Lecture 9: Evaluating Economic Vision and Contextualizing Economic Aims
In this chapter, as usual, I will start by providing some answers to previous questions, and then move on.
Answers to (Some of) Lecture 8s Questions
I said, last lecture: Participatory workers must be able to weigh the gains from working less or employing less productive though more fulfilling techniques, against the consequent loss of consumer well- being. Participatory consumers need to be able to weigh the gains of a consumption request against the sacrifices required to produce it. Participatory workers must be able to distinguish an equitable work load from one that is too light or too heavy. And participatory consumers need to be able to distinguish reasonable consumption demands from ones that are unreasonable or overly modest. Finally, all actors must know the true social costs and benefits of things they demand or supply, that is, all the nonhuman and human, quantifiable and non-quantifiable consequences of their choices, if they are going to participate in informed collective self-management.
Yes, it seems to me like an accurate accounting. I have few ideas beyond what is in the books... In fact, when I think about it I realize that since writing them, while I have spent much time answering questions or reacting to confusions and criticisms, I have had almost no time to spend thinking about enriching the vision, or refining it, or augmenting it. Strange. But then why shouldnt others do that, in any event?
Prices are to provide information to help actors make choices as part of the allocation process, it seems to me. We register them, and then make our choices in light of implications, in part clarified by knowing prices.
Prices are useful and worthwhile when they help us make decisions that truly reflect our desires and capacities and accurately account for those of others, and broader implications. Prices are better or worse, therefore, to the degree that they convey an accurate (if very summary) representation of the relative costs and benefits of options. They are less useful, the more they misrepresent these, They are harmful when they systematically and inexorably misrepresent, particularly if always in the same direction, as with the way market prices misrepresent externalities, social goods, etc. etc.
We call our prices indicative to emphasize that they are information which we utilize alongside other information, and that they are products of a social process designed to provide useful information and not a power struggle designed to have winners and losers.
I said, last lecture: So, without engaging in undue mystification, we should remember that estimates of social costs and benefits with any claim to accuracy must arise from social, communicative processes. The trick is to organize these processes so people have no incentives to dissimulate regarding their true desires, and all have equal opportunity to manifest their feelings. It is precisely because our participatory planning process is different from the flawed communicative processes of market and centrally planned allocation that the prices to which it gives rise will be different as well.
Well, I guess it means what it says. I am not sure I can answer this one either...If prices emerge from a process that is supposed to allow each actor to express their preferences and desires and have these accounted for proportionately as the actor is affected, then it is key that the process gives actors no reason to misrepresent themselves and provides them every means to know their own true interests and feelings. We claim parecon has these qualities. If it doesnt, then it needs to be corrected, or replaced...
I also said: The idea is that qualitative information is necessary if quantitative indicators are to be kept as accurate as possible. But qualitative information is also necessary to develop workers sensitivity to fellow workers situations and everyones understanding of the intricate tapestry of human relations that determines what we can and cannot consume or produce. So both to assure accuracy and to foster solidarity we need a continual, social resetting of prices in light of updated qualitative information about work lives and consumption activity. Thus, the cybernetic burden of a participatory allocation procedure is considerably greater than for non-participatory economies. Not only must a participatory economy generate and revise accurate quantitative measures of social costs and benefits in light of changing conditions, but it must communicate substantial qualitative information about others conditions as well.
In our society the qualitative information that is passed in the allocation process (in market exchanges) has as its purpose getting someone to do something regardless of the merit of their doing so. Thus we have ads aimed at getting someone to buy something, regardless of their need for it. The goal isnt helping someone to do what they wish, in light of true knowledge, etc. It is getting someone to buy, regardless of whether it will help the person, pleasure them, or whatever. Thus ads are generally manipulative, full of lies, and so on.
Notice: In parecon producers never want people to purchase what they produce other than if they are really going to benefit from it. There is no incentive to want to increase sales, per se...
(Think about book publishers now. What do they care about? Number of books sold, or impact of the books? Well, what does the best seller list measure...)
