Tflec2

Thinking Forward

Lecture 2:
Existing Visionary Options

This lecture focuses on various existing economic options and evaluates
their production, consumption, and allocation role structures in light
of the values we enunciated in lecture 1. First, however, I need to
offer my own answers to the questions raised last lecture.

Answers
to Lecture 1 Questions

A word, first, about the point of these questions. The really important things overall
in these exercises are:

  1. To think about economic concepts and vision
    methodically and comprehensively. The usual approach
    is, instead, to apply some experiences, or lessons,
    or beliefs, or a little thought, and race to conclusions.
    This is often OK in life—often, indeed, there is
    no time for more. But when trying to theorize some
    domain (such as economics) or design some system
    (such as an economy) far more care and discipline is needed.
     
  2. To actually believe in our own thoughts and draw conclusions
    from them. I mean this seriously. The vast majority
    of folks would, I think, arrive at views quite disdainful
    of existing structures, were they to do these exercises
    in a non-threatening context. But, having done this, it
    would then have few if any implications for many
    people’s attitudes toward the structures addressed,
    or the actual economy we live in. Some kind of weight
    of experience, or history, or pessimism, or whatever,
    would override their reasoned assessments. Instead,
    we should (i) develop concepts and aims, (ii) apply
    the concepts to understand situations and processes
    in light of aims, and (iii) reject what fails, and
    support what seems worthy. We have to be flexible and
    humble about our judgments, of course. But I don’t
    see arriving at views, and then dispensing with them in conversations
    with friends, in our estimates of our role in society,
    etc.

So what about the questions asked last lecture? Taking the
content of lecture 1 as a starting point, and in light of our
purposes, the following brief answers would be more than
satisfactory, to my thinking.

  • What are the inputs, and what are the outputs of
    production processes?

Inputs include material items (such as resources,
goods produced elsewhere, and infrastructure), but also people’s
work or labor, people themselves (including the level of
knowledge they have, health, the moods and levels of fulfillment
they have, their personalities, skills, etc.), and the social
relations of the workplace (including the roles of the
workplace and the rules of its operation, relations between
actors, etc.). Saying these are all inputs means that
all these entities enter into the production process as
aspects needed for it to occur and influencing its outcomes,
being reproduced, altered, or used up in the process.

As obvious as every aspect of the above answer is once one
sees them listed, many people indicating inputs stop with
material things plus people’s work. But despite the fact that
“material things plus work” is also the answer most often
offered by mainstream economists and even most schools of radical economists,
this is woefully inadequate. Imagine a psychologist listing
human interests and leaving out sex, or a nutritionist
listing inputs to the body and leaving out vitamins.
Similarly, what sense does it make to list economic inputs
and leave out people’s skills, knowledge, and emotions?

Well, in fact, the strange truth is that for some purposes
this can make good sense.

Remember, we choose concepts to highlight features that we
care about and that we need to pay attention to for our
subsequent thinking and visualizing to be effective. But what
if your priority was only to maximize profits for an owner,
regardless of effects on anyone else save insofar as these effects mattered
for the size of profits? Then for you to use concepts that
left out certain features that we as citizens or workers
might think are important to include, given our different
priorities, makes sense. This is why the “bottom line”
for accountants paid by owners of companies, does not include any reference
whatever to the effect of economic life on producers and
consumers, but only includes reference to monetary costs and
revenues and, ultimately, profits. The theorist has an
agenda, and what matters to that agenda is conceptualized, while
what doesn’t matter to it, or what might distract from it, is avoided.

In any event, to continue with the answer to the question
raised, outputs of production processes certainly
include material items (such as the intended material
products and by-products of the production process, whether desirable
or harmful, including pollution, etc.), and services
produced, but also include people (with potentially changed
knowledge, health, moods and fulfillment levels, personalities,
skills, etc.) and social relations (which, likewise, may be
altered due to the production process). Here too the absence of
the latter two categories of output from production typifies
most economists’ views and, obviously, once the point is
made, consigns them to inadequacy—at least regarding our
priorities. For how could you possibly evaluate a production institution vis-à-vis
its effects on solidarity, equity, diversity, and self
management, if you don’t even include in the conceptual tool box
you use to examine the institution reference to its affects
on human personality, knowledge, skills, and social
relations?

How could it make any sense to list the inputs and outputs
of work and not list the state of being of the people who participate
in it and the state of social relations among them if one is
concerned with designing (or evaluating) economic models to
benefit people? How can you design the model to benefit factor
x, when you leave factor x out of the conceptual apparatus
you use in building your model in the first place? You can’t,
obviously.

On the other hand, however, to repeat a critical point for understanding
the logic of conceptual systems and theories, if your focus
is not people per se, but profit or material surplus, and if you
care about people only insofar as you must to address these other
profit or power centered aims, then different criteria guide what
parts of reality you decide to highlight. That is, with
profits as your priority it makes sense, however inhumane it
may be, to use concepts that leave effects on people out of
the analytic picture save insofar as the effects bear on profits.

I want to elaborate (perhaps beat to death would be a
better term for what I am doing) this point about concepts just
a bit further before proceeding to the next question.

We are trying to build a theory. We want concepts that
highlight what we care about, and anything that significantly
effects what we care about. Someone might say that air goes
in the windows of the workplace—but who cares? Or that
dirt goes into the workplace congealed to the incoming raw materials,
but this too is not something to put in our theory at the
level of basic concepts. But what is it that we do care about
in a workplace—and, in light of that, what goes in?

