A few thoughts on Parecon

I’m sure most people reading this would be aware of Participatory Economics (Parecon, for short). Put forward by Michael Albert and Robin Hahnel in various forms for a while now, it has its fair share of supporters (including some anarchists). Personally, I think it is deeply flawed. I’ll discuss why here.

I’m sure most people reading this would be aware of Participatory Economics (Parecon, for short). Put forward by Michael Albert and Robin Hahnel in various forms for a while now, it has its fair share of supporters (including some anarchists). Personally, I think it is deeply flawed. I’ll discuss why here.

First, however, I should mention the recents articles I’ve posted, in no particular order. The only new one is on Labour’s 50% tax rate for top earners. Not much to say about that, because it is (at best) fighting symptons rather than causes of our soaring inequality. Still, it is causing much gnashing of teeth in the right-wing media so that, at least, has increased social utility by making many people laugh…

Next up are a few reviews. I posted a review of an excellent biography of leading Italian-American anarcho-syndicalist Carlo Tresca. It is by the same author who wrote an excellent history of Italian anarchism and gives a great insight on the difficulties of labour organising in the America at the start of the 20th century. It also explores the sadly too common sectarian in the movement, as Tresca was hated with a passion by the followers of Luigi Gaellani (an anti-organisationalist communist-anarchist whose book The End of Anarchism? is quite good, mostly). Then there is a review of a Kropotkin book, Evolution and Environment (volume 11 of Black Rose’s incomplete Collected Works series). It contains the classic "Modern Science and Anarchism", which I would recommend every anarchist read. The next is a review of On Fire, a collection of eye-witness accounts of the Geona protests and last there is a review of Eric Schlosser’s Fast Food Nation, a damning indictment of the industrialisation of our food supply. Reading it made me extremely aware that the centralisation and concentration of food production, as well as degrading quantity and safety in favour of profits, also would impact if we did have a social revolution. This is because the current centralised food production process makes it extremely suspectible to disruption and any revolution will, to say the least, be somewhat disruptive….

Lastly, there are some material on what some people may think are my favourite subjects, Leninism and "anarcho"-capitalism (they are not, but unfortunately I seem to get dragged back into discussing them). In terms of Marxism, there is a reply to a leading member of the British SWP’s attacks on the Makhnovists and Kronstadt. Suffice to say, a quick look at the sources he quotes from shows how, to be polite, selective he was (a reply to a similar American attack can found here. Then there is the text of a free booklet on Anti-Capitalism or State Capitalism I produced back in 2001/2 to counter Leninist attempts to recruit from the anti-capitalist movement. It seeks to explain the history of Leninism and how, in practice, its "anti-capitalism" is just state-capitalism. Finally, there is An Anarchist FAQ blog entry which discusses an unpublished article by the founder of "anarcho"-capitalism in which he concludes (correctly!) that his ideology is not anarchist, because "all" schools of anarchism, including individualist anarchism, had "socialistic" elements. And An Anarchist FAQ gets criticism in certain right-wing circles for arguing exactly the same thing… Oh, the joy!

Which brings me to Parecon. I’ve read quite a few Parecon books and articles over the years (starting with Looking Forward way back in the 1990s). And I have to say, I’m still at a lost why people (particularly anarchists) take it seriously. It is not all bad, I should state. Certain elements are correct, perhaps unsurprisingly as anarchists have been advocating them for some time, some (such as, for example, workplace self-management since 1840!). No, it is the general context these good elements are placed in which I object to, mostly because it would (in practice) be completely unworkable.

