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Reply to Horowitz 4


 

[This essay is part of an extended debate with David Horowitz found here.]

 

David,

 

I can understand being busy, I have that problem too… When you want to stop our exchange, however, you will have to stop writing content. As long as you reply with new points, I will reply in turn. It is my habit, and I type quickly.

 

Your opening allusion to distaste for meetings and time wasting being a reason why my kind of economy will not work turns out to be ill considered. Yes, an economy that requires excessive time, even to do wonderful things, could be a bad vision if the time loss outweighed the other gains, I quite agree. Of course. But having eliminated class conflict, waste production of all kinds, and much else that distracts us from useful endeavor, the fact that everyone instead of a very few people make decisions in a participatory economy–a moral and social gain, not to mention yielding better decisions–turns out not to reduce our available non-economic time, but to expand it. There are many reasons for this, not least that people are in position to control the length of the work day and week as compared to markets driving it to extremes humans can barely tolerate. You may be interested to know that this concern about meeting time is one of the few criticisms other leftists have rendered of the system, and of course we have responded to them in full. You can find the material on the web site, http://www.zcomm.org/znet/topics/parecon, if interested.

 

You say you “apologize for confusing `coordinatorism’ with participatory economics.” It was late and you were working under considerable pressure. No problem, now you know.

 

There are of course connections between our critique of coordinatorism and earlier work by a great many folks, that is true. But there are some very distinctive features, as well. Mainly, we discern the structural roots of a coordinator class / working class conflict in the nature of a division of labor that monopolizes empowering work in few hands, and we highlight, as well, the manner in which both central planning and markets impose this division of labor and the associated class division even against the wills of economic actors — one of the reasons why we opt for an entirely different approach to economic allocation. Finally, we find that marxism itself, you may be surprised to hear, while having many valid things to say about capitalism, is mute about coordinator class dynamics and relations not accidentally, but because it ultimately puts forth a conceptual apparatus and vision that services the interests of the coordinator class, not workers.

 

You say, “Like Marx’s, your critique of the commodity fetishism of the market contains a little truth smothered in a huge error, which the failure of Soviet socialism has once and for all confirmed. The huge error is that the price system blocks knowledge when in fact it encodes it and encodes knowledge of such complexity that no human brain or computer can replace it.”

 

Okay, this is a coherent assertion, which could be true or false. But you might want to check with economists about a few things, before you decide which. Markets encode in prices, as you say, what is supposed to be the relative valuations of all items in the economy, a valuable function if its accomplished well. Markets, at least totally free ones, do this by embodying what is claimed to be a kind of summary of the full social costs and benefits of the production and consumption of each item in prices, garnering these from the revealed preferences of buyers and sellers engaging in market transactions. That’s the claim. But absolutely no serious economist believes any such thing, even about totally free markets, much less real ones. All agree that all markets however free and however much every buyer and seller is small compared to all others (a) leave out externalities, therefore mispricing any good that has effects on people other than those who are immediately involved in buying and selling, and (b) sum not unadorned personal preferences, but personal preferences weighted by the economic power buyers and sellers can bring to bear. Thus even only considering these two universally admitted problems, markets do in fact hide information, or rather not convey it, not only qualitative knowledge that is essential to human empathy, but just the plain old costs and benefits.

 

The actual economic debate is not whether this occurs, David, but whether it matters. Are externalities present in sufficient degree for the fact of the allocation system ignoring them to present a really serious problem? I suppose silly folks can disagree about whether ignoring the impact of pollution and other ecological spin-offs, or of alcoholism and its impacts, or of the diseases that arise from consuming cigarettes, say, and the social costs associated with these, of the benefits of public parks and of the the spin offs of education, or of the effects of production on workers themselves, the tired or ripped up bodies they bring home, the miserable incomes they earn, the fumes they breathe, all excluded from the cost/benefit calculations of markets, or taken into account inadequately, at any rate, are important, but do you really want to? This is only one of many problems of markets, by the way. For example, the going adage is that markets deliver what we want. The truth is far more that markets cause us to conform ourselves to want what they deliver–an what they deliver is sharply constrained to reproduce class relations and profit the already rich. I could go on, of course…but in doing so I guess I’d be repeating points made last message…the ones that overwhelmed you.

 

You say: “This is what the Soviets demonstrated. They couldn’t build a modern economy by substituting politics for the market, which is what you want to do.”

 

Well, aside from the facts — what the Soviet economy achieved, however much it failed to achieve — we have a semantic difference. I want to substitute a different economic structure for the market, not politics, not the state. It is called participatory planning. It is carried out in the economy, not the polity. But beyond this, your reasoning here is striking and deserves further comment.

