We have now completed half of this course (book). In this lecture, 6, as in past ones, I would like to begin by presenting my answers to questions raised last time. Then I will try to very briefly summarize some of the ground we have already covered. Then we will move on to the institutional section of the course, including five more lectures, by dealing with production institutions.

Answers to Lecture 5 Questions

Here are my answers, briefly, to last time’s questions.

Well, they need to be making those decisions that affect them, in proportion as they are affected by them. So, clearly, they need to be making decisions about the organization of the workplace, the pace of work, the allocation of responsibilities, etc., at a very high level of impact. They need to be making decisions about output level, product characteristics, etc., at a high but not by any means exclusive level of impact. Every choice that must be resolved for each workplace has to be determined, it would seem, by some mechanism that combines the wills of the workers in that unit and the wills of the consumers and the broader public affected by the unit’s actions, in the proper proportion. .

If I work someplace and have to make choices about how much work I should do, how much product for consumption the plant should produce, etc., I have to know both the true social costs (in required material inputs, in the time of work and the quality of workers’ circumstances, in pollution, in effects on workers, etc.) and the true social benefits arising from the use the product is put to, etc.

One possibility is that I get this information in some kind of congealed form such as a price that succinctly summarizes all of it.

Another possibility, more humane and informative about real social relationships, but with additional communications requirements and ease of use problems, is that I get this information, or can at least access it when I need it, in all its qualitative glory.

Suppose consumer demand for air conditioners suddenly jumps. Is the only thing I need to know that people say that they want more? No, I need to know why, because I need to know whether the costs associated with choosing to raise my plant’s refrigerator output (or my plant’s freon output for use by the refrigerator industry) are warranted by the gains that will accrue from people having access to the new fridges. How might I get that information? Perhaps in a changed price that reflects their desire, as well as the added social costs of meeting it. Also, however, my economy might enable me to easily access qualitative data, descriptive accounts, to determine that a bunch of air conditioners made in the past have suddenly punked out, explaining the unusual increase in demand, or that there is a new game that can only be played in a cold room (which might not move me near as much, at least at first take).

Under markets each worker has the option to choose only whether or not to sell their labor power to their employer, or to try to switch to some other job, or perhaps to fight for better conditions in the current one. Within the workplace, below the coordinator class level, all but low-relevance decisions about production are already taken. Yes, we have to decide how to move our bodies, etc., within the constraint of getting the job done, but that’s about it save insofar as we are rebelling against our conditions and therefore operating outside or against the economy’s logic.

For the coordinator class, however, the decision process is more complex. On the one hand, subordinate to capital and wanting to keep their jobs at capital’s behest, they need to know the implications of each choice for the only thing that matters to capital: bottom line outcomes including short-term profit and longer term market share and economic power. But from their own perspective, like workers, coordinators also need to decide where they wish to be working and, wherever that might be, they can seek to try to improve their conditions of work, their power at work, and their income, at that site. This generally involves making themselves as indispensable as possible (which is rarely precisely the same as maximizing profits or the dominance of capital) and leads to interesting questions about efficiency and waste from different angles of interest...

As to capitalists, they need to know who to employ to have their workplaces pursue the ends they seek. And they need to know how to extract the obedience and effort they seek. Or, if they are on the site themselves, they need to know the bottom line issues bearing on costs and revenue. Capital and coordinators need to know, as well, therefore, what the public is willing to pay for products, what it costs to hire labor and purchase resources, how to organize work to reduce the power of labor to demand more income or to slow the pace of their efforts, etc.

Note, the required information isn’t the implications of consuming the product for people or society (much less the full implications of production decisions for the well being of workers or the community). These are only a second order concerns, at best, and then only insofar as they affect what really matters, which is profits and the ability to appropriate them.

The price, conveniently for the interests of those dominating the economy, isn’t a token that clarifies the full implications of economic choices on everyone affected. Prices instead summarize power relations, not full social costs and benefits, and this is precisely in tune with what dominant classes need to carry out their responsibilities.

