A few days ago, Michael Albert’s reply to my critique of parecon in the October issue of “Communist Voice” was posted on PEN-L. It was a long statement that covered many points, and I am going to respond in several parts over the next week or two, posting each section of my reply as I finish it.
My critique of parecon in “Communist Voice” is divided into two articles. One is devoted to the overall assessment of parecon, and even includes some admissions by pareconists themselves concerning some of the sore points of parecon. The other is devoted to outlining the structure of parecon. Both articles are based not only on a study of Albert’s new book “Parecon: life after capitalism”, but on a number of Albert and Hahnel’s earlier works and some articles by other pareconists.
Albert however didn’t take the time to make an overall assessment of the criticism I presented. He examines only my article on parecon structure, and even that article he only deals with superficially. For example, he writes that he doesn’t know how I came to my view that, during the parecon planning process, most people don’t get much say on the big issues of the economy, that the facilitation boards (committees of experts) play a major role, and the preparation of the annual parecon plan is a long grueling process. Yet the article contains a description of preparation of the annual parecon plan — with its five-round and seven-round iterative systems and its restrictions on who is allowed to propose what and at what stage of the process. It is this description, based on procedures that Albert and Hahnel specified in their writing, that leads to my conclusions about the nature of parecon planning. He doesn’t challenge my description
– he just ignores it. Similarly, he says that he doesn’t have the faintest idea of why I say there is a central bank in parecon, but he ignores my discussion of the parecon financial system.
Nevertheless Albert’s reply raises many issues of interest, and it will be worthwhile to examine them in some detail. I will begin now by recalling how parecon relates to other anarchist proposals, and then I will list some of the subjects I intend to deal with in other parts of this reply.
Parecon promotes itself as an anarchist vision, but it is not only directed against state-capitalist economic systems, but also against anarchist localism. Many anarchists believe in a system of autonomous collectives linked by simply by mutual aid and solidarity without any overall institutions. Such a system doesn’t provide, in practice, the necessary overall direction of the economy and connection between different collectives. This was shown, for example, in the Spanish Civil War, even though the CNT union confederation was anarcho-syndicalist and believed, in theory, in a certain overall direction of the economy. In practice, the CNT’s recognition of the need for overall planning was too weak, and the ideology of its members so focused on autonomy, that this didn’t work out. (See my article on the economic experience of the Spanish Civil War at www.communistvoice.org/10cSpanishCivil.html, which cites, among other things, the complaints of a CNT commission itself concerning the failure of the collectivized enterprises in Barcelona to coordinate their efforts.)
However, in his book “Parecon: life after capitalism”, Albert is careful how he expresses his opposition to anarchist autonomism, as he doesn’t wish to upset the adherents of other anarchist trends too much. He seeks to sort of slide them over into parecon, rather than giving too close a look on its basic economic structure. This is why he seeks to downplay the role of centralism in parecon, brushing the mechanism of this aside as mere technical details. Similarly, it is why he downplays the the role of the government apparatus in the parecon scheme, saying that he is only talking about economics, or even hinting that parecon might be compatible with a whole range of different ideas about government. Along these lines, the pareconist Brian Dominick, in an article posted on the official parecon web site, writes that “In addressing anarchists on the question of parecon and the state, it’s important to note that advocates of parecon are not necessarily in total agreement on these questions.” (“ParEcon, Anarchy and Politics”, paragraph 3, at www.parecon.org/writings/brian_state.htm) In his reply to me, Albert makes a big point about separating economics and politics. But it is this diplomacy towards the anarchists, not the supposed difficulty in discussing politics and economics in the same book or article, that leads to Albert’s peekaboo on the question of the state. Indeed, one really can’t divide parecon politics from parecon economics into two self-contained, separate compartments. The politics flows from the economic vision; a certain political structure would be required by a parecon economy.
What I did in my article on the structure of parecon was bring out various features of parecon without evasion. I tried to give readers an overall view of parecon structure, which is not easy to get from any single parecon article or book. In this way, I hoped that I would help other activists, even those who very much disagree with my political standpoint, judge parecon for themselves, without having to spend as much time in research as I did.
A study of the overall economic structure of parecon will show that, while Albert seeks to avoid both anarchist localism and Stalinist bureaucracy, he instead borrows key features from anarchist localism, Stalinist bureaucracy and market-socialism. He proposes a system which, if it could actually be put into practice, would create the ironic situation of a society centered on a plan, and yet subject to marketplace forces and financial planning.
In my subsequent replies, I intend to deal with the following issues:
The first part will deal with the issue of the parecon overall plan. In his reply to me, Albert seeks to downplay the extent of parecon centralism and make a distinction between the annual parecon plan that governs the entire economy, and centralism. He argues, in essence, that the fact that parecon has an overall annual economic plan doesn’t mean that it has central planning because, in his view, every society — even the free-market ones — have an overall annual plan and “a final list of inputs and outputs” for each year. He claims that the only difference between different economies is how their annual plans are prepared.
Albert repeats this astonishing assertion about the universal nature of overall planning several times. This flies in the face of reality. It obscures the massive divide between a planned economy and one subject to the anarchy of production. It obscures the need to consider the requirements necessary to actually have a planned economy, and is thus one of many thing that casts doubt upon where parecon could ever be implemented as the economic plan for an entire region.
Albert’s argument also slurs over the need for desirable types of planned economies to have such safeguards for people’s rights as respecting the divide between purely private interests and public interests, because allegedly the parecon plan automatically respects everyone’s interests and takes account, to the maximum extent feasible, of everyone’s desires and preferences.
