Markets, Corporations, and Parecon
A presentation for the Albany Park, North Park, Mayfair Neighbors for Peace and Justice Economics, April 25, 2009
In this presentation, I'll address four questions pertaining to our economy. (1) What are some of the problems? (2) What solutions have been proposed? (3) What solutions would I advocate? (4) What can we do? This presentation is divided into four sections, one for each of these four questions. Note that in keeping with the panel I'll be focusing on the economy and economics, and if there's something here that's unclear or confusing, please ask after the presentation.
Section One: What are some of the problems?
The economic problems we face are unarguably systemic. Among the gravest of them are the disproportionate role that limited-liability corporations with rights of personhood pose to humanity and the planet. Government regulations, one entity that might serve as a check and balance to corporate power, are often handmaidens for corporate interests and stepping stones to corporate interests. Pick any broad realm you choose: the environment, war and militarism, labor rights, energy, education, media -- chances are very good that one or more corporations have a stranglehold of control and progress. Thus, a great deal of activism rightly targets corporations.
Another consideration is the economic institution of markets, where buyers and sellers are pitted against one another. Corporate dominance is to a great extent fueled by markets because corporations, as described in the film "The Corporation", are the political-economic equivalent of monsters. Corporations demand increasing profit for their shareholders at the expense of everything else. In a market economy, it is perversely rational to establish these corporate monsters since markets are a competitive realm where you win at another's expense -- to behave like a monster in effect, and the bigger the monster, the better the chance to win. Therefore, it is imperative to address markets as well as corporations.
This is a cruel irony since markets have been touted in various ways even by many liberals and leftists as neutral, beneficient, or unavoidable -- but seldom as a key institution than should be abolished and replaced. The proverbial "invisible hand" of competitive markets is long touted. Far less discussed is what some critical economists have called the "invisible foot", which refer to the problems that are endemic to markets. These problems include markets' competitive ethos fostering monstrous corporations, markets' chronic mispricing focusing prices exclusively on buyers and sellers, and markets' persistently ignoring social, labor, and environmental considerations.
Section Two: What solutions have been proposed?
Some believe markets can be controlled and harnessed, and their worse aspects contained and minimized. But, as I've said elsewhere, provisions can be put in place to mitigate some of the negative effects of markets, just as we see in present-day efforts to oppose corporations, but corporations by their competitive urge and competitive advantage fight back, and thanks to this eat-or-be-eaten logic of markets corporations win nearly every time. Plus, there remains the potential to ignore or belittle the chronic problems with markets -- blatant mispricing, commodity fetishism, ignoring social consumption, and others. Some may try to solve those problems by means outside of the market, but market advocates fight back with the proverbial stick of "free markets".
Many on the left have proposed a command-planning economy instead, even though this has been soundly rebuked, including by mainstream economists. Command-planning economies bear top-down hierarchies, ignore social effects, see technical information monopolized by a select few, and (ironically enough for a supposedly non-competitive model) spawn competition among actors within the command-planning pecking order.
Now we see an intersection of supposedly disparate parts of the economic spectrum. Corporations themselves are command planning economies and possess the structural attributes of command-planning economies. This leads to another cruel irony: those who advocate markets as an alternative wind up spawning the very command-planning institutions that they've opposed, except that they're corporations originating in the economic sphere rather than command-planning states in the political sphere.
So what remains instead of these retentionist systems, such as markets, command-planning, and corporations? Since the economic problems at hand are systemic, the solutions themselves must also be systemic. And one set of alternative economic systems that has been offered is termed "democratic planning".
Section Three: What solution would I advocate?
The best model of democratic planning goes by the name of "parecon" -- participatory economics. Here is a description of what it is, how it works, and how it's better than what's come before.
Parecon is an economic model that strives to achieve solidarity, equity, efficiency, diversity, and self-management (a set of values encapsulated in the acronym "SEEDS"). Parecon has four main institutions: (1) All jobs are balanced for desirability and empowerment. (2) Remuneration is determined by effort and sacrifice in socially-valued labor as gauged by one's workmates. (3) Economic decisions are made by decision-making bodies comprising those who work in a workplace or consume in a residence, where those who are impacted by a decision have decision-making power proportional to the degree they're impacted by that decision. (4) A participatory planning procedure addresses allocation, where consumption or production plans are submitted, with the help of a facilitation mechanism, to those who are impacted by those plans, and revised if necessary by those who made those plans in a series of rounds based on assorted qualitative and quantitative feedback, all done without command planning and without markets.
Parecon is better than retentionist systems like command planning, markets, and corporations because parecon spells out a new and markedly different set of rules to achieve a positive set of goals. Retentionist systems bear job hierarchies where a relative few bear highly empowering and desirable jobs, whereas participatory economics requires jobs balanced for desirability and empowerment. Retentionist systems pay poorly and require decisions that (overwhelmingly negatively) affect those who have little say in those decisions; parecon pays more fairly and strives to provide more fair decision-making power to its participants. In allocation, parecon uses participatory planning for the shared goal of eliminating excess demand, in contrast to competitive markets which spawn command-planning corporations and to the command-planning economies which spawn competition.
Section Four: What can we do?
In sum, we should abolish corporations by abolishing the markets where they spawn and thrive, and replace those markets with a participatory economy. Easier said than done. How do we do that?
First, we must widen awareness of the idea and build support for it. There are many things we can do, like this panel, and expressing the ideas in various creative media -- radio, video and film, in print, on the internet, and elsewhere -- and in various forms, fictional and actual alike. We also have to draw connections between this admittedly abstract and far-reaching proposal and the immediate impacts it has on so-called "everyday people". We can use these ideas to help people in their immediate needs and concerns, and connect previously disparate activist efforts on the immediate anti-corporate initiatives and those who work on the theoretical economics front.
The next steps and the harder steps include calling out the hypocrisy and double-standards among retentionists, regardless where they fall on the political spectrum. It's easy to mock acolytes of Milton Friedman as unwitting and hypocritical command-planning advocates. It's far more difficult to critique liberal or left groups that implement organizational structures that often structurally mimic the very corporations we oppose.
It's also hard, but necessary, to build new institutions that implement parecon rules. There are already some existing examples, and we should continue to build more. One idea along these lines would be to make a website or other entity that has established a useful function directly using the structures of participatory economics to its advantage.
At some point, with continued agitation and with expanded imagination, we can ultimately implement the institutional changes we need, but we must seriously take on the question "What do we want?". Oddly enough, both libertarians and Marxists, though they can't agree on what color the sky is, curiously offer the very same response to the question of "What do you want?" They both answer: "Let's figure that out after we win." Fat chance: We won't win if we don't seriously address this question, and I hope that this presentation offers some food for thought in this regard. I thank you for your time and attention, and I look forward to your questions and comments.