James Scott is at Cato Unbound this month, talking about problems with the state. I’d have much preferred to have seen him stirring it up a little bit, by arguing against markets along the lines that he does in a recent interview elsewhere on the internets.1
It seems to me that large-scale exchange and trade in any commodities at all require a certain level of standardization. Cronon’s book Nature’s metropolis, which is a kind of ecological history of Chicago, has a chapter on the futures market for grain. There exists a tremendous natural variety in the kind of corn, soya and wheat that were grown, but they all have to be sorted into two or three grades in the great granaries, and to be shipped abroad in huge cargo ships–the impetus to standardize in the granaries found its way back to the landscape and diversity of the surroundings of Chicago, reducing the entire region to monocropping.
It’s the same principle at work as I describe in Seeing like a State with regards to the Normalbaum in German scientific forestry. Agricultural commodities become standardized as they move and bulk in international trade. If you build a McDonalds or Kentucky Fried Chicken franchise, they tell you architecturally exactly how to construct it, you have to buy the equipment that is standardized, it all has to be placed in the same relationship to the other things in the floor plan, so it’s all worked out in detail, and it is worked out in such detail to produce a standardized burger or standardized fried chicken. And because it is standardized, the person who comes from the corporate headquarters can come with a kind of checklist in which every place is more or less the same, and they can check on cleanliness, quality, productivity and conformity to the corporate standard. This is the kind of control over distance that is required for industrial purposes. In the end, what is the assembly line? It is an effort to standardize the unit of labor power. The processes are not so different for grain production, burgers, or cars—as are the effects on diversity. Contract farming is then an instance to adapt agriculture to post-Fordist conditions with a higher emphasis on demand.
I’m pleased to read this because it confirms my reading of Scott in a post I wrote a few years back. And as I noted then, it provides a very interesting countercase against Hayek’s argument for the epistemological superiority of the market. Hayek argues that markets are superior because they allow the “dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess” to be aggregated in a useful way. This occurs through the price mechanism, which captures and communicates all the forms of information that other participants in the market need to know (pig farmers do not need to know that the turnip crop has been devastated by drought in a country five hundred miles away – all they need to know is that turnips are more expensive this year, and perhaps they should feed their pigs on mangel-wurzels instead).
But Hayek is remarkably incurious about the actual social processes through which markets work, and in particular the forms of standardization that are necessary to make long-distance trade work. I imagine Scott’s counterblast going something like this: It is all very fine to say that markets provide a means to communicate tacit knowledge, and it is even true of many markets, especially small scale ones with participants who know each other, know the product and so on. But global markets do not rely on tacit knowledge. They rely on standardization – the homogenization of products so that they can be lumped under the appropriate heading within a set of standard codified categories. Far from communicating tacit knowledge, the price system (and the codified standards that underlie it) destroys it systematically.
I think that this critique is hard for Hayekians to answer on their own terms. Hayek goes to some length to adumbrate economists for their failure to treat non-scientific and non-codified knowledge as important. If markets both distort production (by pushing towards products that can be standardized) and destroy knowledge (by lumping concrete things that are differentiated in important ways under abstract headings), then the Hayekian case for markets is at least qualified. One can still preserve the claim that modern markets preserve and communicate some aspects of non-codified knowledge. But one has to acknowledge that other forms of economic order can do this too (and at least under some circumstances may perhaps do it better, if Scott is to be believed).
1He does talk about this a little in the closing paragraphs. “Intervention in society (or nature) for whatever purpose (e.g. delivering welfare benefits to those with particular disability or keeping watch on political enemies) requires creating the mapping or optics necessary to legibility. In Seeing Like a State, and as a student of politics, I concentrate on state-making and government. Nevertheless, as I endeavor to make clear, large-scale capitalism is just as much an agency of homogenization, uniformity, grids, and heroic simplification as the state, with the difference that, for capitalists, simplification must pay. The profit motive compels a level of simplification and tunnel vision that, if anything, is more heroic that the early scientific forest of Germany. In this respect, the conclusions I draw from the failures of modern social engineering are as applicable to market-driven standardization as they are to bureaucratic homogeneity.” But still – I’d have liked to see him stirring it up at greater length and with greater explicitness.