Under central planning the workers in plants need to know nothing other than the orders they have to fulfill and the techniques they need to use to do it. The planners may have different needs. Arguably, they need to know the full social costs and benefits of each possible choice, so they can create a socially optimal plan, assuming that is their assignment. In practice, however, they generally need some awareness of overall impact and effects, but will be much more interested in how economic alternatives that they must choose among impact on their own positions in society, particularly their power and their income.

How much they want to work. What they want to own.

I can’t buy something responsibly without confidence that my choice is a socially sensible one. I need to know, therefore, the benefits to me, but also the costs to society and to other individuals of making what I want available to me. This information could be conveyed by prices—assuming they represent true social costs and benefits—or by qualitative accounts that convey a textured and revealing picture of just what goes on in production, allocation, consumption.

In markets and central planning there is no way to know anything about the circumstances of others, nor to account for such information in one’s consumption preferences—at least within the norms of these systems. Thus all that is needed is a price, a budget, and some information about the purpose and character of products (sort of what advertising is...), where all of these bits of information are, however, not about costs and benefits, but about power, and, in any event skewed by power to serve its interests (as in advertising that manipulates rather than informing, for the obvious reason that the seller’s interest is to sell, not to meet needs or provide means to fulfill real desires...) .

Well, one possibility, as already noted, is that it is encapsulated in a number, a price, which represents a tally of all social costs and benefits. Another possibility is that the information is conveyed qualitatively, as accounts of workplace conditions, info about inputs and outputs, and so on. It may well be, indeed, that we have to use both information mechanisms. The first has the virtue of brevity and ease of use in trying to make determinations. For example, we don’t know how much we should opt to consume, to take our share, but not more than our share. If prices are accurate, our budget tells us this quickly and let’s us operate on the insight easily.

The second approach, qualitative accounts, on the other hand, has the virtue of empowering us, expanding our awareness, facilitating solidarity and empathy, and—and this proves to be quite important—of being less subject to unseen biases and therefore of providing a kind of check on and corrective of digital prices.

In markets there are prices (which convey the available knowledge, which is not, however, a tally of all social costs and benefits but instead a tally of what people are willing to pay and able to charge in light of their bargaining power). There is also advertising, geared to generate a sale, regardless of the actual benefits that would accrue to the user thereby.

In central planning information and motivations can take a variety of forms. Inevitably, however, the wills of planners will predominate and this would, in time, skew information (including prices and descriptive accounts) in ways corresponding with their view of the world, and their interests within the economy. More, in central planning the information is not, below the top, for people to make decision, but for people to implement decisions made by others.

Presumably, in a good economy we want information consistent with a full accounting of implications of economic actions, consistent with decision making by those affects, and consistent with the insight that nobody would want to produce or sell anything that wasn’t going to benefit consumers—why waste one’s time in such a ludicrous or even counter productive pursuit?

We can have units that operate collectively in their decision making. In workplaces this can be anything from a work group or team to a workplace or industry wide council. Regarding consumption, this can include living groups, living areas, neighborhoods, counties, etc. etc. beyond the level of the individual.

It seems to follow that we have to have a kind of self-conscious negotiating process in which there is a steady accrual of information about desires and preferences, all providing a context for people to make known their choices, and to in turn moderate them in light of the choices other people opt for, until there is a workable outcome. The other three options are each inconsistent with one or more of our guiding values, equity, self management, solidarity, diversity, and efficiency. They are a kind of dynamic exchange in which, however, power or competition acts to constrain outcomes down to final choices (markets), or a top down determination of choices (central planning). or a (well motivated but ultimately counter-productive) decentralization of economic scale so extreme that all decisions are made on the spot, by all concerned and effected, because there is little division of labor or need for complex allocation at all.

If I am working at a balanced job complex, the length of my work time at this complex is a measure of my effort and sacrifice. With equity, what I get for that average exercise is an average income. With these equilibrations, the value of my consumption budget should match the value of yours, and of everyone else’s. The only variation would be due to my working overtime, or my taking extra time off, etc. But this means that my proposal for how much I want to work is also, implicitly, a statement about the total social product and about how much I (and everyone else) will be budgeted to consume.

