your news network, is that bribery?

No.


If a corporation contributes to your political campaign, is that bribery?

Not always.


If a corporation decides how much product or services it wants to buy from you, is that bribery?

No.


Personally I'd say a lot of things are bribery without being officially labelled bribery.

OK, but the issue at hand here is one of motive. Bribery may be a factor but the real issue is the division of work in terms of accurately rating the creditworthiness of some firm.

[Yet_Another_Boring_Marxist]

This would remove the entire purpose of credit agencies. Every state owned credit agency would have a vested interest in giving the highest credit rating to their respective government, thus rendering them meaningless in terms of the service they provide investers and driving the rest of the private sector to create their own credit agencies. Honestly, I can't even say this is reformism, this is just plain old stupidity. Even Huey Long's hair brained schemes made more sense than this.

[cyu]

If a corporation decides to advertise with another news network, contribute money to another politician's campaign, or decides to buy products and services from your market rivals, then whether their money is going to you or somebody else can be used to affect your news reporting, your political policies, or whatever else your organization does.

But yes, I see what you mean though. Conflicts of interest can arise not just from bribery, but from other avenues as well.

But ultimately I don't see credit agencies playing any role in post-capitalist society. Credit ratings judge whether you should give money by whether they can demonstrate they are *not* a risk... The communist goal is in fact the exact opposite - money (or economic resources) is judged as rightly going to those who most need it.

Or in the words of Bob Hope, "Banks are a place that will lend you money, if you prove that you don't need it."

[Prof. Oblivion]

It's already the government's job to regulate this sort of stuff, so there effectively is no difference.

[ckaihatsu]

This whole topic casts into stark relief the *absurdity* of the notion of (financial) "risk", especially in the sense of ensuring a sound future for humanity and society.

The array of separatist private interests at play, competing over even the rules of the game, makes a joke of the idea that "risk" is somehow comprehensively measurable and scientific, not to mention the regular market crashes throughout all of capitalist history.

It simply adds to our arsenal of arguments for a *society-wide*, *hands-on* approach to the co-administration of all things material, instead of resigning it to the financial-feudal patchwork of ownership and interests that prevails today.

[Die Neue Zeit]

This is a hair-breadth away from the libertarian call to 'nationalize the U.S. dollar' (away from The Fed).

Mere formalities posing as substantive politics.

Interesting twist, but keep in mind, comrade, that any left calls for such should not be in isolation.

Where did you get that "nationalize the US dollar" crap from? Really, public management over the money supply is only possible with a fully publicly-owned and administered financial services system (no credit unions even). It is this left policy that makes or breaks any calls for public ownership of the credit ratings agencies, because financial services and related financial information services are intertwined.


Also, related to this topic, we could say that the *furthest*-right a revolutionary politics would go -- into the waters of reformism, as a tactical move -- would be a call for the 'nationalization of banks', which could be better-phrased as 'the democratization of banks' or the 'socialization of the banks'.

That has proven historically to be muddle-headed. How many banks? Why are credit unions and other financial services providers ignored?

[Die Neue Zeit]

Only under democratic workers' control, and even then, leave it to the reformists please.

They're not for public ownership of the entire financial services system, though. :confused:


OT: it's not a great idea to 'in-source' credit rating agency functions to governments, to rate banks that (in the UK) are largely government owned. It's the same conflict of interest that allowed the credit bubble to build the first time. Bad, bad move!

You've lost me on the conflict of interest part, I'm afraid. Credit rating agencies don't rate just banks. They rate publicly traded securities and, of course, even national governments.

Given your acquaintance with my previous posts on the matter, in Europe I am very much against "nationalization." I am for monopoly "Unionization" of *all* direct financial services via the ECB (retail banking, commercial banking, investment banking, property insurance, life insurance, etc.), for monopoly "Unionization" of *all* credit rating functions via another EU body, and for monopoly "Unionization" of all financial attest services via something with more teeth than a mere "Court of Auditors."


If the government is carrying out a rating of a largely government-owned firm whose performance may be correlated indirectly (via macro-economic performance) with the fortunes of the government, then there will also be a similar problem of motive.

