Centrifugal Tendencies in Information & Wealth

I’m a big fan of Aurora and hope that her contribution to this symposium helps encourage more anarchists to engage fearlessly with the mathematical dynamics of an anarchist society. But I must admit my disappointment, I was hoping her contribution would seriously engage with the arguments for markets and either present a novel alternative or the foundations of an alternative research project. Anarcho-communism is in dire need of resuscitation, without a modern economics program more enticing than the bureaucratic quagmire of Parecon, it risks being overrun by denialists and crackpots. The basic pitch remains salient, but the moment adherents run across arguments for markets most now retreat to obtuse and tepid attacks on the entire academic project of economics, hoping to, by sleight-of-hand, transmute valid but limited critiques of applicability and scope into an excuse to ignore anything and everything.

Thus have anti-market anarchists ratcheted themselves inexorably towards rejections of mathematics, measurement, science, abstraction, etc. It’s particularly frustrating because, in the context of broader polarizations in the Two Cultures of academia, this has likewise caused the left to broadly abandon analytic conversations. I would desperately like to avoid a future where analytic nerds are automatically shuffled into the hands of right-libertarians defending hierarchy while obscurantist poets claim exclusive ownership over the left. In such a dystopia we left market anarchists will be left trying to chart an ever tighter course between Scylla and Charybdis, attacked by those who think you have to pick either compassion or clarity. Aurora’s work on the social complexity of anarchist societies is a refreshing counter to such incipient anti-mathematics tendencies. But regrettably I find it entirely orthogonal to the topic of whether markets are most useful at the sort of complex economic coordination anarchists aspire to.

Aurora seeks to lay the foundations of a “cybernetic communist infrastructure of computation that would replace the profit optimization mechanism of markets” but what she actually covers — with a detour into measures of complexity and the integrated information project — is mostly that highly networked non-hierarchical systems can be said to have a high degree of complexity. While it may be a necessary counter to more stalinist conceptions of communism to emphasize a need for complexity, this seems rather trivial.

While physicists and computer scientists have been — as is our wont — more cavalier about models and term usage than strict mathematicians, there are strong reasons for our association of entropy with complexity and information entanglement. When separated systems are put into contact with one another, lines of internal causality grow more complex and become computationally harder and harder to track or tease apart. What’s critical in all this is the limits of our brains. When we watch a drop of ink enter a cup of water, the ink-water system at first appears relatively simple, then grows increasingly complex in noticeable features, before finally concluding in a state of indiscernible greyness. This final state appears “simple,” but only because our limited brains “lost the plot” as the ink-water system grew in complexity with diffusion.

As societies and cultures grow in scale or come into greater contact with one another, so too does their entanglement grow and what were once simple dynamics get mixed up into increasing complexity. Reactionaries — being small minded creatures fearful of the spiraling “unintended consequences” of rapid evolution — fear this complexity because they can’t keep track of it; it all looks formless and grey to them. Hence why polemics against “globalism” try to paint our churning interconnected world of constantly forking subcultures as “dreary” or “uniform.” The static fuzz on an old television set might appear contentless, but in reality it’s the combination of countless sources of background radio waves, a rich tapestry of causes we are simply too limited to parse.

I feel it should go without saying that a more networked and less centralized or hierarchical society would be a more complex society, and have more integrated information that is spread across it in ways not discernible from individual elements in isolation.

What Aurora wants with a measure like Phi is a guide to at least one necessary component to maximizing integration and agency,

Maximizing integrated information (in an effective complexity version) would mean obtaining a system that realizes the maximal possible integration of informational complexity across all possible subsystems and the highest degree of causal interconnectedness of subsystems.

But the implication that this will cash out in a prescription of anarcho-communism is a leap too far.

There are two broad objections:

1) It’s not clear that maximizing integrated information cashes out in terms of actual human needs. A highly complex society is not necessarily an optimal society. There are many different complex configurations a society might be in where that complexity is not efficiently applied to achieving our needs and wants. One might imagine a highly bureaucratized system with a high degree of internal connection, where information is spread out in complex ways and one person can affect everything, but done so dysfunctionally that no one actually gets fed. One might term this the problem of Mud Pie Complexity, a society that is exceedingly complex, but only in the service of making mud pies rather than anything truly useful. Aurora presents integrated information maximization as necessary but not sufficient, but if there are other values we’re supposed to be maximizing there’s still the question of when and how do those values get weighed against one another? Simply saying we should have more information integration is not the same thing as saying we should maximize it. I would doubt that it’s truly orthogonal with other values we might have, thus one is forced into the same problem virtue ethicists are faced with when describing multiple virtues or variables to maximize at once. How do these values couple to one another? When faced with a tradeoff between more integrated information and more happiness, say, at what rate do we trade one for the other?