Not really. There is no regular relation, other than as mediated through bargaining power in the market economy, between consumption preferences and work outlays in markets. And in the planned economy, it depends on the norms of distribution that are employed and the class biases of planners.

How long do I work? The idea is simple. Imagine we all do precisely the same task. Then what is the measure of effort and sacrifice? Clearly it is duration. Now, supposing that we all do different things, if their overall qualitative impact on our quality of life and empowerment are equal, still duration is the right measure. And, yes I think this is fine. It is quite consistent with everything we have postulated so far as guiding values.

Well, what will be the costs of beginning this new line? And what will be the benefits? We are going to need some resources (which could go to other ends instead, some labor, etc. There may be some pollution. It would be onerous work, and so on. On the other hand, if we undertake the innovation we will accrue this new product that presumably people will benefit from. So the question is, does the benefit out weigh the cost so that on balance the investment is a good idea compared to other possible choices of what we might do with our time, resources, tools, etc. As to how the decision can be reached by real people in real time, well, my answer on that will have to wait coming discussions. .

This question is pretty interesting, I think. Suppose I work in a plant that produces refrigerators, and you work in a publishing house. OK, by this time we hopefully realize that if the values implemented in our economy are those we have highlighted so far in our discussions, in my plant and in yours there are going to be balanced job complexes. Moreover, if in your publishing house the average job complex is more desirable than the societal average (which is pretty likely) and in my refrigerator factory it is less desirable (for the sake of this discussion) then I will get to work some hours outside of my factory at a nice and empowering set of tasks, and you will have to work some hours outside your publishing house, balancing off its quality job offerings with some onerous tasks elsewhere.

Now suppose someone in my factory comes up with an idea for changing the assembly line to make the work more desirable. And someone in your publishing house also comes up with an innovative idea, having to do with improving your phone system that would improve conditions for editorial work. Which investment should be a higher priority to undertake—from a social perspective? What about from your perspective and mine?

The length of the work day should be impacted by how much leisure people want, versus how large a consumption budget they want, assuming attention to all other social costs and benefits. The size and composition of the social product should be impacted by people’s preferences for consumption versus their desires to have time to enjoy it, again, assuming attention to all other social costs and benefits. How much to set aside for calamities should be impacted by good predications as to their likely impact.

What about under markets? Well, in that case the allocation system itself creates a drive for growth that transcends the will of any actors. More, a set of actors who is given dominant power over outcomes, is also given an interest in growth. As a result, in a market system the link between the amount of output desired and the amount of leisure desired is largely sundered for most people. We will have to work our heads off so we want as much as we can have.

There is a similar, but weaker tendency in a centrally planned economy, where certain kinds of innovations and grandiose scale of operations help solidify and enlarge the claims on power of the dominant coordinator class.

About calamities, here is something to think about. What should be the locus of decision-making, of payment, and of receipt of payment when there are accidents, grave illnesses, etc.? What is the value being upheld?

These, it seems to me, are to be accounted however people choose politically to have them accounted for. That is, they are not intrinsically economic questions, but, in the first place, questions whose answers depend on implementation of cultural structures, gender roles, etc., beyond the underlying bounds of economic rationality, though impacting on it. There could be ecological norms that must be abided. Their could be rules about the volume of output that has to be devoted to investment for betterment of life in the future. Their could be rules about gender balance. And so on. We thus want an allocation system that is not only capable of operating sensibly economically, but that is able to do so even while abiding such extra economic injunctions deriving elsewhere in society –just as we want kinship relations, community relations, a polity, etc. that is able to function compatibly with the dictates and requirements of our envisioned economy. This degree of flexibility exists, we will see, for parecon. It can also arguably exist for central planning. It does not and cannot exist, however, for markets. Staunch right-wing defenders of markets are right about this. That is, if we claim to want markets because of various virtues we find in them, we are inconsistent when we impose constraints upon their operations. Why? Because the arguments that convinced us markets have certain virtues (which are wrong in any event, but if we were marketeers we wouldn’t think that) loose all their force (even in the eyes of marketeers) once we interfere, even minimally, in market operations.

