Ehrenreich: Before proceeding to other matters, my big reason for wanting some things to remain marketized is that it would reduce the burden of planning. As you know, some have complained that parecon condemns us to endless meetings, so why not leave “non-essentials” to the market?
Albert: Opting for some markets in order to reduce the burden on participatory planning doesn’t, in fact, reduce that burden. What is planned would have to use items from the marketized industries, and also deliver items to them. Managing those interfaces would add a whole new and disruptive dimension to participatory planning. Moreover, supposing this interfacing could even exist, it would condemn the participatory planning process to arrive at false plans by undermining its capacity to determine true exchange values.
Markets compel competition for market share and revenues. What would it mean to say that some workplaces should compete to sell as much as possible in order to accrue surpluses, but that they then shouldn’t disperse those surpluses to their employees? On the one hand, if they do disperse surpluses to their employees, then the entire remuneration scheme of participatory planning — to remunerate not for output, or for bargaining power, or for property, but only for effort and sacrifice — is laid waste. On the other hand, if they don’t disperse their surpluses to employees, then the firms aren’t really operating in a market fashion and, what’s more, have no basis for deciding their level of production, length of workday, etc.
I therefore wonder what you have in mind when you say you want non-essential production decisions to be decided by markets. It wouldn’t mean that people wouldn’t make choices for those items. It would mean people would make their choices under the institutional pressures of market competition. Why would you want to have allocation decisions made with institutionally imposed surplus-seeking motivations, using wrong prices as guides, engendering unjust remuneration, imposing antisocial behavioral incentives, and with actors exercising inappropriate levels of influence – instead of having participatory planning in which people make the decisions based on true prices exercising proportionate say in pursuit of social well being and development rather than surplus accumulation?
If markets are accompanied by capitalist ownership relations, then the pursuit of revenues that markets induce, after meeting costs and investing in equipment, is largely allotted to profits for the owners. If markets exist with public or state owned property, then the pursuit of revenues they induce, after meeting costs and investing in equipment, is largely allotted to a surplus for what I call a coordinator class. There are elements of progress in this alteration, but much less than I seek as my aims.
When you say we should marketize inessential goods – what qualifies something as being inessential? Inessential goods would include a huge array of items if it includes dresses, but aren’t all products essential if we consider that they are all created by people, headed for consumption by people, utilizing assets which could be put to other (“more essential”) ends, and so on?
Are sneakers inessential – if so, does that mean it is okay for firms pursuing market share and surpluses via cutting the cost of production of sneakers to run sweat shops and spew pollution? Is soda pop inessential? If it is, and we have it operate via market exchange, is it okay for the soda pop firms to gobble up all the available quinine so that millions die of malaria? Is it okay for all the workers in the soda pop firms to be overseen by bosses and reduced to only rote labor just because they aren’t producing milk?
Economies are general equilibrium systems. What happens in one place is inextricably bound to influence and be influenced by what happens elsewhere. If you feel that housing is essential and clothes aren’t, how do planned housing decisions get made unless clothes decisions are being taken interactively at the same time and how can the housing decision be good decisions unless the valuations of clothes are correct? If clothes decisions are being taken by market dynamics, then the planning of housing is undermined by the inaccuracy of clothing choices. Too much or too little productive time, energy, and resources, may be going to clothes instead of housing.
Markets lead to corporate divisions of labor and to remuneration that diverges from measures of effort and sacrifice — which is the type of remuneration participatory planning advocates — even without private ownership of productive assets.
Likewise, markets missprice goods and services due to failing to account for external and public effects, again, even without private ownership. The fact that dresses are “inessential” doesn’t tell us that their production involves no external environmental effects. What if producing dresses uses important resources, or generates damaging pollution? And producing dresses most certainly impacts workers. Markets induce individualist behavior of the narrowest sort, again, even without private ownership. Markets give an incentive to dump pollution and to otherwise ignore the effects of one’s actions on those who aren’t buying and selling. Why do we want people who produce dresses to be motivated by greed, not the fulfillment of themselves and consumers? Why would we want to accept market ills for any item in the economy?
If a particular industry operates on a market, say the dress industry, it means that that industry seeks to sell as many of its products as possible, at as high a price as it can extract as possible, regardless of the implications of those sales on buyers or more broadly. Dress producers will advertise. They will want to buy cheap and sell dear. They will prefer production techniques that cost them less even if they pollute more. The dress industry will produce in light of incorrect valuations of the product. It will cut costs of production regardless of whether doing so hurts workers more than it benefits consumers. The dress industry will do all these things, and much more, to get market share and stay in operation.
When you say leave non essentials to a market — I also think perhaps you have in mind central planning and markets, and you are thinking why not augment one with some of the other, since neither has stupendous virtues compared to the other. But my claim for participatory planning, which I can’t make in full in an interview without abusing length even more than I already am, is that participatory planning does have stupendous virtues compared to either markets or central planning. Participatory planning produces solidarity by creating conditions in which to get ahead actors must take into account the well being of those who produce what they consume or consume what they produce. It facilitates actors having appropriate decision making power by its modes of decision making and proper pricing. It is consistent with and facilitates remunerating effort and sacrifice. It respects and expands diversity. It establishes a dynamic consistent with classlessness by not requiring a layer of coordinators controlling outcomes.