ParEcon Again

William S. Lear rael at
Fri Oct 30 07:43:31 PST 1998

I have BCC'd this to Robin Hahnel, who might like to review whether or not I am arguing correctly, or making a muddle of his ideas. Robin, you can reply to if you like and I'll post for you.

On Thu, October 29, 1998 at 22:19:43 (-0800) Dennis R Redmond writes:
>On Wed, 28 Oct 1998, Brett Knowlton wrote:
>> I don't understand this objection. Albert and Hahnel are fairly explicit
>> about the fact that engineers, scientists, technicians, managers, etc.,
>> what they call the coordinator class, should also be eliminated. ...
>Ye Gods. We're going to *eliminate* engineers and scientists as a class?

This is not what A/H suggest at all. I think Brett has mis-spoken on this one --- at least confused two separate ideas. They want to get rid of a permanent coordinator class, but that does not mean the sorts of jobs Brett defines as part of the coordinator class are not necessary (except probably for the last: managers). The coordinator class function of many of them would have to be done away with. But we still need bridges, serums, and roads.

>What's horrible about capitalism is NOT the division of labor, it's the
>exploitation of that labor (and of Nature). ...

Don't forget alienation. That's a biggie --- A/H do provide, of course, for division of labor.

> .... My point is that if we're
>serious about changing the mode of production, we have to be serious about
>the people who already work in the current mode of production: this means
>organizing unions, fighting for a big welfare state, demilitarizing the
>USA, etc. Isn't the welfare state itself a perfect model of what ParEcon
>is trying to do -- the creation of a decommodified zone, where the laws of
>the market have been (temporarily) abrogated?

Yes and no: the welfare state may be a tactical step along the way to a fully democratic (participatory) society (economy), thus unions would be important. But, of course, unions exist as a defensive mechanism to protect workers from capital, so presumably, we wouldn't need them per se in a fully participatory society. Also, I would argue that the welfare state is far from a "decommodified zone".

>> My understanding of ParEcons proposed iterative method for determining
>> prices goes something like this: consumers have a budget, and they write
>> down what they want for the next period. Producers will do the same
>> (propose output levels). These initial requests/plans are then compared
>> and prices for each commodity are determined. This could conceivably be
>> done in a completely mechanical fashion (i.e., a computer could do it -
>> presumably the algorithm for arriving at the resulting prices would be
>> subject to popular approval).
>> The facilitation board is really only needed to ensure final convergence of
>> the iterative process to a practical plan. That is, without outside
>> interference, you might get oscillation between two plans which exhibit
>> excess demand and excess supply, for example.
>So if my salary is currently $9000 a year, and I want $18000 worth of
>goods next year, how would the system handle this? *Everyone* is going to
>want a bigger piece of the pie, right? (Including -- and especially --
>firms). ...

Then, since you are judged to have put out an effort worth $9000 by your peers, unless you can give a good argument why you should get more, you'll be $9,000 short of your dreams.

Also, A/H make some good arguments that purely pecuniary motives would be muted under a participatory system. Other values would have a chance to surface, and abundance for all would help to further sink the sickening greed, in all its horribly mutated social forms, with which we are currently afflicted.

> .... ParEcon assumes that we all have this relatively unmediated
>relationship to production and consumption, and can limit ourselves to a
>relatively stable consumption basket. ...

I'm not sure what you mean by "we all have" an "unmediated relationship to production and consumption". Do you mean people, inside them, have this mental relationship, or do you mean people in their external relationships? In any case, I don't think that your claim of an unmediated relationship is quite right. The relationship is highly social, since there is, on the production side, peer review of effort, and on the consumption side, there is the opportunity for social values to enter into the demand for goods.

You mention below that money mediates production and consumption, which is true, but I'm not quite sure that ParEcon necessarily wants to eliminate money. Robin really would be the one to answer this...

As to the claim that ParEcon "assumes ... a relatively stable consumption basket" --- this is nowhere, as far as I can tell, a limitation within the model. In fact, an efficiently functioning participatory system might very well be able to handle a quite dynamic set of tastes.

> .... That may be true for peripheral,
>agrarian economies, but even the smallest business in
>the First World uses money to mediate these things. Which is maybe why the
>European social democrats, for all their problems, are on to something
>when they insist that economic democracy is not incompatible with money or
>entrepreneurial spirit -- it's just that *everyone* would have money and
>be able to express their talents to the utmost, and not just the rich.

It's one thing, of course, to say economic democracy is not incompatible with money (hence [however limited] private property), and another to say it is not incompatible with "entrepreneurial spirit". I'm not quite sure what the latter is exactly, but if it involves alienation (essentially slavery), exploitation, or even market mechanisms, then I do not think it is compatible.

Also, Robin has some very powerful arguments as to why the market requires that you constantly re-distribute wealth through the state: the free-market pricing mechanism --- contra Hayek and his followers (apparently, some on this list) --- is subject to wild inaccuracies due to externalities (positive and negative, both on the production and consumption "sides", and all in between). I have, incidentally, extended the notion of externalities in what, as far as I know, is an original direction: I call it "temporal externalities" as opposed to plain ol' externalities (which are presumably a type of "spatial" externality). When I have a moment, I'll write up my brilliant ideas for all to comment (though I may introduce them over on PEN-L to have them battered in a bit more of an intimate setting first). I think this idea, along with some of the work by folks like Tversky and Kahneman could be very fruitful. Suffice it to say, Hayek, I think, was terribly wrong in his claims about the capabilities of a free-market pricing mechanism.

I am also dubious, if I interpret you correctly as the meaning of "entrepreneurial", that it is at all practicable to even *have* rich people and relatively poor people, and not have the former have therefore more opportunity to "express their talents". As far back as Aristotle it was recognized that approximate equality would be necessary for freedom to reign. Why should that be any different today?


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