This is a bit tricky, I think, and perhaps a little premature. The idea is simple, and then there are just a bunch of statistical tricks and other such things that ease the task and figuring out what these “tricks” might be is the key to answering this question.

You want a set of aims for everyone in the economy. Thus, you need to know people’s and groups consumption choices, and what each workplace is to produce, by what means, with what in puts and outputs. But in needing to know what everybody is going to consume, how much detail do we need? Can we extrapolate the details, just from knowing certain gross figures and certain reliable things about people, or our population in particular? Thus can we go from number of shirts wanted, to numbers of each size shirt, or type shirt, sufficiently closely so that we only need the first piece of data to arrive at all the conclusions? What about knowing about nuts, as compared to surveying detailed preferences for all kinds of nuts? Is the former enough to deduce the latter? And so on. Do we each need to predict the likelihood that we will need medicines? Or meet new people or have children unexpectedly, etc.? Do we have to predict which nights during the year we are going to want to go out for dinner? Or what will be the amount of food we wish to buy day by day or week by week, for the whole year? Or can all these things be accounted for in a gross and average way by the system, based on extrapolations from broader stated preference of individuals, plus knowledge from past experiences, and so on?

Think about what the workers in a factory creating some product need to know—and what the planning process needs to discern for them to be able to have that required information...

Well, given our values, it seems like this should be a degree of material incentive—that is, access to a fair share of the social product—and a degree of social/personal incentive, that is, the respect or even the admiration of one’s work mates. For this type of incentive system to work, a far cry from the desire to be rich or to avoid poverty—it must be that all alternative and contrary ways of orienting one’s priorities are considerably worse. There are, that is, two sides to incentives.

Thus, for example, we can reward effort and sacrifice, both materially and with respect, and we can reward creativity and accomplishment, with respect and emotional responses, and we can structure outcomes so that behavior like shirking, or stealing, or trying to disproportionately influence outcomes yields no gains and only exacts losses for the perpetrator.

This question harks back to the description of allocation at the outset of the last lecture, and I would like to recontextualize it, to hammer home some of the images/insights. We have, at the outset of any economic period, an almost infinite array of possible outcomes we might choose for our economy. This great diversity doesn’t mean all economies offer up all possible outcomes. This is quite false. For example, class divided economies don’t offer classless outcomes. Economies based on wage slavery don’t offer unalienated outcomes. And so on.

But any economy offers countless possible outcomes, even within the limitations of abiding its biases and reproducing its central features. Now, suppose we focus our attention on the various processes that delimit from the immense set of possible outcomes down to the actual set of outcomes that do in fact transpire. We can call the factors that induce this narrowing of options all the way to a final choice, the economic processor. We can also, however, note that it doesn’t happen in one immense swoop. Even in the most dictatorial centrally planned economy, there are many facets that influence the narrowing from all possibilities down to one enacted choice—the allocation process, including the operation of many economic processors. Suppose we go back even further. We start out with all the outcomes that are possible given the laws of physics. Then there is, first, a processing of this set of options down by the fact that we have a certain level of technology, certain economic institutions and roles, etc. (This is exceptionally important for evaluating alternative economies—that is, there different implications for the overall possibility set of options for production and consumption.) .

Anyhow, within a good economy, the upshot of the answers above and of our discussion thus far, I think, is that what we want is that the processor is to the greatest extent possible, the population, pure and simple. The allocation system should manifest people’s will on outcomes in proportion as they are affected by those outcomes. It is human need and desire and potential, mediated so that everyone has a fair and proportionate say, that should take society from the almost infinite possibility set of what to do with its economic potential for the year, to what it actually will do. And, moreover, the economies institutions should not delimit the overall possibility set in any way that limits the extent to which we can attain equity, self-management, solidarity, diversity, or efficiency.

