Parecon: Life After Capitalism [Paperback]

To find out about participatory economics, I read two books, The ABCs of Political Economy by Robin Hahnel and Parecon by Michael Albert. I would recommend the former over the latter. Admittedly, they cover somewhat different ground. The former critiques basic concepts in neoclassical economics in light of political economy and is not meant as a detailed exposition of participatory economics (parecon). But in defending political economy, Hahnel explains the moral foundations behind parecon's system of remuneration and parecon's critique of markets much more clearly and concisely than Albert does. And Albert's book is so turgid and repetitive that you arguably get a clearer picture of the parecon system (and of the various criticisms of the model) from Hahnel's one chapter on the subject than you do from Albert's whole book. Hahnel's book is a model of how to popularize complex ideas without condescension or oversimplification. You finish the book feeling he has equipped you to think for yourself. In his care to craft comprehensible prose, Hahnel is consistent with his own belief in popular democracy and open debate. Hahnel also practices what he preaches by debating with alternative points of view, quoting from other authors, referring to other traditions, and providing ample footnotes.

By contrast, Albert's style contradicts his avowed commitment to democracy and non hierarchical discourse. He writes like a member of the "coordinator" class he condemns. His writing exemplifies what Richard Lanham, in the tradition of Orwell, has called the "official style," a style laden with abstract nouns linked by prepositional phrases and passive verbs, a style designed not to communicate ideas clearly, but to overawe the reader with pseudo-scientific abstractions connoting bureaucratic mastery over reality. Moreover, unlike Hahnel, Albert largely ignores the long tradition of other authors who have speculated on the subject of life after capitalism and provides no footnotes or endnotes and only a very skimpy bibliography. He does not review other proposed systems of non-market, democratic planning and dismisses market socialism in only 1 1/2 pages as another version of class society. He thereby does little to discourage readers from fallaciously inferring that if they oppose capitalism they must favor the particular system he is proposing (notice how even the book's title, "Parecon: Life After Capitalism," encourages this fallacy). Although he does rehearse various criticisms of parecon, his summary of critics is cursory and brusque, his defense of himself long-winded and blustering. Hahnel, by contrast, carefully and respectfully articulates other perspectives before stating his own position.

In case you think I'm being too harsh, here are two examples of Albert's style (you could find similar sentences on almost every page):

"Different abilities to benefit from competitive exchange can also result from more accurate predictions about uncertain consequences or from differential knowledge of the terms of exchange (which in turn could stem from genetic differences in this particular 'talent' or differences in training or, more often, from different access to relevant information)."

As Lanham notes, in bureaucratic prose like this, you never know who is doing what to whom; agents and actions are obscured beneath heaps of abstract nouns. But that sentence was easier to digest than many. Try this one:

"Suppose in place of top-down central planning and competitive market exchange, we opt for cooperative, informed decision-making via structures that ensure actors a say in decisions in proportion as outcomes affect them and that provide access to accurate valuations as well as appropriate training and confidence to develop and communicate preferences--that is, we opt for allocation that fosters council-centered participatory self-management, remuneration for effort and sacrifice, balanced job complexes, proper valuations of collective and ecological impacts, and classlessness."

This is a defense of participatory economics written as if by a government policy wonk. For a clearer, more concise and effective defense, I'd turn to Hahnel.

This is the clearest exposition yet of participatory economics,
an alternative to captitalism, market socialism, and
Soviet-style central planning. The participatory economics
model was developed by Michael Albert in collaboration
with Robin Hahnel. I would recommend reading this book
with Hahnel's recent book, The ABCs of Political Economy,
which provides a more in-depth critique of mainstream
pro-market economics.

Instead of allocation by how much
power or bargaining clout you have -- which is how markets
really work (forget about mainstream propaganda
about markets as "efficiency machines"!) --
participatory economics is based on the idea of
self-management -- each is to have a say over economic
decisions in proportion to how much they are impacted.

Governance by corporations and the state is replaced
by democratic worker and neighborhood organizations.
The market is replaced by participatory planning -- the
creation of a comprehensive agenda for production by
the direct input of requests
for work and consumption outcomes by individuals and
groups, and a back and forth process of negotiation.
Intead of elite planners, as in Soviet-style central
planning, we all would craft the economic plan.

In the process of individuals and groups evaluating
possible outcomes, the planning system takes account
of consumer and worker preferences, thus giving measures
of social benefits and costs. As each production group
approximates to the average social cost/benefit, waste
is avoided. The overall structure is designed to support
the tendencies in human nature towards solidarity and
cooperation, as opposed to the market, which imposes
a regime where "nice guys finish last."

Parecon has a particularly elegant solution to the
problem of under-production of collective goods,
and over-production of negative external effects,
like pollution, which are widespread and destructive
effects of markets.

Little is said about how such an economic framework
would come about. Albert thinks that having a good
vision of where we want to go is important to motivating
the kinds of mass movements that would be needed to
bring about such a change.

When was the last time you had a voice regarding what's being produced in the economy? And how much of an influence did you have over the cost of your last doctor visit? Finally, does the market care about the homeless or the environment, or does it only care about profits, leaving the former two concerns for you, the taxpayer, to deal with (i.e., market discipline)? People should ask themselves questions such as these before reading Michael Albert's Parecon: Life After Capitalism.

In a nutshell, this book offers an alternative economic vision that could fulfill human potentials and needs in participatory ways. Parecon's guiding values are equity, diversity, solidarity, and participatory self-management.

Clearly then, this book requires critical thinking on the part of the reader. Prepare to be challenged at first, as Albert analyzes the inherent weaknesses of both capitalist and the so-called "socialist" economies (e.g., former USSR), and how they both subvert human values to a considerable extent. In fact, he demonstrates conclusively how capitalism destroys equity, limits choices, wrecks solidarity, and smashes worker self-management. And because capitalism remunerates for bargaining power and has corporate divisions of labor, these ill-effects will be inevitable under capitalism, according to Albert. Therefore, Albert dismisses capitalism when thinking about a desirable economic vision.

Albert picks apart the so-called "socialist" economies in the same way. He shows the reader that such economies are clearly totalitarian, as they typically have state ownership and central planning; despite some marginal democratic forms on the periphery. Further, he argues that such systems create a new class of people who monopolize skills and decision-making -- what he calls the "coordinator class". Ironically, the philosopher Bakunin warned of this over a century ago about such a systems; a system under the control of an elite minority "overflowing with brains". Ultimately, Albert proclaims, we should reject such "socialist" systems on the same grounds that we reject capitalism; they're flawed, and violate basic human rights and "the values we hold dear".

But again, the focus of this book is to actually develop a new economy -- its relations, institutions, and so on. At the same time, it's remarkably consistent with a long tradition of libertarian thought from the Left. Albert merely expands upon those ideas in order to arrive at a realistic, desirable economic vision for the future.

Economies affect people. Understanding this and working to make that relationship compatible should be our concern. This book is an important step in that direction.