Gar
Never denied that. What I said (and I admitted I put it badly) was that the total social time on consumer estimates under parecon would be no more than the total social time spent on complex taxes under capitalism. I admitted that under capitalism a lot of this effort is delegated to experts. I pointed out that if necessary this could be done under Parecon. Though it would better if people do their own, it does not actually put the process out of the consumers control if they did delegate some of the work to experts.
Justin
> Moreover, not the concession taht the guesses I make will be
> inaccurate. This means the aggregate demand input, multiplied by everyone's
> inaccuracies (never mind deliberate overestimates) will be
> catastrophically wrong. We are not "tied" to it, but if we wehat we
> decide to make is based on wrong inputs, there will be shortages of
> what people _do_ want and surpluses of what they _don't_ want. And who
> decides what is a "raesonable" shift between "categories," And We fixes the
> categories?
Gar
All iterative process go on a process of this type of estimation. A store stocks groceries based on guesses about how much the customers will buy. An auto maker makes cars based on the same type of guess work.
In parecon producers make plans at the beginning of the year based on consumers estimates of their actual demand, consumer survey and any other information they can get. How is this LESS accurate than producers under capitalism making the same types of guesses.
Capitalism starts each year with an implicit plan. About 98% of the economy is in the hands of corporations big enough to do annual planning. (This is not just a function of bigness. You don't have to be very big to need to do annual budgeting in the business world.) The implicitly plan in capitalism is the sum of all these annual corporate plans (plus the sum of any government plans as well).
Neither plan is completely right. Both will have to adjusted throughout the year.
Deliberate overestimates are ruled out by the fact that just as under capitalism you have to live within the limits of your income (with rare exceptions). To overestimate in one category you have to underestimate in another.
Justin
<SNIP>
>
> A fundamental disagreement. Overproduction is waste. It means that we
> have more stuff of certain sorts that we don't want, so in a world of
> scarece resources we have less of what we do want. Note also the sources of
> the overpriduction. It's not a "sensible hedgea gainst risk" to make a lot
> of stuff no onewants based on bad estimates. A sensible hedge would be
> figure > out the margin of error based on accurate estimates of demand.
Gar (quoted by Justin)
>
> > No decent restaurant ends up without some food waste. Grocery stores
> > end up with a certain amount of produce rotting on their shelve.
>
> Sure, but we try to minimize this, or we should. A&H guarantee a great
> deal of waste.
>
<snip>
Gar No I don't agree you have shown this. Capitalism has an implicitly initial plan (one no individual know). Parecon has an explicitly one publicly available. I do not believe you have demonstrated that Parecon's initial plan will be less reflective of public needs and desires, will have more overproduction that a market economy.
Justin quotes 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.
>
> It's not all you need in a rigid system like A&H. And the system is
> rigid, since it requires approval and debate up and dwon the line for
> changes.
>
Producers under parecon are free to change their
production plans in respond to price signal
changes. If these involve additional productive
inputs of course they need approval from someone.
Under markets, if you want to increase production you need approval by your creditors (if you just need some raw materials or parts to assemble) or from bankers or other sources of capital if your production increase requires long term capital investment. Under capitalism, if possible, you will already have arranged a credit line. Under parecon, if possible, you will already have have gotten contingency plans approved for additional productive inputs.
> > 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
> But it requires a good deal of consensus at the lower levels, which
> involves transactions costs in getting to that consensus. There will
> be tendency to avoid the debate and living with a suboptimal set of
> choices.
Um, I don't think parecon relies on consensus. I suppose you could adapt consensus to run one (though I'd be very anti) but as far as I know every example A&H give use majority rule.
Justin
<Snip>
>
> But outside monopoly situatuions there are at least many different
> corporations, all of which are in any case raiding the ideas of small
> entrepreneurs. In any case, I'm not sure that it's a recommebdadtion
> of A&H that their system is just as rigid as corporate capitalism, even
> if that were true.
Gar And in Parecon their are many different worker councils, and many different councils of councils. In any case, I doubt you can design a market system that does not lead to oligarchy if not monopoly.
