I recently had an opportunity to read an essay criticizing Participatory Economics from Odessa Steps, titled The Sad Conceit of Participatory Economics. My reactions to what appeared in it, trying to correct strange readings, mostly, lead me to want to urge merely that readers actually take a look at the model for themselves. But a few comments may help motivate those who have seen Steps essay doing so.
From the outset the confusions in the essay dominate its content. Parecon, as it called for short, doesn’t employ, as Steps begins by asserting, “a modified market” – at least in and useful sense of the word market or modified. Yes, people in a parecon get items to consume, and these have relative values. But if we say that getting items with valuations means an allocation system is a market system, there would only be market systems. Parecon employs what is called participatory planning – not market allocation — which is a social negotiation of inputs and outputs based on socially generated valuations representing the true and full social costs of production and consumption.
Steps next says: “Work and consumption is self-managed. Production is managed by factories and workplaces organized in producer federations. These decide what they will produce, at what input cost (price), and in what quantity.” But this could hardly be more wrong. Economies are integrated affairs. What is done in one place rebounds to affect virtually everyone, everywhere. If a firm produces some volume of bicycles (or nuclear missiles), say, the materials used for the bikes (or missiles) weren’t used for other ends, such as wheelchairs (or housing). The people who might have consumed the other things that could have been instead produced, are affected. In a parecon the aim is that each actor should influence decisions in proportion as they will be affected by the outcomes of those decisions. Yes, oddly, this means that virtually the entire populace must have some impact even on the decision how many bicycles (or nuclear missiles) does my factory produce. So, in a parecon, workers in a workplace do not unilaterally decide what they will produce, etc., but instead have a large, self-managing say, which means a say that is proportionate to the effects on them in the matter.
Steps says, “The right to consume is earned through work, with society granting individuals ‘consumption shares’ in return for labor. People who choose not to work earn no shares (not even dole) and don’t eat.”
Actually, a parecon could provide a minimal income even for those who decide that they aren’t going to work at allâ€¦though I don’t happen to see any reason to advocate that. On the other hand, a parecon would of course support those who cannot work, which is an entirely different matter.
Steps says, “How many consumption shares we earn is decided collectively with each job graded according to the social cost of production and the effort required; basically the less socially-costly the job but the more effort required, the higher the wages, sorry, ‘share’.”
This is also wrong. People in a parecon are remunerated for the effort and sacrifice they lay out. I don’t know what Steps means by socially costly when referring to a job. I do not get more for producing things that use more valuable inputs. I do get more if I work longer, or harder, or work at tasks that are more onerous. This contrasts with rewarding property, or power, or output. It also contrasts with saying people get income even if they don’t work – which is to me an odd formulation which would consign the economy (a) to not having any way to know people’s relative desires for items, and (b) to a level of output that may have no serious relation to the extent of output people would like relative to their view of its cost of production.
Steps says, “Coordinating and mediating federations called Iterative Facilitation Boards (IFBs), would set prices based on the social cost to produce things and wages based on the ‘disutility’ of particular kinds of work and the effort involved in our jobs.”
This is perhaps at least an understandable misreading, but very far away from the parecon reality, since it isn’t the facilitation boards that set prices – it is the planning process, in full. In other words, it is the preferences of workers and consumers as manifested in the planning negotiations. Facilitators have impact only in the same way as everyone else. In fact, this misunderstanding, as others that Steps raises, is explicitly dealt with, actually in numerous places, in descriptions of parecon.
In central planning you do have boards of planners who actually set prices, and input and output quotas, etc. In more enlightened versions of this, they might poll the populace for its opinions and preferences, before they decide the economy’s dictates. I can see how Steps might not like such a system – as I don’t like it, in fact utterly reject it. What I can’t understand is how Steps could read descriptions of Parecon and then describe it as he or she does.
Steps says “In order to create some basic level of fairness, each person would have ‘balanced’ jobs, with some shit work, some mental work, some manual work and so on, with varying rates of pay.”
Again, this is not parecon. It is not primarily fairness being sought, though that is an option too, but a condition of balanced empowerment effects so that there can be true self management – which is to say, classlessness.
