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286 pages, Hardcover
First published March 10, 2010
If a Martian, with no preconceptions, came to Earth and observed our economy, Simon mused, would he conclude that Earthlings live in a market economy? No, Simon said, he would almost certainly have concluded that Earthlings live in an organizational economy in the sense that the bulk of earth’s economic activities is coordinated within the boundaries of firms (organizations), rather than through market transactions between those firms. If firms were represented by green and markets by red, Simon argued, the Martian would see ‘large green areas interconnected by red lines’, rather than ‘a network of red lines connecting green spots’....Indeed, the capitalist triumph of the corporation itself does not operate using market mechanisms internally, when you enter into it! Work by employees is done in this mass social mobilization by what David Graeber (RIP; Debt: The First 5,000 Years) provocatively calls “baseline communism” (from each according to their ability, to each according to their need), i.e. cooperation/teamwork with all its messy human qualities, under the discipline (indeed restriction, as start-up culture recognizes) of corporate hierarchy. None of this relies on market exchange, i.e. sellers/buyers seeking to maximize immediate individual returns.
Liberalism’s fatal hypocrisy [...] was to rejoice in the virtuous Jills and Jacks, the neighbourhood butchers, bakers and brewers, so as to defend the vile East India Companies, the Facebooks and the Amazons, which know no neighbours, have no partners, respect no moral sentiments [Adam Smith's other book, The Theory of Moral Sentiments] and stop at nothing to destroy their competitors. By replacing partnerships with anonymous shareholders, we created Leviathans that end up undermining and defying all the values that liberals [...] claim to cherish.
"...Whether or not the recent market turmoil leads to a protracted slide or a violent crash, it is proof that we have wasted the past seven years propping up a bankrupt economic model. Before things get any worse, we need to replace it with one in which the financial sector is made less complex and more patient, investment in the real economy is encouraged by fiscal and technological incentives, and measures are brought in to reduce inequality so that demand can be maintained without creating more debts..."