<snip>
Justin
>
> A worker's council in a factory or plant, that wouldn't be too bad. In
> fact, that'swhat I'd like to see in a worker self-managed market
> system. But in A&H you need a lot of approval outside the firm. In capiatlsim
> or worker self-management, the form thinks upa n idea and flaots it. The
> market sells them whether it was a good idea. In A&H, sinxce you don't
> have a market, you need all sorts of political approval from local
> community leaders, from the suppliers and their local political
> leaders, etc. It's not like negotiating a contract. It's more like dealing with
> a coalition.
No in A&H you if you want to try something new,
requiring additional productive inputs all you
need is :
a) to already have approval for a certain
flexibility in your use of productive inputs (the
equivalent to having a credit line in market
systems) or
b) to persuade one council which has such
approvals to extend it to you (the equivalent of
securing a credit line)
>
> > 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?
>
> Partly because, dealing in kind, instead of getting the capital from
> lenders and buying what you want, you have to deal _in kind_ with each
> supplier of resources. Of course there';s the question of incentive.
> In a market system, lenders lend and sellers sell because theyt expecta
> profit. But why should my lumber mill give you wood for the houses
> that you think area good idea? Even supposing that we agree, why think
> that giving it yoyu rather than to Him is a better allocation of resources?
This is a fundamental misunderstanding. If I am a producer of wooden housing I do not need approval from a specific lumber mill. I need approval to use a certain amount of lumber. I buy lumber as I need it from whoever supplies the quality I need at the best price.
In terms of incentives -- that is rather departing from the cybernetic argument you made. A full answer will require another post as long as this one. To focus on cybernetics: A council of councils allocates resources among the councils which make it up. If it allocate resources inefficiently then it will have fewer resources to allocate next time. Thus there is a long term process under parecon where those councils extending the equivalent of credit unwisely end up with no credit to extend. This is the equivalent of banks which lend unwisely in markets being disbanded (or more likely taken over by other banks).
<snip>
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
> A confusion. What I said was not taht shadow pricesa ren't used by
> producers, indeed, they are used only by producersa nd planners.
> Rather it > was that a price rise does not have effect it does in a market system.
> Therem the price raise says, Profits to be made here! In A&H, therea
> re no profits to be made. To get producers to reallocate their efforts,
> someone authoritative will have to tell them to do that, no doubt
> democrarically and with a good many transactions costs.
>
No -- this is a fundamental misunderstanding. A
council of workers only stays in operation in
Parecon of it produces more than the productive
inputs it consumes (including labor and in the
long run). A parallel is that a business under
markets only stays in business if it makes a
profit. If prices change there is an immediate
inventive for workers councils to reallocate their
production so as to avoid lowering their
efficiency.
Justin on lack of privacy
Justin quotes Gar
> > Talk about red herrings! Obviously, to maintain confidentiality
> > figures will have to be aggregated sufficiently to avoid identifying
> > people with unusual tastes.
>
Justin
> Insofar as A&H idaelize smallish communities with face to face
> democracy. A&H idealize smallish communities.
> this will not be so easy.
Gar A&H don't idealize small communities
Justin
> In any acse, even if there is no individual identification, there will be an understandable reluctance to enter your preferences for things of which your community disapproves.
Gar
Why? If no one knows you are buy that copy of Hayek, why should it matter to you whether people would disapprove if they knew? And if the mere knowledge of disapproval with anonymity and no penalty discourage you under parecon why are you less discouraged ordering your Hayek in a plain brown wrapper under markets.
>
> >
> > 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.
Gar
> > Again, are you familiar with their work? Consumption requests at or
> > below that earned by work cannot be vetoed by consumption councils.
>
Justin
> That can't be right, since decisions about what is made have to be
> approved at the lower levels before being aggregated and sent on
> several > times. What A&H say is that request for stuffwe decide to make can't
> be > vetoed. The problem comes in deciding what to make. If my preferences
> for > the works of Hayek never get past the local level, they will not be
> printed,and I will be unable to buy them with what I earn.
>
> Youa re right that I was in error about being able to buy from a
> national market.