Each worker has a certain physical condition going in, and perhaps
another, even including a lost limb, say, or just plain exhaustion,
coming out. Notice, if we simply elide this from our theory—ignore
it, leave it out, not have any concepts that focus on it—then
the recognition leaves our thoughts as well. This is precisely
what happens in what is called neoclassical economics, or professional
economics, or economics propaganda, as I might label it. Why propaganda?
Because from the start the framework highlights only some
facets and ignores others (this much is in fact true of any
intellectual framework) according to a criteria that distorts
understanding in the interests of elites and ignores the plight
of workers
. Here is something to think about, therefore, and in
light of all this: Is what we are doing merely a different
kind of propaganda, now taking the perspective of workers but
ignoring the conditions and interests of elites?

  • What are the primary roles within capitalist
    workplaces?

Well, there are those who own the place and by virtue of
this have a claim on profits and have ultimate authority over
operations. They may have inherited their deed to ownership,
or they may have begun the firm themselves and worked
fantastically hard making it successful, or they may have bought
it. Regardless, we call these folks capitalists.

Then there are those who have considerable control over
their own circumstances of work and usually also over the
definition of or the conditions of the work of many other
people as well. They have their position as manager, engineer,
lawyer, doctor, etc., by virtue of educational certification and
monopolized skills, knowledge, and access to information and decision-making authority.
I call these folks coordinators.

And then there are people who have nearly no control over
their own conditions of work, or over anyone else’s either,
and whose circumstances are determined only by their ability
to win higher wages or better conditions through organization
with others in like straits, the workers.

Of course, we could refine endlessly beyond this, but
these three classes are, I think, a sufficient demarcation
for most broad analytic and visionary purposes. With contrary
interests to one another and different world views arising
from the different roles they fulfill in the economy, these
three classes contend over quality of circumstance and share
of productive output, as well as for power over outcomes.
They even have different agendas for what an economy should be…a
point we have already touched on in explaining why mainstream economic
theory leaves out some focuses that we find critical.

  • Is a public school a workplace; what about a GM
    factory, a family? Why or why not?

If we define a workplace as a place where inputs are
transformed into outputs, then, yes, of course, all these are workplaces.
If we confine the term workplace to refer to places where
production in this broad sense occurs and where it is also
the primary defining feature of the institution, then no, the school
and family are not workplaces. It is really a matter of the
conceptual breadth that we want our choice of words to have
at any given time. In fact, since such institutions must
partake of economic involvement to get their inputs and
provide their outputs, I think it makes sense to pay attention
to them as workplaces to precisely that extent.

  • What are the inputs and outputs of consumption
    activity?

Actually consumption and production are each economic
activity, distinguishable only by the fact that in the former
the focus is on the items taken in (and the level of human
fulfillment immediately resulting) whereas in the latter the
focus is on the items (material or service) made available as outputs.
But really, the answer for inputs and outputs to production
does quite nicely for inputs and outputs of consumption as
well, with only a few minor word changes. In and out of each
we have material things (some natural and some produced, some
sought, and some as by-products), and people including their
mood, fulfillment, and attributes (changing, perhaps, along
the way), and social relations (again, subject to change).

  • What distinguishes consumption activity from
    production activity?

The focus of attention of the person doing the labeling.

  • What are some consumption activity roles?

Ah, now there is some difference because of the
institution in which most of what we will generally want to
call production (due to its focus) or consumption (due to its
focus) takes place. Consumption, as we will most often use
the word, occurs via choices made in some living unit or
group of such units, often with roles that are highly influenced
by gender relations, community relations, etc.

Thus, in different societies with different organization
of living units, there may be quite different attitudes about consumption
and different rules by which it is carried out. Does a
patriarch make all choices, or parents, or a tribal elder,
for example? Are there taboos and requirements? Do people meet and
discuss options before determining what they want? Do
children have a say, or take what they are given?

Of course, it is also relevant to consider the degree to
which class allegiance alters one’s consumption role by affecting
one’s attitudes, options, and so on.

  • Is a factory, a school, or a family a consumption
    institution? Why or why not?

Clearly, yes, if we view them in terms of what they take
in, or in terms of their place in the economy as recipients of
outputs from elsewhere. Which is exactly how we ought to view
them when we are thinking about the consumption part of
economic activity. However, when we have on other hats, these
institutions rightfully take on other primary aspects.

  • In a market, what determines how much product each
    actor gets?

Power, which can in turn be affected by many variables
such as monopolization, unionization, consciousness and organization, prior distribution
of wealth and assets, race, gender, age, laws, government intervention,
supply and demand, and so on.

Perhaps I should have said bargaining power. The concept
is, however, a bit of a catch all. For example, suppose you
produce some needed product and corner the market—that
is, you become a monopoly or monopsony. You now have more
power then if there were many other firms offering the product. You
can extract more payment. Or imagine you are a small business
and I am a very big client of yours—you depend on me to
exist and I could go elsewhere. Then you have another small client
who can’t go elsewhere to get your service or product, and depends
on you. I have great relative power in our transaction. But
you have great relative power in the transaction with the smaller
client.

Suppose I am a worker in a union, or not in a union, my
bargaining power changes. Suppose I am a woman or Latino
worker. In a racist or sexist context or a society in which
these oppressive dynamics are absent, my bargaining power
changes.

