Franz Oppenheimer — The Law of Transformation and Social Market Economy Oleg Komlik

Oppenheimer’s Law of Transformation can be read as the paradox of cooperative economics and it refers to macro-social dynamics: the beginning of a cooperative group endeavor will end up in a capitalist calculation enterprise or cease to exist as long as the macro-social conditions are based on capitalist monetization and accounting. Knowledge is about predictability and wisdom is about outcome: the later Kibbutzim were from the Oppenheimer viewpoint a survival mechanism which will be inevitably followed by economic means of privatization.

This is another must-read. It's hardly an accident that this knowledge is again coming to a head after having been known at least since Marx & Engels as conditions that led to the previous two world wars are being recreated. I already said some time ago that WWIII has already begun. It just hasn't gone viral yet.

The problem is institutional, and it goes back 5000 years as the post describes. There seems to be no way out as long as money is used to produce commodities in order to make more money (Marx's M-C-M'). The problem is that money not only buys commodities but also result in asymmetric power through asymmetric control of the means of production. Oppenheimer’s nLaw of Transformation suggests that this cannot be remedied in a monetary production economy through co-ops.

Is there another alternative? Our resident Libertarian-Austrian commentator keeps reminding us of the economic calculation problem and socialist calculation debate that suggests not. Socialist experiments to date have not scaled. Franz Oppenheimer suggests that that even limited-scale attempts have ultimately transmogrified into capitalism.

I have suggested that two things are needed for a genuine transformation. The first is an observation that Karl Marx made in Preface to A Contribution to the Critique of Political Economy:

Just as one does not judge an individual by what he thinks about himself, so one cannot judge such a period of transformation by its consciousness, but, on the contrary, this consciousness must be explained from the contradictions of material life, from the conflict existing between the social forces of production and the relations of production. No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society.
Mankind thus inevitably sets itself only such tasks as it is able to solve, since closer examination will always show that the problem itself arises only when the material conditions for its solution are already present or at least in the course of formation.

While I agree with the highlighted text, I would dispute the assertion of materialism. Materialism is the ontological underpinning of naturalism as the methodology of science as "true knowledge vs. opinion" in the ancient Greek sense of episteme vs. doxa that underlies the Western intellectual tradition.

As R. Buckminster Fuller pointed out, the wealth of humankind includes not only material wealth but also "metaphysical" wealth in the form of knowledge. While the former is finite, the latter is potentially infinite. In addition, to this there is also "spiritual" wealth in the form of everything that distinguishes humans. Fundamental to this is the ability to know and appreciate universality, where worldly knowledge is only a part of the story and not the greater part either. In addition to the cognitive faculties are the affective faculties, linked by the volitional faculty.

Thus, the second factor that comes into play in social transformation is the "spiritual" dimension, which can be considered either metaphysically or humanistically. For present purposes, the distinction can be disregarded, important as it may be otherwise. The important factor is that humans can not only know universally but also feel universally.

The level of collective conscious is revealed by the level of universality that the members of a society exhibit in behavior, culture and institutions. The present day level of collective consciousness is based on self-interest and this is reflected socially, political, and economically. Meher Baba elaborates on this in "The New Humanity." Some argue that this is just human nature, so get used to it. Others assert that the level of consciousness is malleable. Bucky Fuller showed that increasing electricity use has a profound effect, on one hand. On the other hand, raising the general level of education also affects the collective consciousness positively.

At a deeper level, the wisdom traditions of the world have asserted that consciousness can be transformed directly and have provided instructions on now to do so. These are being adopted increasingly.

For a transition away from predatory capitalism, two factors are needed. The first is a shift in the mode of production, which may be happening with the transition from the industrial age to the knowledge age. Dealing with climate change is also going to be a game-changer. The second is a transformation of the level of consciousness through a "spiritual awakening" such as has been suggested as coming in The Fourth Turing, for example.

Anyway, there is a lot to chew on in this post.

Economic Sociology and Political Economy
Franz Oppenheimer — The Law of Transformation and Social Market Economy
Oleg Komlik | founder and editor-in-chief of the ES/PE, Chairman of the Junior Sociologists Network at the International Sociological Association, a PhD Candidate in Economic Sociology in the Department of Sociology and Anthropology at Ben-Gurion University, and a Lecturer in the School of Behavioral Sciences at the College of Management Academic Studies