Chris Dillow — Free markets need socialism

Good observations but I think that Dillow may be conceding to much to call it socialism. Capitalism requires a state to establish and secure property rights for example, as well as to maintain order in a society. This requires institutions and institutions are also based on law and regulation as a matter of order. The question is over the appropriate role of government both with respect to a society and also its economy. There is always a dichotomy between freedom and law and order. Freedom in human society in not possible without the rule of law and imposition of order. The alternative is the law of the jungle, since humans are not subject to different laws than the rest of nature.

Humans have learned to harness those laws to advantage through science and engineering, and a human group of any significant size (beyond Dunbar's number) and complexity requires design, for example, a constitution, laws and legal, judicial, and enforcement systems. It also requires social engineering in response to changing conditions in order to function in an orderly way while providing individuals with as much personal freedom as good order will tolerate. Libertarians of the right don't like it, but order trumps freedom in society. The alternatives are not benign anarchy versus authoritarian control but order versus chaos and in chaos there is no functioning society.

The dichotomy between capitalism and socialism is a false distinction based on the fallacy of the excluded middle and also false equivalence. The situation is more nuanced, and as Hyman Minsky quipped, there are as many forms of capitalism as Heinz has brands.

Libertarians of the left know better. There is no necessity to fall into authoritarianism if individual freedom is limited in some cases owing to the rights of others and also responsible exercise of freedom. The rule of law necessary to civilization requires the rule of law and the fundamental principle that distinguishes the rule of law from the rule of men is equality of persons, which underlies equal rights and equal justice.

Order is meaningless in a complex society without being related to the society as a dynamic system. The objective of economics as a policy science is to show how a social system can operate efficiently and effectively for the society, that is, under law, for all equally. Of course this doesn't imply equality of individuals, each whom is unique, but equality of persons as individuals that share the same nature as human beings.

The assumption that anything less than economic liberalism is "socialism" or not real freedom in nonsense. The task of a liberal society is to harmonize social, political and economic liberalism. There are many ways to do this, some more efficient and effective than others, but effectiveness is dependent on the criteria that define it. In a liberal society that is a political determination to be made by the people in concert.

Stumbling and Mumbling
Free markets need socialismChris Dillow | Investors Chronicle

See also Tom Crowl, Thoughts on the Biosocial Roots of Oligarchy at Civilization Systems.