Summary Results of the First Half of Our Lectures

Leaving out some the details I would say that so far we have covered the following:

Define our domain of concern, Determine its main component elements. Determine what it is, in broad value terms, that we want to achieve with our vision for this domain. Examine in more detail the main component features, and determine what we want for each of them, broadly speaking. Implement our aims in institutional designs and structures for the component features. Be sure the components that we envision fit together. Be sure the whole vision for our domain fits with the rest of the domains of society. Move on to issues of implementation, refinement, etc.

We have highlighted production, consumption, and allocation, and we have clarified what each embodies and involves in terms of types of roles, processes, information, decisions, inputs and outputs, etc., what their relations to one another are, etc. Our results have been about 180 degrees off from what is typically thought/taught, about economics, even by most radicals.

We have created a typology of economies and situated those we know about regarding their component features, class structure, etc. and the implications of these for human well being and development. Again, our views have been at odds with generally accepted views, mainstream and radical as well.

We have settled on four primary guiding values (some of us may have some more we are employing), and we have used these and our clarification of what economics is about, etc., to elaborate more detailed goals for each of the main aspects of any economy, its production, consumption, and allocation institutions. All this is more or less unique to us and in large part contrary to views held by other economists, etc.

So, at this point, if this were a traditional course, I would expect everybody to be able to write a lucid and insightful essay presenting the ideas and claims and logic for each of the four above “achievements” of the course to date, and either supporting or criticizing our results. That would mean you are with us. If you feel you couldn’t write such an essay, or take such a stance in a discussion, you might want to review prior lectures and exchanges or ask some questions. If I were giving a test at this point, I would likely assume the above level of awareness of what has gone on so far as a given, (that is, that everyone could fill out the above outline pretty substantially) and instead ask you to try to do as much of the above as you could in an essay, not for economics, but for, say, gender relations or cultural/community relations. Or, as an alternative test question choice, I might ask you to defend some system other than parecon by way of some set of values other than those we have enumerated, showing how the other model (say capitalism) is a perfectly logical and sensible one, given the other set of values.

Either of these essay topics would seem to me to be a good exercise in the types of conceptualizing central to thinking about vision. But, be that as it may, now we are ready to try to actually design some institutional features, first for production, then for consumption, and then for allocation.

Production Institutions

Well, now we have reached the actual stage of trying to design/describe institutional structures that fulfill our aims. Think of a workplace. It could be modest, say ten or fifteen people, or it could be huge, say 1,000 or even 5,000 people. Perhaps a little production unit, or a major university or hospital or assembly operation. Within this place, how do we want decisions to be made? And what organizational forms will we employ to facilitate our preferred decision-making schemes?

Decisions

Suppose we think of the workplace as a gigantic process, with inputs and outputs, of course. What are the decisions? Well, what will be produced, by what means, at what pace, with what technologies? What will be the jobs and who will fill them? During each day, how will we get our work done? What will I do, what will you do, how will we mesh our efforts successfully with each other and with others throughout the plant?

Some of the decisions are interactive with the rest of the economy—they are part and parcel of the broad level of allocation. Some, are more a matter of implementation, organizing the workday given its broad aims. We all know from experience these latter types of decision, and we can easily conceive of the former types, though few of us have probably ever been involved in making any of them.

(If you think in terms of the processor idea re allocation you can see that we are on a particular part of the continuum.) .

Now any workplace has some processes and associated decisions that involve many people very interactively and mutually dependently—for example, how much product, what new technology or social organization? And each workplace has some processes and decisions that involve a smaller array of people most directly—for example how should the personnel department or the promotion department organize to accomplish its responsibilities—with the determinations usually dependent on prior higher level choices as well. And some decisions that are narrower still—can I trade responsibilities with you today, what order am I going to do my tasks in this morning—that are, however, delimited by a whole array of prior more encompassing decisions. We also know the general menu of decision making methodologies we can employ, I think.