I still don't see the conflict of interest problem because funding for the latter two bodies would be independent of the comings and goings of the ECB. Currently, anyway, there are no issues with government-owned firms being subject to financial attest engagements by an Auditor-General, who "rates" the quality of the financial information presented by those firms.

[Die Neue Zeit]

This would remove the entire purpose of credit agencies. Every state owned credit agency would have a vested interest in giving the highest credit rating to their respective government

Think about it from even a cooperative-based economy's perspective: a publicly owned credit rating agency would serve the purpose of evaluating the financial situation of as many domestic coops as allowed in its mandate. Transitions, anyone?

Financial blackmail of a foreign government isn't the primary purpose of a credit rating agency.

[ckaihatsu]

This is a hair-breadth away from the libertarian call to 'nationalize the U.S. dollar' (away from The Fed).

Mere formalities posing as substantive politics.





Interesting twist, but keep in mind, comrade, that any left calls for such should not be in isolation.


Well, as TB points out:





Only under democratic workers' control, and even then, leave it to the reformists please.





Where did you get that "nationalize the US dollar" crap from?


You're putting forth contradictory characterizations of it. If it's such "crap" (your wording), then why even entertain the notion, as you do here:





Really, public management over the money supply is only possible with a fully publicly-owned and administered financial services system (no credit unions even). It is this left policy that makes or breaks any calls for public ownership of the credit ratings agencies,




because financial services and related financial information services are intertwined.


Yes.





Also, related to this topic, we could say that the *furthest*-right a revolutionary politics would go -- into the waters of reformism, as a tactical move -- would be a call for the 'nationalization of banks', which could be better-phrased as 'the democratization of banks' or the 'socialization of the banks'.





That has proven historically to be muddle-headed. How many banks?


Well, again, it's only for the sake of *tactics*, so then the overall political context would be everything.





Why are credit unions and other financial services providers ignored?




because financial services and related financial information services are intertwined.


Yes.

[Die Neue Zeit]

You're putting forth contradictory characterizations of it.

I was only asking you to cite your "libertarian" sources, hence the word "crap."

[ckaihatsu]

I was only asking you to cite your "libertarian" sources, hence the word "crap."


I've been using quite a lot of political capital already just mentioning it -- I doubt there'd be anything to be gained by having to say the term another time.

(I actually don't recall -- some website I came across somewhere.)

[MarxSchmarx]

I don't particularly have a "dog in this fight". After capitalism, I don't see much role for credit. The notion of credit, at least in the way it is employed today, is largely predicated on the scarcity of capital that must be judiciously invested by - you guessed it - capitalists.

But in terms of the implementation, I don't know how this would work. I think one problem here is that the government operates by laws and regulations, whereas actuarial calculations are largely subjective and can only be valued by the market, at least under capitalism.

Suppose my hamburger restaurant got a government credit rating of F. How could I appeal this? I think if it was the health department I could go to court and contest the points or at least show that I've taken steps to improve (e.g., hire an exterminator). Or it could be that my hamburger restaurant violated promulgated laws (e.g. all employees must wash hands).

But if the government decided - well, look, your books are fine and alright now but really in this market odds are against you - so you are a credit risk, what recourse would I have? With private agencies, I can at least say well, morningstar does what it does, it's after all just another private company, and I can sue them for libel if needs be and have an independent government arbitrate. But under capitalism, the issue seems arbitrary. Even if it's not like I've broken any laws or regulations, I still receive government sanctions in the form of a reduced credit rating. I guess by the standards of the bourgeois state, I just don't see how that works.

[Die Neue Zeit]

Comrade, wouldn't a better, more pertinent example be a hamburger coop (not a small proprietary hamburger restaurant), as alluded to earlier in this thread? :confused:

Also, there is no such official rating as F. Would you be referring to somewhere between B and CCC instead?

Furthermore, credit rating has very little if anything to do with health and safety laws. It has more to do with expectations for discounted cash flows. This discussion also alludes to the bankruptcy of "workers control," as even workplace coops that are parochial enough to produce only for that immediate workplace's consumption needs (like the rampant factory production meltdowns in early Soviet Russia) (http://www.revleft.com/vb/lenin-and-centralization-t174992/index.html?p=2509319) would and should be penalized from the perspective of those public wealth funds replacing capital markets, in the name of Stakeholder Co-Management (http://www.revleft.com/vb/stakeholder-co-management-t145117/index.html).