I should mention that this blog was provoked by an exchange on Anarchist Black Cat (a class struggle anarchist webforum which has the distinct advantage unlike libcom of not being infected with ultra-leftist Marxists like the ICC). There is a thread entitled Why is anarchism unkown? which has evolved into a discussion of what an anarchist society would look like. A comrade took exception to a quote from Rudolf Rocker on "free contract" and I replied as follows:

 

‘Actually, the idea that "Anarchists desire a federation of free communities which shall be bound to one another by their common economic and social interests and arrange their affairs by mutual agreement and free contract" can be found in Bakunin, Kropotkin, Malatesta, Goldman and so forth. If that is "quite wrong-headed" then anarchism itself is so…’

 

The person who considered the basic anarchist ideas of free association ("free contract") and agreement is a strong supporter of Parecon. Personally, I cannot see how a free society can work unless based on free agreement and association ("free association" may be preferrable to "free contract" to some, but it is a just perference for words which one you use I think). A commune must be based on free association, with individuals having the right (and the duty, at times!) to leave, not to associate. That same right must be extended to communes as well, plus federations of communes and so forth (a point I made in my critique of Bookchin’s last book, along with a critique of the so-called distinction between government and state which some on that thread also made). Equally, individuals and communes can associate into specific federations as and when required (some will join together to pursue a hobby, to produce a journal, scientists will form professional bodies and so forth while communes with specific needs will meet to discuss what they have in common).

The same goes for workplaces (co-operatives/syndicates/collectives). In fact, more so as such free association is required to ensure that produced goods actually meet consumer needs. Which made me think of Parecon and its problems. I would guess that a lack of awareness of the need for free association (direct horizontal links, "free contracts") flows from the flawed positions inherent in Parecon. I’ll try to explain why.

So what is wrong with Parecon? Well, first, while it abolished wage-labour by self-management, it keeps the wages system (prices for goods, payment by deeds). While I think most communist-anarchists would tolerate this immediately after a revolution, none would consider it desirable as the final state of a free economy. However, that seems a minor point compared to the awkward fact that it will not work.

The reason why can be seen from market socialist David Schweickart’s critique. His very useful book Against Capitalism contains a good summary (along with lots of other informative information and arguments). However, this is out-of-print (although libraries, particularly university ones, may have it). The best source on-line is his debate with Parecon’s Michael Albert (and hats-off for Albert seeking out debate and posting the results on Znet’s webpage!). Schweickart’s contributions are charmingly, although sadly accurately, entitled Nonsense on StiltsI Still Think It’s Nonsense.

Or listen to him on this subject:

And:

And:

 

And:

 

Before summarising the key issue, I feel I need to stress that I don’t necessarily agree with Schweickart’s positive vision of market socialism (although given it is based on a market of co-operatives, I do feel he should mention Proudhon more!). I’ll say this, though, I do think that it would work — unlike Parecon. And if mutualism is the best we can get, then I’ll live with it. But as a communist-anarchist I think we can do better. Similarly, I don’t think Schweickart’s critique is inspired by his being a professor and so part of what Parecon supporters call "the co-ordinator class". Nor does that inspire his market socialist vision, particularly as he stands for democratic election of administrative staff in co-operative workplaces. I think his critique stands on its merits and his market socialism is an attempt to produce a socialism which can work and remain true to our desires for liberty, equality and solidarity (regardless of how well those hopes are realised). I will note that it seems somewhat ironic, given how much stress Parecon places on facilitation boards and planning, they go on about the dangers of a "co-ordinator" class!

The key problem is simply the amount of information required to be collected, aggregated, processed and studied. As Schweickart points out, we are talking about a lot of goods — millions, in fact, once we take into account intermediate goods as well as finished ones. Then there are the balanced job complexes, which will involve millions of jobs to be described, evaluated and then balanced across an economy. My workplace did the first two tasks and it took months just for a few thousands — and we were not trying to balance them across the workplace, never mind over a geographical area which has millions of workers in it!

Let us assume that the citizens of Parecon manage to list all the goods they wish to desire to consume in the following year. Then the facilitation boards gather than information up and produce a series of plans from it. Yes, not one but a series so the citizens can vote on them. How do they decide which one is best? There are two options: either the plans are pretty detailed or they list aggregate information (i.e., 500,000 shirts verses 1,000 red ones of size X, 1,500 red ones of size Y, 5,000 blue ones of size X, and so on). The detailed list will get pretty long, particularly as the plan will need to specify the intermediate goods required (different colours require different dyes, different sizes require different amounts of materials, then there is the energy required, the material for the machinery maintaince and so on). So it would next to impossible to go through one plan, never mind a few, and evaluate what it actually means. In terms of aggregate plans, knowing that we need 500,000 shirts is all well and fine but it tells you nothing at all in terms of what work will be required to be done. As Schweickart notes, saying that 100,000 kilos of "meat" is planned tells you next to nothing.

