Does this course tell a story with a moral? Yes, if you want one. No, if you don't. At our first session, I said that this would not be one of those courses that are only too familiar in academe: courses that tell a triumphal story of progress on the problems they consider. Such courses proceed through a succession of theories, presenting them as ultimately false theories which fail to solve the problems, but stressing that each theory captures a grain of the truth. Such courses finally arrive at the final, state-of-the-art theory-cum-solution. This, argues the professor, is the best approximation we currently have to the Truth about the problems, and therefore it is the theory that the professor currently accepts. Such courses adopt the structure of Hegel's Lectures on the History of Philosophy, which is the very model of such a story of intellectual progress. As I said in the first session, such a format encourages students to use and learn concepts, theories, and questions about the problems treated in the courses. But it doesn’t encourage students to critically assess all theories dealing with the problems, since the final theory is presented as our best current approximation to the Truth. As such, that theory will not be seriously questioned by the diligent student. By contrast, this course has aimed to provide students with the tools to critically assess all theories dealing with the problems we have considered. So this course has not offered any theory as the Truth about capitalism’s good and bad points. Indeed, this course has explicitly denied that there is any general truth about capitalism’s goodness or badness. Rather than present any affirmation about capitalism as the best approximation to the Truth, this course hinges on two denials. The course denies that capitalism is in general good, or that capitalism is in general better than socialism. The course also denies that socialism is in general good, or that socialism is in general better than capitalism. To the question, "Which is better, capitalism or socialism?" the only sensible answer, this course maintains, is "It depends on the circumstances."
So the course has no single positive moral. Yet that does not mean that the course has no general messages to deliver. In fact, it has four general messages that it hopes students will take away, and three messages that it would send to particular audiences.
The first general message is: Whether capitalism or socialism is better depends on which specific domain of the economy you are thinking about making capitalist or socialist. The ideological mistake is to think that we must choose between capitalism and socialism once for all—that they come as a package deal, governing every sector of the economy. The truth as this course sees it is, first, that we can and do choose to make this or that sector more or less capitalist, more or less socialist. Whether that sector is better off being capitalist or socialist depends on the circumstances. The truth as this course sees it is, second, that there is no general truth about whether capitalism or socialism is in general better than the other. Both have their good and bad points. So don't ask: "which is in general better: capitalism or socialism?", because that's a bad question with a false presupposition. Instead ask: "Do we in this society as it’s now arranged do better to organize this specific part of the economy on more capitalistic lines or more socialistic lines?"
The second general message is: Don't talk about capitalism vs. socialism. Framing the alternatives that way disguises an enormous amount of institutional and policy choices; choices that determine how well an economic system will do in a particular institutional environment. Instead, talk about comparisons among specific political-economic systems—the varieties of market systems and planning systems. Hence we do better to ask: Would this sector be better organized along corporate capitalist lines, or along private-enterprise-ownership lines, or along planner sovereignty market system lines, or worker-democracy capitalist lines, or hierarchical market socialist lines, etc? So get specific about which kinds of market system or planning system you’re comparing!
The third general message is: The right way to approach these questions of "Which system should we prefer?" is comparative. To approach these questions intelligently, we must consider them as questions of comparing the costs and benefits of alternative systems, and we must specify the systems in as much detail as possible. So be clear about which systems you're comparing, and along which dimensions of goodness and badness you’re comparing them. Ask yourself: Better with respect to what? Worse with respect to what? To get an acceptable overall judgment of the balance of relative costs and benefits, you have to consider all the relevant dimensions of value and disvalue.
The final general message is: There are alternatives to the system that presently dominates in rich countries, a hierarchical corporate capitalism based on wage-labor. There are market-based alternatives to this, like worker cooperatives, consumer cooperatives, owner-managed firms, worker-control capitalism, or worker democracy. We are not stuck with this system: we can choose to change it, and insofar as it endures, that is a choice that we as a society have made.
Lastly, the course would send three messages to particular audiences.
To the ayatollahs of the free market, such as could be found only a couple of years ago in the Economics Departments at Harvard and the University of Chicago, and in the International Monetary Fund.
"It's the institutions, stupid! Whether making a sector of an economy capitalist is a good idea depends on that sector’s institutional environment."
To the ayatollahs of non-market systems, who urge replacing the market system with economies based on something besides markets.
"If you place much value on material concerns, then you should be wary of non-market systems for a whole economy. For their record has not been good with respect to such concerns. The only exceptions have occurred during national emergencies or total war. Peacetime economies centered on the market system outperform non-market-centered peacetime economies with respect to wealth-generation, poverty-alleviation, rising standards of living, and distributing goods and services. Whether it be feudalism, or central planning, or production and distribution by free gift in small communes: the record of such non-market systems, when they are adopted for a whole economy, pales by comparison with market systems, at least when it comes to anything larger than small fraternal groups. In anything bigger than small groups, economies centered on the market system outperform non-market-centered economies on these dimensions."
To neo-classical economists.
"If you want to comprehensively assess the costs and benefits of capitalism, socialism, and alternative economic systems, you must examine the political environment in which the economic system resides, as well as the system itself. To intelligently assess the merits and demerits of the alternative systems, you need to do both economics and politics. For political authority is a form of economic coordination, and market systems a form of popular control of society."
These are the insights suggested by this course. For this course put the question, "What are all the good and bad points of capitalism?" It then critically inquired into as many as possible of the great theories from the social sciences that have tried to identify one of the good or bad points. That inquiry results in these messages, which together form the moral of our story.