[ckaihatsu]

I don't particularly have a "dog in this fight". After capitalism, I don't see much role for credit. The notion of credit, at least in the way it is employed today, is largely predicated on the scarcity of capital that must be judiciously invested by - you guessed it - capitalists.

But in terms of the implementation, I don't know how this would work. I think one problem here is that the government operates by laws and regulations, whereas actuarial calculations are largely subjective and can only be valued by the market, at least under capitalism.

Suppose my hamburger restaurant got a government credit rating of F. How could I appeal this?


I think you're highlighting the irreconcilable contradiction between the *capital*-based approach to material valuations -- as through financial risk -- and that of a material-rational, communist-type communal / collective approach to positing some kind of inter-material ("value") interchangeability.

We can't *ignore* real material risks, as with building directly on swampland, but obviously the notion of any *financial*-based calculation of material (and humane) risk is inherently stilted, to say the least.

But anything less than full collectivist co-administration will wind up relying on some kind of specialized, elitist bureaucratic management -- in place of workers control itself.

People may be used to thinking of laws and regulations as being humanity's finest standard of wisdom to-date, *and* the sacrosanct last word on such matters, but, since they respect the institution of capital and its skewered notions of financial "risk", it's impossible for such bourgeois contrivances to be taken seriously -- much less looked-up-to -- by a nascent revolutionary consciousness.

The contradiction between capital-based authority, and that of a collectivist worker-based one, is unresolvable -- it's either one or the other.

[cyu]

I'd also add that there's ultimately a difference in motivation between a capitalist economy and a non-capitalist one. The capitalist economy is based on fear - if you can't produce, if you don't make a profit, then we threaten you with bankruptcy, with receivership, with eviction, with credit rating black marks, with homelessness, with poverty and starvation.

Since success in capitalism tends to require sociopathy, fear is about the only tool that those in power truly know how to use.

Anti-capitalists of course want to remove the threat of poverty and starvation as the basis of economic motivation. If your economic activities are failing, so what, there's no need to lie about your profits, cheat your customers, or secretly defile the environment - if they fail, they fail - no skin off your back. You're not thrown into the streets - you can just merely move on to wherever else you feel you can contribute the most.

[MarxSchmarx]

Comrade, wouldn't a better, more pertinent example be a hamburger coop (not a small proprietary hamburger restaurant), as alluded to earlier in this thread? :confused:

Also, there is no such official rating as F. Would you be referring to somewhere between B and CCC instead?

Furthermore, credit rating has very little if anything to do with health and safety laws. It has more to do with expectations for discounted cash flows. This discussion also alludes to the bankruptcy of "workers control," as even workplace coops that are parochial enough to produce only for that immediate workplace's consumption needs (like the rampant factory production meltdowns in early Soviet Russia) (http://www.revleft.com/vb/lenin-and-centralization-t174992/index.html?p=2509319) would and should be penalized from the perspective of those state funds replacing capital markets, in the name of Stakeholder Co-Management (http://www.revleft.com/vb/stakeholder-co-management-t145117/index.html).

The way I see it, the issue is contingent upon capitalism still being the dominant mode of production. In such an environment, if credit is necessary to operate, I guess my point was that health and safety laws aren't accounted for in credit ratings. The former can be appealed using the legal framework, the latter cannot under capitalism. That is why to some degree it is one thing for the state to impose legal sanctions for violating XYZ, but giving a credit rating of F or CCC or -100 or something is not a legal decision, and you are thus asking the capitalist state to do more than exercise its traditional role and (horror of horrors) actively participate in fostering the functioning of capitalism, whichi is what it does but hides behind a veneer of independence from the economic arrangement of society.


I think you're highlighting the irreconcilable contradiction between the *capital*-based approach to material valuations -- as through financial risk -- and that of a material-rational, communist-type communal / collective approach to positing some kind of inter-material ("value") interchangeability.

