Resolution and Progress in the Dispute

If the account of the dispute developed in this chapter is both accurate and illuminating, it should be possible to explain clearly what would count as a resolution of it, as well as what would count as progress short of resolution.

Would proving that the economic system of the good society is not a free enterprise (or socialist) system resolve this dispute? The answer is complex. Let us begin by recalling what this involves. First and foremost, it involves explaining some social vice or other by reference to the type-defining fea­tures of a free enterprise system (viz., private ownership of most of the means of production and the freedom to sell one’s labor). This is more difficult than it might seem because one must establish a fairly direct empirical or logical connection between these very abstract defining features and some social vice or other.

What is at issue here goes right to the heart of the controversy between those on the Left, who believe that some social ills of existing capitalist soci­eties can be blamed directly and entirely on the defining features of the free enterprise system, and those on the Right, who believe that these social ills, if they exist at all, are best explained by reference to exogenous factors, such as unrelated aspects of the political system, human nature (including origi­nal sin), historical accident, and especially the political activities of socialists and their fellow travelers. By contrast, those on the Left argue that any soci­ety with a free enterprise system would have this social problem because it is of the nature of such a system that it creates this problem. Let us call this kind of argument a comprehensive critique. The conclusion of such an argument has the following general form:

(CC) Any economic system that meets the defining conditions for a free enterprise system (viz., private ownership of most of the means of pro­duction and freedom to sell one’s labor) has some social vice V.

The argument for a statement of the form (CC) may or may not lead through mediating hypotheses of the form

(MH) Any economic system that meets the defining conditions for a free enterprise system has property Q and any system with property Q has social vice V.

Though arguments of this form do bring in factors other than those cited in the definition of a free enterprise system, those factors are nonaccidentally related to these defining features, so such an argument would constitute a comprehensive critique of a free enterprise system.

A comprehensive critique can be achieved in another way. Suppose that one developed an exhaustive catalogue of subtypes of free enterprise systems and then gave different arguments running from the defining features of each subtype to some social vice or other (possibly not the same vice for each subtype). This would achieve the same result, because one would still be able to conclude that any society with a free enterprise system suffers some social vice (or other) and thus that a good society does not have a free enterprise economic system.

fn offering either kind of comprehensive critique, a critic must also show that some type of socialist economic system avoids whatever vices have been attributed to a free enterprise system (or to all the subtypes of free enterprise systems). This positive task must be executed if the critique is to provide rea­sons for social change in the direction of socialism. This means that a suc­cessful attack on the free enterprise system requires at least a limited defense of some type of socialist economic system—limited to showing that the favored type of system has the virtue of not having the relevant social vice or vices. This can be done by showing that the relevant type-defining features prevent or preclude the vice(s) from emerging, or it can be shown that these type-defining features so SigniHcantly ameliorate the vices that they lose their status as social vices and become minor social defects (blemishes, so to speak).

An example will illustrate. Suppose a socialist shows that any free enter­prise system will visit widespread alienation on the people who live in that society and that widespread alienation is a social vice. For the reasons indi­cated, this socialist must also show that some favored type of socialist eco­nomic system would prevent or preclude alienation altogether or at least would reduce it to insignificant levels.

Suppose that these arguments have been worked out. This would be at least a partial resolution of the debate—and would definitely constitute progress—because it would have ruled out one generic type of economic sys­tem as a candidate for the economic system of the good society.²³ Moreover, it would have been further shown that some type of socialist economic sys­tem suffers none of those vices. The question now becomes, Does proving that a type of economic system lacks a social vice or vices that can be justly blamed on the other type of system constitute a complete or total defense of that type of system? If so, then the dispute will have been completely resolved.

Unfortunately, the answer is no, and the reason is simple. In addition to proving that there are some virtues explainable in terms of the defining fea­tures of the favored type (beginning with the absence of the other side’s vices), a complete defense also requires that one show that the favored type of eco­nomic system is not responsible for any social vice, not just the ones correctly attributable to the other side. The reason for this is that a complete defense proves that an economic system is, in virtue of its type-defining features, responsible for some of the things that make a society a good society and none of the things that are sufficient to make a society not a good society. In short, it does good deeds and sins not. Or, to be more precise, it commits no cardinal sins. The distinction is important. As was just suggested, there may be lesser social defects (“social blemishes”) traceable to the type-defining fea­tures of the favored economic system.