At his point, Steps says Parecon has “a lot more to it than this short description, but you’ve got the principles.” Regretably, that isn’t the case. At this point Steps readers don’t know the guiding logic, or the key institutions, etc. And it is not as if this couldn’t be broadly conveyed at the level of a review in few words. For example, Parecon is a system built on accomplishing production, consumption, and allocation in ways that advance solidarity, equity (meaning remuneration for effort and sacrifice), diversity, and self management (meaning decision making input in proportion as one is affected by outcomes of decisions). The key institutions are workers and consumers councils with self managed decision making norms and methods, balanced job complexes wherein each worker has a totality of tasks that are comparable in their impact on the worker’s empowerment as the job complexes of every other worker, remuneration for effort and sacrifice which, in context, means overwhelmingly for how long and how intensely we work, and participatory planning (which, admittedly, is the hardest feature to succinctly present). The features are critical to removing not only the basis for capitalist rule, but also the basis for what is called coordinator class rule – as in 20% or so monopolizing empowering labors and, by virtue of doing so dominating the other 80% both regarding decision making influence and access to income and wealth.
Steps continuesâ€¦”It is an incredibly complex market system that would require many millions of people to operate.”
Actually, the allocation system in a parecon has no markets at all – I am a market abolitionist — but does have a system that requires not merely millions of people, but the entire populace, to operate. Of course, far from being incredible, that is true now, as well. Our current economy works via the choices of the entire populace, too. The difference is instead of merely receiving set prices, the populace impacts relative valuations, or prices, and thus what is available to consume as well, with appropriate self managing influence. And instead of enjoying harshly unequal conditions and incomes that elevate some to dominance while relegating others to subordination, the parecon populace participates in the parecon allocation system and overall economy as equals.
Steps says, “For instance, there would be people actually measuring how hard a job is, assigning it a rating, balancing that rating off against millions of others, calculating relative costs and ‘disutilities’ and then trying to balance off the productive power and consumption of four or five billion people in millions of factories.” This is, I guess, merely a matter of not thinking the issues through. Valuation happens, one way or another, in every economy. In a parecon it happens in a just and self managing manner. Yes, in a workplace the workforce apportions tasks into jobs that are balanced for empowerment effects. This occurs instead of owners apportioning tasks into jobs that are unbalanced for empowerment effects. It is not harderâ€¦but it is very different. Steps is an anarchist. I wonder what he or she has in mind instead of the populace combining together in effective ways to equitably determine the contours and content of their economic lives. Steps might want to claim that it can’t happen, but then I don’t understand why there is no discussion of the actual descriptions of parecon, and of the very explicit material offered to make the case that it can happen.
Steps has a kind of scare tactic approach: “Consider the vast effort that would need to go into making trillions of calculations of this kind in a more or less endless round of price- and wage-setting.”
There is no endless round of anything in parecon, in the sense implied, any more than that would be a sensible description of what happens in any economy, including the one we now live in, where relative values are also of course continually in flux.
Steps says “Then think about the vast power that could be wielded by any group of people controlling this process.”
It is as if those advocating parecon aren’t concerned about some group controlling, or even having undue influence on allocation outcomes – but of course, we are. That is the whole point, in fact. But we are proposing a way to actually accomplish worthy and desirable allocation – yet not have anyone have undue control over it. Steps ignores this.
Steps says “Think about how you would feel if a faceless bureaucrat somewhere was deciding how much your labor was worth this week, especially if that decision affected how well you ate, or whether you could afford healthcare or schooling (yes, in parecon you have to pay for housing, food, healthcare and everything else).”
First off, there is no faceless bureaucrat deciding anything for me or about me, or Steps, in a parecon. But, it is true, in a parecon how much any labor — whether mine or Steps’ — is worth is a result of the overall overall amount of work the populace is doing (which determines the social output people get a part of). And in a parecon what a balanced job complex is also depends not just of a local choice, but on the overall average. As a result of these features, which I hope people will look into in more detail for themselves, in a parecon an individual attains higher quality work conditions and/or more income only in ways that are socially solidaritous, and never at the expense of others. The rest of the above is simply fanciful, again, since in a parecon healthcare would of course be free and likewise schooling. In fact, learning is not just free, but often paid, as socially useful labor.