The point is, in a market economy buyers and sellers do
not, as the rhetoric informs us, meet with prices and the character
of the exchange globally set regardless of their individual
relations. Instead, prices for the same good and services for
the same payment often vary dramatically depending on the relative bargaining
power of the buyers and sellers. If people living in a poor community
cannot travel far at all, then a local supermarket may be able
to charge them more for carrots than the same supermarket
would be able to charge rich people in a different neighborhood,
able to shop elsewhere.

  • And what determines, in a market economy, how much
    work each actor does?

Again, power, and the wills of the actors who have the
power to manifest. Thus we have struggle over the length of
the work day, or work intensity, etc.

  • What is investment and what does it have to do with allocation?

Investment is just a decision to apply certain resources,
energies, and materials to creating new productive facilities,
relations, and capacities to be utilized in the future. It is
important by virtue of influencing the playing field tomorrow
and thereafter. The relation to allocation is that some
amount of society’s product is earmarked, during the
allocation process, for investment rather than for meeting
immediate ends. The word is not intrinsically pejorative and
has no accompanying implication regarding who gets what or the
goals of innovations, etc. Investment in a particular type of
economy, however, will be contoured by that economy’s norms
to have certain qualities, which we may or may not like.

  • So, what do you think of this discussion of values
    and economics, and what alternative suggestions might
    you have for the value system we utilize in our work
    to come?

The best way for me to answer this question will be to
proceed with lecture 2.

Further Discussion of Values and Economies

As noted in Lecture 1 economies influence what we do (by providing
roles that we have to fill) and what we get from the productive
output (by affecting allocation outcomes). These two facts in
turn have much to do with our possible life stories.

If the economy propels anti-social attitudes or distorts
and under-utilizes human capabilities, or if it rewards people
unjustly or creates hostilities among people, or if it wastes
time and effort needlessly or inexorably distorts personalities
or violates the ecology, these would be issues to take up in evaluating
it. The task is to assess the built-in dynamics of the
economy and their inevitable implications for people’s lives.

So what would we like an economy to achieve in the way of broad
general aims for people’s lives? I noted last lecture four values,
plus some basic economic criteria, meant to be necessary and
(at the broad level) also sufficient as evaluative norms for designing
and judging economies. Now let’s develop each just a bit
further.

First, equity says
that we should have fair or just outcomes. No one should get more
of a good thing, or of a bad thing, than he or she deserves.

The idea isn’t, however, to have a fair playing field and
then a race, like a land grab, in which everyone starts at the
same time with no advantages. In such contests outcomes can
and generally are still unequal even if we go so far as to
handicap fast runners with extra weight—that’s why
people run like maniacs, because some get good land and some
bad.

Our aim isn’t, therefore, to have a fair contest but with
gross disparity of outcome. Our aim is to attain fair outcomes.
And so the question arises, well, what is fair? In talking
about material distribution and about life circumstances,
what should be our criteria for what people get? And so we have
our first thought question for this lecture, to be answered
preparatory to undertaking lecture 3:

  • Beyond a vague notion of equity, what should be the
    actual criteria of remuneration and disposition of economic responsibilities?
    How do we determine how much people are paid, what
    share of output they receive?

Second, solidarity
means the economy should foster empathy among people, mutual respect
and caring, rather than an attitude that you are my enemy or, in any
event, I don’t care about your well being.

This value requires little explanation, I think. If
economic functions and requirements produce sociality and solidarity,
good. If they produce hostility and anti-social attitudes,
bad. It would seem that to contest this is impossible for all
but a psychopath.

Third, diversity merely testifies to a belief that homogeneity
is boring and we all benefit from diverse outcomes.

Partly this is because diversity of outcomes is a good
hedge against errors. If everything is always done one way, then
if that one way is wrong, one has to start from scratch. But
if there are generally many approaches being utilized and
employed, then when one proves detrimental there are others
to choose among, well conceived and tested. And partly
diversity is valuable because life is short and we can enjoy
other people’s different involvements vicariously, or via
their product. We get pleasure, that is, vicariously appreciating
the products and attainments and life stories of others who choose different
pursuits than ours. We need to put diversity in our brief list, as
compared to many other values we might mention, because
otherwise one could attain the other three aims we have enumerated
by simply homogenizing everything into exact oneness. It is
not derivative, therefore, but essential to the list.

Finally, fourth, participatory self management means
that each person should have a fair say over his or her own
life.

But what is a fair say? Well, we should be able to affect
the decisions that in turn affect us, and we should be able to
do it in proportion as we are in turn affected. But please
notice—this is not just one person one vote nor is it consensus
decision-making, for that matter. One person one vote is sometimes useful, sometimes
not, because it gives identical impact on outcomes to each person,
not proportionate impact. Likewise consensus is also sometimes useful,
sometimes not, because it ultimately gives veto power to each participant.

Clearly there is no point, pragmatic or ethical, in the
person on the other side of the plant having the same say as
I do (much less veto power) over how I arrange my desk space.
To give others that power over my space is not democracy in
action, but a kind of silly knee-jerk notion of democracy leading to
waste, bedlam, or fisticuffs. Participatory self management
instead allots to each actor a say in decisions proportionate
to the degree the actor is affected by the decisions. This
seems to us to be what most people really mean by democracy,
and to be what we ought to mean by it, in any event.