>
Gar
All you need in order to buy something is for some workers council somewhere to decide to make what you want to buy and gain access to the productive inputs needed to make it. If nobody wants to make what you want to buy or nobody wants to advance them the productive inputs then of course you cannot buy it. And in markets, if nobody wants to make what you want to buy or nobody wants to extend them the credit line to make it -- you won't be able to buy it either. Surely you would not favor a command economy where things were manufacture nobody wanted to make?
Justin
> > > 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.
Gar -- I should have said approximately the same.
The reason for the variation is important -- but
not relevant to the cybernetics of the system;
just brought up for purposes of accuracy.
>
> As I said, this is hopeless implausible. It's exactly Marx's treatment
> of abstract labor. It's a hopeless irrational method of allocating labor,
> because it doess not price labor according to its economic value or
> the value of producing it. Skilled machinests are just a lot more
> expensive than ordinary laborers, and A&H have no nonauthoritative method of
> allocating labor to where it's needed.
Wrong. People consume the same per hour. But workplaces pay marginal value for productive inputs -- including labor. What gives people incentives to pay attention to such price signals is another matter. I will deal with it once the cybernetic discussion is finished.
Here I <snip> a long portion on estimates problem. I conceded that listing your years consumption is more burdensome than making up grocery list. But I point out that a parecon would eliminate the income tax we have under our current system, and thus social time on making consumption list would not exceed social time currently spent on income tax. Justin takes my passing thought on delegating consumption planning to professionals, insists that everyone would do it and thus that we would hot have democratic control of consumption. I don't agree that delegating to a professional under your control necessarily does this or that everyone would so delegate. <snip> Back to planning
>
> >
> > 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.
>
Justin
> On the contrary. I argued for the point. I did nota ssert it. I
> observed taht the Russians were only able to make a rather bad plan every five
> years,a nd this without all the added transaction costs of participation. I think ythat those costs would add rather than substract from the total time required.
Gar But the Russian planning methods had nothing in common with A&H's. Democracy is not the only difference. Consumption planning by consumers reduces the work councils and councils of councils and so on to a fraction of what the Russians had to do
>
> 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.
>
> There's a big difference wuith trying to coordinate within versus
> across an enterprise. I don't think that Albert and Hahnel have ever
> discussed Coase and Williamsom on the reasion we have firms and markets and why
> the boundary is where it is. The argument, in brief, is that at a certain
> point the transactions costs of planning make it more efficient to use
> market relations and vice versa.
>
A lot of parecon planning is not "planning" in the
Coase and Williamson sense. And a lot of things
you seem to think of as being decided by abstract
markets are really decided by internal corporate
planners, plus bankers. Markets effect these
planners only as a long term feedback mechanism,
and I demonstrated above that there is a similar
feedback mechanism in parecon.
> 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.
>
> Not much. But I am aware of the phenomenon. I don't think much of
> theargument that, since there's a lot of planning alraedy going on,
> that > we can therefore plan everything.
NO some of it must be left to a process of
iterative feedback. I'm arguing that markets --
that is making decisions based upon bargaining
power are not the only iterative feedback
mechanism possible and that A&H have laid out a
rather elegant one.
<long snip>
Justin
> And how is it that consumers don't shape the decisions enterprises
> make ina market economy? Ask the designers of the Edsel.
Gar
The difference is that consumes in markets shape these decisions in highly unequal ways. In parecon consumers have an equal say in an iterative process similar to that of markets.
JUstin quotes Gar
>
> >
> > 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
>
> Great. You don't have to participate. All you give up is your say. In &H, you participate or take what they give you.
Gar
Bullshit. Meetings are not substitutes for the market in parecon. Meetings are a substitute for decisions made by corporate executives under capitalism. You favor market socialism. So workers either go to worker council meetings or lose their say under your system too. Justin
In
> contrast, in a market economy you get your say just buy buying this
Gar
And by contrast in parecon you can have your say just by taking part in a two week consumption planning process. You can have an additional impact by changing your mind during the course of the year.
That is exactly the same say you have as consumer under markets. In fact it is a little bit more -- because Bill Gates consumption is not outweighing your consumption by 2000 to one or whatever it is. (not the same ration as his income to yours).
