Justin replies:
> But you have to know what good you will want. I don't know a week in
> advance. When I go grocery shopping, I _always_ forgot something and have to return to the store, sometimes several times in a week. In addition there are unexpected needs. My son outgrew his tap dance shoes the week of the recital. If I'd ordered one set for a year, expecting them to last, he couldn't have danced. Or, my wife and I just saw a bunch of furniture by an artist we liked; we were going to accumulate a bunch of stuff slowly for our new house, but we found this stuff we liked and the price was right, so we bought quite a lot of it unexpectedly. Or one's car dies, as it will.
Gar
Your estimate is a just that -- an estimate. You are not tied to it to the penny. Also you are spending more time on this than you do on a grocery list. As long as total consumption remains the same, you can shift within reason between categories.
Justin adds
>
> If you estimate high, as everone would in A&H's system, threre will be
> overproduction andwaste. If you estimate low, you'll be stuck. The thing is, as Hayek says, the future is hard to get right.
Gar All right. Here is the key. Overproduction (within reason) is not waste. It is a sensible hedge against risk. Nobody gets the future right.
No decent restaurant ends up without some food waste. Grocery stores end up with a certain amount of produce rotting on their shelve. (Thanks to capitalism, some people starve while food rots on the shelves.)
With nonperishable goods, the process is more subtle. But most manufacturers of non-perishable goods end up selling a part of their production at less than the cost of production.
Justin quotes Gar
>
> > If productions plans and consumption plans do not
> > add up to a planned production of surplus, prices
> > of goods in excess demand are adjusted upwards.
> > People plan their consumption again based upon
> > these new prices. (Production is being planned at
> > the same time also adjusting to these price
> > signals.) The process continues until a plan with
> > a little slack in it is reach (production
> > exceeding consumption slightly to cover errors and
> > emergencies.)
>
Justin replies
> This is _exactly_ Lange's shadow pricing and the ratcheting production be estimation. As Hayek argued, this is great if you believe in neoclassical economics, no transaction costs, etc. In the real world, it leads to shortages and overproduction.
Gar Again, no one gets the future exactly right. To take a simple case, no one can predict exactly what the weather will be. We can't even get gross predictions like when the next drought will be. So in any decent society (market or planned) MORE grain will be planted than is required.
Justin quotes Gar
> >
> > Now the process may be burdensome. (I will deal
> > with that in a moment.) But surely there is
> > nothing impossible about it. Computers are not
> > doing the planning. Computers are simply adding up
> > the numbers. The planning is done in the same way
> > markets do it -- by people responding to price
> > signals in an iterative process.
>
Justin replies
> I didn't say taht computersw ere doing the planning. That's a red herring.
Gar Misunderstood you. Sorry. The words "computer dependent" must have come from someone quoting you.
Justin
> In fact, that it is people who are doing it is part of the problem. People don't know their needs taht far in advance. And the people who make up the plans have immense power, but that below.
Gar People can give a rough estimate that far in advance -- which is all you need. I'll deal with the power issue later in this post where you do.
Justin
>
> Nor is this theway the marketdoes it. A m,arket ssystem doesn't require everybody's approval, a costly requirement in terms of time and effort.
Gar Um the only thing in Parecon that requires approval by a majority of everybody are certain decisions at an extremely MACRO level which we both deal with later in this post.
Justin
>In a market system, if you think you can sell your designer furniture or tap shoes and can raise the capital, the only approval you need is from your creditors. It's much more flexible. It's also more flexible for consumers. You can just go and get what you need and can afford when you need and can afford it. You don't have to wait for the plan to creak through a correction.
Our current system is more flexible for the producer? Have you ever tried to get a new project or a change in an existing one through top management in a big corporation?
New factories come from two sources -- as an outgrowth of an existing factory or as a brand new "entrepreneurial" factory.
In the first case, in a market system you have to go to upper management. And, if you think this is decided without lots of meetings and lots of people pissing in the soup, you are crazy.
In a parecon, you would have to get approval from some local level of workers council. Why would you expect the number of meetings or the transaction cost of dealing with a workers council to be higher than those of dealing with corporate vice-presidents.
In terms of entrepreneurship. If you want to start a new entrepreneurial business of any size in a market economy, you go to venture capital (and this involves meetings galore). If one venture source turns you down you can try another. But you have to find someone to put up the money.
In a Parecon, you have to find a council of workers (at some level) or perhaps a consumers council (in exceptional cases) to advance you the resources. Again if one turns you down you can go to another. Why should this be less flexible or have higher transaction costs than going to venture capitalists?
What about entrepreneurs financing business out of personal consumption? Very rare -- but can happen in both Parecon and Markets.
What about Bill Gates using his pocket change to open a liquor store? All right that cannot happen in Parecon and in theory can in markets. But does this happen often enough to make a difference? Usually when a rich man (rich women are much rarer) opens a business he does so with other peoples money.
Justin quotes Gar
> >
> > And if part way through the year, aggregate
> > consumption differs drastically from the plan
> > there is no reason price signal could be adjusted
> > in response.