2) Even if we posit it as a most underlying value and assume a kind of forward-thinking optimization process towards phi that necessarily optimizes for human health, happiness, flourishing, agency, etc, as a byproduct, it’s not at all clear that this excludes markets. It may well be the case that markets are a critical necessity to efficiently satiating the complex desires and preferences of individual humans. Indeed there are well established arguments towards this conclusion and Aurora does not engage with them.

What points she makes in passing against markets are twofold:

1) Markets supposedly lead to runaway accumulation:

The  profit  driven  maximization  process  of  markets  is  not  a  viable  option,  not because “profit” is a bad word (it is!)  but because of the way the dynamics works: even if one could start with an ideal initial condition of equally distributed wealth, even very small fluctuations will get largely amplified, rapidly reproducing a situation of  uneven  accumulation.   In  the  profit  dynamics  of  markets  an  equitable  wealth distribution  is  necessarily  an  unstable  condition.   That’s  in  essence  why  markets cannot be liberated from capitalism. Markets are an automated generator of capitalist wealth inequalities,  which can quickly and easily wipe out any hard-won gains that cost major social upheavals and difficult revolutionary actions to achieve.

2) Competition in markets encourages secrecy which limits the profusion of useful evaluative information:

Maximizing our integrated information Φ favors cooperation over competition, since competition tends to break apart a system into separate competitors and this decreases the Φ function, while cooperation increases connectedness and enlarges the network of mutual causal influences, leading to an increase of Φ.

I am honestly annoyed that it’s 2020 and folks still make these arguments without even mentioning, much less responding to, standard left market anarchist points on them, but let’s quickly go over them for the record.

Just as there are accumulative dynamics that can amplify small perturbations of wealth in a market society, so too are there dis-accumulative dynamics — or as Charles Johnson and Gary Chartier put it in the introduction to their 2012 compilation Markets Not Capitalism, there are “centrifugal tendencies” to markets that spread out wealth and in the right societies and situations can overwhelm and outpower accumulative tendencies.

These centrifugal tendencies are myriad and operate at different scales in different ways, but to assume from the outset that the capital accumulative tendencies will inherently outpace and overpower the centrifugal tendencies is to just bypass the entire conversation.

Just to begin with we all know that in a perfectly decentralized/competitive abstract market profit margins would fall to zero or so close as to make no difference. In this idealization a stray extra penny might be randomly found here or there, and primarily used to help course-correct inefficiencies, hardly capable of much runaway compounding. It is certainly the case that existing markets are not perfectly decentralized or competitive, as well as many other ways they deviate from the spherical cow type abstractions studied in economics 101, but most if not all of the sources of wealth and control centralization in our actually existing economy are the product of very specific legacies and policies of state violence. Mutualists throughout history like Benjamin Tucker have painstakingly traced the myriad avenues by which such violence is cloaked or embedded in seemingly small details and yet creates vast inequality and injustice, creating monopolies or comparable concentrations to horrific effect.

It is worth reiterating that markets — networks of exchange of property — have existed throughout history in various roles, in various cultures, including ostensibly stateless ones, and some with quite complicated machinations. Insofar as the centralized violence of state power was absent, these markets tended towards more decentralized / egalitarian norms. David Graeber, no big fan of markets, admits this much in Debt: The First Five Thousand Years.

Similarly James C Scott, another market skeptic, details how bottom-up emergent markets in different cultures have tended towards some strategies of aggressive illegibility precisely to prevent control by states or would-be-state actors. In this respect markets have often been a site of deliberately unruly resistance to power, a kind of emergent routing-around the damage of would-be monopolies of any form. Black markets are a kind of check, albeit a desperate last-leg, one of unruliness, that stops cancers of accumulative wealth/power from completely strangling a society and instead helps nurture elements of resistance capable of ultimately overthrowing those powers.

State communists, taking their cue from Marx, have tended to envy the vast and centralized industrial production chains of capitalism. Businesses like Walmart are able to exploit economies of scale to produce a vast number of commodities in a uniform fashion for much lower costs per unit. But where did these economies of scale come from? The vast majority of them are the product of state violence. To give just one example, when imperialist conquest and capitalist enslavement builds roads and train tracks that would otherwise have never been built it removes transportation costs, making businesses profitable at a larger scale than they otherwise would be, and driving out more dexterous local production, as well as suppressing investment opportunities for technologies that assist such smaller scale production. Walmart would not even be profitable if it had to pay proportionally for the wear and tear its trucks inflict on public roads.

