David Brin has a long and through provoking article on the
false dichotomy that has been constructed between guided allocation and free markets. Both the left and the right are to blame for this misleading and frequently self-serving dichotomy that shapes so much of our thinking and debate. His article is especially relevant relevant as we consider how to attain global sustainability.

The article sufficiently long (over 18 pages printed) that it seems a service to excerpt the essentials without too much interspersed commentary. Hopefully this summary will encourage you to read the full article.

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[T]his damnfool left-right thing has yet another aspect that I haven’t addressed before. Yet another part of a dismal dichotomy that badly needs debunking, at long last.

I am talking about the struggle between those preaching “prudent sustainability” and those who claim that market forces will solve all looming crises of poverty, pollution, energy depletion and so on.

We’ve all grown familiar with these apparently rigid “sides”, and so let me avow something from the start. If I am forced to choose between them, you can bet that I will side with the New Puritans of the sustainability crowd! They, at least, want somemodernist attention paid to assertive problem-solving, instead of preaching an indolent, pollyanna faith that some grand and superior external force will come to our rescue, averting calamity in the nick of time.

But that’s the point. I will not choose sides between the extreme poles of yet another absurd “devil’s dichotomy.” As I say here:and here
… we don’t have to pick between two perfectly opposite positions! In fact, that kind of inflexibility is the surest way to guarantee our failure as a civilization.

So let’s pull back from our immediate troubles, once again, and ponder how these two viewpoints may reflect assumptions that are far older and more similar than any of the adversaries think, reflecting habits of thought going back thousands of years.

In fact, there are certain ways in which doctrinaire leftists are taking up old-time feudalist positions while today’s neo-feudalists of the right seem, at first, to be standing up for the Enlightenment… only to show their truer, reactionary colors when we dig a little deeper.
…

[There have been many expressions] of what’s recently been called the Copenhagen Doctrine or, more generally, the precept of Faith in Blind Markets (FIBM)

Now first let me put aside any notion that I’m an adherent of the opposite principle — the general notion called Guided Allocation of Resources (GAR). As you will see below, I most definitely am not!

What I will show is that this dispute goes back a long way. It is an ancient dichotomy… and one that’s deeply misunderstood.

WHAT IS ‘GUIDED ALLOCATION’?

Before we appraise the modern fetishism called Faith in Blind Markets (FIBM), it is essential that we cover the older fallacy of GAR, or guided allocation. This notion contends that society’s best, brightest and wisest should decide how capital will be invested, which goods will be produced, and who will work at what tasks.

To those who were raised in the 20th Century, this description surely sounds like socialism. But that is a narrow and parochial view of GAR. A glaring logical and historical fallacy. An absurdity, in fact. (As a test of your own flexibility and sagacity, stop here and ponder for a moment why I call this reflex association preposterous. Why do I say that socialism is NOT the foremost or exclusive exemplar of guided allocation? Think “history” and stretch your assumptions a bit, before reading on.)

In fact, GAR has been the fundamental principle of governance and economics in nearly all human societies — not just socialistic ones — ever since the discovery of agriculture! Take the cabals of kings, nobles, and clerics that ruled over most of them. Those oligarchs felt just as sure of their superior ability to manage and allocate resources — including human labor — as the Soviet nomenklatura commissars were. Perhaps more so!

GUIDED ALLOCATION - TOO TEMPTING TO RESIST?

I should point out that collusive cheating is only the first of several flaws, inherent in the notion of guided allocation.

The second flaw was almost as great — imperfect human knowledge of complex systems. Even when ruling elites tried to govern judiciously, for the the good of all, generation after generation of wise guys fell for the same alluring trap… the same delusion… believing that they understood society, morality, physical law, and economics well enough to allocate effectively.

THE MARKET ALTERNATIVE

In contrast to guided allocation, genuinely liberated markets have a very short history.

Yes, great Pericles spoke in their favor, and not only of economic markets, but also markets of knowledge, ideas, policy and law (e.g. democracy.) Alas, the notion was new and difficult to implement in lasting ways. It was also deeply unpopular among tyrants and oligarchs, who unleashed every weapon against that fragile, early experiment. Moreover, once the pericleans were quashed, aristocrats in every subsequent culture relentlessly subsidized and promulgated Plato and his followers, who made it their business to defend top-down hierarchy with utter tenacity, for close to 2500 years.

Guided allocation remained king - literally - during all that time. A long and daunting epoch of failure and pain.

