There may be reasons, however, to make a distinction between the way public goods are connected to people as consumers and public goods that are linked to their status as citizens. For one thing, some public goods do not fall neatly into the distinction between consumers and producers. Educational public goods, for example, serve people’s needs both as producers and consumers, and the same can be said for health care. Public transportation systems are public goods for people both as consumers and producers. Democratically accountable government institutions might be more appropriate than consumer or producer federations for providing these kinds of multidimensional public goods and monitoring their performance. But it is also the case that there is a range of public goods (or aspects of public goods) which, in certain important ways, serve the needs of people neither as consumers or producers but as members of a community. Public gathering places are public goods, and in a sense they are “consumed” by people when they gather for public purposes, but this is only one aspect of their social meaning. They also contribute to constructing a public sphere and public identities. Public spaces for performing music and theater are a public good in which these activities are consumed by audiences and produced by performers; but they are also sites for the collective project of affirming cultural identities and purposes. Aspects of the mass media are like this as well insofar as the media contribute to civic mindedness and solidarities.
Perhaps these kinds of civic public goods would be adequately attended to by nested councils and federations organized around consumption. But perhaps not. It may be that they would be better fostered by citizens’ assemblies organized as political bodies within a federated state structure. As a sociologist I am somewhat skeptical that a system of councils organized around the social role of people-as-consumers and institutionally embedded in a planning process concerned with negotiations with workers’ federations through the intermediation of the IFB’s management of indicative prices is the optimal setting for deliberations over civic public goods.
The Problem of Externalities
One of the most important elements in Robin’s critique of markets is their inability to adequately take account of negative and positive externalities of production on their own. If there were no negative and positive externalities, and if there were no concentrations of power in markets (and thus no monopoly rents), then the equilibrium prices of goods in markets would be unlikely to differ dramatically from those generated by participatory planning. Both systems would produce prices closely in line with the total real costs of production.9 But of course, there are substantial positive and negative externalities. Among the most interesting and original parts of the model of participatory economics is the way Robin proposes to deal with these issues.
The key problem for any planning process with respect to externalities is figuring out a way to assign quantitative values to externalities so that these can be adequately reflected in the prices of the things that people consume. Assigning a value to such costs and benefits involves two steps. First, there is a technical problem of identifying the inventory of actual negative and positive side-effects of a given production process. This is the work of scientists and technical experts. For example, environmental negative externalities, involve identifying the amounts of different pollutants generated in a given production process, and scientifically showing what the ill-effects of given levels are. Producers, of course, should be required to report these levels, and this generally requires some kind of monitoring and enforcement mechanism, but these levels only have meaning in a planning process when there is a way of assessing the harms they cause. This is where science plays a pivotal role: providing information about such things as the increase in risk of cancer caused by a given level of a particular pollutant.
This brings us to the second step: figuring out the value to be placed on the harm. It would always be possible, of course, to declare that zero pollution is the only acceptable level. This could, however, turn out to be enormously costly in many situations, and thus some device needs to be concocted to put a value on the harms caused by a given level of pollution compared to the costs of reducing the pollution. This is where Robin’s model has a particularly original suggestion. Basically he proposes that federations of consumer councils at the appropriate geographical level in which an environmental negative externality of production is present be allowed to decide on the level of compensation they need in order to be willing to accept a given amount of pollution. This is like saying: I’ll be happy to have a cancer risk increase by 10 percent if you increase my consumption by 20 percent. Here is how the process works:
In each iteration in the annual planning procedure there is an “indicative price” for every pollutant in every region impacted representing the current estimate of the damage, or social cost of releasing a unit of that pollutant into the region. What is a pollutant and what is not is decided by federations representing those who live in a region, who are advised by scientists employed in R&D operations run by their federation10 … If a worker council proposes to emit x units of a particular pollutant into an affected region they are ‘charged’ the indicative price for releasing that pollutant in the region times x … The consumer federation for the region affected looks at the indicative price for a unit of any pollutant that impacts the region and decides how many units it wishes to allow to be emitted. The federation can decide they do not wish to permit any units of a pollutant to be emitted, in which case no worker council operating in the region will be allowed to emit any of that pollutant. But, if the federation decides to allow x units of a pollutant to be emitted in the region, then the regional federation is ‘credited’ with x times the indicative price for that pollutant.
What does it mean for a consumer federation to be “credited?” It means the federation will be permitted to buy more public goods for its members to consume than would otherwise be possible given the effort ratings of its members. Or, it means the members of the federation will be able to consume more individually than their effort ratings from work would otherwise warrant. (pp. 124–5)
If the consumers harmed by pollution are unwilling to permit, at the level of compensation offered by the price of pollution, as much pollution as the producers would like, then the price for units of pollution will go up in the next round of the iterative planning process. And if the price is too high, then the federation of consumers affected by pollution will want to purchase more units of pollution than the producers will want to emit, and so the price will decline in the next round. This continues iteratively until an equilibrium is reached.
This is indeed a clever device. The principal alternative discussed by Robin is pollution taxes (called “Pigouvian taxes”) set equal to the value of the negative externalities and imposed on polluters. The problem with such taxes, as Robin points out, is the difficulty in knowing how high to set the taxes to fully cover the amount of damage caused by the pollution. What Robin proposes is a specific method for determining the level of those taxes by organizing what is very much like a series of collective auctions for the right to pollute. The auctions continue until there is an equilibrium between the demand for pollution payments and the supply of pollutants offered by producers. Robin sees the process as iterative adjustments in the indicative price for pollution, but it could equally well be described as a method for determining the Pigouvian taxes on pollutants. This looks a lot like a quasi-market in which the buyers and sellers are councils of various sorts acting as agents for individuals as consumers and workers.
This device for calculating the value of externalities could work well in some situations. But it could easily become extremely complex and cumbersome. There are a number of issues in play: The geographical boundaries of a particular source of pollution may or may not correspond to the boundaries of existing consumer federations. If the smallest scale federation that includes all of the affected areas is the relevant decision-making body, then this would often include large