The last requirement for an economy, which goes more
or less without saying, is that it also fulfill economic
aims: that is, it has to deliver the products desired,
and it has to do this without wasting anything that
people care about (which is called, being efficient).

So what is efficiency? To most people, this is not so
obvious, I think, and therefore bears just a bit more comment.
The answer is, in the abstract, there is no such thing. There
is only efficiency in light of some set of aims and valuations.

Efficiency means utilizing “assets” fully,
effectively, without waste. If you have waste, then you could attain whatever
positive ends you got without the waste (if it is inevitable
it isn’t waste) and therefore with improvement. So you do
want to be efficient in the sense of avoiding waste.

But, notice, if we say that the end sought is maximizing
output, or profits (which is not the same) and we place no value
on, for example, the well being of the work force (so this is
not an asset we care about), then not utilizing every last
ounce of energy, even if it means disempowering workers
entirely, is inefficient. On the other hand, if we value
worker well being so that we see it as an asset that we care
about or even part of the goal, then we get a very different
view of what is efficient and what isn’t.

In our society the word efficient is taken to mean not
wasteful, but also correct, mature, professional, careful, reasoned,
and so on, and is therefore deemed good. But it is also taken
to mean getting the most profit from available inputs
regardless of the impact on anyone or anything outside the transaction.
Which is not so good. And therein arises the confusion.

In any event, to return to our list of values, my claim
about these evaluative criteria is intuitively pretty obvious but
hard to demonstrate logically.

  1. In an economy, other things equal, if we have more of
    these attributes, the economy is better. If we have
    less, it is worse.
     
  2. If we attain all these aims to a great degree, we
    will also attain or be in a position to attain virtually
    any other desirable economic value anyone could
    propose.

The list of broad aims is useful, therefore, in being both
necessary and sufficient to our over all goals. Economies often
demarcate people into groups with opposed interests such that
people in one such group are better off than people in
others, have more power, and so on. These economically
defined groups are called classes, and classlessness, for
example, is a an aim that emerges naturally from those we
have chosen because if you have classes, as compared to not
having them, you are worse on all these values. Class division
reduces equity (the dominant class has more than its
subordinates), curtails solidarity (classes struggle with one another),
reduces diversity (within classes homogeneity is the rule),
and limits self management (as one class has preponderant power
over others). The elimination of classes improves on all these
criteria. So, with our values as guide, clearly no classes is better
than classes…

What about ecology? How come we don’t have a separate
value for, say, sustainability? Certainly lots of progressive
economists do list such a value and of course we in fact have
such values ourselves. So why not list it? Is it really
implicit in the four that we do list?

I will first tell you the actual history. When we first
developed the parecon model, Robin Hahnel and I thought about
this stuff pretty much as you are doing in these exercises,
though over a longer time, of course. But when we thought
about values to organize our structures around, the aims that
roles we would advocate would try to attain, we came up with
the values I offered here and nothing about ecology. I have
to admit, with some embarrassment, that this wasn’t because
we self consciously assessed the possibility of including an ecological
value and decided not to. The truth is, it just wasn’t on our
minds.

Now the interesting thing is, I think, it didn’t matter
that we were not as self conscious as we ought to have been about
this issue. That is, I honestly think the economy that
emerges from applying the values so far listed is just as good re
the ecology as it would have been had we put in another value highlighting the
ecology. I’ll go even further. I think it is better re the
ecology than what many Greens advocate for the economy,
starting from sustainability as their primary aim.

Why do I say these things?

Well, the values we have enumerated will cause us to
require of our economic institutions that they account for ecological
effects insofar as these impact on human well being and
development. The values we have chosen will not, however,
cause us to design our economic institutions to have built-in
features for judging the ecology, or nature, or particular
species, regardless of implications for people. And I happen
to think this makes good sense. If a society wants to impose
on its economy that regardless of economic impact on people a
particular species must be defended, for example, that is
fine. And the economy ought to be able to accommodate such extra-economic
(in this case ecological) requirements. But the economy
itself should not do this a priori. The economy—in
my view, anyhow—ought to provide people the means to
determine their economic actions in accord with their desires
and capacities and in tune with others doing likewise, but
without prejudging issues that are extra-economic.

Some Greens, as another example, argue that scale of
operations, or degree of industry, are critical matters that must
be dealt with in principle at the level of guiding values.
They will argue, that is, that a good economy is one that always
and aggressively (or even maximally) promotes small scale, or that utilizes
industry only as a last resort. I think, instead, that such
aims, as a matter of principle, make no sense at all
economically (or ecologically, for that matter, but that is
another story). What an economy ought to do is settle on scale
of operations for firms, for example, or on levels and types
of technologies, all in accord with higher values, such as,
in our case, equity, self management, and so on. Sometimes a larger
scale will make sense for a project or workplace, sometimes
smaller. Sometimes new technologies ought to be utilized,
sometimes not. The idea is that the economy should provide actors
the information needed to make these judgments, rather than
making the judgments a priori, due to some built-in abstract
norm.

Still, at each step in these lectures, you should, if you
feel this value (sustainability) or any other value strongly
as an independent aim, consider whether what I am saying is
missing something or not. And attempt to incorporate whatever
additional features, or change whatever features I offer as
you see fit, for your own developing economic vision.

