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(en) NEA (Northeastern Anarchist) #8 - The Sad Conceit of Participatory Economics By Odessa Steps (Anarchist Federation - Britain)

From Worker <a-infos-en@ainfos.ca>
Date Thu, 8 Jan 2004 15:17:17 +0100 (CET)

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As social and organizational anarchists, members of the
Anarchist Federation in Britain believe that a free, fair and
stable society of the future must be of a particular kind -
anarchist communism. But as class struggle anarchists we
rarely spend a lot of time thinking about, describing and
experimenting with the forms of the future society; we're too
busy fighting the one that exists today.

This gives people who are not anarchist communists the
opportunity to imagine, test and promote ideas which will be
ready to hand when a revolution occurs.

Now this matters because it is likely that the revolution will
not be brought about by a single organization, by a group of
organizations or even millions of individuals believing one
set of things about how society should be organized. It is
likely that before, during and after the collapse of capitalism
dozens of theories and many practical expressions of these
theories will emerge. On the one hand, that could be a very
good thing. But what if what is proposed and actually
implemented is not libertarian in nature or has the capacity
or potential to recreate capitalism? Are we then to have to
fight a second revolution against such ideas? Or do we
challenge them now?

One such system is called Participatory Economics
(parecon). It was proposed in two books (The Political
Economy of Participatory Economics, and Looking Forward:
Participatory Economics for the Twenty First Century) and
has some support among anarchists and autonomists. It is a
system for managing the economy of (present and) future
society based on a fairer relationship between producer and
consumer. While it continues to make use of a (modified)
market, it seeks to abolish the power of capitalists to dictate
the value of our work and the cost of consumption (i.e.
wages and prices) by establishing a democratic,
participatory economy based on socialized production but
individualized consumption. Now who could argue with that?

Work and consumption is self-managed. Production is
managed by factories and workplaces organized in producer
federations. These decide what they will produce, at what
input cost (price), and in what quantity. The right to
consume is earned through work, with society granting
individuals 'consumption shares' in return for labor. People
who choose not to work earn no shares (not even dole) and
don't eat. How many consumption shares we earn is decided
collectively with each job graded according to the social cost
of production and the effort required; basically the less
socially-costly the job but the more effort required, the
higher the wages, sorry, 'share'. The relations between
individuals and society-at-large are mediated through
producer/worker and neighborhood/consumer councils.
Coordinating and mediating federations called Iterative
Facilitation Boards (IFBs), would set prices based on the
social cost to produce things and wages based on the
'disutility' of particular kinds of work and the effort involved
in our jobs. In order to create some basic level of fairness,
each person would have 'balanced' jobs, with some shit
work, some mental work, some manual work and so on, with
varying rates of pay. Involvement in all the phases and
stages of this economic process would be participatory and
democratic in nature, creating an informed, empowered
society of workers and consumers.

Parecon was invented by a group of American thinkers and
economists and there's a lot more to it than this short
description but you've got the principles. It is an incredibly
complex market system that would require many millions of
people to operate. For instance, there would be people
actually measuring how hard a job is, assigning it a rating,
balancing that rating off against millions of others,
calculating relative costs and 'disutilities' and then trying to
balance off the productive power and consumption of four or
five billion people in millions of factories. To give you a
flavor of this, consider this quote from one of Parecon's
inventors to a question about calculating cost-benefit: "Say
master carpentry has a disutility rating of .84 where 1.00 is
the average disutility of labor in general. The indicative price
of master carpentry labor would be calculated as follows:
take the indicative price that emerges from the planning
process - which will be the analog of the price of arable land
with 20 inches of rain and a 3 month growing season, and
just like the indicative price for that land reflects
productivity and scarcity as determined by supply and
demand through bidding from all potential users in the
economy - and multiply that price for master carpentry labor
by .84. In this way disutility can be combined with scarcity
and productivity to give us an overall assessment of social
opportunity costs of using different kinds of labor. Consider
the vast effort that would need to go into making trillions of
calculations of this kind in a more or less endless round of
price- and wage-setting. Then think about the vast power
that could be wielded by any group of people controlling this
process. Think about how you would feel if a faceless
bureaucrat somewhere was deciding how much your labor
was worth this week, especially if that decision affected
how well you ate, or whether you could afford healthcare or
schooling (yes, in parecon you have to pay for housing, food,
healthcare and everything else). Parecon uses market
economics. All markets are subject to a series of influences:
the supply of commodities or labor, the aspirations of actors
within it, their relative power and so on. Like all markets it
can be manipulated and controlled and its operation may not
always be fair. Markets have ability to confer political power
on those who control them. And that political power can be
used to defend or extend our control over the market.