We can't *ignore* real material risks, as with building directly on swampland, but obviously the notion of any *financial*-based calculation of material (and humane) risk is inherently stilted, to say the least.

But anything less than full collectivist co-administration will wind up relying on some kind of specialized, elitist bureaucratic management -- in place of workers control itself.

People may be used to thinking of laws and regulations as being humanity's finest standard of wisdom to-date, *and* the sacrosanct last word on such matters, but, since they respect the institution of capital and its skewered notions of financial "risk", it's impossible for such bourgeois contrivances to be taken seriously -- much less looked-up-to -- by a nascent revolutionary consciousness.

The contradiction between capital-based authority, and that of a collectivist worker-based one, is unresolvable -- it's either one or the other.


I'm not sure I completely comprehend the former point, although I have a vague sense of what is being alluded to. I guess my response is that control of credit ratings by the state is to some degree a logical extension of the role of the capitalist state - enforcing contracts and the like to facilitate markets - to perhaps issue commonly used credit ratings. I agree with what seems to be ckaihatsu's point that this interferes with the other capitalist state's objective, which is to administer law irrespective of how well they facilitate markets.

But this applies to other areas of life as well. For instance, the role of the capitalist state in extracting carbon credits from polluting industries arguably facilitates the market and thus promotes capitalism, even though it seems the state is taking over a function previously handled by the private sector.

[Die Neue Zeit]

I think you're highlighting the irreconcilable contradiction between the *capital*-based approach to material valuations -- as through financial risk -- and that of a material-rational, communist-type communal / collective approach to positing some kind of inter-material ("value") interchangeability.

Comrade, financial risk isn't the same thing as scarcity of industrial capital. I am in agreement with you on problems with "financial risk" models (not least of which being that finance capital markets are really not "efficient").


We can't *ignore* real material risks, as with building directly on swampland, but obviously the notion of any *financial*-based calculation of material (and humane) risk is inherently stilted, to say the least.

Fine, but shouldn't there be similar incentives and disincentives under a broader (coop) enterprise risk assessment framework?


The capitalist economy is based on fear - if you can't produce, if you don't make a profit, then we threaten you with bankruptcy, with receivership, with eviction, with credit rating black marks, with homelessness, with poverty and starvation.

[...]

Anti-capitalists of course want to remove the threat of poverty and starvation as the basis of economic motivation. If your economic activities are failing, so what, there's no need to lie about your profits, cheat your customers, or secretly defile the environment - if they fail, they fail - no skin off your back. You're not thrown into the streets - you can just merely move on to wherever else you feel you can contribute the most.

I'm not discussing those at all (lying, cheating, defiling, etc.).

What I am asking is: If there will be lots of coops in a transitional period, why should public wealth funds turn a blind eye to something like the enterprise risk associated with parochial production for immediate workplace employee needs? Why should public wealth funds ignore societal productivity? Productivity and accumulation are still important. The "credit rating black marks" are meant to be a warning for certain coops to get their production act together, before the coop "commercial" sticks of bankruptcy and public receivership kick in. "Underproduction for use" is a mockery that should be penalized socially.

Oh, and all those sticks I mentioned aren't "skin off your back," since there shouldn't be resulting homelessness, poverty, or starvation.


The way I see it, the issue is contingent upon capitalism still being the dominant mode of production.

You mean generalized commodity production, right? "Capitalism" isn't the only possible form of it. As I said, even non-"capitalist" forms for transition can't ignore things like productivity and accumulation.


That is why to some degree it is one thing for the state to impose legal sanctions for violating XYZ, but giving a credit rating of F or CCC or -100 or something is not a legal decision, and you are thus asking the capitalist state to do more than exercise its traditional role and (horror of horrors) actively participate in fostering the functioning of capitalism, whichi is what it does but hides behind a veneer of independence from the economic arrangement of society.

Would this be a step into Indicative Planning (http://www.revleft.com/vb/behavioural-political-economy-t161630/index.html), then?

[cyu]

So let's assume money is still being used in some transitional period. There are many ways to decide where money should go.

The traditional capitalist method is that money should go where you get the best return on investment. (Or at least where the wealthy can get the most return on investment.)

