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Title: Imagining the Future Author: Eric Hayes Date: 20 October 2011 Language: en Topics: participatory economics, Irish Anarchist Review Source: Retrieved on 24th December 2021 from http://www.wsm.ie/c/introduction-participatory-economics Notes: Published in the Irish Anarchist Review Issue 4.
In the last issue we had a missive from the future. It told us of the
great changes in the post-revolutionary anarchist world. In this article
of the future society series, I will focus solely upon an anarchist
vision of a future economy. This is called participatory economics,
often abbreviated parecon, a classless economic system proposed
primarily by activist and political theorist Michael Albert and, among
others, economist Robin Hahnel. The model was developed through the 70s
and 80s and the first exclusively parecon books were published in 1991.
Many of their early writings concentrated on what they perceived as
flaws in Marxist and Marxist-Leninist theory.
Unfortunately, for all its emphasis on class analysis, Marxism blinded
many fighting against the economics of competition and greed to
important antagonisms between the working class and the new,
professional managerial class â or as Albert and Hahnel termed it, the
coordinator class. While consumer and worker councils are familiar to
libertarian socialists, as are analyses of the poly-labelled managerial
class, Pareconâs round-by-round participatory planning, balanced
job-complexes, and a remunerative system not based upon output are less
familiar.
These institutions are designed to create a classless libertarian
socialist alternative where everyone will have the opportunity to
develop all of their creative capacities. To quote:
âWe recognize that council communists, syndicalists, anarchists, and
guild socialists fell short of spelling out a coherent, theoretical
model explaining how such a system could work.â
They continue:
âOur predecessors frequently provided stirring comparisons of the
advantages of a libertarian, non-market, socialist alternative compared
to capitalism and authoritarian planning. But all too often they failed
to respond to difficult questions about how necessary decisions would be
made, why their procedures would yield a coherent plan, or why the
outcome would be efficient.â
The aims and values of participatory economics will be familiar to many
and are:
An economy should not produce anti-social behaviour or a lack of
empathy. This should not be controversial, so I wonât overdo it. I think
most people would agree with more solidarity from an economy, not less!
So our economy should actively promote solidarity, not only attempt to
provide structures for its expression.
This essentially means valuing options â not narrowing options. Instead
of homogeneity we should have diversity. We can all benefit vicariously
from other peoples diverse activities, and there is not just one correct
way of doing things. People should have many choices.
There is no justification, neither in terms of efficiency or morality,
for remuneration of property, land or machines. It is theft from
everyone else. Power should not be remunerated for similar reasons. The
self-serving myth that such inequalities are justified based upon merit
are addressed in the words of Edward Bellamy in the 19^(th) Century:
âYou may set it down as a rule that the rich, the possessors of great
wealth, had no moral right to it as based upon desert, for either their
fortunes belonged to the class of inherited wealth, or else, when
accumulated in a lifetime, necessarily represented chiefly the product
of others, more or less forcibly or fraudulently obtained.â
But output should also not be remunerated. Should we reward genetic
endowment? Should we reward better tools? Or more desired products? Well
no, it is also unfair. If two people are cutting corn with the same
tools and level of effort there is no reason, neither on the basis of
efficiency or morality, to reward them differently. It would reward a
host of things that people have no control over. So if we reward for
effort, then the coal-miner earns more, much more, than a manager in an
office, or say, a worker in a publishing house. If we are to reward
equitably, we should reward only effort at socially valued labour.
The way a parecon works, income differentials beyond average income
could not disrupt solidarity or self-management. But what if youâre sick
or if you canât work? The answer is that a parecon is a mixed economy
which has distribution according to need for calamities, health, and
other related similar facets of consumption such as say, education,
housing, special needs, and so on.
People should have an input into decisions in proportion that they are
affected by them. This doesnât mean using the same system, for example,
one-person one vote, consensus or dictatorial, all the time. Rather, the
method is decided depending on the nature of the decisions.
Say, if someone puts up a picture of a family member in their workspace,
who decides? This is a dictatorial decision for that person. But, how
about a ghetto blaster where everyone can hear it nearby? Well those
people affected then decide. If we donât do this then one person will
have more of a say than another person. I am the worldâs foremost expert
on my own preferences, so we should each be responsible for expressing
them.
