About ‘Parecon: life after capitalism’



Parecon as it would like to be
Equity and solidarity
Ecological balance
The reign of the law of value
Parecon and the alternative institutions of today

. Michael Albert’s new book Parecon: Life After Capitalism appeared earlier this year. This is the latest of many books and articles which Albert, often with the collaboration of Robin Hahnel, has written over the last quarter of a century to promote his vision of a future society. Parecon, which is short for “PARticipatory ECONomics”, is his model of what capitalism should be replaced by.

. Albert believes that the protest movements around the world are being held back because most activists don’t see any alternative to marketplace economics. I certainly agree with the importance of an anti-capitalist vision, although I don’t think that this is the main explanation for the present disorganization of the left. But unfortunately Albert writes as if he believed that everyone could be united by simply sketching a picture of a future society run according to the principles of morality. He doesn’t deal seriously with the similarities and differences between parecon and other pictures of an anti-capitalist future, and he doesn’t test his vision against the experience of the last century of the working class movement.

. Albert is a long-time activist with more-or-less anarchist convictions. He is one of the founders of Z Magazine, and he is the main director of the related website, ZNet (www.zmag.org). This is the trend which is close ideologically to Noam Chomsky. It seeks to unite people with differing ideas around itself. In accord with this, Albert generally plays down the differences between his conceptions and those of the activists he is trying to attract. He emphasizes common aspirations, and passes lightly over different ideas about how to achieve these aspirations. Albert’s book Parecon often appeals to general criticisms of the devastation wrought by markets, corporations and governments, criticisms with which we, and most of the left, would wholeheartedly agree. But the real point of parecon is that it is supposedly an alternative to other left visions. To understand Albert’s dream, and to see whether it is realistic, it is helpful to see where it fits in the left spectrum.

. Parecon is, according to Albert, “basically an anarchistic economic vision that eliminates fixed hierarchy and delivers self-management”. (1) But Albert believes that other anarchist economic visions don’t seriously provide for the necessary connection between different economic units, and thus don’t provide economic efficiency. Albert believes that parecon solves the ills of anarchism, and molds economic efficiency with adherence to human values. We shall see whether this is in fact so, or whether Albert mainly adds bureaucracy to the anarchist vision without overcoming its reliance on the market.

. Albert differs not only from capitalism and anarchist localism, but from market socialism and Stalinist-style economies (which he calls centralism). However Albert doesn’t even bother dealing with the actual Marxist ideal of communism (as opposed to Stalinist state-capitalism in the name of communism). He doesn’t consider the possibility that central planning based on social ownership of the means of production can be democratic, allow for self-management and very broad local and regional initiative, and eventually eliminate the need, not just for capitalists and corporations, but for money and markets.

. Indeed, it really is necessary to go beyond not just capitalism, but market socialism, Stalinist state-capitalism, and anarchist localism. None of these alternatives goes beyond capitalism:

. * Market socialism openly preserves the market.

. * Stalinist-type economies claim to do away with capitalism. Albert accepts their claim. Although he recognizes that Stalinism is oppressive, he holds that these went beyond capitalism, and that there was no Soviet bourgeoisie. This is a common view on the left these days. But in reality, Stalinist economies are actually state-capitalism, and they are ruled by a bureaucratic bourgeoisie.

. * Anarchist localism has autonomous units connected to each other through exchanging goods, so it is actually still subject to the rule of the marketplace.

. My objection to Albert is not that he opposes market-socialism, Stalinism, and localism, but that, in the end, it turns out that he hasn’t really got beyond them. For all his rhetoric about opposing the idea that “there is no sensible alternative”, parecon simply dresses up old solutions with new verbiage. He thinks that humanity will never be able to do away with money, markets, and financial-style calculations. Nor does he understand the distinction between a transitional economy in progress towards that goal, and an oppressive Stalinist system. So he is forced to rely on a patchwork of ideas from the very systems that he wants to oppose.

. * From market-socialism, Albert borrows the idea of pricing things at their true value, their “social cost”. He believes that planning consists in large part of pricing things accurately, thus supposedly purging the economy of the distortions introduced by corporate capitalism. He takes over from the market-socialists, as well as from the bourgeois economists and corporate apologists, the belief that money, and buying and selling are eternal. In essence, parecon does not seek to overcome the law of value, but to purify it.