 

If someone or some group or country sets out to do x and fails, does it somehow prove, as you seem to think, that no one else in the future could possible attain x, particularly by other means? What is odd in the relation of all this to history, of course, is that in the Soviet case they set out to do x, and by and large they did it, though with many problems to be sure — that is, they established a powerful state and economy which benefited its ruling political elites and ruling economic class but subordinated everyone else, as intended. In contrast I want to do y, something entirely different — that is, establish an economy with no ruling class and which fosters the fulfillment and development of all its members equitably via self managing decisions, and which bears virtually no resemblance to the Soviet agenda, using entirely different institutions, etc. Yet, nonetheless, you keep raising the Soviet Union in reply to me. It is a non-sequitor, I am afraid, and you ought to be able to see that, unless, of course, you want to explain how participatory economics is, despite appearances, subject to the same logic and criticisms. You haven’t even tried to do that. I welcome your doing so.

 

You say, “Commodity fetishism is the key to the prosperity and efficiency of the capitalist economy and to the relative peace of capitalist states.” This is pretty incredible…relative peace? But okay, you think that in order to have output and to have peace we must put up with various problems that also adhere to the use of markets. It could be the case. But you should agree that were it possible to have a system that could attain output and peace as well as market allocation systems, or better, and could also avoid the problems of those systems and incorporate additional benefits — such as promoting solidarity, diversity, equitable outcomes, and self-management — would be an improvement. If you do take that stand, which it would seem utterly inhumane to reject, then it seems to me you should hope for the emergence of an economic vision with those properties. You should also not refuse to assess one that comes along, claiming that it can’t possibly exist, it can’t work, a priori, as if there can never be anything new in the world. It isn’t just that you are wrong when you do that, because does have those properties and would work, but it is a horridly sectarian and close-minded stance, which one would think you would not want to be party to.

 

You say…”Competition is the necessary (and I emphasize the word necessary) form that cooperation takes in an economy that is larger than that of the tribe where the goals of members are common and their communication with each other is direct (Hayek, The Fatal Conceit).”

 

I trust you see that the above is not an argument, but instead only an assertion. Nothing is offered to substantiate it. It says that if a group is large then it can’t cooperatively manage its affairs, but must rely on each actor individually competing with all the rest, each trying to get ahead without regard for the plight of others. That is a massive (not to mention very sad) claim. How would someone support it? Well, you might make a case that the information transfer is too much, when you get beyond a certain number of folks (or workplaces or products), to handle qualitatively and so has to be encapsulated in quantities called prices. And then you might make a claim that it can’t be sensibly and sufficiently accurately encapsulated into prices by anything other than a decentralized accounting of the preferences of actors who produce and consume. So far so good. But now comes the hard part. You have to then claim that the single possible vehicle for revealing and tallying the preferences of buyers and sellers in a decentralized fashion is the market, imperfect as it is due to tallying only buyers and sellers literally in each transaction but not those outside though also impacted, and due to tallying not just preferences, but wills as manifested unequally due to income differences. Okay, but the last claim is just a claim, again, not an argument. To make it an argument you would have to describe some properties or attributes of humans or of institutions that preclude anything other than competitive markets from being able to handle this task. No one has done anything like that. No one has even tried to do it. You may be interested in knowing that serious economists, one’s whose work you like, I suspect, in their not for the broad public technical work deny the claim, freely admitting that many other arrangements can accomplish this task, including (yes, you guessed it, the central planning that we both hate).

 

Now what is my task, to rebut your assertion that there is no third way, there is only markets or the moribund and rejected central planning. Well, since it isn’t an argument, but is, instead, an assertion made on faith, I can’t tackle its component claims and logic. There is none there to tackle. So I have to do something else. I have to point to a model which does what you claim can’t be done. So, indeed, with my co-author Robin Hahnel I point to participatory economics and participatory planning. I demonstrate in verbal qualitative language and also in the technical mathematical manner of professional economists its various efficiency and other properties (see www.parecon.org for the Princeton University Press book titled The Political Economy of Participatory Economics), and I await reaction. I am still waiting.

 

You say, “I do not have the time or the interest to elaborate this for you.” I’m sorry David, but you can’t elaborate it, no one can…because there is no elaboration. There is a reasonable argument that allocation requires vast information transfer and that this has to be congealed into summarized measures of relative value useful to buyers and sellers, and one can also arguably show that certain centralized approaches to accomplishing this will fall short in various respects (as one can show, by the way, that market approaches will also fall short in various respects, for example due to externalities), but you cannot and no one has shown that no approach other than markets can do better than markets, not least, I would say, because such an approach exists, participatory planning, and such a case has been made for it, and not been rebutted.

 

You say “Your views are in a pure sense primitive; they refuse to confront what experience has so painfully confirmed. You do not understand why Soviet and Cuban socialism failed. Nor do you understand planning in the corporation if you think it takes place outside the market’s discipline. (If it does, the corporation goes bankrupt.)”

