Economic nationalism v. self-determination - 1 comment

I was going to post about this anyway, but Tom Miller's comment on my Iraqi Oil post gave the plan some added impetus.

The issue there was whether a population's chances of economic self-determination (the ability to act freely) are improved by an industry - or the economy in general - being owned/managed by their government, rather than by foreign companies (I should add that the most obvious alternative - ownership by domestic companies - wasn't mentioned explicitly). There is a sense in which that desire for self-determination could have been intended to apply to the country as a whole, but that idea really takes us back to a model of countries on a war footing, desperate to secure "strategic" resources. That's something for aspiring despots like Chávez to worry about, and isn't helpful for a discussion that should focus on open economies, and differences in economic power within those economies.

I don't think we can, or should generalise about the economic freedom/autonomy of individuals solely on the basis of the ownership of the largest economic assets. Incompetent or corrupt governments can - and do, throughout the developing world - subjugate their own populations, and deprive them of the means (legal, material, social, etc.) to enjoy economic freedom, just as others can - and do - expose them to the predation of private companies. That those companies might be owned, or based abroad, doesn't in itself alter the motivation to take advantage of the economically powerless.

The idea that people cannot enjoy economic autonomy - either individually or collectively - without state ownership, "strategic resources", "national champions", or widespread restrictions on economic activity, is both prevalent and destructive, and reduces our ability to explain and to tackle our own economic inequalities, let alone those in the developing world.

Or, for rather more lucid and persuasive coverage, try this - Cooperative Islands in a Capitalist Sea? :

If everyone capable of benefiting from the alternative economy participates in it, and it makes full and efficient use of the resources already available to them, eventually we'll have a society where most of what the average person consumes is produced in a network of self-employed or worker-owned production, and the owning classes are left with large tracts of land and understaffed factories that are almost useless to them because it's so hard to hire labor except at an unprofitable price. At that point, the correlation of forces will have shifted until the capitalists and landlords are islands in a mutualist sea--and their land and factories will be the last thing to fall, just like the U.S Embassy in Saigon.

And much more. I don't agree with all of it, but it offers a model of economic empowerment that no amount of grant or subsidy can conjure up.

Update (21/01): fixed typo