Parecon: Life After Capitalism? - Barbara Ehrenreich Interviews Michael Albert

Of course, capitalism can be better or worse. The bargaining power of contending classes determines just how draconian income distribution, concentrations of power, and conflicts among economic classes are. With more bargaining power, we can raise wages, improve work conditions, increase social investments, and win many other innovations. We can certainly win and defend improvements against capitalism’s socially reinforced greed and power, and we must—but why not simultaneously seek a new system that has desirable outcomes as its norm? 

The big choice is not markets versus a bunch of committees. That’s a false polarity. The big choice is between competitive markets—which depend on each actor fleecing the rest, which misaccount the relative value of all items and distort preferences, which lead workplaces to seek maximum surpluses and deliver unjust remuneration, which apportion decision making influence hierarchically, and which produce class division and class rule—and cooperative participatory planning, which produces equity, solidarity, diversity, and self-management. 

Having markets for some items and not for others might have relative benefits if markets had significant virtues that no alternative allocation system could match and exceed and if markets had no huge debits for the proposed items and if a market in some items, but not in others was viable, for that matter. 

But markets have numerous disastrous faults that apply not only to markets in labor or to markets in huge investment projects, but to markets in any item at all, including dresses. Finally, if you don’t have labor markets, the entire argument that marketeers put forth for having any kind of markets collapses. 

Applying all this to skirts, we should want the tastes and preferences of all workers and consumers and particularly of people who wear and those who produce skirts to interactively proportionately influence their length and colors, as well as their number and composition, their method of production, and so on—instead of profit seeking determining all these results. But to have a market in skirts not only violates these desires, it means skirt prices will diverge from the true social costs and benefits of their production and consumption, that skirt factories will seek surpluses as their guiding motive, will remunerate their workers unjustly, will utilize ill conceived methods of production, and will incorporate class division, among many other faults. 

All the items involved in economic life are connected. Producing more of any one item leaves less assets for producing all other items. Items that seem relatively simple on the consumption side can utilize all kinds of inputs with wide ranging ramifications. Mispricing any item induces a ripple effect that misprices the rest. Having antisocial motives at play in any one item’s production and consumption skews the context for other items’ production and consumption. Excessive or inferior remuneration levels generate harmful incentives. 

In other words, markets aren’t a little bad in some contexts. Instead, in all contexts, markets instill anti-social motivations in buyers and sellers, misprice items that are exchanged, misdirect aims regarding what to produce in what quantities and by what means, mis-remunerate producers, introduce class division and class rule, and embody an imperial logic that spreads itself throughout economic life. 

If eating, having shelter, and having desirable additional items to express and fulfill our potentials and enjoy life’s options—including skirts—couldn’t be had by some system better in its material and human implications than markets, then, yes, we would have to settle for markets and try to ameliorate their ills as our highest aspiration. But luckily, there is a system that is much better than markets so that we can strive for participatory planning even as we also ameliorate current market ills. 

I don’t want to prolong the skirt discussion (I hardly ever wear them myself), but I am confused about the way you conflate markets with capitalist exploitation. There were markets of one kind or another for thousands of years before capitalism, so they can’t be the same thing. Do you totally reject all attempts to create non-exploitative enterprises within capitalism, for example—like “No Sweat” in LA, various micro-enterprises throughout the world, etc?

I certainly don’t mean to conflate markets with capitalism. They differ. Capitalism has markets in labor power and in most though not all goods. But you can certainly have markets without having private ownership of the means of production, as, for example, existed in Yugoslavia not long ago. I think I was careful in my list to pinpoint faults of markets per se, not of capitalist markets. Markets compel pursuit of surplus for example, but that surplus won’t go to owners if they are not capitalist markets. 

Having helped create a non-exploitative publishing company, South End Press, I certainly advocate creating better institutions now. But it is also important to note that when we create desirable institutions, if we do it short of winning a whole new economy, they will exist in a sea of counter pressures pushing to return our activities to an oppressive logic. There is counter pressure to cut corners, to advertise, to cut costs, and to have managers impose the cost cutting policies as well as to lengthen the work day regardless of people’s desires for leisure, and so on. We should seek not only reforms, but a whole new economy. 

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? 

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 interface could occur, 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? But 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 for effort and sacrifice—is laid waste. If they don’t disperse their surpluses to employees, however, then the firms aren’t really operating in a market fashion and in fact have no basis for deciding their level of production, length of workday, etc. 

Therefore I 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, of course, but do so 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 bills 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, after meeting bills and investing in equipment, is largely allotted to surplus for what I call a coordinator class. 

When you say we should marketize inessential goods— what qualifies something as being inessential? 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 surplus in sneakers to run sweat shops? 