. * From Stalinist economics Albert takes some basic methods of economic calculation. Albert also falls into the pro-Stalinist style of theorizing when he regards “indicative prices” and “participatory prices” as different from prices, “accounting money” as different from money, keeping financial balances in a central computer system as different from banking, and “cost benefit ratios” as different from profit rates. Marxist communism recognizes that money and financial planning can’t be eliminated immediately after the capitalists are dispossessed, and that there is an extended transition period during which the working class gains more and more ability to run the economy, thus preparing to eventually dispense altogether with commodity production and marketplace methods. But much of Trotskyist and Stalinist economics denies that the use of money and profit accounting in the state sector, after the revolution, are marketplace methods. They theorize that the categories of commodity production lose their class character, and only superficially resemble the categories used in capitalist economies. This allows them to claim that the state sector has gone beyond capitalism, even when the working class has lost control of the state and the economy as a whole.

. * From anarchist localism, Albert borrows his rhetoric about hierarchy, his belief that centralism is always anti-democratic, and his vision of society as a fusion of local collectives connected through the exchange of goods.

. Thus, Albert doesn’t just take some secondary features from market-socialism, Stalinism, and anarchist localism. He embraces some of the key fallacies of these trends.


Parecon as it would like to be

. Albert and Hahnel present parecon as a simple idea — everyone should determine things to the degree that they are affected by them. But in fact, a parecon economy is a complex one. An accompanying article describes some of the features of a parecon-style society. Here is simply a brief overview.

. A parecon society is run by three separate systems of councils: workers’ councils to deal with matters of production, from work teams to workplace councils to councils linking entire industries; also a system of consumption councils organized territorially, from the neighborhood, or even the housing complex, on up; and some type of government councils. The councils also establish bodies of experts, called “facilitation boards”. The workplace and neighborhood councils have the right to determine matters that affect only them, and higher-level councils take decisions of broader scope.

. There is an annual economic plan that determines the basic wage rate, the basic amount of work, every enterprise’s plan for production and investment, and the prices at which everything will be produced and sold. While a single annual plan guides the entire economic life of a parecon society, Albert and Hahnel insist that this is not a central plan, on the grounds that everyone — not just individuals, but every workers’ council, consumption council or other unit of parecon society — participates in a complex five-step planning process which determines this plan. For most people, however, this participation consists in bidding on how much they wish to work, and what they wish to consume, and the main result of this bidding process is to determine prices which correctly indicate the “social cost” of things, and which will result in supply and demand being balanced.

. This is the basic structure of a society which Albert believes can achieve all the moral values which a capitalist alternative should have. In particular, he stresses “equity, diversity, solidarity, self-management, and ecological balance”. (2) Let’s consider whether a parecon economy, assuming it actually can function as he describes, will achieve these and similar goals. I hope to be able to return in a later article to whether an economy with the structure of a parecon could actually exist in the way Albert imagines. For now, I will only comment on that question in passing, mostly when I consider current experience with trying to organize along the lines of parecon.


Equity and solidarity

. Parecon focuses a good deal of attention on trying to ensure equity in how much people are paid. It focuses attention on different moral ideas about what a just pay scale would be, and what deductions or additions to pay should be made to deal with how much effort a worker makes on the job, or how much a worker sacrifices to make that effort. It ends up with a basic hourly wage rate that is equal for all workers in a parecon economy. This means that the wild inequalities of today’s market capitalism would be abolished. Pay would, however, vary according to the hours worked, and the hourly rate itself is supposed to be adjusted according to an assessment of the workers effort or sacrifice (which aren’t necessarily the same thing). But these differences would presumably still be relatively small compared to present inequalities. Indeed, since income is also to be provided for children(3), even the difference in conditions between large and small families would be mild.

. Solidarity, by way of contrast, is pretty much an afterthought. In Chapter 2 of Parecon, which is entitled “Economic Values”, there are over 10 pages on argumentation over what is needed to ensure equity. There is a quarter of a page on solidarity, and it concludes that a parecon economy automatically ensures solidarity without conscious effort being directed to that end. Albert returns to this theme in Chapter 10, where he writes a page on solidarity, but the emphasis is on the claim that “In a parecon, even antisocial people, if they want to get ahead, must do socially positive things”. (4) Although Albert identifies with anarchism, there is no discussion of “mutual aid”, which is the usual anarchist answer to how solidarity will be manifested between autonomous collectives. (5)

. It turns out that, without solidarity, equity too pretty much goes down the drain. For one thing, it is likely that there will be separate parecon economies in different regions or countries. Each parecon economy will have a certain equity in pay for all its members, but there may be vast differences in the wealth and living conditions of different parecon societies. Certainly any future society will inherent such differences from present-day capitalism. How would a parecon society overcome these differences? This is not directly discussed in Albert’s Parecon, which is astonishing in itself. But it was dealt with in an internet forum on parecon where Albert and Hahnel answered questions. The answer was simply that “a parecon attitude in this realm is to have exchange rates, which, over time, facilitate equalization”. (6) Nothing else was mentioned. Internationalism and fraternal assis

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