And that is the crux of the problem. Yes, people have voted for 500,000 shirts to be produced (and, presumably, the necessary aggegrate inputs those need). How do the shirt syndicates know that so many red shirts are needed? How many blue ones? Where are they needed? How does it know that commune X needs 100 blue shirts? If that information is not in the plan, then commune X needs to directly contact syndicate Y to place an order. If it is in the plan, then the plan gets even more detailed. Production quotas determined by the facilitation board mean little as specific workplaces will need to know who wants what when.

As Schweickart puts it:

 

"Here we are at the heart of the matter regarding non-market allocation. Albert doesn’t seem to recognize — despite my pressing the point in my critique–that if consumers don’t specify in detail what they want, then producers — who must produce specific items, not general categories — will have great difficulty in knowing what to produce. Worse still, they will have little incentive to find out."

 

The point is well made, although I question his assumption that horizontal links automatically imply market allocations (Alec Nove made the same assumption, asserting that there were only horizontal links — the market — and vertical ones — planning). Without specific syndicates requesting specific goods at specific times to meet specific needs, an economy will not meet people’s needs. Saying that 1 million tonnes of steel need to be produced in a year says nothing about what specifically needs to be produced, which depends on how it will be used. And a facilitation board will simply not know that information for large numbers of consumers and workplaces. Schweickart explains why in some detail and should be read.

Hence the pressing need for those classic anarchist ideas on free association, free contract, mutual agreement, mutual aid! Once direct links between producer and consumer can communicate the information required to produce the right thing at the right time!

As mentioned in AFAQ’s discussion of how Bolshevik ideology negatively impacted on the Russian revolution, this lack of horizontal links was a major cause of waste and bureaucracy. Rather than directly seek out other workplaces, the Bolsheviks forced them to go through the centre. This centre was ignorant of local conditions — it did not even know how many workplaces it had under its remit! Attempts at direct contact between workplaces were discouraged but it was what kept the economy going (at least, what was left of it). Workplaces did not know when the centre would get round to informing its suppliers what it required and when it required it (probably because that information was sitting on some bureaucrats desk unread). For the lucky ones which did get such information, bureaucrats would send material to workplaces in other parts of Russia (unaware that nearer factories needed it) on a railway network which was constantly breaking down (due to lack of fuel, civil war damage, strikes, and workers to scared to act without official approval). It made a bad situation worse…

Yes, I know, this was central planning. Parecon aims for decentralised planning. But it aims for comprehensive planning, specific amounts of material being produced for specific needs. It would still be one plan for a specific economy and production units need to know who wants what when. The plan must specify that to be comprehensive enough to provide the information required to meet the human needs expressed in it. And having computers will not help.

All of which, to bring me back to what inspired by discussion of Parecon, shows the importance of Rocker’s summary of anarchism: "Anarchists desire a federation of free communities which shall be bound to one another by their common economic and social interests and arrange their affairs by mutual agreement and free contract". Only direct horizontal links between syndicates and between communes and syndicates can ensure that what is produced meets the specific use-values required at the time they are needed. Assuming a comprehensive plan did exist (big if!), the fact that 5,000 six centimetre nails are to be produced tells us nothing about who needs them and when they should be delivered! As such, even Parecon will need "free contracts" and "mutual agreement" in order to work — and given the uncertain nature of real-life, any such comprehensive plan would need to be revised in light of unexpected developments. All of which provokes the question of why bother with such detailed planning in the first place…

Of course direct horizontal links does not preclude general geographical and industrial federations. These would be required to discuss general issues, how to respond to changing shifts in production needs and resource use, what should be prioritised, conflicts between syndicates which cannot be resolved by those directly involved and such like. But such federations would not be trying the extremely difficult task of trying to produce comprehensive plans!