In a purely democratic society (agnostic of both capitalism and communism), money would go wherever the votes decide the money should go. With each voter having equal decision power (as opposed to capitalism / plutocracy / authoritarianism, where the ruling minority's decision-making power far outweighs everyone else).

What are some other ways that money can be allocated?

In a needs-based society, money goes to those that need it most - ie. the starving and the homeless. If you're already living comfortably, f**k you - come back to us after your iPhone runs out of batteries.

In a anarchist society, if you need something to survive, you just take it - no money necessary. If others are tired of being "robbed" all the time, then it is in their interest to help ensure nobody in society is in that much need. Decision-making with respect to resource allocation is a more personal one (as opposed to decisions being made by society as a whole, by a privileged minority, or by an authoritarian bureaucracy).

If economic organizations are linked by cooperation rather than competition, then the organizations decide amongst each other where resources should go. But like political democracy, it works better when the voters have cooperation in mind rather than trying to compete with each other. And people start competing when you let some groups get a leg up on others - such as when capitalists are allowed to wield economic power over the poor, then people will start competing for economic power - or when some ethnic groups are allowed to force others into ghettoes or into the sea, then people will start competing for that kind of power.

[ckaihatsu]

I'm not sure I completely comprehend the former point, although I have a vague sense of what is being alluded to. I guess my response is that control of credit ratings by the state is to some degree a logical extension of the role of the capitalist state - enforcing contracts and the like to facilitate markets - to perhaps issue commonly used credit ratings. I agree with what seems to be ckaihatsu's point that this interferes with the other capitalist state's objective, which is to administer law irrespective of how well they facilitate markets.

But this applies to other areas of life as well. For instance, the role of the capitalist state in extracting carbon credits from polluting industries arguably facilitates the market and thus promotes capitalism, even though it seems the state is taking over a function previously handled by the private sector.


The tricky thing here with this entire topic is that it crosses two different socio-economic paradigms, capitalism and workers' democracy, and has to compare *real* material factors and judgments in the context of *both* paradigms.

You're correct, of course, to bring attention to the inherent conflict-of-interests within the role of the bourgeois state, as over respect for private property vs. respect for the social good.

From a *revolutionary* standpoint the state's administration of the carbon credits system seems like mere marketing, since it wouldn't *matter* whether such a scheme was being handled by government or by private industry itself.

We should be clear in noting that, yes, there would have to be binding judgments / decision-making in any kind of post-capitalist order, but that the *current* use of financial calculations for such only serve the interests of property, aided by the state.

[ckaihatsu]

Comrade, financial risk isn't the same thing as scarcity of industrial capital.


I really don't see how you're arriving at this interpretation of my wording, DNZ.





I am in agreement with you on problems with "financial risk" models (not least of which being that finance capital markets are really not "efficient").


Yup.





Fine, but shouldn't there be similar incentives and disincentives under a broader (coop) enterprise risk assessment framework?


Yes, please feel free to elaborate here.





In a purely democratic society (agnostic of both capitalism and communism), money would go wherever the votes decide the money should go. With each voter having equal decision power (as opposed to capitalism / plutocracy / authoritarianism, where the ruling minority's decision-making power far outweighs everyone else).


Sorry to do this, but 'economic democracy' is only a term of convenience. Treating money as something to be voted on only begs the question of its underlying value, and may simply be an exercise in redundancy.





In a anarchist society, if you need something to survive, you just take it - no money necessary. If others are tired of being "robbed" all the time, then it is in their interest to help ensure nobody in society is in that much need. Decision-making with respect to resource allocation is a more personal one (as opposed to decisions being made by society as a whole, by a privileged minority, or by an authoritarian bureaucracy).


I have no *blanket* objection to this approach, but do have some differences in terms of how (mass) production could better be organized and implemented.

[cyu]

Treating money as something to be voted on only begs the question of its underlying value

Yes, it actually is a great discussion to have I think. What is the point of money and why do we have it? Pro-capitalists might say we need money in order to ensure the economy functions properly so that it can produce the right types and amounts of stuff. Then they turn right around and say, "So the poor aren't getting enough under capitalism? Well, that's not the economy's job."

