 Hi, this is Professor Gerald Friedman, Department of Economics, University of Massachusetts at Amherst. And here today I talk about intentional markets, intentional economies, and the possibility of a democratic economy. Now, economists don't usually like to think about democracy, and they don't like to think about intentional. On the contrary, the whole idea of the invisible hand is, you'll get a good social outcome, regardless of your intent. Adam Smith talks about in The Wealth of Nations that we don't get bread because the baker wants to give us bread. We don't get candlesticks because the candlestick maker wants us to have light. They act for their self-interest, and the result ends up being something that we like. Something good. No intentionality. And democracy is understood in the sense only in terms of individuals having choices and making choices, exercising choice. Now, in theory, orthodox economists say that people acting in this way just after their own self-interest will end up producing the best social outcome. Actually, this general equilibrium theory is extraordinarily weak. The requirements for this to happen are so extreme that it's safe to say the orthodox theory has actually completely discredited itself because you'll never get this welfare outcome. It depends on all externalities being priced. It depends on all market demand curves being continuously downward slope. It makes all sorts of extreme assumptions that we can pretty much dismiss. And if you have even one of these assumptions violated, the whole thing goes away. The results go away. So in particular, for our purposes, we can talk about markets producing, unintentionally producing the best social outcome on the circumstances where there are no externalities. No positive externalities where what I do benefits you. No negative externalities where what you do, the pollution you emit, the smoke that comes out of your chimney has no bad effects on me. Under that assumption, you get a step towards an unintentionally good social outcome. Now, that's pretty tendentious. It's not very realistic. So for over a century, people have been groping to some other way to do it. Some way to intentionally create a better economy. A lot of energy has gone into doing this at the top level. And this was part of the idea behind the Soviet Union. There was an agency in the Soviet government, Gasplan, based in Moscow, that planned the Soviet economy. Thinking about the externalities, thinking about the positive externalities, thinking about the effects on income distribution, et cetera. And Gasplan in Moscow sent out orders every year. What are you supposed to produce? Here's how you're supposed to do it. It may have worked better than a lot of people credit it. But still, even if this worked well, it's intentional but undemocratic. Work and cooperatives are another way to do this. Although it's not really clear how they'll work. But the idea of work and cooperatives is the cooperators, the people in the work or cooperative will make their decisions in a democratic fashion. We have democracy within the firm. They'll decide what to produce because they're embedded in the community. They live there. They'll concern themselves with the externalities, et cetera. And they'll all produce what the community wants. There's a little bit of a black box here. While I'm sympathetic with this idea and I certainly hope it will work and I would probably prefer it to anything else that we've got on the table right now, there are real problems with it. I could certainly see conflicts of interest between the cooperators and the community. The cooperators may say, well, you know, we want to just put out a little bit of pollution. The community may be like, we don't want any pollution. How do we weigh these alternative interests? Maybe the cooperators, the people in the cooperative, want to put out sweetened sodas. Some people in the community don't want sugar in their kid's soda. Other people in the community don't care. How do we weigh the competing interests of the different groups in the community and the cooperators? What if it's a narrow majority in one group? How do we have voting systems? How do we weight the interests of different groups? Gosplan didn't weight them at all. Adam Smithian economists don't need to weight them. If we're going to have a democratic intentional community, then we need to figure out rules to make these decisions in a democratic fashion. We're not there by any means. Maybe you guys will help solve these problems. Thank you and have a nice day. Bye-bye.