And even assuming that Parecon could work once it is all in place (a very big if!), there is still the problem of implementing it. As anarchists have argued for some time (since Bakunin, but Kropotkin especially!) revolutions tend to disrupt the economy somewhat (to be somewhat understated). I’m not sure that organising facilitation bodies to generate 3 detailed plans for people to vote on will be likely to be high on people’s list of things to do… Which suggests that Parecon is not considered as the economy of a society in revolution but rather one introduced in quiet periods and overtime. Yet, I fail to see why a free people who managed to organise their economy sufficiently well to overcome the problems they faced immediately after a revolution would utterly change that setup once things calmed down. Sure, they would seek to build upon, improve and deepen the structures and processes they had created but rooting it all up and replacing it with Parecon seems unlikely — assuming Parecon would work, which it won’t.

Why do people take Parecon seriously? Partly because its goals are ones which anarchists and other radicals can subscribe to. It aims for a classless, self-managed society — and who can object to that? Partly because, I think, Albert and his comrades are the only ones discussing vision, the ins-and-outs of a post-capitalist system. This is a somewhat refreshing change to (usually Marxist) statements that to discuss the future is utopianism (but if only Marx had been more specific on his vision then it would have been harder for Lenin and Stalin to abuse his ideas as much as they did!). As such, Albert and his comrades should be congratulated for taking the effort for their work — even if flawed, it adds to a necessary debate. And if it gets people thinking about alternatives, then it has contributed something to our struggle for liberation.

In terms of visions of the future, I think that is wise. We need to thing about the practical problems a revolution and an anarchist society would face. I would also recommend that we assume the worse-case scenario as well — otherwise we would be like the Bolsheviks who, brought-up in social democratic orthodoxy, failed to appreciate what was involved in transforming society (they really should have read Kropotkin!). In terms of the general structure of a free society, anarchists should not abstractly compare what could be with what is. Rather, we need to look at the class struggle to gain an insight into what social organisations would be at the heart of the revolutionary process — and the post-capitalist economy and society. This is discussed in AFAQ so I won’t do so now. Suffice to say, we build the new world by struggling against this one and so a free economy will be marked by workplaces which have turned their occupation and strike assemblies, committees and federations into producer co-operatives and agro-industrial federations (to use Proudhon’s expression).

So Parecon does fill a hole, a desire to present a coherent alternative to capitalism. Sadly, I think it cannot do so. While it expresses good hopes and dreams, I feel that the baneful influence of neo-classical economics and equilibrium analysis stikes again. There is no awareness of the complexity of a modern economy (producing various vectors and matrices and saying that they converge mathematically does not reflect reality). It does not recognise the uncertainty at the heart of reality (an uncertainty which capitalism magnifies due to its markets and need for profits). It does not recognise the problems in aggregating information about products and communicating the needs they represent to those who produce them. It simply staggers belief that planning boards can gather the necessary information, combine it succcessfully and inform producers what is specifically required and when — best to leave that to direct horizontal links ("free contracts") between syndicates (and, need I repeat, this does not imply money).

I’m sure that for the supporters of Parecon my comments will be dismissed (with dark mutterings of "market socialism", "reflecting the interests of the co-ordinator class" and such like). I think that part of this will flow from a basic incapacity in seeing the point I’m trying to make (and Schweickart before me, I must stress). This can be seen from Albert’s (non-)reply to Schweickart in their debate. And, to be honest, I can understand this lack of understanding — it is hard to be told that something you have invested much energy, time, effort and (most importantly) hope into does not work. That is a natural human response (and helps explain why so many people remain Leninists in spite of the substantial evidence showing its failure under Lenin).

Still, perhaps I’m wrong — I’m willing to be convinced otherwise. After all, I’m well aware that commmunist-anarchism may prove to be a impractical dream and that Proudhon was right after all. If that is so, then so be it — we get nowhere denying reality (if you want to do that, become an economist!). But, as regards both libertarian communism and Parecon, I don’t think so…