And I said: In short, participatory planning can obtain a reasonable first estimate of effort expended by counting labor hours because peoples job complexes have been balanced. These estimates can then be revised in light of effort intensity ratings by ones work mates. In attempting to gain consumption flexibility, only unbalancing job complexes is prohibited.
I think what it means in practice is what I describe in theory, with a degree of practical flexibility. And yes, it is quite OK with me...
And I said: To guard against `reductionist accounting' each actor needs access to a list of everything that goes into producing goods directly and indirectly, and a description of what will be gained from consuming them.
In fact, I think the sentence is overstated. We need to be able to do this, and to do it often enough so we are in touch with the reality of production and consumption and how it works and its broad effects, and the real meaning of the numbers we call indicative prices, and so on. But we dont need to do it for every item, and all the time.
It is really a kind of general learning process, on the one hand, developing knowledge of the economy, and a procedure for checking things out when ones inclinations and prices or requests seem out of whack and one wants to know why, in more detail.
I think the info is qualitative, descriptive, and is communicated in words by telecommunications, of course. What is going on, methodologically, is we are trying to figure out what kinds of structural processes, steps, information, etc., must be utilized for allocation to have the properties we want for it.
A council is a set of relations among a bunch of people. They allow bunches of people to make collective decisions that are not simply the sum of each persons individual decisions. Thus, for example, decisions about workplace organization, say, or collective goods consumption. I propose that we have councils that are effective means for arriving at group decisions in ways compatible with our overarching values--solidarity, equity, self management, diversity. There are many different ways to attain this, I suspect, and choosing among them may be largely a matter of the size and role of the council, of the preferences of its members, of the types of decisions under review, etc. Councils are an essential ingredient of real democracy, it seems to me.
A facilitation board is a workplace whose product is information and data useful for people trying to participate in the participatory planning process. Therefore, facilitation boards amass data and present it in accessible format. I think the critical requirement of these institutions is that they function within the norms of the economy, consistent with its values, etc. One could imagine additional requirements, but I doubt any additional ones are necessary because I do not see any compelling way for people working in these institutions to aggrandize themselves at the expense of others. People would work in them who wanted to. The perks and problems, as with any other workplace, would be those associated with the tasks involved in the work. The workers would have balanced job complexes, of course.
I said each consumption actor proposes a consumption plan. I also said Similarly, each production actor proposes a production plan.
Consumers and consumer units and councils, and likewise producers and producers units, councils. I like it...
Consumers first proposals should seek more than producers first proposals offer to produce--because both are supposed to ask for their ideal preferred options. I would think that people were curbing their requests unduly, and exaggerating their desires to work unduly, if we had opposite outcomes.
Discrepancies are reduced by way of the allocation planning process. That is its purpose. The problem with the central planning approach is that even if we assume a benign planner, with omniscient insight into what is needed, we still dont have people making decisions in proportion as they are affected by them. In practice, of course, a central planner with disproportionate powers will be neither benign nor all-knowing. The problem with the market solution, however competitive, is that it arrives at answers by a process that is biased in various ways (for example, against public goods, etc.) thus yielding bad outcomes, as well as denying proportionate say...
The additional problem is that in practice both these modes of allocation produce class division...
It means we have knowledge of last years plan to use as a starting point in thinking about what we wish to do this year. We can modify in light of changes in technology, population, our own tastes, etc. The problem is we could have a mistake last year affect this year, and then affect next year, etc.
We know our budget from last year. We get info that lets us figure out what it would be with the same level of work this year... Then we can make intelligent decisions about whether we want to work the same level, more, or less.
And why do they receive information from higher level production and consumption councils regarding long-term investment projects or collective consumption proposals already agreed to in previous plans that imply commitments for this year? Also, does this mean there is some center making decisions for everybody else?
Part of my income is spent on collective goods. I need to know this both because it reduces the amount left to spend on individual items, and because the content of the collective goods consumption affects what I need/want individually. If I have a ball field coming to my neighborhood, or a gym or library, it has implications...
People are learning what is possible, what is desired, and how they match up, for others, and for themselves.