To summarize, I think the models we develop using the
values enunciated here will be attuned to ecological valuations
and choices precisely insofar as these impact on human well
being and development—and will also be able to be constrained
by ecological choices that might be made on other grounds,
for example, the rights of nature, or whatever else. Our
economic vision will, of course, attend to sustainability,
since to have an economy that isn’t sustainable is
catastrophic from the human point of view.

So, for now anyway, and with the caveat that you must do otherwise
if you see fit to, we can plausibly take our goals as the four
noted, plus, within the bounds of meeting those values and human
needs generally, economic efficiency. Could we choose other
combinations of values that might also be as necessary and as
sufficient? Sure, yes, I think perhaps we could. These few are chosen,
I suppose we could say, out of experience/intuition and in the expectation/hope
that they are well-suited to guiding economic evaluation and design.
I think they make our job easier than some other ways of
highlighting things, and so until the experience of using
them proves otherwise, I proceed. Indeed, this is always why
we choose concepts, methods, and values for our toolbox. We
want to put in what is useful to attaining our intellectual
and practical aims. And we want to leave out what would waste
our time or distract or distort our efforts. Too little
detail or any wrong detail is no good. But so is too much detail.

Existing Economic Models

Suppose someone asked how many different stereo systems
are there to choose from. You might make a list of the major components
(suppose it is amp, receiver, speakers) and then count the
instances in each group. If there were 20 types of amp, and
15 types of receiver, and 40 types of speaker, (not just different colors,
but really different types) and if you could mix and match these
in any combination, then there would be 20x15x40 = 12,000 different unique
types of stereo system to choose from. If some components
were incompatible with others, however, the total would drop,
perhaps quite a bit.

Now consider economies. How many distinct economic models are
there to choose from? Well we can usefully think of economies
as including ownership relations, production institutions,
and allocation institutions. If we list the types available
for each of these components, and check for compatibility problems,
we can enumerate all existing (and perhaps all possible)
types of economic models that we might choose from for our
future.

Why did I leave out consumption institutions, and put in ownership
relations? Well, because variations in the former prove in
practice not to be so critical to the overall character of modern economies
that we might consider in thinking about an economic vision,
and therefore not so important for us to highlight in this book,
whereas variations in the latter, ownership relations, do prove
to be a particularly critical factor in determining the defining
character of economies.

So, what possible choices for institutions do we have?

Briefly, for ownership relations, any economy can have
private ownership, state or public ownership, or
collective ownership, and that’s it. That’s the whole
menu of ownership options we have to choose from: four
options.

For production relations, our visionary economy can
have hierarchical workplace structure, or formal but
unimplimented workers’ control, or participatory council structure,
and again, that’s it. Three options, broadly speaking,
are all I know of. (Of course each can have many
sub-variants, but that is a different issue).

And finally, for allocation relations, our
visionary economy can have markets, central planning, or
a combination of the two, complete decentralization, or
participatory planning. And, ignoring sub-variants, again
that’s it. Four options.

So to figure out all possible economies, we can just ask
how many combinations there are, remembering that combinations
which can’t hold together because of incompatibilities, have
to be ruled out. Well the total number of unique combinations
is 3x3x4 = 36. But it turns out that once we evaluate each of
these individually things simplify dramatically because many combinations
just don’t work together.

We can choose variants
on Capitalism—which have private ownership, hierarchical production
relations, and markets with more or less government intervention.

Or we can choose variants
on (what I call) Coordinatorism (usually misleadingly called socialism)—which
have collective or state ownership, hierarchical production relations
or formal but unimplimented workers’ control, and more or less markets
or central planning.

Or we can choose variants
on a system we might call Decentralized Community Economics—which
can have any compatible combination of the ownership and organizational
features, but is always organized into in a myriad of small locales
each of which functions autonomously from the rest, self-sufficiently,
without allocation relations among them.

Or we can choose variants
on Participatory Economics—which has proportionate ownership,
participatory council structures, and participatory planning, and
furthers the values we seek.

To get more models, someone has to come up with other
types of institutions or show that some other combination of
the ones we have already enumerated are viable, it seems to
me. This is not an apriori impossible task, to be sure. Indeed,
this book purports to provide the kind of conceptual approach needed to
do it well. But, for now, finding more options is not on our
agenda. (Of course, in a real society, economies don’t exist
in the abstract, as models, but only in combination with
states, kinship spheres, cultures, and so on.).

And thus arise a few “thought questions”
preparatory to moving on to lecture 3:

  • We have deduced the possibility 3x3x4 = 36 different conceivable economic
    systems including unique combinations of the
    components. How come we are able to boil this down to
    only four broad economic types? And why aren’t there
    more than 36 that are conceivable? Or, can you conceive
    of more?
     
  • Who advocates these different models, and why?
     
  • What are the class relations of each of the four
    models and how do they arise from the basic institutions employed?

Judgments

To render judgments on these models is not so difficult as
it might at first seem. We need only assess their basic institutions
for implications vis-à-vis the evaluative standards we
decided to highlight—equity, solidarity, diversity, and
self management. If we are going to be disciplined about this,
as we ought to be, then, if we find that a basic component
institution is bad on one or more of these counts, we should
want to reject it from our preferred economic vision. This is
no different than deciding that amplifiers that use tubes are
too costly, or receivers without FM are too inflexible, or that
speakers that don’t generate enough volume are insubstantial,
and ruling these out on such grounds while moving on to
compose a preferred stereo system from the remaining possible
components. The logic for economies is essentially the same.
Rule out economic components that violate our aims. Build a
workable, desirable economy out of those components that further
our aims by mixing and matching them into a workable whole
system. Nothing subtle is at work here. We consider component ownership options,
production relations options, allocation options, and then we
have the basis for thinking about economies as a whole.