Many leftists are afraid of this word, but stripped from its capitalist
context, efficiency just means not wasting things. Under capitalism, it
means not wasting things capitalists desire. It doesnât matter that you
destroy peopleâs lives, or that you pollute the environment. Efficiency
is a word whose meaning depends on the values and aims of the people
using the word. It is good not to waste things when producing socially
valued goods and services. In this context efficiency incorporates
environmental responsibility, and is in accord with our values.
These values are attained through the following institutions:
An economy is a mixture of ingredients to fulfil production,
consumption, and allocation. Instead of money or power dictating the use
of resources, ordinary people would deliberate in relatively small
councils in order to decide what is best for their community.
This means democratic groups, called worker and consumer councils, using
self-managerial methods for decision-making. Say we start with
neighbourhood groups. Each is part of a bigger community, and larger
council, which will represent the councils within, when choices in one
affect more than just their members. Everyone has a say in services and
goods according to the impact on them through this federated system of
nested WCs and CCs. This ensures that power doesnât come down from the
top but is nested up from the bottom: from the neighbourhood, to the
ward, city, county, province, continent and so on, with personal and
public consumption and production being addressed as appropriate.
Personal consumption is purely private and anonymous and can even be
transferred to a different council from where you live if you prefer.
While a type of credit card technology can aid consumption and updating.
All economies need people to do work, and all workplaces tend to
organise this work into bundles of tasks we commonly refer to as âjobsâ.
In a class-ridden society, jobs are organised to maintain a hierarchical
structure. People towards the top of the hierarchy (the coordinator
class) will have jobs composed of tasks that are empowering whilst those
towards the bottom of the hierarchy (the working class) have jobs made
up of dis-empowering tasks.
This corporate division of labour is an institutional feature found in
both capitalist and coordinator economies. A feature that systematically
maintains workplace hierarchy whilst undermining self-management through
a monopoly on empowering labour. If we want everyone to have an equal
opportunity to participate in economic decision-making, and that a
formal right to participate in meetings translates into an effective
right to participate; does this not require balancing work with
empowerment?
Parecon rejects the corporate division of labour as incompatible with
self-management. But what is the alternative? Parecon says:
âletâs make each job comparable to all others in its quality of life and
even more importantly in its empowerment effect ... From a corporate
division of labour that enshrines a coordinator class above workers, we
move to a classless division of labour that elevates all workers to
their fullest potentials.â
This classlessness is achieved with the creation of a new institutional
feature called âbalanced job complexesâ, meaning jobs are re-designed
throughout the economy so that they are balanced between, on the one
hand, skilled and design work, and, on the other, the physical, less
desirable and less empowering work. The education system is changed to
democratise access to expertise, information and training, and integrate
this with the system of production itself.
It should be noted that each individualâs job complex will contain a
very few tasks and, of course, there is a division of labour. People
would still be trained and educated to be doctors or engineers say.
However, nobodyâs mixture of tasks will be significantly more empowering
than others, or significantly more desirable than others. The economy
would also have delegation (e.g., heads of work teams). But not people
who are always the order givers and others who are always the order
takers. Each person will experience both being in authority and being
under anotherâs authority in different situations and at different
times.
Job complexes are not balanced by a national bureaucracy but through
each WC balancing committee, just as they have an effort rating
committee. The time any individual spends on this committee is treated
as one task in their job complex. Balancing is not onerous and could be
done once a year. There is no outside agent who oversees this operation
with power to dictate or veto outcomes.
In a parecon, private ownership of economic institutions no longer
exists. Effort and sacrifice is proposed as a morally sound alternative
criteria for remuneration: âIf you work longer, and you do it
effectively, you are entitled to more of the social product. If you work
more intensely, to socially useful ends, again you are entitled to more
social product. If you work at a more onerous, dangerous or boring, but
still socially warranted, tasks; again, you are entitled to more social
product.â
But what about: âFrom each according to ability, to each according to
need.â? Albert and Hahnel think that this maxim has more to do with
compassion and humanity than economic justice and it âis our humanity
that compels us to provide for those in needâ. In a parecon, those
unable to work receive a socially average income of items and services
of their choosing (of course those with special needs would get more,
such as medicine). In fact, everyone gets this socially average income.
