Tflec9

Thinking Forward

Lecture 9:
Evaluating Economic Vision and Contextualizing Economic Aims

In this chapter, as usual, I will start by providing some
answers to previous questions, and then move on.

Answers to (Some of) Lecture 8’s Questions

I said, last lecture: “Participatory workers must be
able to weigh the gains from working less or employing less productive
though more fulfilling techniques, against the consequent
loss of consumer well- being. Participatory consumers need to
be able to weigh the gains of a consumption request against the
sacrifices required to produce it. Participatory workers must
be able to distinguish an equitable work load from one that
is too light or too heavy. And participatory consumers need
to be able to distinguish reasonable consumption demands from
ones that are unreasonable or overly modest. Finally, all
actors must know the true social costs and benefits of things they
demand or supply, that is, all the nonhuman and human,
quantifiable and non-quantifiable consequences of their choices,
if they are going to participate in informed collective
self-management.”

  • Is this acceptable? Does this seem like an accurate
    accounting of what is needed to have a good allocation communications
    system? Do you have different ideas for an economy
    you would like?

Yes, it seems to me like an accurate accounting. I have
few ideas beyond what is in the books… In fact, when I think
about it I realize that since writing them, while I have
spent much time answering questions or reacting to confusions and
criticisms, I have had almost no time to spend thinking about enriching
the vision, or refining it, or augmenting it. Strange. But
then why shouldn’t others do that, in any event?

  • What are prices for, in any economy? What do we do
    with them? When are prices useful and worthwhile? What
    attributes make some prices harmful? Why do we call
    our prices “indicative prices” instead of
    simply prices?

Prices are to provide information to help actors make
choices as part of the allocation process, it seems to me. We
register them, and then make our choices in light of
implications, in part clarified by knowing prices.

Prices are useful and worthwhile when they help us make
decisions that truly reflect our desires and capacities and
accurately account for those of others, and broader
implications. Prices are better or worse, therefore, to the degree that
they convey an accurate (if very summary) representation of
the relative costs and benefits of options. They are less
useful, the more they misrepresent these, They are harmful
when they systematically and inexorably misrepresent, particularly
if always in the same direction, as with the way market
prices misrepresent externalities, social goods, etc. etc.

We call our prices indicative to emphasize that they are
information which we utilize alongside other information, and
that they are products of a social process designed to
provide useful information and not a power struggle designed
to have winners and losers.

I said, last lecture: “So, without engaging in undue
mystification, we should remember that estimates of social costs
and benefits with any claim to accuracy must arise from
social, communicative processes. The trick is to organize
these processes so people have no incentives to dissimulate regarding
their true desires, and all have equal opportunity to
manifest their feelings. It is precisely because our
participatory planning process is different from the flawed
communicative processes of market and centrally planned allocation
that the prices to which it gives rise will be different as well.”

  • What the hell does the above paragraph mean?

Well, I guess it means what it says. I am not sure I can
answer this one either…If prices emerge from a process that
is supposed to allow each actor to express their preferences
and desires and have these accounted for proportionately as
the actor is affected, then it is key that the process gives actors
no reason to misrepresent themselves and provides them every
means to know their own true interests and feelings. We claim
parecon has these qualities. If it doesn’t, then it needs to
be corrected, or replaced…

I also said: “The idea is that qualitative
information is necessary if quantitative indicators are to be kept
as accurate as possible. But qualitative information is also
necessary to develop workers’ sensitivity to fellow workers’
situations and everyone’s understanding of the intricate
tapestry of human relations that determines what we can and
cannot consume or produce. So both to assure accuracy and to
foster solidarity we need a continual, social resetting of
prices in light of updated qualitative information about work
lives and consumption activity. Thus, the cybernetic burden
of a participatory allocation procedure is considerably
greater than for non-participatory economies. Not only must a
participatory economy generate and revise accurate
quantitative measures of social costs and benefits in light
of changing conditions, but it must communicate substantial qualitative information
about others’ conditions as well.”

  • What is different about this view, and the one
    typical of our own society? Is the above view okay
    with you?

