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Situating Parecon: A Talk in Innsbruck Austria
April 29, 2008
By
Michael Albert
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Introduction
First, I'd like to thank everyone here and especially the organizers for inviting me. It is a great honor and I hope I can offer something useful.
I generally prefer spontaneous and interactive exchanges, both as a speaker and when attending events. For that reason, I will try to keep this talk, which is prepared in advance to help with translation, and which I therefore have to deliver from a script, relatively short.
So to begin...back when I was in college, nearly forty years ago, I was in our leftist national student organization, called Students for a Democratic Society, or SDS.
Our chapter of SDS, at MIT where I was a student, was called RL SDS. The RL stood for Rosa Luxembourg, the great German revolutionary.
Rosa Luxembourg once said, "you lose, you lose, you lose, you win." She meant, I believe, that even major setbacks are part of a process of historic social change.
Rosa Luxembourg gave her life fighting for change but when we win, finally, so will
But win what?
The long answer appears in a book I have written titled Parecon: Life After Capitalism, among other places. The shorter answer, I will try to summarize here tonight.
The word "Parecon" in the title of the book is an abbreviation for Participatory Economics.
The phrase "Participatory Economics" is in turn the name for a vision of how to conduct economic life very differently than under capitalism.
First we can consider parecon's origins.
Parecon owes its most distant roots to the first working people who tried to improve their conditions.
Going way back, I am told the first labor strike was in
The Pharaoh then - and as I heard the story this was the only female who was ever a Pharaoh - decided that beyond working six days and being given sufficient pay for food, which was the workers' usual situation, it might be nice to require them to work for all seven days with no pay at all. Perhaps women Pharaohs had to be especially Pharaonic!
Can you imagine building a tomb, in the desert, cutting and lugging massive rocks in the deadly sun, seven days a week, for zero pay? How long before death?
This lady Pharaoh might not have been very smart, but you have to admit it was a natural progression. If you can maintain nearly murderous conditions, why not try maintaining actually murderous conditions?
I was told the decision to revoke the slaves' day off and withhold their food supplies provoked the first labor strike.
Parecon stems from that strike and from every effort by working people, and by consumers too, to improve their conditions and incomes.
More recently, revolutionary marxists like Antonio Gramsci from Italy, Rosa Luxembourg from here in Germany, and Anton Pannekoek from the Netherlands - and anarchists such as Mikhail Bakunin from Russia and Rudolf Rocker again from Germany, have expanded our insights into what it might mean for people to contribute sensibly to and share justly in society's product. These revolutionaries and many others began to conceptualize people making economic choices cooperatively.
Movements with similar inclinations have included the left opposition to the Bolsheviks in
But what were more immediate factors that pushed my co-author Robin Hahnel and I toward conceptualizing parecon?
Needing Vision
First, back in the 1960s, we continually encountered people asking, what do you want? What is your alternative?
At first we were put off by this question. We thought it was raised to rationalize ignoring current injustice.
Why did we need to know an economic replacement for capitalism to oppose the war in
Why did we need to know how our future economy would operate to oppose corporations crushing workers?
In time, however, we decided the questions were often fair and sincere. We saw that people wouldn't fight for change without knowing what the change would be.
So the first factor contributing directly to parecon being born was our seeing the importance of having a compelling vision that could overcome cynicism.
When
Thatcher knew what she was saying. We realized we needed to overcome the fatalistic belief she was celebrating.
Wanting Real Classlessness
A second factor fostering parecon occurred due to a woman named Barbara Ehrenreich and her then husband John publishing an essay which helped us arrive at a new view about classes.
Their essay, later published in a fine book called Between Labor and Capital, was about people in modern day capitalism who reside between labor and capital.
This middle group that the Ehrenreichs highlighted didn't have property, and therefore weren't capitalists. But this group did have considerable control over their own lives and the lives of workers below and also had higher income and more status than those workers. They apparently weren't workers either.
To make a long story short, my co-author Robin Hahnel and I saw in Ehrenreich's work a critical insight for understanding existing economic systems as well as for seeking a new one.
We named the third class between labor and capital, coordinators.
We saw that this coordinator class monopolized control over daily decision making and especially over empowering economic circumstances. We realized that in the absence of capitalists, it could become a ruling class.
In our view this wasn't a bureaucratic problem. And it wasn't a political problem. This class was produced and could be elevated to ruling power by economic institutions. It was an economic matter.