Justin replies
>
> But it operates very differently. In a market, the price rise tells
> producers, go here; the price drop tells consumers, buy now. In the A&H model, the price rise doesn't increase or change the structure of
> production. It affects only the consumer demand function.
Gar
Um pardon me. How carefully have you read their books or on-line postings? Shadow prices are used by producers as much as by consumers in Parecon.
Justin quotes Gar
>
> >
> > 2) Lack of privacy.
> > Answer) This is simply a misunderstanding. Consumption request below that earned by work are made anonymously.
Justin replies
>
> Oh, right. In a smallish community, if there is a request for an unusual sort of item or one disapproved of by the community, it will be known who made it. How _dare_ I put in for a big budget of scholarly books when we hace all these and such unmet needs? Never mind if I have other tastes that I don't care to answer to all and sundry for.
Gar Talk about red herrings! Obviously, to maintain confidentiality figures will have to be aggregated sufficiently to avoid identifying people with unusual tastes.
Justin
>
> In addition A&H haveeliminated a ntional market, since all request have to go through the local community first. So if my taste for scholarly books or body piercing technology or antique lithographs can't get past the filter of my local community, it's out; I can't put in a request over the net to Powell's Books or whatever and get it from elsewhere.
Again, are you familiar with their work? Consumption requests at or below that earned by work cannot be vetoed by consumption councils. And planning is for what you will get, not where you will get it. Nothing stops you from ordering from any place you care to get them.
Justin quotes Gar
> Only if you want to consume more
> > than you earned (and thus live at other peoples
> > expense) need you explain your needs publicly.
> > (No this does not apply to medical needs,
> > retirement, involuntary unemployment, or people
> > with disabilities. This is paid out of collective
> > consumption.)
Justin replies
>
> Of course A&H do not explain their technique for determining what people have "earned" in any plausible way. This leads back to the problem of abstract labor that Marx so unsatisfactorily finessed.
Gar
Actually A&H explain exactly their technique. With variations (which I will go into if anyone really wants that much detail) they pay everyone EXACTLY THE SAME WAGE PER HOUR.
Justin quotes Gar
>
> >
> > 3)Listing your consumption at the beginning of the
> > year is too burdensome.
> >
> > Answer) Two points here. As a practical matter,
> > going through this process is not a lot more
> > complicated than going through a complex income
> > tax. Anyone who has to pay quarter income tax goes
> > through a more equally burdensome process.
>
Justin replies
> Good heavens. I'm a Ph.D and a J.D., and I have to take myt taxes (annual)
> to H&R Block because I don't want to be botheredw ith figuring out a set
> of complex and hard to follow requirements. This is a condemnation, not a
> reccomendation.
Gar I was talking about time, not difficulty. This was my fault for being unclear. And since taxes would be simpler in a system where everyone had pretty much the same income (variations based only on hours worked and special needs funded out of collective consumption), you would not have that big an increase in time.
Justin quotes Gar
>
> If it
> > proves too extreme then we will end up with the
> > profession of personal consumption planner.)
> >
Justin replies
> Indeed. So much for democracy.
The process would be simple -- though time consuming. So you would not have to use a consultant. (In fact Albert really did not like my bringing up the possibility of such consultants arising). But there is a hell of a difference between having decisions made by a central planner, and having the choice of doing it yourself (feasible but tedious) or hiring someone of your choice. I would say this meets Marx's requirements for "recallablity" or representatives with a vengeance.
Justin quotes Gar
>
> > And unless your income is a lot higher than mine,
> > you have to do a certain amount of consumption
> > planning to get through the month now without
> > running out of grocery money, or something to pay
> > the utility bills.
>
Justin replies
> Yes, but this is rough and ready and imprecise. ANd it's a month in
> advance, not a lot more: you can't redo the plan every month.
Gar You don't think spending two weeks a year you could come up with a plan for the year which was "rough and ready and imprecise"? That is all that is required for the system to work.
Justin
>In fact the way they describe it, you can't even redo it every year, Running it up tothe national level and back downw ith all the debate they envisage, five years would be optimistic.
Gar This is merely asserted -- no evidence shown. For consumers there is an increase in planning time. For producers, I do not see why planning time should be any greater than the eternal tedious meetings which go on in our current big corporations. I don't know how much time you've spent in the corporate world. But I can tell you, planning is not something you can escape.
Justin
> The Rissian did it--badly--every five years without the debate.
Gar
The Reddest Herring.
Justin Quotes Gar
>
> > But it is true that under such a system you have
> > to pay more attention to your consumption than you
> > do in ours. Is this bad? Consumption affects
> > society. To actually have to think about your role
> > as consumer, to treat your consumption seriously
> > would also give you a certain immunity from the
> > type of manipulation of demand that advertisers
> > depend so heavily on in our society.
>
Justin replies
> Au contraire, I think people thing a great deal about their consumption; many people think of little else. I don't think A&H foster the right kind of thinking about consumption. Micro-thinking, do I needthis, should I buy that--that's the sort of live simply crap you hear from certain green types.
Gar Now a green herring. This is not live simply stuff; this is a chance as a consumer to actually shape what will be offered to you for consumption -- in a way that a market economy only claims to. Big decisions are influenced by little decisions.