The pareconomists argue that the social problems that arise
from a war between the classes (in the parecon world,
between producer federation, consumer federations and
IFBs) just wouldn't occur. They argue that in a balanced
economy like parecon, you can only get higher consumption
shares or lower prices by increasing the overall size of the
cake, which is good because everyone benefits don't they?
This is the classic argument of capitalists if you think about
it. Pareconomists say this: "In parecon, everyone gets a
share of income based on the effort and sacrifice they
expend in work" (Yes, Boss). Or this: "There is no way to
aggrandize self or a group without benefiting everyone. For
me to get ahead, the total product must grow or I have to
expend more effort and sacrifice, which is fair enough." The
capitalist says: "If I work hard and increase the total wealth
in the world, why shouldn't I get ahead, you benefit too."
Well yes, but now you're rich and powerful and we're not. In
an FAQ about 'dissent', a pareconomist explained that if you
had a dissenting view from the majority, you still might be
able to persuade your local producer federation to give you
the means to express your dissent through, say, a radical
magazine, if they thought dissent was useful to society.
Might they be persuaded by propaganda, bribery or threats?
You betcha! So under parecon, dissent can be stifled by
being denied the physical means to express itself unless you
have the means of persuasion to hand. Individuals and
groups with money (and that's what consumption shares
are), can influence society into believing particular things
and taking decisions based on that belief. For instance:
"Entrepreneurs like me can run your schools more efficiently
than the education federations!" Pareconomists have no
ideological defence against such a proposal. They simply
say, "If it's true, society benefits so let him do it. If it's not
true, society will find him out and take away his right to run
the school". Yeah, sure! The ability of 'society' to reclaim
badly-used resources from their 'owners' or 'users' is entirely
dependent on the power of ordinary people versus the power
of the owning and managerial classes. Suppose I had taken
the prudent step of saying: "I can provide national security
and personal protection at half-price. Let me run your army
and police force" first? After all, that's what the first
monarchs, priests and chieftains did. What then?

Parecon has within it the scope for large inequalities since it
allows people to accumulate wealth over time and its only
defence against people or groups taking control of parts of
the economy and using it for their personal benefit is that the
rest of us wouldn't let them. If true, we wouldn't be in the
mess we are today. In parecon society, workers councils and
producer federations control the means of production; after
all, they are in physical possession of the mines, factories
and transport systems. The federations exist, in part, to get
the highest price they can for their member's labor. The
iterations between consumer, producer and coordinator can
easily become negotiations in which monopoly of the
productive power can be used to bargain up consumption
shares (wages) and bargain down prices. Consumers may be
able to resist price-fixing for 'luxury' items but what about

Many people fascinated by parecon ask would there be a
government to control all this? Pareconomists reply that
government exists to correct market deficiencies or supply
goods (like national defence or healthcare) that markets are
bad at supplying. In the perfect world of the parecon, these
goods can be supplied by the producer federations. But there
will still, apparently, be a need for political institutions to
make decisions about: "war and peace, whether drugs are
legal or not, what the rules and procedures of the criminal
justice system will be, immigration policy, etc".
Pareconomists tend to argue that the political and economic
spheres would be largely separate. But political institutions
making policy decisions do intrude into the economic arena.
Immigration policy determines the supply of labor and the
cost to local economies of losing or gaining workers. Drugs
policy can make certain products illegal and close down the
factories producing them. A criminal justice system could
declare 'economic sabotage' (strikes) illegal. Parecon does
not seem to rule out political parties. They could capture
these institutions wholesale, using the economic and
organizational power of supportive producer federations to
blackmail the rest of society or persuade us to vote 'Socialist
Worker For A Fair Society!' Pareconomists seem to ignore
entirely the lessons of the Russian Revolution about how a
tightly organized, ideological faction could take over
economic and political institutions in a supposedly free
society. Or the lessons of the Spanish Revolution about how
coordinating institutions like banks, commodity and
production boards and so on can be captured and used
against rival groups and the parts of the economy they
control, for instance by bankrupting their factories (and yes,
factories can be bankrupted and closed in the parecon

Parecon is a system in which you are compelled to work in
the regulated system of the parecon. Bureaucrats establish
the value of the work you do and the reward you get for that
work. They also control prices and the cost to you of the
things you need. The sole mechanism of control is our
participation. which to work is made obligatory on all people:
"time necessary for consumption decision-making would be
treated like time necessary for production decision-making;
as part of one's obligations in a participatory economy". Our
obligations! Enforced by who? In parecon, as with
capitalism, wages and prices are determined by a series of
power relationships, mediated by a market (the IFBs). It
cannot prevent wealthy entrepreneurs from taking control of
parts of the economy or powerful federations controlling
prices or exploiting monopolies. The political institutions we
use to balance power between producer and owner
(government, parties etc) would either be non-existent or
have to be re-invented to establish new controls. Its only
overall regulating mechanism is the amount of what's
available but as we know to our cost, it's not the size of the
global economy that matters it how it is shared out that
sucks. Though the means of production are socialized,
individual property is not. Accumulated wealth confers
power that enables people to grab, protect and increase their
property. Parecon does not say how it will prevent private
ownership developing except to say "it won't". What is to
stop property accumulation beginning with entrepreneurs
taking control of production? What is to stop producer units
selling 'surplus' production outside the regulated economy
and pocketing the profit? Pareconomists admit they could not
stop black economies where people buy and sell goods and
labor outside the regulated (sorry iterated) economy
developing. What then? If you want to dissent, you must ask
permission or starve. If you want to live and work outside
the system, parecon has laws for people like you.
Copied from infoshop.org

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