 

I think I am quite well aware of the history and successes and failings of these and related efforts, and you might find some useful information in that direction in various of my writings. The main lessons that anyone wanting to create a more humane and just economy needs to learn from those experiences is the horrible consequences of incorporating either markets or central planning, corporate hierarchy, and of course, the political authoritarianism of leninism.

 

The market’s discipline’s relevance to the central planning that occurs in corporations is merely that it forces attention to maximizing profits and, though often overlooked by analysts, to maintaining the conditions that allow those on top to accrue those profits. Neither of these influences is desirable, relative to superior alternatives such as propelling attention to human well being and development, but in any event this in no way counters that the decisions are made centrally and get various jobs done — moreover, they often violate what I think you mean by market discipline, foregoing short run gains because freed, inside the unit, of the need to seek them, taking into account all manner of factors and implications of choices that markets would ignore, and so on. But, again, all this just keeps harking back to what is a sidebar issue. If central planning can’t accomplish a degree of economic material results as you want claim, or if it can as I think is utterly evident, is largely beside the point to me, just as whether dictatorships can accomplish a degree of social coordination or not is beside the point to me. These systems are horrible in any event.

 

You want to cast economic options in a very simple manner — there are markets, and there is central planning. Pick. In fact, these are not our only options. Another alternative is called participatory planning. It uses different institutions and has different properties. You can’t argue against participatory planning by rejecting central planning, or saying central planning failed, etc. no matter how often you repeat these comments. You don’t argue against having a skyscraper by arguing that a tepee won’t hold enough people, etc. Now if you would like to try to demonstrate that despite its claims to be different, participatory planning in fact reduces to central planning in some manner, I would happily hear that. But I would also be willing to bet you any amount you care to wager that you cannot convincingly make such an argument.

 

You say, “The brilliance of the market is precisely that it is beyond the control of human beings. Like the rule of law, but more dependably, it is the discipline that keeps unruly individuals from veering totally out of control. You and I profoundly disagree.” Yes, you are correct in that last point, we do disagree profoundly. I do not find propelling people to try to squash one another as a means to personal advance the height of brilliance…among other reasons, not least, that markets do, in fact, cause people to veer into patterns of choice that destroy even what they themselves are seeking to achieve, on occasion, as with downturns, recessions, collapses.

 

You say, “This is a common state between individuals. How would we or anyone work together in an enterprise in a society effectively if we did not have an external discipline to connect us and make us function? How would enterprises coordinate their activities in the absence of a neutral and merciless referee like this?”

 

Again, you are just evidencing a sectarian mindset i this passage, or, alternatively, making a case for why you should pay close attention to participatory economics. Participatory planning provides mechanisms to accomplish what you seek, but democratically and with attention to full social costs and benefits, rather than externalities, and with equitable results rather than ones destroying solidarity and producing poverty. And markets are not neutral in any event. They bias outcomes away from social and toward narrowly individualist channels. Nor, in practice, are they universally merciless. Yes, they mercilessly punish the poor and weak, to be sure, but the rich and strong regularly escape market wraith, having organized multiple means to ensure that painful market discipline overwhelmingly leaves their neighborhoods and comfort alone. Moreover, markets are not some kind of interplanetary or god-given disciplinarian with a script with roots outside humanity. Markets accumulate the choices of individual human beings, and indeed, this is what market advocates claim is their virtue. There are numerous problems, but two key ones are that the humans whose preferences are tallied (a) engage in their choices with distorted and incomplete information, and (b) that they are accounted not only in proportion as they are affected and feel desires, but also and more so in tune with their wealth and income. If you sincerely favor having an allocation system which in a decentralized manner congeals the independent decisions of buyers and sellers into an accounting of the relative values of all items taking into account full assessments of related social costs and benefits of the production and consumption, then in fact you should be an advocate of participatory planning. It is easy to prove, not to assert but to prove, even within the rubric of modern neoclassical economic theory, that participatory planning accomplishes these aims (among the other social ones which we also hold dear) better than than even the most free markets, much less those we suffer.

 

You say, “You think Bill Gates gets too much. I don’t. How do we adjudicate this? How do you put a price on what Bill Gates has done? He has created millions of jobs that didn’t exist. He has standardized a system globally. What panel is going to weigh his contributions against his faults.”

 

If you want to discuss this, you can’t prejudge what we are remunerating. You are saying, let’s look at the worth of what Bill Gates has done and decide what it is to see what his remuneration ought to be. You think I disagree about what his contribution is. But as so many other times, you aren’t reading my words. In fact, I say let’s look at his effort and sacrifice while he is working in the economy to see what he should be remunerated. We can agree, that if we use your norm he gets to have gargantuan income. We can also agree, if we use my norm, he gets a nice but not unusually large income. So which norm is moral? Which norm is economically efficient? And why? These are the issues. I won’t give a full presentation here, as you have already indicated that my volume is too much for you — though you can find such at www.parecon.org anytime you wish to — but I will challenge that I think even you don’t really feel, philosophically, as you say you do…by offering an example.