Of course having a classless economy required eliminating the economic basis for capitalists to exist and rule. We would have to get rid of private ownership of workplaces in any good economy we advocated.
But beyond that, the new class analysis convinced us that we would also have to eliminate the economic basis for coordinators to exist and rule.
Hating Markets
A third big factor in the emergence of Parecon, I think, was Robin's and my antipathy to markets.
We hated markets. But why did we hate them? What was it about markets that caused us to want them entirely gone?
The need to explain what we despised about markets forced Robin and I to examine allocation generally and markets specifically. We had to fully uncover how market role structures compelled anti social behavior and greed. We had to discern how markets distorted preferences. We had to see how markets established false prices that mis-accounted for ecology. We had to discover how markets produced coordinator class rule even when capitalists were absent.
In the process of all that, Robin and I became market abolitionists. We knew markets were going to be around for awhile, of course. But that didn't cause us to temper our rejection of them.
The SEP Experience
A fourth big factor in the emergence of parecon was my time working at a left publishing house called South End Press, or SEP for short.
SEP was a project that I and some friends started with the express aim of incorporating our values in our work. We wanted to plant the seeds of the future in the present.
At South End Press this meant we designed jobs that let us share work in creative new ways. We each did a fair share of both onerous and fulfilling tasks. We each did a fair share of empowering and disempowering tasks.
At SEP we also practiced self management in that we used many different voting procedures in different situations, but we always tried to have each participant have an appropriate say over decisions.
Antipathy to Academia
Finally, a fifth big factor in how parecon emerged, or at least in how we wrote and talked about it, was an attitude.
It seemed to us that if we were going to have movements that huge numbers of people not only participated in but controlled, if we were going to have movements where people assessed and refined movement aims and methods as we proceeded, then dialog about aims and methods would have to occur in popular language.
For a book to be about movement aims or methods or even about what's wrong with society, and to be so obscurely written that normal people couldn't perceive its meaning, seemed to us counter productive.
To talk about a popular, grass roots, democratic, self managing movement, while writing with language that literally defied comprehension by normal people with lives to live and little or no time for burrowing into libraries, seemed to us flagrant hypocrisy.
And when people told us we were just being anti-intellectual, we laughed and said, come on. We have a gazillion years of schooling. We have multiple degrees. We often work on intellectual problems. We aren't anti-intellectual at all. Intellect is very good.
We are, however, anti-obscurantist. We are anti-pomposity. We are anti-hypocrisy.
Sure, we can read obscure texts and make believe we understand them as good as the next guy. We just don't want to do that. We don't think anyone else should want to do that either. Most important, we know working people won't have time or inclination to do that, nor should they.
We felt that any useful idea about society, no matter how profound, and no matter how long it may have taken to arrive at, and no matter what means were used, could surely, once it existed, be expressed in plain language for general use.
Parecon's Values
Okay, then what?
We were anti-Leninist with roots in the traditions of libertarian socialism and anarchism.
We hated capitalism.
We suspected old socialisms were horribly flawed.
We had decided that movements needed an economic vision to succeed. We saw that no one was successfully proposing such vision.
We believed markets were abhorrent, but we also knew that no one was offering a compelling alternative.
We had experience, at South End Press, of innovative new ways of organizing work.
We hated obscurantist posturing.
Not surprisingly we began compulsively trying to develop, advocate, and win support for a new type economy.
But why would anyone, we asked ourselves, like one economy, such as parecon, and not like some other economy, such as capitalism or what's called market socialism or centrally planned socialism?
Robin and I decided the only sound grounds for judging economies was to determine whether they fostered values we liked.
So we had a problem.
What were our values? What were the values a good economy should promote by its operations? And that's what the first part of the book, Parecon, is about.
Solidarity
First, we realized that an economy affects the way people interact with one another. We thought about that and decided that it would be good for an economy to promote people caring for one another rather than trampling one another.
Instead of putting up with today's economy in which being nice is a ticket to failure, why shouldn't we seek a future economy in which prospering would require each person taking into account other people's well being and not just his or her own?
We called this first parecon value, in accord with past leftists, solidarity.
We decided a good economy would by its very operations promote rather than crush solidarity.
Diversity
Second, we noticed that an economy affects the range of outcomes people can enjoy in their lives. We thought about that and decided that it would be better for an economy to promote diversity than to homogenize outcomes. We rejected commercializing away variety. We wanted a new economy to enhance variety.