Steps says, “Parecon uses market economics.”
There is a chapter of Parecon: Life After Capitalism that is addressed to those who read about parecon and come away thinking it is, protestations aside, a market economy. I wish Steps had responded to this explicit prophylactic reply to his or her confusions about allocation.
Steps says, “All markets are subject to a series of influences: the supply of commodities or labor, the aspirations of actors within it, their relative power and so on. Like all markets it can be manipulated and controlled and its operation may not always be fair. Markets have ability to confer political power on those who control them. And that political power can be used to defend or extend our control over the market.”
Honestly, this is just confused beyond measure. What does the word market mean for Steps? I suspect it means place or dynamic by which supply comes into accord with demand. That of course, is allocation, of which a market is only a very specific type. If market is made to mean allocation per say, then it would mean every economy, everywhere, every time, was a market economy. It would be a truism. But actually, the word market refers to a situation in which supply comes into accord with demand via buyers and sellers individually competing for separate and antagonistic advance. Buy cheap, sell dear. This does not occur, in a parecon, at all. There are no market prices and no markets exchanges in a parecon. There are, however, as in any economy, processes which determine relative valuations, etc., but in a parecon these are social cooperative negotiations with self managing power for all involved, not competitive buying and selling seeking market share, etc. In other words, the claim is participatory planning cannot be manipulated or swerved to serve the narrow interests of any sector. This claim shouldn’t be believed just on being made, of course. But nor should it be rejected without even recognizing its basis.
Steps says, “The pareconomists argue that the social problems that arise from a war between the classes (in the parecon world, between producer federation, consumer federations and IFBs) just wouldn’t occur.”
I guess Steps means to suggest that while classes are gone in a parecon, there is a new possibility – consumers could oppose producers – never mind that it is the same people and that in a parecon consumption and production are explicitly entwined in a way that precludes one side benefiting at the expense of the other – and people with jobs having to do with the economy and allocation could oppose those who have other kinds of jobs. Again, in Parecon: Life After Capitalism, a whole chapter goes to discussing how those who work in facilitation boards cannot aggrandize themselves by virtue of their position. I wish Steps had paid some attention to this prophylactic reaction to his or her confusion.
Steps says, “They argue that in a balanced economy like parecon, you can only get higher consumption shares or lower prices by increasing the overall size of the cake, which is good because everyone benefits don’t they?”
Actually, no, you can also get a higher income, which means a larger share of the social output, by working harder or longer. Lower prices don’t enter into this at all.
Steps says – “This is the classic argument of capitalists if you think about it. Pareconomists say this: `In parecon, everyone gets a share of income based on the effort and sacrifice they expend in work’ (Yes, Boss).”
This is interesting, I think. First off, there is no capitalist anywhere who thinks that workers, or him or herself, only get income based on the effort and sacrifice they expend in work. Second, why does it follow that my getting an income based on the effort and sacrifice I expend means I am subordinate to some boss – and who is that boss, in a parecon? Nothing is offered by Steps, because there is no boss in a parecon.
Suppose Steps, myself, and two hundred others got stranded on an island. We are clearly going to be there for a long time, maybe years. Things have to be done – single fires, housing, food, entertainment, schools for kids, energy sources, etc. I favor our all getting together and figuring out how to apportion tasks equitably so that we all have a fair balanced job complex (equally empowering and uplifting/demanding) with remuneration (that is, our share rights in the social product of all our labors) deriving from effort and sacrifice (save for those unable to work, too old, too young, etc.) If we all agree to this, where is there a boss in the mix?
What does Steps favor, instead. Perhaps that Steps is free to spend his or her days swimming and day dreaming, and maybe enjoying entertainments that others create – but doing none of the onerous and demanding work of the island — and eating well, and having a home and so on. Of course we can’t all do that, or we all die, as there is no food. So why does Steps get to do it, I wonder. If we all say, no, if you don’t work, you don’t get to share in the product of our labors – are we Steps’s boss? I suppose, if Steps wants to look at it that wayâ€¦but it certainly is an antisocial viewpoint in the way I look at things.
