I also believe—as I will argue in more detail later—that this expectation may not be so different from what Robin’s model would, in practice, generate iteratively over time. Robin acknowledges that the actual functioning of his model for a participatory economy combines initial rounds of planning (through his nested participatory councils of various sorts) and after-the-fact, continual “adjustments” that occur for a variety of reasons. Depending on the scale of processes through which these adjustments occur and exactly how they are executed, they could function a lot like markets. And since this is an ongoing process in which the adjustments in one period constitute inputs for subsequent planning, it is not so clear that the marketish processes would play only a peripheral role.
This way of thinking about the issues implies that the concept of “markets” is not a binary. In a binary conception of markets you either have markets or you don’t; any given transaction is either a market transaction or it is not. A non-binary conception recognizes that exchanges can be heavily regulated and affected by collective priorities, but still involve things being bought and sold in which the prices are affected by supply and demand as well as regulatory constraints. Such exchanges involve significant market and non-market mechanisms. Or to take a different kind of example, in my usage of the term “markets,” garage sales (and their internet equivalents like Craigslist) are a form of market relations: items are put up for sale; the prices tend to be higher in the morning than at the end of the day in response to the demand by consumers for the things on offer; more garage sales are likely to occur (i.e. the supply of goods for sale through this mechanism will be greater) in an economic environment where there are lots of people who like to buy used things. A participatory economy, I would predict, is likely to allow, perhaps even encourage, things like garage sales. Of course capitalism is not like a garage sale writ large because the power relations implicated in capitalist markets are vastly different from those in a neighborhood garage sale. Garage sales are a very minor aspect of the market system in contemporary capitalism. But nevertheless, they constitute a particular form of market processes.
In what follows I focus on five elements of Robin’s model:4 household consumption planning; the mechanisms for dealing with externalities; public goods planning; risk-taking innovation; the organization of work and pay. My skepticism is greatest about the first of these, so I will spend the most time exploring its mechanisms and ramifications. For the others I have specific issues to discuss, but I broadly endorse what I see as the core principles they each attempt to achieve.
Participatory Planning of Household Consumption
In his book (p. 115), Robin describes four basic principles that his model of participatory planning is meant to embody, all of which are touched on in his opening contribution to this dialogue as well:
1.We want people to have input in decisions to the degree they are affected.
2.We want outcomes to be fair and efficient.
3.We want procedures to promote rather than undermine solidarity.
4.We want all our plans to be environmentally sustainable.
These are all desirable principles. What I wish to interrogate is the second element in the second criterion: efficiency.5 Specifically, I am skeptical that an institutional design in which markets have been completely eliminated—where they play no role whatsoever in economic coordination—is likely to be as efficient as an institutional configuration that combines a variety of forms of economic coordination: participatory planning, centralized regulations, and market interactions. I will not argue for the superiority of markets over participatory planning; I am arguing for the desirability of an institutional ecosystem of the economy that combines a variety of institutional forms and mechanisms.
I will focus first on the aspect of the planning process which I feel is the most problematic, the planning of household consumption. The planning of consumption is in many ways the pivotal process within the participatory economy model for this is what most fundamentally dictates what is produced in the economy. As Robin writes:
There is complete freedom of choice in a participatory economy regarding what one wishes to consume. Moreover, consumer preferences determine what will be produced in a participatory economy whereas they only do so very imperfectly in market economies. Since markets bias consumer choice by overcharging for goods whose production or consumption entail positive external effects, undercharging for goods with negative external effects, and over supplying private goods relative to public goods, markets influence what will be produced in systematic ways that deviate from consumers’ true preferences. Participatory planning is carefully designed to eliminate these biases which both infringe on ‘consumer sovereignty’ and generate inefficiencies. (p. 80)
Robin’s model of the participatory planning of public goods—collective consumption in its various forms—does not pose the same problems. By their very nature, public goods are always planned in one way or another, and Robin’s proposed model of participatory planning of public goods in which councils at the appropriate scale for a given public good are the primary site for deliberation over public goods seems absolutely right. I also have much less to say about the various forms of production planning—annual plans, long-term investments and development planning. These are certainly important, and some of what I have to say would be relevant to those arenas of planning as well, but I also think that the weight of the participatory planning elements for those kinds of decisions would, in an optimal social design, be much greater than for household consumption planning.
One final provisional comment: I am not sure that in all details I fully understand the operation of the participatory planning mechanisms that are at the core of Robin’s model. I have read Robin’s opening contribution and the relevant chapters in the book numerous times, as well as Michael Albert’s book Parecon: Life After Capitalism and a few other discussions of these issues, but nevertheless there are parts of the exposition that, for me anyway, remain unclear. I have not been able to develop an intuitive understanding of how all of this actually works, how all of the pieces fit together, and especially why the proposed institutional design eliminates all perverse incentives so that everyone provides perfect information to everyone else, thus making the system invulnerable to opportunism by individuals or groups.6
Let me begin by reviewing the basic elements, as I understand them, of the way consumption planning for individual households takes place in Robin’s model. This process is covered to some extent in Robin’s opening contribution but there it is interwoven with an account of production planning as well. For my purposes it is useful to distil the consumption planning process, which I take to be as follows:
1.At the beginning of the process the IFB, announces current estimates of indicative prices for everything (consumption items, inputs to production, labor, etc.) based on estimates of opportunity costs and positive and negative externalities in the production of all goods and services.
2.Each household begins the process with a budget constraint determined by: (a) an effort rating based on the contributions of labor effort by all household members during the previous year, (b) a level of consumption allowances for people excused from participation in production (children, elderly, severely disabled, etc.), and (c) a consumption allowance for people who simply don’t want to work (this is, in effect, an unconditional basic income, presumably set at a level to fully meet basic needs).
3.Every year