This is what a complete defense of a type of economic system establishes, and this is why such a defense must do more than show that a system of that type does not have some vice correctly attributable to the other generic type of economic system. A complete defense of a type of economic system would show that there are no social vices whatsoever traceable to those type-defin­ing features. But how could one possibly do that? The burden of proof in a complete defense of a type of economic system appears overwhelming. Indeed, it seems that without some exhaustive catalogue of social vices, it would be an impossible task to execute. How could one know that some unspecified vice could not be traced to the type-defining features of the favored economic system, especially if, as seems reasonable to suppose, the favored type does not as yet exist anywhere?

The most obvious solution is to look to the theory of the good society for an exhaustive catalogue of all social vices. The problem with this suggestion is that a complete theory of the good society is probably something very few participants in this dispute have. (It would seem to require a fully formed social philosophy.) It is as if someone trying to figure out how to start an automobile company from scratch were advised to first get an unlimited line of credit from a consortium of the world’s largest banks. The advice is sound but difficult to implement. The next question is, Is there any second-best solution?

One promising possibility is the following: suppose that in addition to showing that the favored type of system would not be responsible for the social vices associated with the other generic type of system, one could also show that this type of system would not be responsible for any of the social vices associated with existing economic systems of the same generic type as the favored one.

Establishing all of that would still not prove that the type-defining fea­tures of the favored system would not be responsible for any social vice what­soever. But accomplishing all of this would provide some—indeed, very good—reason to believe it would not. By hypothesis, one has shown that a certain type of socialist system has neither the serious problems attributable to free enterprise systems generally nor the serious problems that have been attributed to other types of socialist systems. That would seem to count for quite a bit, even if it is not an outright proof of the essential goodness of the favored type of economic system. Let us call this a stout defense. A stout defense is not a complete defense, but it does constitute a part—perhaps a large part—of one. If a type of economic system could be stoutly defended, it seems that one would be entitled to say that there is good reason to believe (though it is by no means certain) that the favored type of economic system is the best one can reasonably hope for. After all, it has none of the social vices attributable to existing socialist or free enterprise economic systems.

Consider the following hypothetical example of a stout defense. Suppose a socialist establishes that any free enterprise system suffers some social vices (e.g., systematic exploitation, objectionable inequality). He then defends a type of market socialism in which the predominant form of organization is the worker-owned cooperative. This defense consists of showing that such a system would have none of the vices of a free enterprise system and perhaps that it would have some additional virtues as well.

Suppose, further, that he provides good reason to believe that the very considerable social vices that have been attributed to existing socialist eco­nomic systems would not recur if this form of market socialism were insti­tuted.

By so elevating this type of socialist economic system above the ranks of the existing sinners of this world (both free enterprise and socialist), our socialist has not thereby proven that such a system could not itself be respon­sible for some social vice or other, but he has at least given a stout defense of this type of system. This would come close to resolving the dispute between those who favor capitalism and those who favor socialism—perhaps as close as one could reasonably hope for.

If a stout defense comes close to resolving the dispute, is there any way to make substantial progress short of a stout defense? I believe there is. Clearly, one of the most difficult prerequisites of a stout defense is a comprehensive critique of all economic systems of the other generic type. A more limited cri­tique (and correlative defense of a version of the favored type) would target only a certain (sub-)type of free enterprise or socialist economic system, instead of all such systems. This is a more manageable project.

For example, some critics of socialism (Mises 1951; Hayek 1935) have tar­geted all and only those socialist economic systems that employ central plan­ning. As in the case of a stout defense, if this critique is to have meaning in the context of the capitalism/socialism dispute, the critic must explain how a free enterprise system (perhaps of a certain type) avoids the social vice(s) attributed to centrally planned economies. In short, this critique would require a limited defense of some version of a free enterprise system. As the next chapter shows, these critics of socialism have discharged both parts of their task. Notice that this limited critique of one type of socialist economic system would leave untouched other types of socialist systems (e.g., market socialist systems) and so would not serve as a complete vindication of some version of the free enterprise system over all varieties of socialist economic systems—which should seem about right to those familiar with the Hayek- Mises critique of socialism.

The conclusion of a successful limited critique of a certain type of eco­nomic system is that the economic system of the good society is not of this type. In the example, this implies that if the economic system of the good society is to be socialist, it cannot be centrally planned. A critique of this sort narrows the range of systems still subject to debate and so represents real progress in the dispute. How much progress depends on the type-defining features that are called to account. If those features are widely instantiated in the real world or if they are prominent in socialist thought, then this cri­tique represents significant progress.

