Friday, 6 April 2012

There are no firms because groups do not exist

For the purposes of this piece we need to define two separate forms of institutional relationship in the economy; the collective farm and the antagonistic exchange.

Definition of collective farm: This type of economic entity is one where participants are invited to join a business and are rewarded to the extent that they have met their obligations. Rewards are shared fairly. There is a risk that the collective farm will not make a profit and then its members will face poverty.

Definition of antagonistic exchange: In this relationship each member wants what the other has and is willing to trade but no more than that. Purely their own needs are met with no interest in the well-being of the other. This is the type of trade we are familiar with in market anarchy.

The appealing advantage of the collective farm is that we are not (at least initially) excluded from entry. We have every right to join and remain a member provided we do our share of the work... unfortunately the notion of a collective farm is an illusion since there are no groups... collective government doesn't work. Even in a business which has the appearance of a collective enterprise each agent is an individual.

No firm or business can be thought of as a collective farm because groups do not exist.

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