[ckaihatsu]

Yes, it actually is a great discussion to have I think. What is the point of money and why do we have it? Pro-capitalists might say we need money in order to ensure the economy functions properly so that it can produce the right types and amounts of stuff. Then they turn right around and say, "So the poor aren't getting enough under capitalism? Well, that's not the economy's job."


I think it boils down to whether a revolutionary sees a need for an interchangeability of material factors, or not.

Many might say that everything labor-related could be handled *descriptively*, with political-type discussions had over any significant matter.

I, however, think that a more-systematized method for consistently recognizing and considering liberated-labor inputs would go a long way, as all standardization does.

My concern is that recordkeeping, as among localities, could quickly become unwieldy, especially over the allocation and coordination of resources in common, going forward.

[MarxSchmarx]

The tricky thing here with this entire topic is that it crosses two different socio-economic paradigms, capitalism and workers' democracy, and has to compare *real* material factors and judgments in the context of *both* paradigms.

You're correct, of course, to bring attention to the inherent conflict-of-interests within the role of the bourgeois state, as over respect for private property vs. respect for the social good.

From a *revolutionary* standpoint the state's administration of the carbon credits system seems like mere marketing, since it wouldn't *matter* whether such a scheme was being handled by government or by private industry itself.

We should be clear in noting that, yes, there would have to be binding judgments / decision-making in any kind of post-capitalist order, but that the *current* use of financial calculations for such only serve the interests of property, aided by the state.

Fair enough.




The way I see it, the issue is contingent upon capitalism still being the dominant mode of production.
You mean generalized commodity production, right? "Capitalism" isn't the only possible form of it. As I said, even non-"capitalist" forms for transition can't ignore things like productivity and accumulation.


It's hard to say. If there is an alternative to capitalism that is just as oppressive I don't know if credit will emerge as a particularly powerful form of social organization.
indeed, capitalism has (at least since the 1800s) proved to be basically the only social system where something like credit matters. My understanding is that these kinds of metrics were not used by, e.g., Bolshevist regimes or even other advanced capitalist states until recently (e.g., I believe some capitalist countries do not have a numerical value assigned to each citizen)



That is why to some degree it is one thing for the state to impose legal sanctions for violating XYZ, but giving a credit rating of F or CCC or -100 or something is not a legal decision, and you are thus asking the capitalist state to do more than exercise its traditional role and (horror of horrors) actively participate in fostering the functioning of capitalism, whichi is what it does but hides behind a veneer of independence from the economic arrangement of society.

Would this be a step into Indicative Planning (http://www.revleft.com/vb/behavioural-political-economy-t161630/index.html), then?

As I read it, approaches such as indicative planning have very little to say about capitalist jurisprudence, which forms the a key pillar of how modern capitalist economies and certainly liberal-philosphies operate.

[Die Neue Zeit]

It's hard to say. If there is an alternative to capitalism that is just as oppressive I don't know if credit will emerge as a particularly powerful form of social organization.

indeed, capitalism has (at least since the 1800s) proved to be basically the only social system where something like credit matters.

You just gave me brain cramps by forcing me to think about this when I do commit this discussion on credit ratings (and to a much lesser extent financial attest) into something more formal. ;)


My understanding is that these kinds of metrics were not used by, e.g., Bolshevist regimes or even other advanced capitalist states until recently (e.g., I believe some capitalist countries do not have a numerical value assigned to each citizen)

I'm sure that applies to "socialist profit," inventory control, and the rest of the Kosygin reforms, but surely cruder metrics were introduced at that time.


As I read it, approaches such as indicative planning have very little to say about capitalist jurisprudence, which forms the a key pillar of how modern capitalist economies and certainly liberal-philosphies operate.

You mean rule-of-law constitutionalism?

[cyu]

If we never get an http://en.wikipedia.org/wiki/Ansible then there can never be any truly centralized planning. There will always be a limit to how far any economic jurisdiction can reach.

As a result, there would always have to be some independence between far flung areas. At the borders between areas is where it gets interesting.

What if one jurisdiction had decided on one type of resource allocation while a nearby jurisdiction had decided on another? Can they even be discrete policies, or would some kind of merge always have to happen in the border areas?