 

Suppose you were stranded on an island tomorrow, with a thousand other folks, from a big shipwreck. The rest of the world decides everyone died…you all go unnoticed, you are stuck. So you all start to set up shop and live as you are collectively able. Now some guy named Bill comes up with some great insight — let’s a way to extract electrical energy from some plentiful fern, whatever — and the innovation improves everyone’s lives by huge amounts. It took him ten minutes of thought but let’s say had he not provided it, it would never have been discovered.

 

The time arrives to apportion the benefits available on the island, the products of peoples hard labors. Do you assert that Bill should have half the total, three quarters, 90%, even not having to work another minute, due to the immense contribution his insight rendered? If yes, okay, then you are consistent though morally peculiar. If no, then I think you are inconsistent, but in a pinch, like most folks who would say, hold on, it is fantastic that Bill had that insight, and we can make a statue to him and celebrate the anniversary of the thought with a big party each year, or whatever, but I worked my ass off and I deserve a proportionate share of our little economy’s product for those labors, and so do you and her and him, for your similar hard work. So if Bill wants to eat and to enjoy some of the meager luxuries we have on our island, he has to do his fair share of work. His great contribution doesn’t allay that fact. Notice, he now has an incentive to work hard…as well… morality and incentives do not have to clash.

 

Does Bill Gates deserve, morally, or warrant for economic efficiency, a hundred billion dollars, or even just more than a hard working assembler in a crowded, noisy, plant. Nope. sorry, not in a humane, cooperative, equitable economy, which would be efficient as well, if it incorporates not only remuneration for effort and sacrifice, but councils democracy, balanced job complexes, and participatory planning.

 

You add: “Who even can balance the advantages from having a standard operating system against the disadvantages of having a quasi monopoly that limits competition? You think you or any group you can assemble could sort these issues out and come up with a solution that is just? You couldn’t even begin to assemble the facts necessary to make such a judgment even if you could find judges free from biases, which you can’t.”

 

Yes, and this merely demonstrates that you are asking a useless question in a system that promotes such thinking as wise. The real issue is, can we know how long and hard people work at socially useful tasks, and can we have an allocation system that rewards people in accord, and that also apportions assets in tune with capacities, needs, and desires. The answer is yes, I point you to participatory economics.

 

You say, “I have enjoyed this exchange with you, but again see no point in going on. Market socialists at least have learned these basic lessons.”

 

No, I suspect the truth is that regrettably most market socialists are just not willing to take on the belief that markets are like gravity, or ideal, or both…so they succumb and incorporate markets in their vision, and it is a pity.

 

You say, “Your attempts to distance yourself from the communist left (I prefer this term to Leninist) puzzle me. I read Z. It is pretty much down the line pro-Sandinista, pro-Fidel, and anti-America. So I think I’ve described your politics correctly. It’s only after the great work of destruction of western civilization has been completed that you are going to break ranks and go into the opposition again.”

 

This is ridiculous and you know it. So I wonder why you say such things. Again the world is more nuanced than you permit. I don’t even know what opposing America could possibly mean — but I do oppose capitalism, racism, sexism, and so on. Sure. And yes, I do support efforts in third world countries to extricate their economies and polities from tutelage to outside rule or to tyrants within, and more importantly oppose barbaric efforts on our part to prevent such extrication. And yes. I can have those view, and still have criticisms of movements that arise, even if that is too subtle a mix for you to manage. If you want to know whether Z and particularly I am part of the Leninist or communist left, you don’t have to rely on me and my writings. Go find some of them and ask them. Actually, interestingly, a ZNet volunteer has just scanned and provided a copy of the first book I ever wrote, published in 1974, but written a couple of years earlier, called What Is To Be Undone. I believe at that time you were what you would now label communist or stalinist, no? Check the book…you will find that I wasn’t.

 

You say: “I will say this for you; you have shown a greater capacity for civility and a more genuine intellectual passion in these emails than I would have expected would be possible from an editor of Z. Would that there were more leftists like you.”

 

Don’t take the wrong implication. I debated Hubert Humphrey during the Vietnam War. I don’t think it would have been possible for me to feel more antipathy to another human being and all that he was involved in and stood for, but I was civil, though aggressive. Your life trajectory strikes me as residing well beneath contempt, but that doesn’t impact the desirability of taking ideas you offer, even silly ones, unresearched ones, and knee-jerk ones, at face value and responding civilly to their content.

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