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Re: Meaning of markets, scarcity, abundance (was: Re: [ox-en] Re: transition from slavery to feudalism, mirror for transition from capitalism to peer society)

Hi Stefan,

thanks for your precision regarding markets.

Your distinguishing of scarcity and limitedness is interesting, but not vital I think, as my own usage of scarcity does not depend on any 'objectivity', but simply that there is more demand than supply, and that demand can be subjective or a result of a market. The key issue is that without mechanism, the resource would be depleted. Anyway, I find scarcity better precisely because of its limitation, namely that it is scarce for human need. That it is limited in an abstract sense, is less interesting.

Your remark on growth is exactly what I'm saying, and that we need to shift from a need to infinite material growth, to a shift to growing in immaterial qualities ...

What I'm not sure is why it is the commodity-money cycle (M-C-M) that is responsible for infinite growth. I think this cycle was operating in stable local markets long before capitalism. Rather, I'm more sensible to the argument that it is the interest rate which is specifically responsible for the growth imperative, for the simple reason you can't pay back the newly created interest, without either taking the money from someone else (if stable supply), or growing the overall supply (which means real growth, otherwise inflation sets in). In other words, with a very low, neutral or even negative interest rate, as was the case in many periods of history, there can be markets that are not 'capitalist' and not have an in-built growth incentive.

So please explain by M-C-M is by itself sufficient for infinite growth,

Your rejection of my conclusion (replacing pseudo-scarcity and pseudo-abundance with their opposite), by your new formulation, i.e. replacing scarcity with limitedness (that's fine for me, though I find it much less clear), and obviating the different logic of the material and immaterial fields, simply hides the difference  between rivality vs. non -rivality/antirivaly. So, I'll stick to my conclusions.

Now, as you say: "No. We need a society which copes with the limits of nature and
generally furthers use oriented production". That is an entirely reasonable conclusion, in line with mine in fact, but the only question in my mind if is totally use-oriented systems are a realistic option right now. I think not, and therefore I think we'll have plural and pluralist economies, where use-oriented production will grow significantly and hopefully will become dominant.

By the way, regarding markets, I have since seen many statements saying that 'markets have always existed' ....So my question to the anthropologists is the following: do we have a record of societies that existed entirely without market. Would that not suppose totally self-sufficient tribes without any contact with the outside? Or that the exchange with the outside happened exclusively with a different mechanism. I assume that it is very likely that both conditions have existed, but some fleshing out would be welcome.

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----- Original Message ----
From: Stefan Merten <smerten>
To: list-en
Cc: Stefan Merten <smerten>
Sent: Wednesday, November 14, 2007 11:27:54 PM
Subject: Meaning of markets, scarcity, abundance (was: Re: [ox-en] Re: transition from slavery to feudalism, mirror for transition from capitalism to peer society)

Hash: SHA1

Hi Michel and all!

I share the criticism which has been on the list about your (initial)
perception of markets - especially Gregers' criticism. However, I'd
like to go a step further.

2 months (69 days) ago Michael Bauwens wrote:
You are right: markets have not always existed, though
they have existed for a very long time before the
adven t of capitalism, so that formulation is a little

I think we get closer to learn something if we check what functions
markets have - which is also debatable. To me there is:

* Distribution of goods

  Probably one of the most obvious functions of markets is the
  distribution of goods. Goods that have been produced in a separate
  process are brought to a market and there they can be distributed.

  This function of markets is certainly something which we generally
  need in a society which includes separation of labor - i.e. in every
  society which can be wished for.

  In Free Software this distribution can be seen - see (Linux)
  distributions or countless web sites of Free Software projects or
  SourceForge or ... However, this is not something I'd call a market
  but a flow of goods.

* Connection of otherwise separated social entities

  If those social entities would not be separated from each other they
  could cooperate in the first place and would not need to distribute
  there separately produced good afterwards.

  This separation is probably a result of large societies where you
  can not have this type of connection in each instance because the
  costs for such a connection are simply too high. This is BTW the end
  to all these backward oriented types of Utopias where people are
  connected on a level of knowing each other. No, separation of
  social entities is not reversable in any society which can be wished

  In a typical market transaction the connection vanishes as soon as
  the good is distributed. This maximizes your freedom because you
  don't need to cope with all these difficulties which human
  relationships can bring with them.