Justin
> We need macro-thinking: should we have more cars and fewer trains
> and buses or vice versa.
Gar
Yes
> That's something that A&H don't raelly have a place for.
Yes they do. Production Councils, consumption councils -- and (if you
do not want to trust to pure economics to manage such things)
government intervention.
>
Justin quotes Gar
> >
> > 3) Too many meetings, too much time wasted on
> > planning
> >
> > ANSWER) Our present society is not exactly free of
> > such meetings. Time spent in meetings and planning
> > is not increased intolerably over that in our
> > current system.
Justin replies
>
> This is a bald assertion. A&H add to all the meetings on has to go to--for example, in my case, as a prospective attorney, with clients and judges and partners and coworkers and such--meetings to debate consumption and planning. There's a considerable net increase in meeting time.
Most of these decisions are made in meetings now. And no one has to participate in a particular meeting. You can always send your proxy with someone who is attending if you don't want to attend in person or electronically yourself.
Justin quote Gar
>
> It is simply that in a Parecon
> > some people no longer spend half their lives
> > waiting impatiently for meetings to end,
>
Justin replies with heavy handed irony
> Oh, all of a sudden, for some reason, all the old meetings and all the new ones become more tolerable?
Gar
NO but the work of participating in meetings will be divided up more
evenly. Everyone will have to opportunity to participate. Nobody will
have to participate -- and if you don't participate you will still
have the chance to have your interests weighted by sending a proxy.
Justin continues
>I won't have to worry about my kids, because they'll be in childcare. I won't have to worry about my wife. We can see each other at consumption planning meetings. I won't have to woory about finding time for leisure or schilarly work. There won;t be a question of
> any such time.
Right -- after planning doesn't duplicate any of the time you spend
now, so it will all be added time. And there are not efficiencies in
Parecon that make any of that lost time back.
>
> while
> > others spend half their lives implementing stupid
> > decisions made by people waiting impatiently for
> > meetings to end.
> >
> I see. All the decisions will be smart and I will see their wisdom and
> feel part of the process because I have one vote--in the national
> plan--out of 280 million.
No you have 100% of the vote in your personal consumption, 1/tenth
of the vote in your workplace team, 1/100th of the vote in your
workplace.
Justin quotes Gar
>
> >
> > 4) Too much power to the facilitation boards
> >
> > The processes performed by facilitation boards are
> > essentially mechanical and do not include framing.
>
Justin replies
> They necessarily include framing. Given a lot of raw data, the FB will
> have to choose among a great number of ways of matching input and output to narrow it down to a manageable number of alternatives, say three. This is the power to frame, since of the cvhoices among those alternatives, different ones with similar priorities woyuld have radically different impacts on lots of preople. There's nothing mechanical about it. As you say, this is a process done by people and not computers.
Justin quotes Gar
>
> > They could in fact be delegated to computers -- at
> > the cost of a certain inefficiency that always
> > occurs when you remove the possibility of applying
> > human common sense to a problem.
>
Justin replies
> If you decide to use a rigid formula: given these parameters, optimize, > then you could, in principle, remove the human element. I submit that this would be politically untenable. It would also be practically unworkable, > given that optimization according to a formula will lead to unsatisfactory results. And power remains in the hands of those who choose the formula.
> Let me write the formula, and I will be the dictator.
>
> --jks
Gar
Here we have a misunderstanding because you weren't clear. I thought you were talking about the intermediate rounds of price setting. You are talking about the idea that once a plan is close to slack equilibrium (what you call overproduction) final rounds of refinement could be shortened by having facilitators prepare a choice of final plans.
But at this point, how inputs and outputs are matched has been pretty well decided in the iterative process. So has collective consumption. At this point I can see only two dimensions to be decided.
1) How safe do you want to be? That is how much surplus do you need to produce to allow for errors, disasters and changes. 2) What leisure/production tradeoff do you want. That is within the range of hours people are willing to work do we want to (as a society produce a little more and have a little less leisure time or produce a little less and have a little more leisure time.) Large tradeoffs between leisure and work will already have been made during the iterative process.
I would think it would be possible to produce a spectra of choices along these axis which give you a pretty comprehensive set of choices. (In spite of what A&h say, I'm not sure that four or five is the right number though.) I think you could control for framing problems in a number of ways.
1) Make none of the above a choice 2) allow people other than the facilitation broad to submit plans (within the range decided by the iterative process). 3) possibly use Borda weighted voting. (That is if there are nine plans, rate them on a scale from 1 to 9. Add up total points for each plan. Plan with the most points wins.)
BTW -- to anticipate a question : People have the information to choose between plans because each affects them differently. You can choose between plans based on your risk tolerance and your personal leisure/work preference tradeoff.
This was very long because I quoted you in full -- required by circumstances. Since I am posting to the list you don't have the same necessity. Please do not feel compelled to return the favor. Please quote (as is your usual practice) only those points to which you are replying.
Thanks
Gar
P.S. -- to anyone who is interested in parecon Albert has a parecon site on-line at http://www.zmag.org/ParEcon/aboutparecon.htm I have my own brief discussion of parecon at: http://www.zmag.org/lipow.htm