There is one other secondary issue I’d like to raise about household consumption planning and neighborhood consumer councils. I understand—and support—the role of neighborhood councils in planning neighborhood public goods. I don’t understand why my personal consumption should be the business of a neighborhood council, even apart from the problem already discussed of the usefulness of the procedures involved. The general principle underlying participatory planning is that people should be involved in decisions to the extent it affects them. But why does my personal consumption have any effect whatsoever on my immediate neighbors any more than it does on anyone else? They are affected by the division of consumption between public goods and private consumption, but not by the content of what I consume, so why should they have any role in that at all? The same goes for my requests for loans or credit: why is this the business of my neighbors?
How Marketish Are “Adjustments”?
In his opening piece in this dialogue, Robin only sketches part of the planning process—the annual plan as generated by worker and consumer councils. However, in his book he acknowledges that the initial annual plans will only be approximations and that throughout the year adjustments will have to be made. With respect to household consumption, Robin affirms the value of consumers being able to consume what they want in a participatory economy: “There is complete freedom of choice in a participatory economy regarding what one wishes to consume” (p.80). This means that the pre-ordered household consumption plans will result in lots of deviations, and accordingly, lots of adjustments. Here is how Robin foresees these adjustments taking place:
One of the functions of consumer councils and federations is to coordinate changes in consumption among themselves. If another consumer wants more of an item I pre-ordered but no longer want, there is no need to change the amount the agreed upon production plan called for. Whenever consumer councils and federations (which will function like clearing houses for adjustments) discover that changes do not cancel out, the national consumer federation will have to discuss adjustments with industry federations of worker councils. Computerized inventory management systems and “real time” supply chains are already fixtures in the global economy, which makes adjustments much smoother than they would have been only a few decades ago. (p. 85)
The actual process by which these adjustments will occur is not very clear to me, but even with the best inventory management systems one can imagine, there will still be excess inventory of some goods in the system and shortfalls in others. The most obvious way that excess inventory will be dealt with is by allowing people to acquire these things less expensively. To use conventional language, where there is excess supply, prices will be reduced, whether on an erratic basis or as “end of season sales.” To be sure, this means that the prices of these goods will be not reflect the opportunity costs of their initial production or the positive and negative externalities that were taken into consideration in determining their initial “price.” But it will reflect the opportunity costs consumers face in deciding to acquire one good or another.
There will also be shortages in goods. In some specific situations, this is inherent in the nature of the goods. For a theater performance there is a difference between the best seats and the worst seats in the house, although the production costs of the “seat” in terms of material inputs, and positive and negative externalities, don’t differ across seats. For other goods, especially some novel good, there will be shortages just because of the time it takes to produce as much as people want. One way of dealing with shortages in the supply of something is rationing, for example through a lottery. People could buy a theater ticket and be randomly assigned a seat. Or they could order a new product and the length of time they had to wait until they received it could be randomized. That is one perfectly good solution and satisfies a certain interpretation of equality. Or access could be based on a first-come-first-served basis, with the accompanying night-long vigils to get tickets when a box office opens. But one could also charge people more for the items that are in short supply. If this occurs in a social context of effort rating–based income—that is, a system in which everyone has the same choice of how much income they want to earn by simply deciding how much effort they want to expend—then charging more for goods in short supply simply means that those people who really want the good more will be able to choose to consume it sooner. In Robin’s model, the extra income generated by these higher-than-cost-of-production prices would not go into the pockets of the producers. Their incomes would continue to be based on their own effort expenditure. All that would change is that consumers would be able to decide whether it was sufficiently important for them to have the good in question sooner that they would be willing to consume less of something else or work harder for some period of time.
This description of how adjustments to annual consumption plans would work looks a lot like certain critical aspects of markets: prices adjust to disequilibria of supply and demand. This, of course, does not render the economy overall a “free market economy”. The fact that the costs of externalities, positive and negative, are built into the base price of goods, is not something that happens in market systems, and certainly the fact that purchasing power is based on effort-expenditures is not derived from a market mechanism. Yet, allowing the actual prices consumers face to be systematically affected by supply and demand is a market process. And depending upon the actual, practical degree of adjustment needed in the system, this could generate significant variation in prices. My prediction is that in a participatory economy, the participants would decide that this was often a reasonable way of dealing with the problem of discrepancies between supply and demand.
Public Goods Planning
My concerns about participatory planning of public goods are much less than about household consumption. Public goods do need to be discussed and decided on by public bodies, and it is certainly desirable as much as possible to have the deliberation over public goods be by the circles of people who will actually benefit from them. For many, perhaps most public goods, the appropriate level for such decision-making will be at a fairly macro level—cities and regions and even higher levels. But there certainly are some important public goods where the key domain of collective consumption is the neighborhood, and it is appropriate that the people directly affected have the major role in deciding the details on these. This is what, in a limited way, participatory budgeting of municipal infrastructure investments tries to do. Robin’s model of participatory planning of public goods can be thought of as a radical extension of some of the elements of participatory budgeting. I strongly endorse the general spirit of the idea that public goods planning should be maximally participatory at whatever geographical level is most relevant for a particular kind of public good.
The participatory decision-making over collective public goods consumption, however, does not require consumer councils that also approve or disapprove individual household consumption plans. What a neighborhood public goods council needs to decide is the division between public and private consumption within the neighborhood (i.e. how much of income that would otherwise go to households should be allocated to those public goods) and what specific public goods to produce. There is no inherent reason why this needs to be connected to approval of plans for what households consume privately. For this reason, I think it would be better to call these public goods councils than consumption councils.8
Unlike the planning for household consumption, public goods planning at whatever level it occurs requires real public deliberation: meetings, debates, bargaining, formulation of plans for specific projects, etc. Participatory planning of public goods—at the neighborhood level and beyond—will be a critical feature of a post-capitalist, democratic-egalitarian economy, especially because it is likely that the balance between private and public consumption will shift considerably in the public direction. Planning such public goods in a deeply democratic way, however, will be arduous, not simple, because it is unlikely there will be a smooth consensus over the balance between household consumption and public goods or over the specific mix of public goods. This will raise the Oscar Wilde problem of socialism taking up too many evenings, but it is worth it.
There is one set of issues around public goods planning in Robin’s model that was not clear to me: the role of Government institutions rather