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 at the same time and how can they 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 misprice items due to failing to account for external and public effects, again, even without private ownership. The fact that stylish 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? What about the ways it 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. So why would we want to accept these 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, 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, to stay in operation. 

When you say leave non essentials to a market—I also think perhaps you have in mind central planning as compared to markets, and are thinking why not augment the former 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 establishing a context 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. 

Have you ever tried to calculate the human labor costs of all the planning involved in Parecon? Or maybe I should say “time” not dollar “costs.” 

Yes, in the various books that issue is certainly addressed. The discussions not only look at the time it takes to plan, which is only one side of the coin, but also at the time gained due to eliminating diverse kinds of no longer needed activity when we change to a Parecon. 

Some people, especially when hearing a brief summary of Parecon, worry that self consciously deciding on what to produce and consume by a negotiated cooperative process will take too long. I have two answers. First, no, it won’t. The planning process in Parecon is confined to a couple of weeks and only takes part-time attention over that span. But, second, even prior to that answer, we have to decide what would count as being too long. That is, when someone asks me about the cost of planning in time expended, I want to try to communicate that this is at worst a trade off. 

Let’s say, against what I think is the case, that the total time you as a consumer have to spend thinking about and implementing your consumption choices would go up in a Parecon by a factor of two, depending on how much time you spend now. Okay, that would be a cost, to be sure. But would it be a deal breaker? To know that, you have to look at both sides of the equation. You have to weigh the new time costs (which I deny). But you also have to weigh countervailing gains—such as having no ruling class, having equitable work conditions and income distribution, having accurate pricing, having no drive toward selfish individualism, no poverty, and so on through many more. 

Okay, let’s say someone really values time a whole lot. For this person, spending extra time on consumption outweighs attaining classlessness and all the rest. He or she would still need to consider the countervailing implications of having participatory planning for time savings and not just its implications for new time expenditures. 

For example, Parecon affects the length of the workday. Where markets increase workday length by their competitive logic regardless of the wills of workers to have more leisure, participatory planning leaves the choice entirely in the hands of workers and consumers in light of their valuation of leisure versus income. Likewise, there are time savings due to the absence of class struggle, the elimination of the IRS, the end of redundant and wasteful production, the end of having to clean up the messes in the ecology produced by market competition, etc. Even regarding consumption itself, there are very substantial time savings due to people having accurate information, and, in particular, due to sensible collective consumption obviating the need for quite a lot of individual consumption as we now know it, not to mention production of durable goods rather than ones designed to become obsolete.

So, okay, in light of all this would planning in a Parecon take inordinately longer than consuming does now, plus the time for other activities that Parecon replaces? In a Parecon, you have to spend some time, over the course of a week or two, entering your budget and interacting with the overall process. I suspect this won’t take longer than people now spend doing tax returns, say, and worrying about how to pay bills, or recuperating from purchases made due to false advertising, or having to do personal consumption that would be rendered irrational in a Parecon, or in time spent producing or cleaning up wasteful and useless outputs, and so on. After the plan exists, time spent making adaptations as the year proceeds really isn’t significantly different than time spent nowadays on consumption or production decisions, though it is carried out differently, with different implications. 

The point about time expenditures is therefore twofold. Markets are harmful. Even if they are utilized for one good, which isn’t what would occur, the price of that good will be wrong and that wrong price will enter into every other industry incorrectly. The workers in the market driven industry will be motivated to seek surplus and will be unfairly remunerated as compared to all other workers who are motivated by fulfilling needs and are remunerated for effort and sacrifice. The marketized workplace structure will push toward class division. More, it makes no sense to have an infrastructure for “market exchange” and have only a few goods marketed. In fact, it only has sense to both consume via the participatory plan and then also via markets if there are lots and lots of things to buy on the market. But then all the associated ills of markets would be spreading—and we may as well have markets for everything and say goodbye to classlessness. And second, the purported time gain is false, in any event. 

You say your notion of Parecon was influenced by your experiences with real “alternative” organizations like South End Press. Can you tell us something about these experiences and how they shaped your thinking? 

Parecon emerged conceptually from examining the experiences of many post-capitalist economies and efforts, of course, and very central to that were some of our own experiences. When we formed South End Press, for example, we wanted it to implement our values, not only in the books we chose to publish, but also in how we structured the workplace. We knew we wanted real democracy, but when we sat around to talk about how to achieve that, some very serious issues arose. First, what did it mean? Was everything to be decided by a vote of everyone with 50 percent plus one winning? And second, however the decisions were to be arrived at, we realized it wouldn’t matter all that much if we came to the meetings to discuss them with very unequal preparedness, motivation, and insights to offer. 