We called this value, in accord with the growing Green inclinations of the times, diversity.
We decided a good economy would by its very operations promote rather than crush diversity.
Our first two values were uncontroversial. Who would prefer anti-sociality to solidarity? Who would prefer homogeneity to diversity? No one. It was time to address a more difficult issue.
Equity
Economies affect how much people get to consume. What part of the social product is yours, or mine, or anyone's?
What was to be our economic value regarding income?
One norm for determining income we could opt for was to reward people for having a piece of paper in their pocket. We could reward people for having a deed to property. We rejected that, of course.
We saw no moral reason why Bill Gates having a deed should make him more wealthy than the combined population of whole central American countries.
We saw no incentive reason for letting owners take profits, either. And of course we knew that rewarding property with profit had horrible side effects. We could see those all over the world.
A second norm for determining remuneration we could have opted for was to reward bargaining power. This norm operates in all market economies. You get what you can take.
Criminals like Al Capone no doubt find this norm congenial. Intellects at, say, the
But we thought normal caring human beings, given a choice, wouldn't support this pathological value. We thought normal people, given a choice, would reject rewarding bargaining power as being barbaric. In any case, we rejected it, so we still didn't have our norm.
A third option we could have settled for is actually widely liked on the left. It is to reward output.
You get back from the social product the equivalent of what you put into it by your labors. If you produce more value, you get more wage. If you produce less value, you get less wage.
This superficially seemed fair enough, which probably explains why so many well meaning people advocate it. In fact, when we examined it, we found that this norm was not morally or economically sound at all.
Rewarding output, rewards, among other things, genetic endowment. If you are born with great talent, which in this context means great capacity to produce things that many people appreciate, you get rewarded greater income for your productivity on top of the luck of being born with the productive talents. If you are born Maradona or Madonna, for example, you get regaled with bounty on top of your genetic luck.
Likewise, if you happen to use better tools than someone else, or to produce something valued more, again, you get more income.
Thinking about this, Robin and I decided it was economically irrational and morally disgraceful. I can't in the time we have tonight rehearse the whole argument, though it isn't difficult. Tomorrow we can do more, if you like. For now, suffice it to say, we decided on a new norm for income.
We opted for the idea that if you work longer, doing something society wants, you should get more. If you work harder, doing something society wants, you should get more. If you work under worse conditions, doing something society wants, you should get more.
And that's it. That's all that matters. Of course, if you can't work, or if you have special health needs, you get income for that simply by virtue of being a person. But regarding work, you do something worthy. You get paid for duration. You get paid for intensity. You get paid for onerousness. You do not get paid for property, power, or output.
So we had our third value: equitable remuneration.
Self Management
Economies affect how much influence we have over our lives. This raised for us the question, what do we value regarding decision making influence?
We thought about it this way.
Consider a worker who wishes to place a picture of his or her spouse in view. If the person works separate from others, perhaps in an office, I think we would all agree he or she should decide, unilaterally, to put it up or not. No one else should have a say. The decision should be made like Stalin decided things, like a dictator. Yes, sometimes we believe in dictatorial, which is one person, decision making.
Now imagine the person wants to bring a loud music player and play deafening heavy metal rock and roll all day. We'd all agree it is no longer his or her singular choice. Everyone in hearing range is affected. We would agree they should all have a say, but not people who can't hear the music - unless, of course, the choice would affect work arrangements that would in turn affect them.
You get the idea.
What we intuitively all know and what Robin and I arrived at formally was that whether to vote 50% plus one or some other algorithm like that, or to seek consensus, or to have unilateral dictatorial choice is not, in fact, a matter of principle.
Sometimes one approach makes sense. Sometimes another does. Specific ways of disseminating information, debating views, and then tallying preferences, are not matters of principle, but means to an end.
The goal is the principle. And the goal we found ourselves favoring was that each person should have a say in decisions in proportion to the degree he or she is affected by them.
After thinking this through, we made this our fourth value, calling it self management. There was nothing particularly original about this, except arguably making the definition so precise and succinct.
Efficiency
Efficiency was our fifth value, but the word needs clarification.
What efficiency meant to us was accomplishing sought ends without wasting valued assets.
Please notice, you would have to be a lunatic to be against efficiency in this sense. To reject this kind of efficiency would mean you advocated failing to achieve sought ends or you wanted to waste things you value.
