<title>B.6 But will not the decisions made by...</title>
<h1>B.6 But will not the decisions made by intelligent individuals with their
own financial success or failure on the line be better most of the
This question refers to an argument commonly used by capitalists to
justify the fact that investment decisions are removed from public control
under capitalism, with private investors making all the decisions.
Clearly the assumption behind this argument is that individuals suddenly
lose their intelligence when they get together and discuss their common
interests. But surely, through debate, we can enrich our ideas by social
interaction. In the marketplace we do not discuss but instead act as
This issue involves the <i>"Isolation Paradox,"</i> according to which the very
logic of individual decision-making is different from that of collective
decision-making. An example is the <i>"tyranny of small decisions."</i> Let us
assume that in the soft drink industry some companies start to produce
(cheaper) non-returnable bottles. The end result of this is that most, if
not all, the companies making returnable bottles lose business and switch
to non-returnables. Result? Increased waste and environmental destruction.
This is because market price fails to take into account social costs and
benefits, indeed it <b>mis</b>-estimates them for both buyer/seller and to
others not involved in the transaction. This is because, as Schumacher
points out, the <i>"strength of the idea of private enterprise lies in
its terrifying simplicity. It suggests that the totality of life can
be reduced to one aspect - profits..."</i> [<b>Small is Beautiful</b>, p. 215]
But life cannot be reduced to one aspect without impoverishing it and
so capitalism <i>"knows the price of everything but the value of nothing."</i>
Therefore the market promotes "the tyranny of small decisions" and this
can have negative outcomes for those involved. The capitalist "solution"
to this problem is no solution, namely to act after the event. Only after
the decisions have been made and their effects felt can action be taken.
But by then the damage has been done. Can suing a company <b>really</b> replace
a fragile eco-system? In addition, the economic context has been significantly
altered, because investment decisions are often difficult to unmake.
In other words, the operations of the market provide an unending source of
examples for the argument that the aggregate results of the pursuit of
private interest may well be collectively damaging. And as collectives are
made up of individuals, that means damaging to the individuals involved.
The remarkable ideological success of "free market" capitalism is to
identify the anti-social choice with self-interest, so that any choice
in the favour of the interests which we share collectively is treated
as a piece of self-sacrifice. However, by atomising decision making, the
market often actively works against the self-interest of the individuals
that make it up.
Game theory is aware that the sum of rational choices do not automatically
yield a rational group outcome. Indeed, it terms such situations as
"collective action" problems. By not agreeing common standards, a "race
to the bottom" can ensue in which a given society reaps choices that we
are individuals really don't want. The rational pursuit of individual
self-interest leaves the group, and so most individuals, worse off. The
problem is not bad individual judgement (far from it, the individual is
the only person able to know what is best for them in a given situation).
It is the absence of social discussion and remedies that compels people
to make unbearable choices because the available menu presents no good
By <b>not</b> discussing the impact of their decisions with everyone who will
be affected, the individuals in question have not made a better decision.
Of course, under our present highly centralised statist and capitalist
system, such a discussion would be impossible to implement, and its
closest approximation -- the election process -- is too vast, bureaucratic
and dominated by wealth to do much beyond passing a few toothless laws
which are generally ignored when they hinder profits.
However, let's consider what the situation would be like under libertarian
socialism, where the local community assemblies discuss the question of
returnable bottles along with the workforce. Here the function of specific
interest groups (such as consumer co-operatives, ecology groups, workplace
Research and Development action committees and so on) would play a
critical role in producing information. Knowledge, as Bakunin, Kropotkin,
etc. knew, is widely dispersed throughout society and the role of interested
parties is essential in making it available to others. Based upon this
information and the debate it provokes, the collective decision reached
would most probably favour returnables over waste. This would be a
better decision from a social and ecological point of view, and one that
would benefit the individuals who discussed and agreed upon its effects on
themselves and their society.
In other words, anarchists think we have to take an active part in creating
the menu as well as picking options from it which reflect our individual
tastes and interests.
It needs to be emphasised that such a system does not involve discussing
and voting on everything under the sun, which would paralyse all
activity. To the contrary, most decisions would be left to those
interested (e.g. workers decide on administration and day-to-day decisions
within the factory), the community decides upon policy (e.g. returnables
over waste). Neither is it a case of electing people to decide for us, as
the decentralised nature of the confederation of communities ensures that
power lies in the hands of local people.
This process in no way implies that "society" decides what an individual
is to consume. That, like all decisions affecting the individual only, is
left entirely up to the person involved. Communal decision-making is for
decisions that impact both the individual and society, allowing those
affected by it to discuss it among themselves as equals, thus creating a
rich social context within which individuals can act. This is an obvious
improvement over the current system, where decisions that often profoundly
alter people's lives are left to the discretion of an elite class of
managers and owners, who are supposed to "know best."
There is, of course, the danger of "tyranny of the majority" in any
democratic system, but in a direct libertarian democracy, this danger
would be greatly reduced, for reasons discussed in section I.5.6 (
there be a danger of a "tyranny of the majority" under libertarian