That is, until Adam Smith and John Locke began drawing our eyes once again toward the Periclean dream. Toward what we moderns might call the “wisdom of empowered crowds.”

Their core notion? That human beings — all of us — are inherently delusional self-deceivers, rationalizers and cheaters. (Duh!) Hence, no elite group can be trusted to allocate resources fairly, or to rule wisely with unbalanced or unaccountable monopolies of power. No, not even the elites YOU happen to admire. Not even them. Not even you. Not even me.

Rather, Smith, Locke, Franklin and their enlightenment peers offered a radical notion. If you empower the masses to act individually, as fully knowledgeable citizens, each person transacting on his or her own behalf, then their differences may add up to strength. The strength and creative power of reciprocal accountability (RA) — applied en masse — to detect and counter a great many foolish errors. Unwise and immature individuals can be be much wiser in aggregate, especially when a dollop of mutual suspicion lets them cancel out each others’ worst tendencies — the malignant, predatory devils of human nature — leaving the angels of fair competition and cooperation to thrive. The guiding concept? To escape the era of kingly delusion, replacing it with an open give-and-take. Above all, letting no one escape criticism.

IS IT REALLY A MATTER OF WISE MARKETS VS FOOLISH ALLOCATORS?

All right, then. Let’s take a closer look at this great dichotomy. One that (we’re told) maps neatly upon the hoary old “left-right political axis”. A dichotomy between the standard human modus operandi - guided allocation - and the newcomer - faith in blind markets.

My claim? That we have been distracted, far too long, by a failure to parse this great debate properly. So let me try to offer a set of encsapsulated key points. And then I’ll kick over the chessboard, pointing out that it was never a dichotomy at all!

Point #1. Reiterating: the approach called Guided Allocation of Resources (GAR) is not specifically socialistic. Rather, it is essentially oligarchic. In principle, communist commissars were no better - or worse - than any other narrow conspiratorial elite of power grabbing cheaters.

Point #2. The fallacy is just as severe in the opposite direction! Any true historian of both economics and politics will tell you that open markets and liberated citizen accountability are the greatest liberal inventions. They were radical, revolutionary, anti-monarchy, anti-oligarchic and reformist. In other words, we are all better off dropping the “left-right” nonsense, when comparing guided allocation to faith in markets. It is simply a poison to clear thinking.

Point #3. Thus, when “market promoters” rightly point out the great flaws of GAR, aren’t they hypocrites to wag their fingers in just one direction? They should shine that critical light on all economy-controlling cabals. Are collusive, price-fixing monopolists more inherently wise and trustworthy than commissars, or feudal lords, or other narrow groups of would-be “allocators”? Aren’t all types more similar to each other than radicals of left or right would ever choose to admit?

Point #4. Even more generally, are not large corporations, in themselves, examples of top-down allocation hierarchies, replicating in-miniature, the rigidity, poor modeling and frequent self-interested cheating that were displayed by kings and commisars? Picture an imperious CEO as royalty! Isn’t the parallel creepy and also… well… rather banal? Even unsurprising?

Yes, competition between major corporations should keep these allocation-centers lean, mean and efficient, while markets supply the essential element of wisdom via supply and demand. (Historians believe that competition between fractious and divided European nations had the same effect during and after the Renaissance, leading to their rapid technological innovation and subsequent conquest of the world. Still, that did not make them internally open. Or intrinsically wise.)

Anyway, note the word “should.” No matter how well-motivated a company is, driven by external competition, a dilemma remains: if corporations utilize command hierarchies similar to kingdoms, won’t they — don’t they — emulate some of the same faults? From leader-egomania and leader conflict-of-interest to relying on a single mind (or small group of minds) to deal with ineffable complexity?

Point #5. Those who (correctly) see the flaws and faults of guided allocation can easily fall into a logical trap — positing that the wise opposite of GAR is Faith in Blind Markets (FIBM).

Indeed, some take the notion of market “blindness” quite seriously, propounding that societies should never meddle in the free interaction of market players (corporations and individuals). Any attempt at “guidance” — by (for example) government regulation — must automatically be rejected, as a matter of basic principle.

In other words, because we have learned that GAR (all capital letters) stinks as a general system, that means we must flee as far as we can, to extremes in the diametric direction! We should reject any use of “gar” (lower case) tools to help markets work better. In extremum, this teaching calls upon us to reject the entire suite of problem-solving methodologies that involve political deliberation, prioritizing and allocating a certain fraction of social resources toward the accomplishment of thoroughly considered and democratically-chosen consensus goals.

