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Parecon Review


Review of Parecon


By Chris Spannos



“Life After Capitalism”, the phrase catapults the imagination into visions of what a good society might look like. It’s also the title of Michael Albert’s latest book in which he outlines a vision for a ‘participatory economy’. As Noam Chomsky says, Michael Albert’s work “merits close attention, debate and action”. Albert’s book proposes radical transformation, and has far reaching implications. From anti-corporate globalization activist’s rejection of vast disparities in wealth and power, to the World Social Forum movement’s demand that “Another world is possible!”, Parecon is an important contribution to the broad efforts working to change the world. Whether an economist, activist, or someone simply interested in these issues, Albert’s clearly written style, depth of information, well organized format, and easy to understand logic will appeal to a wide audience.



Michael Albert is a longtime activist, speaker, and writer. He is coeditor and cofounder of Z Magazine, ZNet, and South End Press, all world renowned contributions to diverse Left literature, thought and activism. He has written numerous articles and books, many with Robin Hahnel, professor of political economy at American University in Washington DC, with whom Albert forged the participatory economic vision.



Drawing a thumbnail sketch, parecon generates a feasible and desirable economic plan that distributes the burdens and benefits of social labor fairly. Participants have decision making input in proportion to the degree they are affected, human and natural resources are used efficiently, providing a variety of outcomes, and human potential, which might otherwise lay dormant, is universally explored.



“Parecon: Life After Capitalism” is born out of numerous efforts. As Albert indicates, it “emerges from many engagements over the years and reflects lessons from actual experience with work life, teaching, organizing, public speaking, dealing with questions in online forums on ZNet, and of course trying to work through the model in new ways as new insights, questions, and explorations arise.”



His previous writings on economics have challenged, head on, the foundations of economic theory, it’s weaknesses, and spelled out possible ways forward. Of all his writings, two works in particular deserve attention here. In 1991 Albert, with Hahnel, published two complimentary texts simultaneously, “Looking Forward: Participatory Economics for the Twenty First Century” (South End Press), a comprehensive and detailed outline of their ideas, and second, “The Political Economy of Participatory Economics” (Princeton University Press), a technical application, of the same ideas, aimed at economists.



Published in the wake following the collapse of the Soviet Block, these two books directly challenged determinist declarations of “the triumph of capitalism”, and assertions that we had reached “the end of history”. They cast off the Thatcherite ideology claiming that “there is no alternative” (TINA), and instead of expressing defeat or consent these two books pushed for a vision of a participatory economy. As Albert says, “Parecon: Life After Capitalism” “is my best effort to motivate, describe, elaborate, and defend the vision.”



Parecon is an economic vision which, as Michael is always quick to point out, is only one piece of the puzzle. He hopes others will contribute to the vision by elaborating complimentary community, culture, kinship, political, and ecological visions. Though it is a vision of the future, parecon is in the tradition of libertarian Left and popular social movements, of past and present. In his introduction Albert clearly sees a connection between the Paris Commune, Anarchists in the Spanish Civil War, and the Australian “Green Bans” of the past. He also points to the similarity of contemporary experimentation with participatory budgeting in Porto Alegre, Brazil, and Kerala, India. Interested readers should also note that there are a number of self conscious experiments using parecon principles within the workplace in Winnipeg, Boston, and New York. These are only a handful of examples with many more similar instances in co-ops, collectives, and worker owned enterprises, around the world. The difference, as Albert notes, is that participatory economics “provides a new economic logic including new institutions with new guiding norms and implications…What parecon can contribute to this heritage and to today’s activism will be revealed, one way or another, in the coming years”.



The book is peppered with quotes, aphorisms and proverbs. From economists such as Adam Smith, Ricardo, Marx, Keynes and Robinson, to philosophers and dissidents Noam Chomsky, Howard Zinn and Bertrand Russell. You’ll even find insightful descriptions of the “absurdity of consumption under capitalism” by science fiction writer Ursula Le Guin.



The book begins developing the parecon vision by determining what an economy is, identifying desirable values, and then evaluating diverse economic systems. This will be an important first step for anyone who is dissatisfied with already existing economic options and seeking alternatives. However, it is suggested that readers read the entire book to get a full picture of how parecon’s defining institutions, features, and procedures interact, so as to get a full understanding of the whole model.



Albert defines an economy as a set of institutions concerned with production, allocation, and consumption. More specifically, he details divisions of labor, remuneration, and decision making. He explores the key features, and dynamics of an economy, such as public or private property, markets, central, or horizontal planning, class structure, and class interactions. From these, Albert identifies five different types of economies — capitalism, market socialism, centrally planned communism, bio-regionalism, and his model of a participatory economy. He studies each of these systems, and by using the values of equity, self-management, diversity, solidarity, and efficiency as guiding criteria, explores their “impact on human outcomes and prospects, and whether we like the impacts or not.”



The resulting evaluation is a thorough condemnation of capitalism, central planning, market socialism and bio-regionalism. It’s also the initial outline of parecon, of social rather than private ownership, nested worker and consumer council’s and balanced job complexes rather than corporate hierarchy, remuneration for effort and sacrifice rather than for property, power, or output, participatory planning rather than markets or central planning, and self-management rather than class rule.