So in a parecon, the criteria for remuneration are (1) how many hours
you work, (2) the intensity of your work effort (3) the onerous
circumstances or harshness of the type of work you do. Yet (3) is not
really relevant, due to the job balancing of BJCs. While (2),
remuneration, is best assessed by oneâs work colleagues and peers,
thereâs no one right way to do this. One workplace might assume everyone
is at average by default and just remunerate according to hours worked,
with deviations from it registered in only special cases, and only with
a minimal and few grades of ratings. Indeed while Albert is loath to
blueprint, this is the expectation he believes most workplaces would
take, and indeed favours.
Remuneration would also need to be regulated in terms of the total
compensation one workplace receives with what others receive. In effect,
this sets an objective standard for the assignment of effort ratings
while productive resources are taken into account. We will touch upon
the participatory planning process later where the socially planned
quota of the WC is set, in which, of course, the council participates
proportionally.
However, letâs look back at the slogan: âFrom each according to ability,
to each according to need.â The Wikipedia article, quoting Marx, claims
that the slogan, when used in this context, is originally Marxian, and
is meant for a society without onerous labour: âMarx delineated the
specific conditions under which such a creed would be applicableâa
society where technology and social organization had substantially
eliminated the need for physical labor in the production of things,
where âlabor has become not only a means of life but lifeâs prime wantâ.
Marx explained that, in such a society, everyone is motivated to work
for the good of society because work would have become a pleasurable and
creative activity. Now unless we can automate every task and job, it is
perhaps unlikely we could ever remove all onerous, rote, and
dis-empowering labour. If that is the case â and we wish to achieve
classlessness and not violate our libertarian and participatory aims and
values â then those onerous jobs should surely be shared.
There is nothing new in socially valued work effort being a condition of
above average consumption entitlement. The Spanish CNT economic program
of the 1930s is an example. Similarly, libertarian communists like
Malatesta argued: âThe only possible alternative to being the oppressed
or the oppressor is voluntary cooperation for the greatest good of all.â
The Italian argued that able-bodied people who refused to work, yet
consumed the benefits of people labouring for them, were probably
developing a taste for privilege!
In other words, our values are affected by this. Solidarity is reduced
through resentment, and likewise for efficiency by rewarding sloth. The
implications for self-management are to diminish it, giving non-workers
more say than they should have. Diversity does not appear to be
affected.
While the âaccording to need.â maxim was a part of the sentiment of
anarchist Spain, it was not the only or even the main operative norm; in
fact, it could not possibly have been. Some levels of work, timing of
participation, actual activity and so on, would have been found
acceptable, and others not acceptable.
In this sense, what many actually mean when they think of an economy
with remuneration âaccording to needâ, actually equates with
remuneration according to effort and sacrifice, tempered by need.
Albert has also pointed out how having this remuneration to an economic
system without classes, and over a few generations, may have different
implications and is certainly not the same as doing so from the very
start. Both authors suggest an evolution towards more remuneration based
upon need as the economy moulds behaviour and endogenous preferences
over time. But even then, such an auditing/price mechanism and
round-by-round coordination may still be needed to have an efficient
modern and complex economy.
In addition to re-designing jobs to facilitate self-management, we also
need to abolish markets as a means of allocating goods and services.
This is because, like the corporate division of labour, markets destroy
solidarity and self-management; âThis occurs not only due to disparities
in wealth translating into disparate power, but because market
competition compels even council based workplaces to cut costs and seek
market share regardless of the ensuing implications.â Workers will
eventually appoint un-recallable managers to compete and increase
output. For recent examples of this see market socialist Yugoslavia, the
occupied factory movement in Argentina, or the history of the MondragĂłn
co-operative in Spain.
As an alternative to both markets and central planning, parecon proposes
allocation through âparticipatory planningâ. âWe say that the
alternative is to have the entire population directly create the plan
themselvesâ and that âthe education system and the availability of
information should be such as to facilitate this.â
Planning is conceptually quite simple, and is part of everyoneâs BJC.
The participants are the workers councils (WCs) and federations, the
consumer councils (CCs) and federations, and an Iteration Facilitation
Board (IFB â a group of BJC workers providing information to
participants in each round).
This yearly planning procedure (say, two weeks or less) can be broken
down into 4 steps:
indicating the social costs and benefits associated with the use of
goods and servicesâ or preliminary estimates) for all final goods and
services, capital goods, natural resources, and categories of labour.
Worker councils and federations respond with production proposals.
good and service, capital good, natural resource, and category of
labour, and adjusts the indicative price for the good up, or down, in
light of the excess demand or supply.
federations revise and resubmit their proposals.