…

Most of us are trying hard to keep faith with the Enlightenment goal of pragmatic problem solving, using an eclectic mix of “right and left-handed tools” from competitive market innovation to reasonable social cooperation. From the quasi-random, supply-demand stimulation of goods and services to the kind of government regulations that tune markets, so that all reasonable costs are paid by the same generation that reaps the immediate benefits. (Instead of passing those costs on to our descendants.)

Indeed, it is that quiet and earnest majority who I am addressing in this article.
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THE “WAR” BETWEEN FIBM AND GAR IS A SPAT BETWEEN COUSINS WHO SHARE THE SAME PERSONALITY FLAW. THE SAME WRONGHEADED ASSUMPTION.

Huber and Mills are probably right that the creativity of millions of unleashed human minds will be applied to problem-solving in the years ahead, to an extent that we’ll find unprecedented and dazzling. Perhaps even enough to bring the positive singularity.

On the other hand, history shows that we have absolutely no basis for blindly trusting that creative cornucopia explosion to happen all by itself! The engendering of those creative millions is too serious and important a task to leave to such a simple dogma! Especially to a blithe nostrum, that has no support in the long history of nations.

True, hierarchical guided allocation proved dangerous and stupid countless times in the past. But not when it has been applied toward well-focused tasks that enhance the capability of millions of human beings to become sagacious individual citizens and market participants!
…

Most of us are trying hard to keep faith with the Enlightenment goal of pragmatic problem solving, using an eclectic mix of “right and left-handed tools” from competitive market innovation to reasonable social cooperation. From the quasi-random, supply-demand stimulation of goods and services to the kind of government regulations that tune markets, so that all reasonable costs are paid by the same generation that reaps the immediate benefits. (Instead of passing those costs on to our descendants.)

Indeed, it is that quiet and earnest majority who I am addressing in this article. Because the radicals of FIBM and GAR will not have lasted up to this point. Because they will have already dismissed this as a rant that evades accepted terminology. This essay proves me to be a “socialist”… or else a libertarian “tool of plutocrats.” Or a wishy-washy oscillator, rudderless and without principles.

HERE’S THE CRUX:

Huber and Mills are probably right that the creativity of millions of unleashed human minds will be applied to problem-solving in the years ahead, to an extent that we’ll find unprecedented and dazzling. Perhaps even enough to bring the positive singularity.

On the other hand, history shows that we have absolutely no basis for blindly trusting that creative cornucopia explosion to happen all by itself! The engendering of those creative millions is too serious and important a task to leave to such a simple dogma! Especially to a blithe nostrum, that has no support in the long history of nations.

True, hierarchical guided allocation proved dangerous and stupid countless times in the past. But not when it has been applied toward well-focused tasks that enhance the capability of millions of human beings to become sagacious individual citizens and market participants! Our universities and internets and democracies and civil rights and commercial codes and free education and subsidized roads and nutrition programs and countless other measures that mitigated the tendency of society to slump into a pyramidal hierarchy of inherited privilege. By helping each generation of kids to believe - in some confidence - that they are able to innovate and cooperate and joyfully compete, we created the world’s first diamond-shaped society.

And we did it using judicious dollops of carefully considered [global allocation of resources]..

If the left is never satisfied in pushing for such things, sometimes forgetting what they are for, the right has no claim to be smug. They take all of these things (like civil rights) for granted, glad to accept the benefits, forgetting that conservatives fought against every last one of them, and now resist every new fine-tuning that might help the great cornucopian machine to work better.

Indeed, while I am a passionate believer in the reciprocal accountability principle of Pericles and Smith and Locke - (as evidenced by my book The Transparent Society) - I cannot turn this pragmatic appreciation into cult belief in a quasi religious version, a caricature of what they taught.

Faith in Blind Markets (FIBM) is neither scientific nor steadfast to the essentially pragmatic mindset of the Lockean Enlightenment.

Nor is the recurring notion of socialist allocation a suitable replacement for a dismally predictable oligarchic conspiracy.

All of these are just slightly re-clothed versions of GAR.

They are crutches for weak thinkers… or else manipulative tools exploited by those who want to be our masters.

They are dismal tales that grab and clutch at us out of the past, unsuitable for sophisticated citizens of an agile and complex and fast-moving Third Millennium.

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