Ownership Options

First, consider private ownership.

We know, and I am not going to rehearse all the evidence
and arguments for want of time, that private ownership means
that capitalists almost exclusively monopolize wealth. But
this is contrary to equity (whatever precise definition we
ultimately give it), and to solidarity (haves and have nots
will not be getting along well), and to self management
(haves will have more say than have nots), and so we simply
have to rule it out as a possible component of our economic
vision.

Another way of saying it would be to say that we
immediately reject private ownership on the grounds that
rather than producing classlessness, it produces class
division with capitalists on top, and class divisions are incompatible with
attaining our four evaluative norms. I know that people spend
lifetimes discussing this, as if there is something
complicated involved. But there isn’t. And since you are
reading a book on conceptualizing economic vision, I will assume
you already know this and not waste a whole lot of time on
the tangential issues, however much fun we might have rehearsing
them.

Next, consider state or public ownership.

Well, we know that under this option the state has
ultimate control over productive property, either directly or
as representative of the public. And even though the state
tells us they will look out for the whole population’s interest,
we know that…

  1. Even if the state did look out solely for the public
    welfare and even if its caste of bureaucrats were
    rapidly rotated and accountable, state influence would
    still not be self-management but management from the
    top down.
     
  2. In fact, if you set aside some group to have major
    powers they will likely develop the means to institutionalize themselves
    and then use their power for their own benefit at the
    cost of society, as in the history of Stalinism, for example.
    Thus there is no equity either.

So it follows that without much ado we can and indeed we
must reject state or public ownership for our economic goal
on grounds that it’s intrinsic authoritarianism thwarts self
management and also equity. You may now be thinking to
yourself, hey, this is too quick, too cavalier, too simple.
But is it? Really?

Go back to the example of the stereo. If we establish some
norms, for example we say that our system has to be able to
hit some notes, or volume, or whatever, and we assess a
possible component and by its very structure and definition
it cannot do what we want, well then, it seems to me we have
no choice. If we are serious about the norms we established,
we must reject the component. Surely if this applies for
stereos, it also applies for economies—more so, if
anything, since so much more is at stake.

Next, we can consider collective ownership.

First, it refers to a situation in which everyone equally
owns every productive unit—though not peoples’ clothes or
houses, etc. This sounds good, but what does mean?

If it means that everyone has an equal say in the
disposition and control of each institution, that would clash
with participatory self management as we have defined it and
thus we would have to reject it. In practice, however, this formulation
of equal say for all in all matters is a bit hard to envision
in any event…

If it means no one has any say or any claims by virtue of ownership,
then this ownership option is essentially neutral, or absent,
with no decision making or distribution implications at all, thus
leaving the economy’s fate to be decided by other features.
So we could certainly employ it, with no fanfare but also with
no loss. It would have no implications for any of the values
we are pursuing or for anything else, for that matter.
(Perhaps we should break collective ownership into the two
options, equal say and no implications for say, but for convenience
I am only going to treat the second, neutral version. If you
would like to address the other version, by all means go
ahead.).

So, what have we discovered about ownership. We don’t like
and can’t abide private ownership or state ownership. We can
abide collective ownership, at least in its neutral sense
(though not with any glee as it has neither good nor bad
implications).

Production Relations Options

First, how about hierarchical workplace structure?

Well, what is it? The idea is simple enough. There is a
hierarchy of status, power, and rewards associated with jobs,
and people fit at different levels depending on the job they
get. Think of a job as a collection of things to do or tasks/responsibilities.
Different individual tasks and responsibilities (take out the
trash, deliver the mail, talk to clients, take orders, put
this ratchet in that slot, design the product, solve
personnel problems, make policy decisions, or whatever)
embody different skill and knowledge prerequisites and cause
the person involved to have to do different things, with
different effects on the person including different
implications for the person’s status, power, and reward.

Now for there to be a hierarchy, in practice it is both
necessary and sufficient that jobs be defined by combining like
quality tasks/responsibilities with one another into
relatively homogenous packages. Thus we get janitors, secretaries,
line workers, managers, engineers, and so on, with jobs that
are differentially empowering and differentially rewarding in
circumstances and also remuneration.

How do we evaluate this option, familiar in nearly every production institution
in the U.S. and the old Soviet Union and every other
contemporary economy as well?

Well, we can see right off that this option offers only
homogenized jobs (and therefore not much diversity), authoritative
decision making from the top (by those with more empowering
work assignments and circumstances), more fulfilling
conditions and more reward for some actors than others
(depending on which quality job you get), and a situation
with those below hostile to those above and vice versa. The
option scores rather poorly, that is, on all our axes of
evaluation.

[Sometimes folks have doubts about the claim that class division actually
reduces diversity. After all, aren’t multiple anything more diverse
than one of the same thing, so isn’t having three or four classes
bound to be more diverse, whatever its other failings, than having
classlessness? Well once we have classes we have large sectors of
people with shared interests, arrayed in a hierarchy of reward and
power. Now a significant part of the existence of each class becomes
defending its niche, so to speak. This means there are powerful pressures
causing all members of the class to adopt certain postures.