Nonetheless, we know that most leftists get a little nauseated hearing the word efficiency. That happens because, under capitalism, where owners rule, efficiency is what the owners decree. Capitalist efficiency is maximizing profit without wasting capitalists' assets. It doesn't give a damn about what we value which is why capitalist often find it efficient to waste workers' lives, for example.
So, with a clarification of meaning, we had our fifth value. We wanted economic activity to accomplish what self managing workers and consumers sought without wasting what they valued. We wanted pareconish efficiency.
Classlessness
A final value, in some sense encompassing the other five, also guided our thinking.
The economy should not produce opposed groups with contrary interests. The economy should be classless.
In the modern world, this meant the economy should not have capitalists above coordinators. But it also meant an economy should not have coordinators above workers.
A desirable economy, we decided, should only have workers, one class - or, what is the same thing, it should be classless.
Institutions
Now we had some guiding values - solidarity, diversity, equity, self management, pareconish efficiency, and classlessness.
But having these values, we also had an agenda.
We could examine existing institutions that might be combined into an economic model to see if by the their structure furthered or obstructed our favored values.
If an institution obstructed one of our preferred values, even just one of them, it would be inferior to an institution that accomplished similar functions but fostered all our values.
So we listed existing economic structures to evaluate this way. This, by the way, is another part of the book I mentioned earlier: Parecon. Interestingly, it turned out there weren't all that many.
We assessed the familiar structures:
private ownership of means of production
corporate divisions of labor
hierarchical decision making
remuneration according to property or personal output or bargaining power, and
markets and central planning for allocation.
In each case we looked at how the institution propelled workers, managers, consumers, and/or planners - and we examined ensuing implications for the values we favored.
We found that these institutions all obstructed and even crushed solidarity, diversity, equity, self management, and pareconish efficiency, and that they produced class rule by elevating either owners or coordinators above workers.
We were stuck.
We wanted to advocate an economic vision, but we couldn't build it out of typically utilized economic institutions. We had to find new institutions.
We thus conceived Participatory Economics, or parecon, based on four alternative institutional commitments.
Self Managing Councils
First, we quickly realized it would be desirable in a parecon for people to participate in economic life via nested worker and consumer councils of the sort we have repeatedly seen whenever movements of workers have sought to control their own economies, most recently in
An added feature of the councils we envisioned for parecon, however, was an explicit commitment to self managed decision making.
In pareconish councils, workers would choose ways of meeting and discussing and finally voting so that workers would all influence decisions in proportion as they were in turn affected by them.
Even more, and this I have to admit is an incredible claim, to be true to self management as a guiding value, we needed to have other institutions beyond councils that guarantee that workers in all plants and consumers in all neighborhoods would affect all decisions in proportion as they were affected by them, or as nearly so as possible.
We realized that even inside a single workplace, for some decisions self management would be best accomplished via one person one vote majority rule. Other decisions might instead entail using a different tally method, or seeking consensus, or that only some specially affected segment of the whole populace should vote.
In parecon's councils, the discussion, debate, and tallying procedures people used would be understood to be tactics chosen to attain the appropriate self managing say for all involved actors.
Equitable Remuneration
Second, beyond organizing ourselves into workers and consumers councils and realizing that we needed mechanisms for these councils to enter into all decisions in a self managing way, we realized that remuneration in a parecon needed to be for effort and sacrifice, not for output or bargaining power.
In a parecon we conceived that
people would earn more if they worked longer.
People would earn more if they worked harder.
People would earn more if they worked under more harsh or harmful conditions.
And co-workers would would judge all that, by means workplaces would decide case by case.
As we conceived it, Parecon rejected someone earning income simply by virtue of having a deed in his or her pocket.
Parecon also rejected a brutish economy in which people would get what they could take. It rejected that bargaining power should govern income.
More controversially, our idea of Parecon rejected that people should get back from an economy the amount they contributed to it by their personal labors.
How much any worker produces always depends on many factors that he or she can't alone control such as having better tools, working in a more or less productive environment, producing more or less valued items, or having innate qualities that increase personal productivity. In a parecon, none of these attributes would justify getting more income.
Economic incentives in a Parecon would certainly need to induce productive labor as well as effective use of tools and talents. But we realized that a Parecon could accomplish that without making incomes inequitable.
In fact, for precisely incentive reasons, payment for effort and sacrifice in our view made not only moral but also economic sense, whereas rewarding the luck of having more productive genes made neither moral or economic sense.