If you don't want to exercise additional say in consumer and worker councils -- well that is your problem -- mitigated by proxies which is a hell of a lot of mitigation. At least stockholder in corporation today do not seem to think the proxy system leaves them powerless. (P.S. the idea of using proxies is my suggestion -- not A&H approved or disapproved. But if the parecon idea is worth anything then it is not the personal property of A&H).
>
> We turn to too many meetings:
>
> >
> > 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 q
> uestion of
> > > any such time.
Gar
> >
> > 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.
> > >
> I don't see any in your argument or A&H's.
The eliminate of complicated tax calculations.
That makes up for the only additional transaction
cost you have demonstrated -- personal consumption
planning.
>
> > > 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.
>
> No, you don't have 100% of the vote in your personal consumption. You
> get > to apply for what you want made and then you get to receive the next
> nearest thing to what you asked for that comes out of the planning
> process.
That is more vote than you have in markets. If you can tell me how to buy stuff nobody makes in a market system I will be very interested
And don't tell me that A&H don't havea national
refereumdum on
> the final plan, 1 vote in 280 million.
They suggest a vote on the final plan to shorten
the planning process. In theory you could extend
the process to three weeks to get a convergence
and not have the referendum. But again I emphasize
that the important the decisions are made during
the iterative planning process. The final plan
makes choices among a few simple dimensions -- and
thus is suitable for voting.
Justin
>
> Framing:
> >
> > Gar
>
> > Here we have a misunderstanding because you weren't clear. I thought
> > you were talking about the intermediate rounds of price setting.
Justin
>
> That too. The intermediate rounds also gibe those who aggregate the
> inputs and send on a local or regional proposal a great deal of power to
> frame,
Gar
Aggregation is simple addition.
>
Justin quote GAr
> 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.
>
Justin
> There is no alternative to this, except to presenta single final
> plan.
Gar There is an undesirable alternative -- letting the plan continue for additional round to equilibrium
Justin quotes Gar
> >
> > 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.
>
Justin
> What you ignore is that there are a great number of paths from any set
> of > inputrs to any set of outputs, the choice among which will have
> significant consequences for the final outputs. The choice among these
> involves framing.
>
Gar
I think this is where you are misunderstanding the process. You are assuming facilitators make choices in HOW inputs match outputs. This piece of wood to that building project -- that sort of thing. The match is total nationwide demand for this grade of wood with total supply. Who classifies the wood? Just as under markets consumers/users of productive inputs and workers doing the production.
The only work facilitators do is the choose how much prices rise for items in excess demand, and how much they fall for items in excessive slack demand. Two points here. I'm not sure facilitators are needed for this at all. It strikes me that -- just as in markets -- the experts best qualified to guess as to what price change is the right one is the local workers council doing the production.
Justin quotes Gar
> >
> > 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.
>
Justin
> That is, how much waste we can tolerate.
Gar No -- there is no reason to assume this particular kind of waste would be greater than under markets.
Justin quotes Gar
>
> > 2) What leisure/production tradeoff do you want.
>
Justin
> Note that waste involves reduced leisure, since people will be working
> on > useless production and will have to work more to make up for it.
Gar
Eliminating this is like building a motor with zero friction -- desirable but not possible. Again I have seen no evidence in you post that the margin of error for iterative planning is greater than under markets.
Justin quotes Gar
>
> > 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
>
Justin
> And if it wins, we have no plan.
Gar
And so you plan for a few additional rounds before
trying again
Justin quotes Gar
>
> > 2) allow people other than the facilitation broad to submit plans
> > (within the range decided by the iterative process).
>
Justin
> A California initiative Ballot problem. Therange of choices has to be
> manageable.
Gar -- the problem with Cal. initiative process is not the number of initiatives. It is that there is a monopoly on information about them. The initiative process would a progressive one in the presence of a diverse press.
Justin quotes Gar
>
> > 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.)
> >
Justin replies
> How does taht help with framing?
Gar
This is a general answer to the problem of voting
when there are more than two choices in a
situation where proportional representation is not
suitable.