Is this real, or just rhetoric?

Well suppose you tell me. Consider music, sports,
entertainment of other sorts, reading material, eating
habits, daily life habits, etc. Are there large commonalties
within classes, and big differences from class to class? Can we
with some reasonable accuracy (actually often pretty high
accuracy) predict people’s tastes and preferences, values and
views, in diverse domains of life, merely knowing their class
affiliation? Of course other factors are at play as well,
including, in the economy, markets, say, but just plain old class
seems to me to have this impact of constraining and delimiting
the options of people in ways that limit and homogenize outcomes,
thus stemming diversity.]

In any event, even without a lot of detailed analysis
(which, however, is very worthwhile to do if you have the time
for it) we can immediately reject hierarchical workplace
structure as not fit for our economic vision since it fosters
class stratification—workers at the bottom and then
coordinators, or then coordinators and capitalists depending
on the type of economy—which is inconsistent with equity,
self management, solidarity, and even diversity.

The second option for production relations we have called formal but unimplimented
workers’ control.

The thing I have in mind here is a system that has in fact
existed, for example in Yugoslavia. In each workplace there
is a council of all the workers which has full authority over
all decisions. The workers, organized into councils, have
ultimate authority. However, we also know that that these councils choose,
for reasons we’ll understand after talking about allocation,
to have homogenized jobs and to hire managers and plant
bosses to rule over work, so the actual result is a
hierarchical workplace structure.

Therefore, despite its formal pluses, in that worker’s
power is at least formally recognized, we reject formal but unimplimented workers’
control for the same reason as we reject hierarchical workplace structure,
because in practice it is a coordinator ruled workplace
obstructing the values we favor. The origin of the hierarchy
is not an imposition from the defined production relations,
but an imposition from the allocation system on each workplace. Nonetheless
in Yugoslavia with formal but unimplimented workers’ control, the
structure of roles in each workplace was only marginally distinguishable in
practice from what exists at a U.S. Ford or a Soviet Latka factory.

So what about balanced job complexes?

We will of course spend considerable time on this option,
later. For now, briefly, the idea is that we combine tasks/responsibilities
into jobs so that each job is comparable to all others for
quality of work experience, status, and particularly for
empowerment implications even though each has its own particular
combination of tasks and responsibilities. And, likewise, we incorporate
an array of workplace councils to facilitate participatory proportionate
decision making.

Balanced job complexes means that:

  1. Every individual regularly does both conception and execution
    in a balanced combination so that she or he is prepared
    to participate effectively in decision-making; .
     
  2. No individual long occupies positions that present
    unusual opportunities to monopolize influence, knowledge,
    or skills relevant to general decision-making; and
     
  3. There is an equal distribution of the costs and
    benefits of work.

And nested council democracy means…proportionate decision-making
and a sensible approach to meetings and time in general.

So, assuming we can fill it out and substantiate our
claims for it, balanced job complexes will be a worthy structural
choice for production (and also consumption) because it is by
its very definition and by the dynamics it imposes fully
self-managed, capable of diversity, equitable in job assignments, and
compatible with material equity and solidarity, assuming, that
is, that we can also build those features into allocation.

Balanced job complexes are, moreover, a classless
choice—with no difference in power/reward and no class difference
among actors in workplaces—and it therefore a good one
for our new economic vision, again, supposing we can make it
work in its own right, and along with viable, compatible allocation
institutions.

Allocation

First we ought to consider markets, though to deal with
this matter in any kind of detail would tax available time and
energy. What do we mean by markets?

  • That all goods, including labor are bought and sold
    for prices set competitively.
     
  • That each actor tries to maximize his or her own gain
    and that no actor can advance without it being at the competitive expense
    of some other actor.
     
  • That decisions are all made in light of immediate
    effects on personal well being for consumers and institutional
    profit for producers—since to do otherwise is to
    suffer unnecessarily as a consumer or risk being competed
    right out of business as a producer.
     
  • That since workplace decisions are purely technical,
    seeking to maximize revenues minus costs, and do not take
    account of the social needs of workers or of the
    community or even of consumers, they are best left to administrators.
    (In other words, even if workers have power, they
    will cede it to a class of coordinators, as in
    Yugoslavia, via what we have called formal but
    unimplimented workers control, rather than preside over decisions
    to oppress themselves.).

Moreover, we know both by our ability to analyze their
intrinsic dynamics and by looking at history that as a result
of the operations of markets, a market economy inevitably
has:

  • Commodity fetishism—wherein decisions account
    for prices of things but take little account of social relations
    between people.
     
  • Antagonistic roles—wherein I get ahead at your
    loss and solidarity is destroyed.
     
  • Anti-social bias—wherein goods are inevitably
    mispriced such that those which benefit groups are
    under valued and thereby under produced, while those
    that help individuals but at a cost to non-buyers are
    over valued and thereby over produced, all leading to
    an anti-social pattern of production and investment
    and an ensuing personality development that is individualist
    in the narrowest sense.
     
  • Workplace hierarchy—wherein a coordinator class
    or perhaps a coordinator class and a capitalist class dominate workers.
     
  • And ecological decay—wherein resources are
    undervalued, pollution and other environmental degradation is
    minimized, long term effects are left out of
    decisions, and of course independent ecological
    criteria can never be taken into account unless they
    are consistent with simple profit-maximization.