In our society the qualitative information that is passed
in the allocation process (in market exchanges) has as its purpose
getting someone to do something regardless of the merit of
their doing so. Thus we have ads aimed at getting someone to
buy something, regardless of their need for it. The goal
isn’t helping someone to do what they wish, in light of true
knowledge, etc. It is getting someone to buy, regardless of
whether it will help the person, pleasure them, or whatever.
Thus ads are generally manipulative, full of lies, and so on.

Notice: In parecon producers never want people to purchase
what they produce other than if they are really going to
benefit from it. There is no incentive to want to increase
sales, per se…

(Think about book publishers now. What do they care about?
Number of books sold, or impact of the books? Well, what does
the best seller list measure…)

And I said: “In short, participatory planning can
obtain a reasonable first estimate of effort expended by
counting labor hours because people’s job complexes have been
balanced. These estimates can then be revised in light of effort
intensity ratings by one’s work mates. In attempting to gain consumption flexibility,
only unbalancing job complexes is prohibited.”

  • And what does that mean, in practice? And is it
    acceptable to you?

I think what it means in practice is what I describe in
theory, with a degree of practical flexibility. And yes, it
is quite OK with me…

And I said: “To guard against `reductionist
accounting’ each actor needs access to a list of everything that
goes into producing goods directly and indirectly, and a
description of what will be gained from consuming them.”

  • Why? And under what conditions do we need this? How
    often? What does this information look like and how
    is it to be communicated? What is going on here,
    methodologically, in trying to figure out a vision?

In fact, I think the sentence is overstated. We need to be
able to do this, and to do it often enough so we are in touch
with the reality of production and consumption and how it
works and its broad effects, and the real meaning of the
numbers we call indicative prices, and so on. But we don’t
need to do it for every item, and all the time.

It is really a kind of general learning process, on the
one hand, developing knowledge of the economy, and a procedure
for checking things out when one’s inclinations and prices or
requests seem out of whack and one wants to know why, in more
detail.

I think the info is qualitative, descriptive, and is
communicated in words by telecommunications, of course. What is
going on, methodologically, is we are trying to figure out
what kinds of structural processes, steps, information, etc., must
be utilized for allocation to have the properties we want for it.

  • What is a council? Of what use are they? What kind do
    I propose we have in a good economy? Do you agree or
    not, and why? How diverse can they be in their
    structure? What constraints operate on them? Are councils part
    and parcel of real participation and democracy, or an obstacle
    to it?

A council is a set of relations among a bunch of people.
They allow bunches of people to make collective decisions
that are not simply the sum of each person’s individual
decisions. Thus, for example, decisions about workplace organization,
say, or collective goods consumption. I propose that we have councils
that are effective means for arriving at group decisions in
ways compatible with our overarching values–solidarity,
equity, self management, diversity. There are many different ways
to attain this, I suspect, and choosing among them may be largely
a matter of the size and role of the council, of the preferences
of its members, of the types of decisions under review, etc. Councils are
an essential ingredient of real democracy, it seems to me.

  • What is a facilitation board? What do they do? Why?
    Are these functions necessary? Is there a better way
    to get them done? What requirements do we need to
    place on institutions that facilitate planning? Who
    would work in them? With what perks and problems?

A facilitation board is a workplace whose product is
information and data useful for people trying to participate in
the participatory planning process. Therefore, facilitation
boards amass data and present it in accessible format. I think
the critical requirement of these institutions is that they
function within the norms of the economy, consistent with its
values, etc. One could imagine additional requirements, but I
doubt any additional ones are necessary because I do not see
any compelling way for people working in these institutions
to aggrandize themselves at the expense of others. People would
work in them who wanted to. The perks and problems, as with any
other workplace, would be those associated with the tasks
involved in the work. The workers would have balanced job complexes,
of course.

I said “each consumption actor proposes a consumption
plan.” I also said “Similarly, each production “actor” proposes
a production plan.”

  • Fine. Who are the “actors” and what
    constitutes such a proposed plan? Is there a better
    way to go?

Consumers and consumer units and councils, and likewise
producers and producers’ units, councils. I like it…

  • How do the consumers’ first proposals likely compare
    with the producers’ first proposals? Why? What would
    we think if what was proposed as output was greater
    than what people said they wanted for input? What is
    to be done about discrepancies? Does participatory planning
    seem like a sensible approach? Would it be better to
    circumvent the hassle via a central planning approach,
    or a market approach?