In the second part I will deal with the issue of how far the mass of the population actually have a say in the major features of the annual parecon plan. He takes issue with my statement that parecon “is a planned economy, but whether it is a wisely- planned or democratically-planned economy is another question. It is `participatory planning’ at its worse: everyone has some say on some little thing, but most people have almost no say on the big issues facing the economy and society.” But he doesn’t show how people really would have input on the big issues.
In fact, in Albert and Hahnel’s writings, they frequently give examples of how workers at a particular enterprise might arrange their affairs. This is of course an attractive idea, but it is not one which is particular to parecon. What they don’t show, is how the general population will determine the major overall issues of the economy. As the staff of a particular workplace, workers only get input in matters relating to their workplace and occupation. As members of local consumption councils, consumers are focused on preparing their annual consumption plan and the neighborhood’s social services. The iterative bidding system for preparing the annual parecon plan, a system which Albert and Hahnel regard as their special contribution to the project of developing decentralized planning, makes it difficult for people to put forward, argue for, and express preferences for, the major projects facing the economy and the society.
The question of the parecon planning system being of some importance, I will return to it in the third part of my reply. Albert denies the process of preparing the parecon plan is a long, grueling one. So I will go into more detail about the descriptions in Albert and Hahnel’s works of the various 5-round and 7-round processes used.
These descriptions deserved to be more widely known about people thinking about parecon. Naturally there is no trouble in a workers council at a some enterprise deciding some issue which affects only them. But if you look at the process involved in setting the overall social plan for a parecon society, it is tedious and bogged down in trivialities.
In the fourth part, I will take up the question of whether parecon uses financial methods. Albert denies that the central parecon institution which has everyone’s financial accounts is a bank; that the parecon “cost-benefit ratio” has any resemblance to a profit rate; that parecon buying and selling constitutes a market; and so forth. But in reality, parecon economy embraces both a plan and a market, and in that sense owes a good deal to market-socialism. This becomes clear if one traces the economic cycle in parecon, such as the cycle of money. In parecon, planning is done in financial terms, economic units exchange goods in financial terms, and enterprises have to maintain positive balances in the central bank, on penalty of possible dissolution. I will go over the evidence for this, making use, as my articles do, of the description of parecon economics given in Albert and Hahnel’s books and articles on parecon.
In his reply to me, Albert quotes my statement that he and Hahnel believe that, if prices are set properly, then they “will be an adequate tool for planning to ensure the balancing of supply and demand, ecological improvement, efficient operation, moral principles, and the satisfaction of personal desires.” He agrees with this, “save for some subtle points about needing to recheck and recalibrate [prices] repeatedly” and “assuming, that is, that the prices are being used via an institutional framework” the operates according to parecon principles. This means that parecon planning aims to set up price-guided mechanisms to accomplish its social aims.
But Albert denies that such price-guided mechanisms have anything in common with capitalist financial methods, and he averts his eyes from the financial cycles in parecon. He thinks that price-guided mechanisms have nothing to do with marketplace methods since parecon institutions are run by workers (beg pardon, workers and consumers), and not capitalist stock-owners. In effect, Albert believes that the capitalist financial methods are fine, provided they are directed by workers and consumers. But in fact these financial methods inevitably tend to reproduce marketplace results.
In the fifth part I will take up whether there is an alternative to these financial methods. Albert argues in favor them (of course, he doesn’t call them financial methods), on the grounds that they are necessary to ensure efficiency. He thus regards it as completely ignorant, if not insane, to imagine that one can ever do away with these financial methods, and insists that “no sane system” can do away with them. He holds that if enterprises don’t measure their success in monetary terms, and calculate the renamed profit rate, they would simply produce goods that no one wanted, be inefficient, etc. This is a similar claim to that of the market-socialists.
However, the market-socialists openly defend the need for markets and marketplace methods, while Albert defends the market by claiming that the parecon market isn’t really a market, the parecon bank really isn’t a bank, and so on.
Indeed Albert displays blank incomprehension that they can be any economic calculation other than financial calculation. He won’t argue this point. It is just simply obvious to him. But in fact the economic experience of the last century development shows that there are indeed other methods of economic calculation that have received a certain stunted development even with the bosom of capitalism and state-capitalism themselves. These methods aren’t socialist economics, but they do show that the needs of an advanced economy go beyond the type of planning that can be provided by money or any single universal index. I wrote about this in an earlier series of articles on economic calculation under socialism. This series points out that neither money, nor a reformed money such as a direct calculation of labor-hours, can provide a rational system of economic calculation. (See especially part two of this article, at www.communistvoice.org/26cLaborHour2.html, which deals with the Soviet method of “material balances” and the late Prof. Leontief’s method in the West of “input-output
In the sixth section, I will go into the question Albert raises of whether, in a parecon economy, anyone can benefit at the expense of others. Albert makes a big deal that his method aren’t really financial methods because no one can benefit. I gave examples in my articles in my article to show that inequality can develop, and that some economic units will have an incentive to behave in ways that harm the overall economy. I will go into more detail on this issue.
In part seven I will go into some questions concerning government and the relationship of economics and politics. Albert raises that a wall between economics and politics, and between parecon and the issue of government. He waves away several sore points in parecon on the grounds that they supposedly don’t concern economics. In fact, politics and economics can’t be neatly separately in this way, and a parecon economy requires a certain political structure or it can’t exist. For example, Albert says “adjudication” of disputes is a separate issue from the parecon economy itself. But to say that every person has an influence over decisions precisely to the degree in which they affect one, but then say nothing about how one “adjudicates”
disputes over how much a decision affects one, makes the general concept of parecon decision-making into a farce.
Finally, I intend to end with some comments on parecon “balanced job complex”.