The planning process continues until there are no longer excess demands
for any goods, categories of labour, primary inputs, or capital stock;
in other words, until a feasible plan is reached.â
Classes of goods and services are grouped together into categories
according to the interchangeability of the resources, intermediate goods
and labour required to make them, as well as some of the easily
predicted variation of optional features. Producers provide quality
items that people will like. If people donât like some, they donât
provide more of that and this is recorded over time. If producers offer
up sweaters people donât like, (despite using focus groups, or
statistics and sample sizes to obtain size, style, colour and so on),
people wonât purchase them at distribution centres, and styles will be
changed. Choices can be changed as the year progresses and producers can
adapt their products.
To simplify updating during the year and after the yearly planning
period, âslackâ is used. Industries produce more and plan excess
capacity so they can expand output if needs be. The US has 15â25%
unutilised capacity; this is easily 2 to 3 times more than what would be
needed in a parecon. Only affected regions or federations of industries
need adjust for any change. Processing and meeting time is not zero in
capitalism and corporations are already planned economies, using
estimations of consumer demand and statistics in terms of fine detail of
final products.
So parecon does not take the âone big meetingâ approach to economic
planning with endless large-scale meetings resulting in chaos and
stagnation. âMany of the procedures we recommended were motivated
precisely to avoid pitfalls in the naĂŻve illusion that âthe peopleâ can
make all economic decisions that affect them in what amounts to âone big
meetingâ...Our participatory planning procedure is one that literally
involves no meetings at all.â So any meetings to decide on proposals
regarding oneâs own activities are meetings within, not between,
councils and federations. Instead the proposal is a procedure in which
councils and federations submit proposals only for their own activities,
receive new information including revised estimates of social costs, and
resubmit proposals, again, only for their own activities. A parecon
might decide that people act individually during the majority of
planning rounds. Each production unit must only prepare detailed
proposals about its own self-activity; which any production unit must do
in any economy.
Parecon not only eliminates the perverse incentive inherent in central
planning to disguise oneâs true capabilities, it provides all councils
with information to easily find if any work or consumption proposal is
socially responsible, i.e. fair and efficient. Because 99% of the votes
are âno brainers,â this does not need to be contentious or
time-consuming. If a WCâs social benefit to social cost ratio is one or
higher (SB/SC > 1), then we are better off if they are given permission
to do what theyâve proposed, otherwise we are worse off. There is a
similar âno brainerâ rule for how to vote on CC proposals. Because, say,
99% of the voting can be done automatically, and 99% of the votes can be
taken care of by federations rather than individual councils, (votes
only have to be on proposals of councils within their worker and
consumer federation), all this voting really takes up very little time.
Nor do we have to do this for millions of different proposals from
councils in distant cities and states. If there are 10 neighbourhood CCs
in a ward federation, then only the other nine councils in that ward
federation need to vote on each of their proposals. If there are 10 ward
federations in a city federation, then only the other nine wards in that
city need to vote on each ward proposal. Wards will need to check on
other ward averages, and cities will need to check on other city
averages, but this still eliminates 99% of the proposals any single
entity must vote on. In other words, most of the voting can be
decentralized and taken care of within federations.
While computers would save more time facilitating planning and
credit-card technology can aid consumption and stock levels, computers
are not required by participatory planning making it more efficient than
central planning in this regard. The only calculations required are
adding individual proposals into aggregate proposals and comparing
aggregate supply and demand for each item. The percentage excess supply
or demand indicative prices could be adjusted without the aid of
computers.
I believe parecon warrants serious attention and investigation by those
who wish to see a coherent classless economy, where workers and
consumers cooperatively, and efficiently, negotiate economic outcomes
with no class divisions. The main advantage of parecon is that the power
to plan is no longer exclusive to elites, or, as in a market socialist
system, unevenly distributed among elite conceptual and manual workers,
but rather open to all. Participatory economics has the potential to
transcend capitalism and also market and centrally planned socialism by
establishing core institutions that promote solidarity, equity of
circumstance and income, diversity, participatory self-management,
classlessness, and efficiency in meeting human needs and developing
human potentials. To quote the late Howard Zinn, âParticipatory
economics is an imaginative, carefully reasoned description, of how we
might live free from economic injustice.â There is an alternative.