The “balanced job complex” is a fundamental, and original, feature of parecon. It is a redefinition of our concept of work. Basically, jobs would be reorganized so that everyone has an equal set of both empowering and un-empowering tasks. Jobs are balanced within each work place and across work places. Balancing jobs within work places is done “to prevent the organization and assignment of tasks from preparing some workers better than others to participate in decision-making at the workplace”, or what would be the result of our standard work place corporate division of labor. Balancing work across work places is equally necessary so that “disempowering and menial work places” are not ruled by empowering ones. The outcome of the participatory balanced job complex is “that every individual..is…involved in both conception and execution tasks, with comparable empowerment and quality of life circumstances for all.”



Another key element is remunerative justice, or pay for effort and sacrifice. This method of pay insures that unequal outcomes are not produced and reproduced, due to ownership of the means of production, bargaining power, output, genetic endowment, talent, skill, better tools, more productive coworkers, environment, inheritance, or luck. Albert argues that these methods of remuneration are inequitable, and “reward people for what does not deserve reward…” Of all these factors people control only their effort. So, effort and sacrifice is the remunerative norm in parecon, tempered by need as “appropriate in cases of illness, catastrophe, incapacity”, etc.



Participants are organized into federations of workers and consumers councils who negotiate allocation through “decentralized participatory planning”. Workers and consumers make proposals about what they want to produce and consume, how much they want, the inputs needed, and the social costs and benefits of their choices. “Iteration Facilitation Boards” (IFB) generate “indicative prices”, using both quantitative and qualitative information, which is used by workers and consumers to update their proposals for further rounds of iterations. The IFB whittles proposals down to a workable plan within five to seven iterative rounds.



No doubt this model will go against the deeply held belief that “there is no third way”. One of the most influential proponents of such a belief is the late British economist Alec Nove. Nove, in his book “The Economics of Feasible Socialism”, argues that for allocating goods and services throughout society, we can only have two choices, markets or central planning. These are two systems which Albert clearly rejects and, after reviewing Nove’s argument, continues to lay the ground work demonstrating the feasibility of a participatory economy.



Albert challenges Nove’s assertion, “His only evidence is to pile up indications of what no one doubts in the first place: …that allocation is complex and important. Nove’s presentation argues only from necessity. It must be that there is no third way because it must be that there is no third way…With this mindset…we would never have advanced beyond the institutions of the Pharaoh’s egypt.” Moreover, in response to those who think that attaining a better economy is a waste of time, should be reserved to histories garbage bin, is a pipe dream, or that such efforts detract from other useful pursuits, Albert responds that a person could desire a new economic system but “feel that regrettably there is no combination of institutions that could possibly bring about better outcomes. Any effort to improve economic solidarity, equity, justice, self-management, etc., would (a) fall short of our intentions, and/or (b) cause so much loss of output and/or of other desired outcomes…that the gains it did attain…would be far outweighed by countervailing losses…This is the real logic of Alec Nove’s position and also of …Thatcher’s famous assertion that ‘there is no alternative’”. He adds that anyone in their right mind should never utter any such phrases gleefully, and compellingly compares such determinations to declarations of TINA about slavery, child labour, overwhelming illiteracy, short life spans, vast disparities in wealth, power, dictatorship, etc. After reading this, one wonders why we haven’t implemented parecon, or some other better system, yet and what’s stopping us from doing so.



After a further detailed outline of allocation, Albert turns to descriptions of “Daily Life in a Participatory Economy”. The purpose is to provide a variety of hypothetical scenarios detailing more specific instances, and providing texture for imagining what life might be like living within a parecon. The fictional “Northstart Press”, is a direct spin on the name of the real book publishing enterprise, “South End Press”, which he helped create, “I start with publishing because my own experience of helping found and define South End Press was impacted by and in turn enriched my understanding of participatory economic work place relations.” He then describes Northstart’s balanced job complexes, workers councils, work weeks, decision making, innovations and participatory planning, all while making condemning contrasts to capitalist publishing houses.



On a somewhat larger scale, the imaginary “John Henry Steel Plant” provides examples of participatory planning and how certain types of disagreements may likely arise, how workers adjust work loads, and the societal costs and consequences, of what the plant produces and uses. In order to demonstrate how parecon is flexible to various work places, Albert explores the daily decision making process involved in the intricate, and detailed, operations of an airport, the “Jesse Owens Airport”. Both individual, and collective consumption are explored in the hypothetical “Emma Goldman community” co-housing unit, and the participatory “Martin Luther King County”. The books final chapters — thirteen in all — examine possible flaws in parecon while simultaneously demonstrating Albert’s profound understanding of his critics, which again challenges the reader to take a stand on the issue of economic vision, alternatives to capitalism, and parecon in particular.



This is an exhaustive argument for a participatory economy and deserves wide spread attention. The paperback edition is due to hit book stores across North America in May, online in April. The first print run of the cloth edition sold out of stock before the books could even be be shipped. Since then Korean and Italian translations have been published with Spanish, Greek, Swedish, Japanese, and numerous other editions all in progress. There are about twenty or so translations in the works.



Chris Spannos sits on the Board of Directors for Vancouver Co-op Radio, CFRO. He produces radio with the Redeye collective.


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