There is at least one other way in which significant progress can be made. It is a fair observation that while participants in this dispute are willing to offer limited defenses of existing economic systems in virtue of certain fea­tures they have, few are willing to offer a stout defense of any existing eco­nomic system. This is so for the simple reason that most thinkers believe that substantial improvements in any existing system are genuinely possible. The type (or, to be more accurate, subtype) of economic system that someone is willing stoutly to defend has new and different attributes—attributes that are supposed to prevent various social vices and insure various social virtues. Let us call a type of system someone is willing to offer a stout defense of ‘a well- motivated system.’ To say that a type of system is well motivated is just to say that there is at least some reason to believe that it is responsible for none of the social vices that have been blamed on existing socialist or free enterprise systems. To put it another way, a well-motivated system is one for which a prima facie case can be made.

Suppose, now, that a well-motivated socialist economic system could be successfully criticized. This would involve showing that such a system would, in fact, be responsible for some social vice or vices and making a limited defense of some type of free enterprise system. This does not prove that no type of socialist system can be given a stout defense, but it does make the prospects look unpromising, if only because it is doubtful that there are very many well-motivated types of socialist systems out there in logical space. (Of course, the same considerations apply, mutatis mutandis, to free enterprise systems.) For these reasons, it seems that a critique of a well-motivated type of economic system would constitute real progress in this debate, though it still falls short of a comprehensive critique of socialist (or free enterprise) sys­tems, that is, a critique of all forms of socialism.

The purpose of this book can now be stated quite simply: it is to give a cri­tique of a well-motivated type of socialist economic system and a limited defense of a certain type of free enterprise system. Chapter 2 identifies a ver­sion of market socialism and provides the motivations for it. Motivating it involves identifying a minimal socialist vision of the good society that nearly all socialists subscribe to and sketching the reasoning that leads from the type­defining features of this form of market socialism to the social virtues that constitute this socialist vision of the good society. (One of those virtues is something nonmarket socialist systems have never realized, viz., achieving a decent standard of living in comparison to what has been achieved in free enterprise systems.)

Chapters 3-7 constitute a sustained critique of this model or version of a market socialist system and a limited defense of a free enterprise system. The main charge to be proved is that this type of system is responsible for wide­spread systematic exploitation of the sort that free enterprise systems pre­clude or minimize. Chapter 3 offers a general analysis or theory of exploita­tive exchange in a market economy. Chapter 4 discusses some recent work in the economics Oforganizations and provides a basis for identifying where, and explaining how, exploitation can take place in any market economy, whether it is free enterprise or socialist. Chapter 5 gives more details on the economics of organizations and explains how the predominant organizational forms of a free enterprise system (capitalist organizations) tend to preclude or minimize opportunities for exploitative exchange. Chapters 6 and 7 contain the heart of the argument against market socialism. These chapters consist of a comparative evaluation of capitalist organizations and market socialist orga­nizations. It is argued that the latter permit—and, indeed, encourage —forms of exploitation that are prevented or discouraged by capitalist orga­nizations and that therefore, on the basis of a widely shared socialist concep­tion of the good society, this version of market socialism cannot be the eco­nomic system of the good society.

The larger significance of this conclusion depends on how well motivated this version of market socialism is and how important the elimination of exploitation is to the socialist conception of the good society. Chapter 8 addresses these issues. The first section considers other types of market sys­tems that look attractive from a socialist perspective. It argues that these other systems are also more exploitative than free enterprise systems, are incom­patible with other elements of the socialist vision of the good society, or are not really forms of socialism. Chapter 8 also explores the larger significance of exploitation for the socialist conception of the good society by discussing the philosophical significance of economic exploitation, in particular, its con­nection to distributive justice.

This chapter has tried to sort out the various possible positions in the cap- italism/socialism dispute and the intellectual commitments that go with those positions. A recurring theme has been the essentially comparative nature of the case for or against any type of economic system. The virtues and vices attributable to economic systems may themselves be given a comparative for­mulation. But even if they are not, making the case for any type of system will require that the case be made against the other type of system, and vice-versa. The reason for this is that at least in this area of political philosophy, one’s cogitations are supposed to issue in reasons for or against fundamental social change. These requirements give a philosophical expression to the general intellectual virtue of taking one’s opponents seriously. A socialist’s opponent believes that some version of the free enterprise system is a good system and that socialist economic systems are not good systems. It is incumbent upon those socialists to provide good reasons to maintain that both of these beliefs are in fact mistaken.²⁴ Similarly, a critic of socialism must provide some rea­sons for thinking that a socialist economic system is not the economic system of the good society and that those reasons are logically related to reasons why some form of a free enterprise is. The standards imposed on this debate are quite high, but they are not impossible to meet.