Steps may think, wait, of course everyone will work. We are all responsible people. Okay, I tend to agree, ignoring the truly anti-social elements – though I think there might well be quite a few folks who would mismatch their work and the consumption they opted for. Put more positively, how do people know how much work is appropriate? And how do they know what combination of tasks they should undertake? And how do they know how much of what outputs is a fair share to take? This is what allocation conveys to us. Without relative valuations to inform our decisions, we can’t be spontaneously socially responsible even if we wish to, nor can our little society, or a big one, know what is best to do with its vast and rich array of capacities. This is overlooked by advocates of each person doing whatever they choose.
Steps says pareconists say “There is no way to aggrandize self or a group without benefiting everyone. For me to get ahead, the total product must grow or I have to expend more effort and sacrifice, which is fair enough.”
That is correct, we do say that, or I do, anyhow.
Then Steps says “The capitalist says: “If I work hard and increase the total wealth in the world, why shouldn’t I get ahead, you benefit too.”
This is incredible to me, coming from an anarchist. First off, the capitalist in fact doesn’t have to work at all. It is his or her property that combines to produce the wealth he or she then claims. But, if Steps was talking about coordinator class members, yes, they could and do say, if I work hard (or not so hard for that matter) and increase the total wealth in the world, why shouldn’t I get ahead, you benefit too.” And our answer is, you should benefit – precisely in proportion to the effort and sacrifice, but not in proportions to the output you generate. It is a completely different standard that we propose (effort and sacrifice) from that which capitalists propose (property and power) and coordinators propose (output and power). This is all dealt with in great detail in the presentationsâ€¦so I wonder why Steps is oblivious to what is said. I am not saying he or she should agree with our morals or economics, but surely he or she should respond to the actual content. In a nutshell, the parecon argument is that rewarding output rewards genetic endowment, luck of conditions and tools, and other factors as well, none of which need to be rewarded to elicit the social production and all of which fail to warrant reward on moral grounds. For incentive effects and morally worthy outcomes, rewarding only effort and sacrifice makes sense.
I again can’t tell what Steps – an anarchist – doesn’t like about this. Is he or she saying she thinks that economic actors should be remunerated for their output – so that great athletes, painters, surgeons, or whatever – should be rich? If not, what is the problem, I wonder?
At this point, Steps goes off for a time into a realm of description that is so devoid of relevance to parecon that I think replying in detail, as I have been doing above, makes little sense.
After a time, however, Steps returns to the topic and says, “Parecon has within it the scope for large inequalities since it allows people to accumulate wealth over time and its only defense against people or groups taking control of parts of the economy and using it for their personal benefit is that the rest of us wouldn’t let them.”
Again, is this about parecon? First, you earn over time, sure. What is the alternative? You earn one year, not the next three, then for two, not the next four? Can you save from income this year for the future – not using it all this year, but preferring to wait until next year or the year after? Yes, sure you can. You can also borrow from the future now. What’s the problem with that, if that is what Steps is referring to?
As to groups taking control of the economy – what groups? Who? The defense against this is that there are no positions of control in the economy to take control of, and, of course, there is a polity to prevent violations like theft, murder, or occupying and running off with a factory. There is no control to take, in a parecon, other than proportionate self managing say. But maybe Steps is asking, what happens if a bunch of loons get together and decide to terrorize a community, like the Mafia, extorting wealth? Answer, (a) it is actually quite difficult to do even in theory in a parecon, as explicit discussions of theft make evident, but, in addition (b) the political system responds, and, yes, figuring out what methods a polity can employ to deal with anti social behavior is an important thing to do, I agree – but isn’t part of describing a new economy itself.
Steps says, “In parecon society, workers councils and producer federations control the means of production; after all, they are in physical possession of the mines, factories and transport systems.”
Writ differently, the populace controls their own lives. Correct. But miners don’t decide what mines do – unrelated to the aspirations and preferences of those who provide them their inputs and use their outputs, of course.
Steps says, “The federations exist, in part, to get the highest price they can for their member’s labor.”
This has, again, zero to do with parecon. It is not the case. It doesn’t even have a meaning in a parecon.