But diseconomies of scale are not just matters of the state putting its finger on the scale to warp costs of labor, infrastructure, and resource acquisition to the benefit of capitalists and corporations. Organizations naturally suffer from severe internal coordination and calculation dysfunctions as they scale up. Firms are in practice miniature command economies, little islands of tyranny to make the Soviet Union blush, and they face the same systemic limitations and inefficiencies. Bosses don’t understand the conditions on the shop floor and it’s hard to communicate that. Paperwork flurries of bureaucratization emerge to keep track of everyone the boss or investors are trying to keep track of, to sharply diminishing returns. The larger the company, the harsher the dysfunction. But even within the warped topsy-turvy “market” of capitalism it’s been repeatedly shown that cooperatives are more efficient than hierarchical businesses in many economic spaces. Still cooperatives face inefficiencies from scaling too large. We don’t have to worry about a single cooperative achieving a tyrannical marketshare to the detriment of other cooperatives. And these diseconomies of scale in social coordination apply even to individual attention — a single rich entrepreneur finds it harder to invest with the precision and attention per dollar than a slightly poorer entrepreneur. As capitalism repeatedly demonstrates for us there is no one stupider and more disconnected than a billionaire. In a society where literally every structure wasn’t set up and reinforced with brutal violence to preserve their wealth and power, those with a sharp pool of wealth would see it evaporate alongside their own increasing disconnect.

For a host of further examples of natural diseconomies of scale, and how states/etc have actively suppressed them to the benefit of capitalists, see much of the work of Kevin Carson, particularly Studies on Mutualist Political Economy and Organization Theory.

But why else have markets outside of modern capitalism and some similar imperialist societies in history largely avoided runaway wealth accumulation to the scale we see today? Well there’s a few more tendencies of free societies and actually freed markets that erode wealth inequalities.

The first and most plain of which is that most pre-capitalist market societies were and are not anonymous, actors within the economy know each other and their histories. Indeed famously on the Island of Yap, folks minted huge coins as currency but then never bothered to actually move the coins, when someone traded ownership to someone else both parties simply informed the entire community. And when you know the economic context of members of your community that gives extraordinary leverage to those with less. In every conventional bottom-up marketplace around the world if you are seen or known to be wealthier you will pay a higher price for goods than people who have less.

This is because value is in a very real sense subjective, although the consequences cut in directions the Austrian economists rarely like exploring. A dollar is simply not worth as much to a richer man as it is worth to a poorer man. And that means in a fair negotiation he’ll be inclined to part with more of them. Every old woman selling fish and vegetables has charged a tax on rich gringos, and that tax can be considerable. Even if someone achieves a level of wealth where he can pay an intermediary to hide the ultimate recipient of a good, he’s still stuck paying that intermediary, who now has leverage in terms of exposure.

In a world very far away from wealth equality the truly rich can leverage vast sums to outmaneuver the small extra taxes they might pay at the village square, but the point is that when a market starts from rough equality, small perturbations in wealth can be quickly handled by these kinds of directed bottom-up taxes.

Finally, but critically, if truly pernicious accumulations of wealth are somehow achieved, there are a host of more active ways to erode that wealth out from underneath the privileged without leaping to full blown guillotines. This is because property titles are not themselves objective and immortal truths, but constantly contested and emergent detentes between actually existing people. General respect for property only emerges without state violence when respecting other people’s property is (in aggregate, on average) a net win for you as well. Property titles are concessions of respect for a claim that have to emerge organically from a bottom-up consensus. We respect that these crops are yours because you tilled the land to grow them, and we wouldn’t want people stealing what we work to produce. But when claims become truly pernicious — as say someone holding preexisting title to the only barrel of water to survive a shipwreck — there’s no reason for the community to respect that title, it becomes null and void.

Around the edges this can look like those with more being forced to invest more in the protection of what they have from burglars, etc. It’s easier to steal a million dollars from one person than a thousand dollars each from a thousand people. Under the state the violence of the police is a subsidy to protect the absurdly misbegotten pernicious property claims of a few disconnected rich.

None of this is to hold up some specific historic example of non-capitalist markets as a blueprint, most heretofore existing societies have sucked in one manner or another. But markets are what we make of them, they’re framed and shaped by individual decisions, culture, social activism, etc. Realizing that markets are always pressed between by a host of accumulative (capitalist) and a host of centrifugal (anarchist) dynamics allows us to fiddle with the dials as it were. To contest and explore configuration space. To find one where the benefits of markets — of their capacity for the efficient application of computational and informational complexity to satiate the complex desires of all — can be had while avoiding collapse into the rampant inefficiencies and inequalities of capitalism.

It is in no way proven that one person having a telescope and another person having a guitar, when those have different exchange values, automatically sets off a ratchet effect of compounding wealth inequality. We do in fact have every reason to believe that there is room for people to have enough varying wealth for market incentives towards honest trade to function, while avoiding actually meaningful inequality.