Though there are other problems as well, on any of these
grounds, which sound abstract when presented so succinctly
but yield the kind of depravity we see throughout our
society—poverty, profit-seeking, homelessness, greed, anti-social
individuality, unemployment, a few percent of all people
owning grossly disproportionate wealth, ecological disasters,
and so on, and which obviously conflict with all four of our
guiding evaluative criteria—we can reject markets as an
allocation system for our visionary economy.

And now we have some thought questions, based on the discussion
to this point.

  • Explain structurally how markets impact on people’s personalities
    and preferences?
     
  • Do markets deliver what we want, or do we want what markets
    deliver, and what difference does it make?

Next, we need to consider central planning. Well,
right off we know that.

  • Central planning is a system whereby planners (coordinators)
    in some sort of central planning board determine
    prices and amounts to be produced in accord with a
    socially decided set of criteria, or, more often, their
    own whim and interests.
     
  • And that under central planning, in order that the
    workplaces can be dealt with by the planners and to
    have someone accountable in each, the planners extend
    themselves out into the workplaces as a layer of managers, engineers,
    etc.—the rest of the coordinator class.

And we also know that as a result of the operations of
central planning, a centrally planned economy inevitably has:

  • authoritarianism—wherein down go orders, up comes clarification
    of potentials, down go new orders, and up comes obedience.
     
  • alienation—wherein, as with markets, there is no way for
    anyone to account for anyone else’s social circumstances, only prices
    are available for judgment.
     
  • not self-management in proportion to effect—since even if
    the planners used a vote to set the criteria by which they plan,
    at best that’s one person one vote which is a far cry from my having
    more say in what effects me more and less in what effects you more.
     
  • Investment to enhance coordinator power and wealth—with an
    emphasis on centralism, large-scale, and high tech—regardless
    of effects on others and on the ecology.

Again it sounds pretty abstract, but in practice it is the
disastrous dynamics we saw in the Soviet and other Eastern
Bloc economies, and so, I think we can reject central
planning too.

So what about complete decentralization and no
allocation among separate locales?

For now, let’s leave this one as an exercise. How do we
evaluate it? Each region is separate and self sufficient. Economic
relations are deduced to community barter, with no
significant allocation system to speak of. How does it
measure up by our values? Equity, Solidarity, Self
Management, and delivering the goods efficiently.

What’s left is Participatory Planning.

We are of course going to spend considerable time conceptualizing
this last allocation option later in the lectures, but, for
the sake of completeness, and with comparable brevity, we know
that it embodies.

  • A network of nested councils for consumption and production
    units, industries, neighborhoods, regions, etc.
     
  • Facilitation boards to assist in data handling.
     
  • Qualitative information and prices that reveal the
    true social costs and benefits of alternative choices.
     
  • Remuneration according to effort which, along with
    balanced job complexes insures comparable consumption
    bundles and material conditions.
     
  • A generalized and ultimate interest in the societal
    pie and improved average work conditions even beyond one’s
    local circumstances.
     
  • And an iterated planning procedure in which units communicate
    their desires back and forth for a number of rounds
    of revision arriving at an agreed social plan.

In participatory planning workers and consumers express
their desires, efficiently modify them in light of ever fuller
information concerning their implications for others, and
finally, democratically settle on an equitable plan.

Social interaction permits all actors to evaluate the full
social burdens and benefits of their own and other people’s
proposals.

Consumption and work equilibrate as consumers discover
whose requests require more than average social sacrifice,
and workers discover who is proposing to shoulder less than
average social burdens.

Each participant influences decisions in proportion as he
or she is affected by them.

Allocation involves a new social, iterative procedure that
differs fundamentally from central planning and markets.

Each council assesses past experience and an accumulated
record of prior planning to estimate the kinds of efforts others
would have to expend to provide a proposed list of inputs,
and the uses to which others could put a proposed list of
outputs, and then makes its own initial proposal.

After seeing all initial proposals, each council gets new information
about the human effects for others of different options. New
estimates of the social values of goods in turn facilitate revising requests
until a workable plan is achieved.

In a nutshell, the procedure whittles down from an
incompatible set of optimal desires to a mutually compatible group
of economic choices in two ways.

  1. Pressure is
    brought to bear on consumers requesting more than others and on
    producers proposing to work less than others to make their proposals
    more equitable.
     
  2. Revisions of
    the valuations of goods induce actors to shift away from using scarce
    resources and goods burdensome to produce toward using more plentiful
    resources and goods less burdensome to produce.

Both kinds of whittling move us from incompatible to
compatible proposals. The first kind promotes equitable outcomes
and the second promotes social efficiency.

Some questions arise:

  • If the above is an account of participatory planning,
    what might be our evaluation of it by our criteria—or what questions
    about it do we need to answer (design) to evaluate it?
     
  • How do we evaluate capitalism as we know it in the
    U.S.
     
  • What about social democracy (and what is it, compared
    to the U.S. economy).
     
  • What about a market, state ownership, formal
    workplace democracy system (sometime, wrongly, called market socialism,
    more aptly called market Coordinatorism, I think).
     
  • What about a centrally planned, state ownership,
    hierarchical workplace, Soviet style economy (or what
    I call Centrally Planned Coordinatorism)?
     
  • What about a Green decentralized economy?
     
  • And why might we have hope for something better than
    the above options?

 

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