Steps says, “The iterations between consumer, producer and coordinator can easily become negotiations in which monopoly of the productive power can be used to bargain up consumption shares (wages) and bargain down prices. Consumers may be able to resist price-fixing for ‘luxury’ items but what about bread?”
I recommend readers of this review pick up a copy of Parecon: Life After Capitalism, and give it a read. See for yourself, is my main response.
Steps says, “Many people fascinated by parecon ask would there be a government to control all this? Pareconomists reply that government exists to correct market deficiencies or supply goods (like national defense or healthcare) that markets are bad at supplying.”
Actually, some pareconists might say that – I would, more or less, say that, with caveats and much more to say – at least about government in a capitalist economy. But no pareconist would say it about polity in a society that has a parecon. Because (a) such a society would have no market deficiencies because it would have no markets, and (b) the economy would take care of public and collective goods.
What we or I would say, instead, about a polity that would operate well in a society with a parecon is that in any society there are necessary and needed political functions having to do with arriving at shared norms (legislation), dealing with disputes and antisocial actions (adjudication) and developing and carrying out shared projects (implementation) and that in a good society a polity – or government if you like – would hopefully accomplish these functions in ways that also propel values we hold dear such as solidarity, equity, diversity, self-management, and perhaps we would add to this list, in this case, justice. I recommend readers take a look at Stephen Shalom’s work on this topic, which can be found in the Life After Capitalism section of ZNet (www.zmag.org).
I think Steps understands the above noted stance and so says, “In the perfect world of the parecon, these goods can be supplied by the producer federations. But there will still, apparently, be a need for political institutions to make decisions about: `war and peace, whether drugs are legal or not, what the rules and procedures of the criminal justice system will be, immigration policy, etc’.” But then he continues to say, “Pareconomists tend to argue that the political and economic spheres would be largely separate.”
And actually, no, we make perfectly clear that polity and economy would each impact and be impacted by the other, and we talk about how. For example, a polity would create norms that an economy must abide – and the parecon would create a context which a polity can only abide if it abides self management, etc.
At this point again Steps goes off in a spiral, away from pareconâ€¦and replying seems unwarranted. Saying that advocates of parecon ignore the lessons of the Russian revolution that an elite can dominate is simply so devoid of reference to parecon, or this advocate of it (having written whole books on the topic), that it is hard for me to take seriouslyâ€¦to be honest.
Steps says, “Parecon is a system in which you are compelled to work in the regulated system of the parecon.”
Yes, if you live in a society with an economy, you either participate in that economy, or you choose not to participate in it. Put like this, the same meaning has a different flavor, doesn’t it? In other words, this is not a parecon feature – it is a part of social life.
“Anything goes” is not viable – and not worthy either – as a guide for social organization. We are social beings, with benefits and responsibilities due to that fact. Freedom for me is good and desirable up until my freedom intercedes your having equal freedom. Anything goes for me would be incompatible with anything goes for you and everyone else. My anything will sometimes conflict with your anything. That is why we have societies, broadly speaking. Writ large, for an economy, I think that each having freedom in accord with others having the same level of freedom, leads to parecon.
Steps say, “Bureaucrats establish the value of the work you do and the reward you get for that work.”
This is nonsense, of course. The value of work – that is, of its product – is determined by the entire planning system as it manifests the population’s preferences. What you get for the work is a function of the effort and sacrifice you expend, overseen by workers councils. Which is to say, overseen by yourself and your equal workmates.
Steps says “They also control prices and the cost to you of the things you need.”
Also false. There are no they. Steps only points to facilitation board workers – people with balanced job complexes and incomes like everyone else, and whose facilitation board work involves no increase in decision making impact on outcomes relative to that of anyone else. Check the descriptions of parecon yourself, please, to decide.
Honestly, I think that following Steps’ desires and concerns but attending to structural needs to manifest them would lead to parecon. I mean that. And as a result what I find very odd about Steps’ discussion is that I think Steps, given his or her desires and inclinations, should like Parecon. Perhaps someday we will get to have a direct conversation and by way of it either hash through the confusions or discover that there really are serious differences.