As to the question of competition creating secrecy. Well the whole point of trade is to provoke and incentivize more honest evaluations of personal preference than can be had in a meeting or via any sort of verbal discussion.

Human brains are complex and human language has too low of bandwidth for us to rapidly export the content of our brains with high fidelity. This is a simple brute fact. As a consequence aspirations like maximizing integrated information necessarily runs aground on the particulars of a species that does not have efficient brain-to-brain communication technologies. I fully and readily admit that were humans to evolve ourselves into a hive mind with a vast degree of functional telepathy the utility of markets would evaporate. We are not there. And so the integration of information between individuals must deal with a host of constraints and optimization problems. What trade does amazingly well is force people to tell something far closer to the truth about how much they desire something. This is not merely a problem of people not being angels. Even perfectly earnest and sincere angels would have trouble comparing personal desires without concrete actionable trades.

Yes, competition can incentivize momentary bouts of secrecy, but the market overall bends against secrecy in aggregate. It takes, once again, state intervention in the market to create cancerous absurdities like intellectual property and espionage laws. A more decentralized market (equivalently: a more egalitarian market) with more “competition” in the sense of choices, would create very strong incentive to steal secrets and shop around. Cooperatives attempting to keep a recipe or strategy secret would have to pay an increased premium to their employees not to defect. Further there will be no healthy market without a proliferation of roles we now weirdly make the select domain of journalists, consumer reports, muckrakers, etc. We can also expect broad social pressures to quickly and viciously cancel any cooperative or individual hustler who deceives or is less than transparent. Of course markets can emerge in complex highly path-dependent ways, so it’s on us as activists and community members to pressure and work proactively to shape prosocial norms of transparency.

One more way the market can be made more transparent is to normalize transactions in public ledger marketplaces or currencies where, like it was in more traditional markets, it’s easy to track every single transaction every person made. There are exceptions to this, of course, in our present highly unequal society, just as we have little reason to respect most property title in our bloodsoaked world, so too do we have every incentive to leverage the potential for illegibility in markets, embracing new constructions of anonymous currency to help finance the activity of comrades. States have historically encouraged anonymous currency — eg with the introduction of specie metals — so as to allow agents of its violence to cloak the source of their wealth. This is reason to ultimately prefer the more public ledger styles of traditional markets, but only to transition when wealth is redistributed. Of course we will never entirely avoid anonymity, but the ways in which markets can facilitate that should be seen as a pressure valve.

The simple fact of the matter is that while secrecy ultimately tends towards a constraint on everyone’s agency, there are a great many situations where we want secrecy to be an option. It is common for communists these days to decry the impersonalism of market exchange, but where they see alienation I see individual resiliency against community abuse. As anarchists we want people to have options outside of participation in a collective, indeed having many collectives and individual, more anonymous modes of interaction that one can shift or rescale investment between is a positive, it provides people with checks and balances.

And that’s what “competition” means at the end of the day — checks and balances. Not hostile egotistical opportunism, but a more fluid society where individuals have many choices in association and collaboration, rather than a few collectives. Individualism is properly understood not as egoism, but as fully consistent with altruism, a kind of intensification of options at every scale, and in the marketplace not just cooperatives but also individual hustles. I have yet to see a real communist alternative that embraces individual agency in such a fractal way.

I honestly wish there was one.

It would be great if we didn’t have to, as individuals, contest and fiddle with the knobs on market norms to build a functioning anarchist society, where we could just with one fell blow come together and decide to be nice and bam, no more hierarchies, no more economy, just some ignorable accounting app on our phones. Decades of work in collective process and studies in computer science have thoroughly disabused me of this notion.

As an opening work in a much longer and wider research project, Aurora’s essay is very exciting, I do hope more than a few anarchists — including anarcho-communists — will pick up her torch. But it’s sadly been my experience that the moment some defender of communism adds equations to a paper, no matter the actual argument, people will endlessly bandy it as proof we don’t need markets to solve complex economic coordination and allocation problems. Nothing could be further from the truth.

Mutual Exchange is C4SS’s goal in two senses: We favor a society rooted in peaceful, voluntary cooperation, and we seek to foster understanding through ongoing dialogue. Mutual Exchange will provide opportunities for conversation about issues that matter to C4SS’s audience.

Online symposiums will include essays by a diverse range of writers presenting and debating their views on a variety of interrelated and overlapping topics, tied together by the overarching monthly theme. C4SS is extremely interested in feedback from our readers. Suggestions and comments are enthusiastically encouraged. If you’re interested in proposing topics and/or authors for our program to pursue, or if you’re interested in participating yourself, please email editor@c4ss.org or emmibevensee@email.arizona.edu.

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The Anatomy of Escape
Organization Theory