I figure my desires and tastes against my preference for leisure time, against knowledge of changing prices and budgets. I create a new proposal for this year by amending/adapting and altering last years, I would think. I am calculating what my budget is, how much I (everyone) want to work, how much I want different possible items, and so on.
This is a subtle question. Statistics are powerful things. Suppose we know the demand for shirts. Can we then calculate how many of each size and style, based on past knowledge? Suppose we know the demand for nuts, grossly. Can we then calculate details? And so on. Much of the detail of daily consumption does not need to be arrived at in the global plan. The more so as an economy is intentionally structured to reduce the need for details...
Does amount desired match amount proposed to be produced, for every good, within an acceptable fudge factor level?
I said The need to win approval from other similar councils forces councils whose per capita consumption request is significantly above the social average to reduce their overall requests. But the need to reduce can be alleviated by substituting goods whose indicative prices have fallen for those whose prices have risen. Attention focuses on the degree to which units diverge from current and projected averages, and on whether their reasons for doing so are compelling.
Yes, I think it is precisely whats needed. It is a kind of dynamic process, a pressure, that causes all the actors in the system to move their proposals toward a stable plan. And yet, each is continually guided by ever more accurate information, and his or her own preferences.
And I said: Similarly workers councils whose ratios of social benefits of outputs to social costs of inputs were lower than average would come under pressure to increase either efficiency or effort, or to explain why the quantitative indicators are misleading in their particular case. Before increasing their work commitment, workers would try to substitute inputs whose indicative prices had fallen for inputs whose indicative prices had risen, and substitute outputs whose indicative prices had risen for outputs whose indicative prices had fallen.
It is just an elaborate way to talk about trying to get some job done at the least cost. Yes, it seems positive to me, given that the quantitative indicators employed account for all social affects.
An iteration is just a round of bargaining or negotiating in the planning process. The system converges because at each step all actors have information and constraints/incentives to move toward convergence. If it is too slow, we would need to find ways to speed the process, without subverting its virtues. But for me too slow is relative and I would think a reasonable amount of time given to planning economic life would be quite acceptable, especially given the reduction in time needed for many many tasks thereby eliminated from economic life.
I think this is really not for me to do. And my intention when outlining the course was that the class would do this, based on methods and lessons learned, and their own inclinations. Let me simply provide some minimal guidance.
Also, one might compare the economy to others, on the same axes of valuation.
If you want to undertake this assignment for parecon, for example, I think it entails deciding what you value, what you want an economy to accomplish, and then assessing whether parecon measures up, in general, and compared to other economic models, by examining its core institutions for production, consumption, and allocation and determining their implications vis-à-vis the values you favor.
Economic Vision in Society
If you think about what we did for the economy, this topic is actually conceptually just an extension. We thought about some basic defining featuresproduction, consumption, allocation. We established goals for each but also knew that whatever choice we made for any one feature had to be compatible with choices for other features.
Thus, the needs of production and what it provides, have to fit the needs of consumption and what it provides, have to fit the needs of allocation and what it provides. And this has to be true not just for the flow of material goods, say, or even labor, but also for types of consciousness, skills, values, and so on. You cant have workplace democracy and councils and balanced job complexes in each production unit if the production units exist in context of a market or central planning allocation system that creates class division. You cant have participatory planning with equitable remuneration if you have workplaces that are organized hierarchically, thereby creating class interests. To return to an earlier analogy, this is like trying to put together a stereo from components and picking speakers and an amplifier which are mismatched in that the speakers require more power than the amp can deliver, or the amp delivers too much power for the speakers to handle.
The same holds for the defining features of a society. We can decide on aims for an economy, but we must also recognize that our economy has to intertwine with a kinship sphere, cultural sphere, political sphere. And each of these has to be at least compatible with the rest. It cant be that one critical side of life requires attributes squelched by others, or that one produces attributes contrary to others.
Knowing one sphere, we cant deduce the rest. But we can come to some conclusions about attributes other spheres must have to be compatible. So, knowing that we want a parecon, we can deduce some qualities that other spheres will have to have to be compatible with the economy. And the same holds the other way, too, if we develop a vision for other spheres of social life.
So here are my questions, as a way to guide, provoke conceptualizing on this axis.