So, regarding the first point, we realized that we wanted to discuss and make decisions in a way that gave appropriate say to each person involved, but we also realized that how much say that was would vary from case to case since impact and importance would vary from case to case. We were allergic—like you—to spending long amounts of time on low importance choices. No one wanted others telling them what to do when it was largely a personal choice. As we worked out rules, hiring and firing became a consensus decision because of the powerful effect a new employee might have on each person who might not like that new employee. Many broad issues were 50 percent plus one, though of course we would seek overall agreement first—salaries, hours, definitions of jobs, and so on. Accepting a book was two-thirds needed in favor with recourse for opponents to delay decisions. Choices about how specific members or teams would organize their own time were made by those folks, not by everyone. In short, we worked out in practice the processes and norms of self management including learning the efficacy of using different modes of decision making for different issues and of allotting different numbers of people to making different choices depending on who the choices affected and to what extent. The norms and vision regarding Parecon decision making emerged very naturally from all that. Similarly, while the council commitment of Parecon has a long pedigree on the left, it was reinforced by the South End Press experience. 

The payment approach in SEP wasn’t so directly related to Parecon’s exact commitments, but indirectly it was. We had almost no resources for the first few years so people worked for room and board and no more. Everyone worked very hard, well over the usual full time job, but even given that, some people worked longer than others. There was no difference in pay, however—we all got room and board, period. When there was sufficient income to have salaries, we put upper limits on them—in accord with our operating inside the U.S. and respecting, I think, U.S. social averages. It was still true, however, that we all got the same pay. Everyone put out intensely, and everyone worked a long week, and for those who worked extra there simply was no more pay to be had. So the extra was just considered volunteering. But for me, being part of SEP and trying to learn from what we were doing while also thinking through other experiences, what Robin Hahnel and I,  in developing the Parecon vision, teased out was the remuneration for effort and sacrifice idea.

The main impact on Parecon of the SEP experience, though, was about the division of labor. We realized that if some people were editors, or handled the finances, and other people just typeset the books, or cleaned the office, no matter what initial pay structure we set up, and no matter what initial voting and discussion procedures we chose, in time the former folks would dominate all outcomes and the latter folks would become typical employees. The former would raise their own incomes and lower that of the subordinates. The hierarchies of power and income and circumstance that we dreaded would worm their way back into our project. So we incorporated what we later called balanced job complexes to insure that our work facilitated all of us being able to participate and have an informed say in the decisions affecting us. It wasn’t easy to do because it was a small operation with not all that many tasks so that apportioning tasks in a balanced way was difficult. Ignoring details, everyone did editorial, everyone did typesetting (which was backbreaking and hugely time consuming) and then some people did some functions like promotion, others did other functions like organizing production and meeting orders, but with everyone doing a balanced mix in their overall job. 

This set of choices about how to organize SEP was, I think, a huge impetus to the Parecon idea of balanced job complexes, though it became refined when thinking about applicability to a whole economy rather than just a single small workplace. 

Why don’t you call yourself a socialist? It seems to me Parecon is well within the socialist tradition. Are you uncomfortable with being associated with that tradition? 

Is the socialist tradition fighting against domination and hierarchy in pursuit of classlessness and self management? Or is it the crushing of grassroots direct involvement in economic and social life and the imposition of domination from above? 

I think the fact that I certainly identify with the former tradition doesn’t overrule that the latter tradition has been a ubiquitous outcome for projects that have called themselves socialist. And I think we have to pay attention to that. We have to pay attention to common usage among the constituencies we wish to talk with, and also to the impact that using labels can have on narrowing our own thinking. 

The word socialism when applied to economics means state or public ownership, market or centrally planned allocation, remuneration for output (or arguably for power), and corporate divisions of labor. These features have been present in every economy that has labeled itself socialist. They have characterized the design and logic of almost all movements that have called themselves socialist. They are present in nearly all written accounts of a socialist economic model that goes beyond espousing values to actually offering institutional aims. These are features I reject, the same as I reject private ownership of productive assets. 

In the past, I have spent considerable time calling myself an unorthodox marxist, or a libertarian socialist. I wrote books, like Socialism Today and Tomorrow, rejecting aspects of the current models but advocating other models for tomorrow, and so on. But I think there comes a time when we have to admit that we have lost the war of words, or at the very least we have to recognize that it is a battle with diminishing returns, and move on to the real substantive issues without conceptual baggage. 

I am anti-private ownership of means of production, anti-profit, anti-market, anti-central planning, and anti- remuneration for output. I am anti-corporate divisions of labor and anti-coordinator class rule. I favor specific institutions contrary to all those allegiances. That means I reject much of what has gone under the name socialism and instead advocate balanced job complexes and participatory planning that have not gone under that name. I guess I think that worrying about whether other leftists will think we are rejecting what is good in the heritage when it is utterly obvious that we aren’t, should not be our concern. I think our concern should be whether people who seek classlessness and who advocate institutions to attain it, can communicate effectively with the rest of the world.