There would be less of an issue if you always left it to the locals to decide for themselves. It gets interesting though to imagine just what a "local" decision-making body is. Is it down to the single person? A nuclear family? A clan or tribe? A cooperative? A township? A province? A continent? A planet? A solar system?

If there are light years between the nearest stars, then decision making between them would not be practical.

[ckaihatsu]

If we never get an http://en.wikipedia.org/wiki/Ansible then there can never be any truly centralized planning. There will always be a limit to how far any economic jurisdiction can reach.


Perhaps, *but* --

We could simply envisage the use of a calendar by either party, to coordinate schedules up and down any given supply chains -- no biggie.





As a result, there would always have to be some independence between far flung areas.


If there wasn't it wouldn't be communism.





At the borders between areas is where it gets interesting.


Yup -- please see diagram, below.





What if one jurisdiction had decided on one type of resource allocation while a nearby jurisdiction had decided on another? Can they even be discrete policies, or would some kind of merge always have to happen in the border areas?


In the case that conflicting policies were developed, such logistics would have to be ironed-out.





There would be less of an issue if you always left it to the locals to decide for themselves. It gets interesting though to imagine just what a "local" decision-making body is. Is it down to the single person? A nuclear family? A clan or tribe? A cooperative? A township? A province? A continent? A planet? A solar system?


Hence the term 'bottom-up'.





If there are light years between the nearest stars, then decision making between them would not be practical.


Multi-Tiered System of Productive and Consumptive Zones for a Post-Capitalist Political Economy

http://s6.postimage.org/ccfl07uy5/Multi_Tiered_System_of_Productive_and_Consumptiv.j pg (http://postimage.org/image/ccfl07uy5/)

[Die Neue Zeit]

If we never get an http://en.wikipedia.org/wiki/Ansible then there can never be any truly centralized planning. There will always be a limit to how far any economic jurisdiction can reach.

Sorry, but comrade Cockshott has stated that computer tech developments have already gone past the point of being able to calculate all the mathematical requirements for detailed planning on a planetary scale.

With such planning, the terms "command economy," "directive planning," and perhaps even "central planning" can be thrown out the window, since historically they weren't as extensive as the kind of computerized planning that is suggested.

That ansible can come later for a post-planetary economy and scale.

[RedMaterialist]

whereas actuarial calculations are largely subjective and can only be valued by the market, at least under capitalism.

Value is determined by the amount of socially necessary labor contained in a commodity. Under capitalism the market expresses the constantly fluctuating price of the commodity. In monopoly capitalism the corporation cartels set the price. Actuarial calculations are entirely objective, ask any accountant. Subjective valuation commodities is a myth perpetuated by the "marginalists."

[RedMaterialist]

Sorry, but comrade Cockshott has stated that computer tech developments have already gone past the point of being able to calculate all the mathematical requirements for detailed planning on a planetary scale.


By the way, Paul Cockshott has not posted here in a long time.

[RedMaterialist]

If we never get an http://en.wikipedia.org/wiki/Ansible then there can never be any truly centralized planning. There will always be a limit to how far any economic jurisdiction can reach.

Not in a world connected with computers.


As a result, there would always have to be some independence between far flung areas. At the borders between areas is where it gets interesting.

What if one jurisdiction had decided on one type of resource allocation while a nearby jurisdiction had decided on another? Can they even be discrete policies, or would some kind of merge always have to happen in the border areas?

Again, instant communication with computers, iphones, the internet, gives instant feedback on resource allocation. There are no longer any borders for gigantic monopoly capitalism and once the system is destroyed the same technology will be used by all humanity instead of a few.



If there are light years between the nearest stars, then decision making between them would not be practical.

Not necessarily. We could use wormholes to communicate with other stars for universal socialism.

[RedMaterialist]

So let's assume money is still being used in some transitional period. There are many ways to decide where money should go.



Money, i.e., surplus value, should go to the people who produce it: the workers. The society of workers will then decide how much of this surplus goes to the elderly, children, those who cannot work (not including Thatcherites, Romney, et al) education, healthcare, etc. After the transition period (after the DOP) money will no longer be needed, then it will be "from each, etc.)