Consumers first proposals should seek more than producers
first proposals offer to produce–because both are supposed
to ask for their ideal preferred options. I would think that
people were curbing their requests unduly, and exaggerating
their desires to work unduly, if we had opposite outcomes.

Discrepancies are reduced by way of the allocation
planning process. That is its purpose. The problem with the central
planning approach is that even if we assume a benign planner,
with omniscient insight into what is needed, we still don’t
have people making decisions in proportion as they are
affected by them. In practice, of course, a central planner
with disproportionate powers will be neither benign nor
all-knowing. The problem with the market solution, however
competitive, is that it arrives at answers by a process that
is biased in various ways (for example, against public goods,
etc.) thus yielding bad outcomes, as well as denying
proportionate say…

The additional problem is that in practice both these
modes of allocation produce class division…

  • What does it mean to say that to start planning for
    this year, workers and consumers councils “access relevant
    data from last year”? Why? How does this help?
    What pitfalls are involved with taking this approach?

It means we have knowledge of last year’s plan to use as a
starting point in thinking about what we wish to do this year.
We can modify in light of changes in technology, population,
our own tastes, etc. The problem is we could have a mistake
last year affect this year, and then affect next year, etc.

  • Why do they next “receive information from
    facilitation boards estimating this year’s probable changes
    in prices and income in light of existing knowledge
    of past investment decisions and changes in the labor force”?
    Are there problems with this?

We know our budget from last year. We get info that lets
us figure out what it would be with the same level of work
this year… Then we can make intelligent decisions about
whether we want to work the same level, more, or less.

And why do “they receive information from higher
level production and consumption councils regarding long-term
investment projects or collective consumption proposals
already agreed to in previous plans that imply commitments
for this year”? Also, does this mean there is some
center making decisions for everybody else?

Part of my income is spent on collective goods. I need to
know this both because it reduces the amount left to spend on
individual items, and because the content of the collective
goods consumption affects what I need/want individually. If I
have a ball field coming to my neighborhood, or a gym or library,
it has implications…

  • What are they learning when “by reviewing
    changes in their own proposals made during last year’s
    planning they assess how much they had to scale down
    their consumption desires or their plans to improve
    the quality of work life, and look to see what
    increases in average income and improvements in the
    quality of average work complexes are projected this
    year over last”?

People are learning what is possible, what is desired, and
how they match up, for others, and for themselves.

  • How do the actors develop proposals for the coming
    year? What do they take into account? What calculations
    and judgments do they engage in?

I figure my desires and tastes against my preference for
leisure time, against knowledge of changing prices and budgets.
I create a new proposal for this year by amending/adapting
and altering last years, I would think. I am calculating what
my budget is, how much I (everyone) want to work, how much I
want different possible items, and so on.

  • What degree of detail does a proposal embody?

This is a subtle question. Statistics are powerful things.
Suppose we know the demand for shirts. Can we then calculate
how many of each size and style, based on past knowledge?
Suppose we know the demand for nuts, grossly. Can we then
calculate details? And so on. Much of the detail of daily consumption
does not need to be arrived at in the global plan. The more
so as an economy is intentionally structured to reduce the
need for details…

  • With the first proposals in, how do we know whether
    they constitute a plan or not?

Does amount desired match amount proposed to be produced,
for every good, within an acceptable fudge factor level?

I said “The need to win approval from other similar
councils forces councils whose per capita consumption request
is significantly above the social average to reduce their
overall requests. But the need to reduce can be alleviated by
substituting goods whose indicative prices have fallen for
those whose prices have risen. Attention focuses on the
degree to which units diverge from current and projected
averages, and on whether their reasons for doing so are
compelling.”

  • Is this good? Why or why not?

Yes, I think it is precisely what’s needed. It is a kind
of dynamic process, a pressure, that causes all the actors in the
system to move their proposals toward a stable plan. And yet,
each is continually guided by ever more accurate information,
and his or her own preferences.