And so the question arises, from among all that is possible, what do we want? What ways of making decisions about the workplace best implement our values: equity, diversity, solidarity, and participatory self management? Or any others that you may wish to pose as more relevant or more important? And is there only one right answer to this question? Here are some thought questions to pursue: .

Councils and Job Complexes

In implementing our values and aims in the workplace, so far we have the idea of decision- making by consensus and/or diverse vote-level requirements (50%+, 66%+, or whatever), sometimes with all involved actors voting, sometimes by representative, all done at various natural levels of involvement—the whole workplace council, divisional or section councils, project groups and work teams, and individuals. And we have the overriding proviso that this structure needs to not only be formally democratic in what people are allowed to do—but that the actors engaged in the interactions also have to be prepared to utilize the possibilities available to them. Thus they must all have background, education, work experience and knowledge, sufficient for them to utilize their formal rights to speak, judge, and vote.

To accomplish this latter aim clearly has implications for schooling and for distribution of information and resources generally. We can’t have a sector of society with tremendous access to information at home and others with little, nor a sector with the time and freedom and energy to utilize such access, and another sector too exhausted to ever take advantage of it. And we certainly can’t have a large part of the population educated at school in ways that destroys initiative and deadens potentials, preparing people, against their capacities and inclinations, to endure boredom and embrace passivity, while a much smaller sector is taught to feel that it not only has the right and the wisdom to decide all for itself and for others, but is also given the tools and confidence that give this arrogance a high degree of accuracy.

But, this is not the end of the implications. Much of our time is spent on the job. And much of the foundation for on-the-job participation is on-the-job empowerment or disempowerment. If we divide up work so that some people have job circumstances that do nothing to promote skills and talents and to convey knowledge requisite to decision making, and that instead tend to curtail or totally prevent access to these, or that even destroy such inclinations and possibilities—then these people will not participate much in decision making regardless of formal rights to do so.

And, similarly, if some people have work situations and responsibilities that give them markedly more knowledge and skill and talents and energy for decision making, rather than squander this asset, it is likely that their wills will in almost all instances translate into the will of the whole workplace disproportionately to their numbers or to the degree that outcomes affect them as compared to other people. The above is a powerful reason, we have argued, not to divide work into homogenous job complexes, each with a different make-up than the rest (which is fine) but each of which is also homogenous and of different empowerment impact than the rest. To implement this type hierarchy of jobs is, in the first place, to violate our self-management values, and in the second place it is to produce class divisions, which in turn enhance differentials not only of power, but also of circumstance and income.

A second reason to avoid defining jobs in a hierarchical manner is that it is unjust. There is no moral excuse for having some people occupy less fulfilling (or more unfulfilling, depending on the average work quality the economy has attained by organizational and technological innovations) work circumstances than others. So what is the solution?

Well, we have argued that it is creation of balanced job complexes, one of the central innovations of the economic vision called parecon. (Or, perhaps you may think of an alternative approach to meeting all these requirements, in response to this lecture, or will raise new objections to the aims themselves-.) And so at this point the issue becomes, what are balanced job complexes, how are they established, how do they change over time, how does a person wind up doing one or another, and what are the negative implications of having them, if any.

For purposes of the following questions, I hope people will think seriously about the issues at hand, in the abstract and also regarding your own work experiences. Balanced job complexes means there is no such thing as a traditional secretary, though there are secretarial tasks divided into job complexes along with other tasks. There is no such thing as a janitor. There is a division of labor, able to be far more self-consciously crafted to fulfill values and aims than now, including productivity and efficiency norms, but this division does not allow for certain distributions of tasks, while making others perfectly acceptable.

Few if any of us, I suspect, work at what is an average job complex for our workplace much less for the economy as a whole. Indeed, few progressive and left projects enact these norms, mostly incorporating instead structures virtually indistinguishable from those of the companies and corporations they oppose... Here are some questions to help push forward the discussion. If you ignore them, or fail to produce your own different or better questions, or fail to comment, then the exercise won’t be nearly as worthwhile as it might be, I should think.