Dope

"...the rise of capitalism involved the disembedding of production and distribution from all extra-economic institutions , led to the growth of an autonomous market economy that operated in terms of profit-maximisation, and even required the adaptation of essentially non-economic social relations and institutions to the demands of economic reproduction. Polanyi expressed this as follows:

"Instead of economy being embedded in social relations, social
relations are embedded in the economic system. The vital importance
of the economic factor to the existence of society precludes
any other result. For once the economic system is organized in
separate institutions , based on specific motives and conferring a
special status, society must be shaped in such a manner as to
allow that system to function according to its own laws. This is
the meaning of the familiar assertion that a market economy can
function only in a market society."

-- Bob Jessup, Regulationist and Autopoieticist
Reflections on Polanyi�s Account of
Market Economies and the Market
Society, New Political Economy, July, 2001

The rather long citation is issued as a warning: LI is not contending that the market nexus is the essence of society. Even though Polanyi's contention that there are economies without markets is, in our view, rather doubtful. Perhaps, as a cautionary measure, we should just maintain agnosticism on this perspective. At least, the conservative critique of this view, mounted by Douglass North and reprised in this essay about Polanyi seems to point to large empirical holes in the thesis that the market system arose only in Western Europe in the late eighteenth and nineteenth century, and that before that time there were ecomomies in which distribution had no market aspect.

The reader might say: the likelihood that Polanyi fanatics are going to flood your e-mail is about a million to one, so just relax, buddy. But we always operate on the prudent side, around here...

So, okay, LI has thought long and hard about regulation. Which speaks volumes about the vacuum in LI's head. Sexual fantasies eventually fail and fade, and we all lose our charms in the end, so: I've taken to thinking about regulation and governance. So sue me.

To speak of regulation is to speak of associations, institutions, and markets as the sites in which regulation is effective. It is not necessarily to speak of the state -- all associations, institutions and markets require some ordering, and this ordering is achieved by regulation enforced by some medium of governance. So, that's clear, I hope. We are going to speak of specifically state sanctioned regulation, because this post is supposed to be continuous with the last one, in which, you may remember, I laid out my disagreements with my friend X. about gun control. The aim, here, is to give some sense of the determining factors in the successful or unsuccessful state regulation of markets.

I'm going to use the term markets in an expanded sense -- markets, in my terms, will be taken to exist when a good or a service is possibly commoditized. That is, it can be exchanged. This makes it possible to talk of such things as the market in homicide, which is a service. That doesn't mean that all services or goods are marketed. Your kids could wash your car, because that is a family chore, or you can take your car to a car wash and have it washed. In one case, the act of washing the car is an extra-market operation, and in the other case it is a fully marketed service.

Given this expanded sense of markets, I'm going to use regulation as a term designating all acts by which the way in which goods or services are composed and offered are modified by the state. Traditionally, regulatory scholars, like Supreme Court justice Stephen Breyer, have concentrated on the state's regulatory role in allocating goods and services, with less attention paid to the state's role in enforcing transparency, for example. We are going to leave the categories of regulation up in the air in this post, since our concern is with the general factors that impinge on the regulation of goods or services generally. Our parochial point, re gun control or the drug trade, is to show how these factors lead to successful bannings, or mitigate against bannings. Our thesis is simple: if the state tries to ban a good or a service without consideration of its popularity, abundance, and the existence of networks that facilitate the good or services production and distribution, the ban has a high chance of being will inefficient, or pernicious to the preservation of civil rights, or counter-productive. We don't think that efficiency itself provides a metric that should determine absolutely the state's use of banning -- for instance, we think banning murder is probably inefficient, but we think the state should ban murder. However, when the ban is ineffective, injurious to civil liberty, and counter-productive (i.e, the objective of the banning is actually negated by the mechanism of the bannning), we think that banning shouldn't occur.

Oh oh. This is truly turbid prose. Soon I am going to reduce the readership of this site to one: myself. But I am going to do one more post on this topic, and then, I promise, we will return to our regularly scheduled progam, nude pictures of Britney Spears Live!