And I said: “Similarly workers’ councils whose ratios
of social benefits of outputs to social costs of inputs were lower
than average would come under pressure to increase either
efficiency or effort, or to explain why the quantitative
indicators are misleading in their particular case. Before increasing their
work commitment, workers would try to substitute inputs whose
indicative prices had fallen for inputs whose indicative
prices had risen, and substitute outputs whose indicative
prices had risen for outputs whose indicative prices had
fallen.”

  • What does this mean? Does it seem positive or
    negative to you?

It is just an elaborate way to talk about trying to get
some job done at the least cost. Yes, it seems positive to
me, given that the quantitative indicators employed account
for all social affects.

  • What is a planning iteration, and explain why parecon
    does or doesn’t converge (a) to a plan, (b) to outcomes
    that are desirable? Suppose in practice it seems to
    converge too slowly. What would be your reaction?

An iteration is just a round of “bargaining” or
negotiating in the planning process. The system converges
because at each step all actors have information and
constraints/incentives to move toward convergence. If it is
too slow, we would need to find ways to speed the process,

without subverting its virtues. But for me “too
slow” is relative and I would think a reasonable amount
of time given to planning economic life would be quite
acceptable, especially given the reduction in time needed for many
many tasks thereby eliminated from economic life.

Evaluating Parecon

I think this is really not for me to do. And my intention
when outlining the course was that the class would do this, based
on methods and lessons learned, and their own inclinations.
Let me simply provide some minimal guidance.

Evaluating any economy means describing one’s
criteria of value, and then determining to what extent
the economy fulfills these. For example, suppose one is most
concerned about ecological sanity, or equity between
races, or—well—whatever. Then one assesses the
economy asking how its dynamics fulfill or deny the
values in question.

Also, one might compare the economy to others, on the same
axes of valuation.

If you want to undertake this “assignment” for
parecon, for example, I think it entails deciding what you
value, what you want an economy to accomplish, and then
assessing whether parecon measures up, in general, and compared
to other economic models, by examining its core institutions
for production, consumption, and allocation and determining
their implications vis-à-vis the values you favor.

Economic Vision in Society

If you think about what we did for the economy, this topic
is actually conceptually just an extension. We thought about
some basic defining features—production, consumption,
allocation. We established goals for each but also knew that
whatever choice we made for any one feature had to be compatible with
choices for other features.

Thus, the needs of production and what it provides, have
to fit the needs of consumption and what it provides, have to
fit the needs of allocation and what it provides. And this
has to be true not just for the flow of material goods, say, or
even labor, but also for types of consciousness, skills,
values, and so on. You can’t have workplace democracy and
councils and balanced job complexes in each production unit
if the production units exist in context of a market or
central planning allocation system that creates class
division. You can’t have participatory planning with
equitable remuneration if you have workplaces that are
organized hierarchically, thereby creating class interests. To
return to an earlier analogy, this is like trying to put
together a stereo from components and picking speakers and an
amplifier which are mismatched in that the speakers require
more power than the amp can deliver, or the amp delivers too
much power for the speakers to handle.

The same holds for the defining features of a society. We
can decide on aims for an economy, but we must also recognize
that our economy has to intertwine with a kinship sphere,
cultural sphere, political sphere. And each of these has to
be at least compatible with the rest. It can’t be that one critical
side of life requires attributes squelched by others, or that
one produces attributes contrary to others.

Knowing one sphere, we can’t deduce the rest. But we can
come to some conclusions about attributes other spheres must
have to be compatible. So, knowing that we want a parecon, we
can deduce some qualities that other spheres will have to
have to be compatible with the economy. And the same holds the
other way, too, if we develop a vision for other spheres of
social life.

So here are my questions, as a way to guide, provoke
conceptualizing on this axis.

  • What are some goals you would like to see attained by
    a revolutionized kinship sphere. What implications would
    this have for an economy, and is parecon compatible?
     
  • What are some goals you would like to see attained by
    a revolutionized cultural sphere. What implications would
    this have for an economy, and is parecon compatible?
     
  • What are some goals you would like to see attained by
    a revolutionized political sphere. What implications would
    this have for an economy, and is parecon compatible?
     
  • Finally, what implications do you think having a
    parecon has for accompanying kinship, cultural, or
    political spheres?

 

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