The big mutuals were inefficient in a profitable way (with “dividends” going to the customers), that is, they employed more people than needed, they were generous rather than stingy with staff benefits, and they were very bureaucratic (but often pleasantly so), and they practiced an exaggerated form of good manners with each other (rather than “boosting productivity” with screaming, threats and punishments).

They were very customer oriented, not share holder oriented. Well, actually shareholders and customers were the same, so why not?

But the interesting thing is that you can call it “free-market” economics, when that term is properly understood. For all free market calculations assume the “vast number of firms” hypothesis, that is, they assume distributism. The economists forget their own premises and hence forget their own economics.

I cannot share your mysticism of modernization, because anything can be modernized, even–or especially–slavery. Nor is economic progress measured just by how many things are produced, but by how well they are distributed. That is the point of Taiwan and the other examples. Starting with highly unequal and inequitable societies, they built structures which brought not just a greater degree of production, but a greater degree of equity. I will argue that the former is always dependent on the latter. It is no accident that the levels of inequality in the US are approaching third world levels just at the time that our manufacturing base is crumbling.

Is their any reason every business in the United States of 2009 why every business cannot be a cooperative? No. Cooperatives are great but you don’t need a distributivist political economy to have them.

“And lots of places got large infusions of capital without the phenomenal growth of Taiwan. Something else is in play.”

Krugman details there other things in his piece on the issue, at the beginning of the discussion. Education, infrastructure, industrialization, etc. These are elements of modernization which can occur in any economic system be it capitalist, communist, or distributivist. The Soviet bloc experienced massive growth as a result of modernization. This is not due to the phenomenal success of Soviet-style communism but merely a reflection of the fact that modernization increases productivity.

And lots of places got large infusions of capital without the phenomenal growth of Taiwan. Something else is in play. As for Korea, it also used the land to the tiller program, and avoided the shibboleths of capitalism and free trade. See Ha-joon Chang, Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, written in answer to Friedman’s flat-earth fantasy, The Lexus and the Olive Tree. And Singapore is a georgist state where the gov’t owns 76% of the property. Hardly a bastion of free-market theory.

I said that the co-operative model was age old and not a unique distributivist system. It’s not an economic ideology but a business model. Syndicalism, as a political movement as opposed to merely a form of business organization, has its own long history stretching from Bakunin, to De Leon, and Chompsky. This form of political organization seems antithetical to distributivism in that its focus is on economic solidarity betwen the entire community as opposed to the economic independence of families (For purposes of bargaining power with capital. It’s no accident that Mondragon arose in Spain, a nation with a long history of anarcho-syndicalism.

As to Taiwan it is not a unique case for the distributive model. It’s staggering growth was more the product of modernization than any economic system. Modernization fueled by an influx of capital from the west. Singapore and South Korea have experienced similar success by embracing a crass corporate capitalism I’m sure you would be critical of.

Has anyone ever done a comparison of management costs of a typical American Corporation and this Mondragon model as a percentage of total costs? Something tells me when 80% are owners, there is little need for the elaborate hoax of “Human Resources” and the “Staff Team building ” of the denatured and PR Mad American Corporation.

Are there any narratives of the day to day life…ie Social “place” of the people within the areas dominated by Mondragon?

Are they fending off the typical entropy of large institutions now that they are so large?

Brierrabbit, right you are! Obama has the best collection of resumes ever to work in gov’t on his economic team. Alas, they are the best at all the wrong things, and their fingerprints are all over the collapse. He promised change, but is delivering more of the same.

A well laid out case, I particularly enjoyed the information concerning cooperatives. The success of the cooperatives is not however a success attributable to a distributivist economic system but rather the success of an age old business model within market economies. The market does not forbid cooperatives and in fact cooperatives play at least a small part in every market economy (At one time I was even a member of one).

Great business model, and an excellent business model for FPR style traditionalists to consider as it seems to reflect their values best.

Taiwan is something different. The policies of the KMT were, in its early days, financed by the U.S.A. (Particularly the land reform you discuss) Without American capital to compensate land owners they would have been left destitute without the means of investing in industrial infrastructure. These policies also included the suppression of labor unions and no minimum wage (let alone a living wage). In 2007 Taiwan finally got a minimum wage, a monthly minimum wage (Not hourly).

Paul Krugman, in one of the rare cases we agree, wrote a devastating piece on the American perception of the success of the Asian Tigers:

http://web.mit.edu/krugman/www/myth.html