  In Free Software we see this connection when one Free Software
  project uses other Free Software products. Inside of a project where
  the developers are connected by being in the same project this type
  of connection making is not necessary. The developers build up a
  social entity in itself.

  It might be notable that in Free Software sometimes the connection
  is deeper than only in the moment of distribution. This is when
  users contribute to the project they are using in one or another

To me these would be the key characteristics of markets. Please note
that scarcity plays no role until here. However, probably usually this
is also understood by markets:

* Exchange based distribution

  The goods are not simply distributed to those who need them but
  exchanged by a general exchange system. I.e.: You can only take if
  you give at the same time something which is considered equal to the
  good you are taking. Because goods are not equal - otherwise it
  would not make sense to exchange them at all - there must be a
  common third which makes them comparable. In capitalism this is the
  price of the labor which went into the product plus the surplus.

  This is the point where alienation comes in because the exchange
  system abstracts from the concrete use of goods. Even the production
  process is changed because suddenly it may make sense to produce for
  a market.

  This is also where the notion of quality of a produced good shifts.
  When you are producing for yourself or socially related people or
  because of your Selbstentfaltung then you are heading for absolute
  quality: Creating the best product you can think of. When you
  produce for a market it totally suffices to produce a quality which
  is just high enough to be sellable.

I think the first two functions of markets have been around for quite
a long time - since the time where their preconditions came into
being, namely separation of labor and separation of social entities.
Even then there might have been elements of exchange but - as Marx
rightly says - the important point is when the markets shifted from a
"Good => Money => Other Good" logic to a "Money => Commodity => More
Money" logic - being the basis of capitalism. This is also the root of
where the logic of infinite growth creeps in. Infinite growth is
certainly alienated from humanity.

Also of course, they are other mechanisms
than the market to allocate scarce resources, and in
my other writings I often state that next to
peer-informed market mechanisms, there will probably
be revived mechanisms of reciprocity.

I'm wondering whether scarcity is the right term here. In the
definition I'm maintaining scarcity is produced by a society - namely
capitalism - to accomplish some other goals. Take mineral oil for
example. Mineral oil was not scarce before it has been used by
engines. Today it is. It was not the mineral oil that changed but the
society changed it's relationship to it.

What you probably mean I'd call limitedness. Mineral oil always was
limited but for the very most part of human history nobody gave a shit
about it. However, to cope with limitedness there are quite a lot of
ways for society. Making things scarce is only one of them, regulation
by law or cultural norms is another one and there are probably more -
such as shifting needs of people in directions where limitedness is
not an issue.

So coming from a capitalist mind set it's probably easy to think in
terms of scarcity. But I think we should have very clear that scarcity
is not God given but a result of a certain society which needs it like
humans need air to breathe. A society which is so scared of goods
which are hard to make scarce - such as information since the Internet

The opposite of scarcity is of course abundance. I tend to think that
it is simply the anti-thesis to scarcity and as such similarly a part
of a capitalist mind set. A dialectical synthesis would sublate both.

We live in a political economy that has it exactly

We believe that our natural world is infinite, and
therefore that we can have an economic system based on
infinite growth. But since the material world is
finite, it is based on pseudo-abundance.

The point is that nature comes without a price - unless a state puts
price tags on parts of nature.

The infinite growth you are struggling with is a direct result of that
"Money => Commodity => More Money" logic. If that logic would be
overcome infinite growth no longer makes sense. This logic, however,
is a direct result of exchange on a large scale.

It's also not true that infinite growth is impossible because of the
limitedness (sic!) of natural resources. This equates growth as such
with a growth in unrecycable material goods. However, growth can
happen in other areas as well. Capitalism currently fights hard to
keep the price tags on information goods - i.e. keep them scarce. If
that would be easier I see no reason why in general there can't be a
non-material infinite growth here. Growth would then be realized by
obsoleting older products for instance by waves of fashion - a scheme
we all know from clothes which are made scarce by fashion.

What we need instead is a political economy based on a
true notion of scarcity in the material realm, and a
realization of abundance in the immaterial realm.

No. We need a society which copes with the limits of nature and
generally furthers use oriented production - regardless of whether
material or information goods are produced. Key for this is banning
alienation. IMHO many problems which are so pressing today then would
vanish in a puff of smoke.


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