Balanced Job Complexes
Okay, we thought, what if we had workers councils that believed in self management and equitable remuneration, but that incorporated typical corporate divisions of labor?
In that case, we decided, the workplace's desirable commitments would be compromised.
Having a corporate division of labor would mean having about 20% of the workforce monopolize largely empowering and pleasurable work and leaving 80% with more obedient, rote, stultifying, and onerous work. That's what a corporate division of labor does.
And we saw that this would ensure that the former empowered group, the coordinator class, would rule the latter disempowered group, the working class. This would of course be contrary to parecon's values.
So we realized that even with a formal commitment to self management, a corporate division of labor would prevent its implementation.
With a corporate division of labor, by the work they do, managers, lawyers, and others in the coordinator class would enter the process of making each decision having defined the discussion's agenda. The coordinators would own the information relevant to debate. The coordinators would possess compelling habits of communication. The coordinators would monopolize the daily levers of power. The coordinators would monopolize as well the confidence and energy to fully participate.
In contrast, having been deadened and exhausted by the rote and repetitive work they do, workers operating within a corporate division of labor, even with a workers council committed to self management, would come to the decision making process disempowered and exhausted.
Coordinators would therefore determine outcomes. In time they would decide to remunerate themselves more. In time they would decide to streamline meetings and decision-making, excluding those below. In time they would orient economic decisions in their own class interests. And all this would occur because their situation would lead them to feel they deserved these benefits, needed them, earned them, etc.
This reasoning showed us that retaining corporate divisions of labor would impose coordinator class rule and in that way subvert the other pareconish institutions we advocated.
Here is the same insight in class analysis terms. By virtue of their deed to property, owners in capitalism preside over means of production. They hire and fire wage slaves. But it turns out that eliminating this relation, while desirable in its own right, is not the same as attaining classlessness.
What parecon's class analysis revealed is that another group in place of owners and also defined by its position in the economy, could aggrandize itself above workers.
We saw that to avoid rule over workers by this coordinator class required that a new economy replace corporate divisions of labor with a new approach to defining work roles.
Parecon calls its third institutional commitment, balanced job complexes.
Everyone who works in any society will inevitably do some collection of tasks as his or her job.
If the economy employs a corporate division of labor, tasks will be combined into jobs that are either largely empowering (for coordinators) or largely disempowering (for workers).
In contrast, a participatory economy will combine tasks into jobs so that the overall empowerment effect of each job is like the overall empowerment effect of every other job.
We won't have managers and assemblers. We won't have editors and secretaries. We won't have surgeons and nurses. The functions that all these actors now fulfill will persist in a parecon, of course. But the labor will be divided up differently
Some people will do surgery while most won't. Those who take scalpel to brains will, however, also clean bed pans, sweep floors, or assist with other hospital functions.
The total empowerment and pleasure that the capitalist surgeon's new job in a parecon affords is made average by remixing its tasks. The total empowerment and pleasure that the capitalist's custodian or nurse's aid's new job in a parecon affords is made average by remixing its tasks.
Surgeons in a parecon will have a balanced job complex that conveys the same total empowerment and pleasure as the new pareconish job of the person who previously only cleaned up.
What Robin and I felt was that we needed to institutionally eliminate coordinator class rule over all other workers. We couldn't do it by eliminating empowering tasks. We couldn't do it by everyone doing the same things. These choices were absurd and impossible.
We could eliminate coordinator class rule, however, by distributing empowering and rote work so that all economic actors could fully participate in self managed decision making. To this end, parecon incorporates balanced job complexes.
Participatory Planning
Next, fourth, we thought what if we have a new economy that has lots of workplaces and communities that are all committed to having workers and consumers councils. They all want to use self managed decision making procedures. They all want to remunerate for effort and sacrifice. They even all have balanced job complexes.
In addition to these excellent features, what happens if we incorporate central planning or markets for allocation?
Would this combination of institutions constitute a new and worthy vision?
Central Planning
We quickly decided central planning is not a worthy choice. We knew this from historical experience as well as simple analysis. In a new economy that incorporated central planning, central planners would be distinguished from other actors by their power over outcomes, by the conceptual and design character of their labor, and by legitimating academic and other credentials kept from other people.
Central planners would seek managers in each workplace to be responsible for enforcing the central plan. These managers would have similar credentials to the central planners and would be vested with similar elite rights.
The dynamics of central planning are down goes instructions up comes information about the possibility of fulfilling them. Down goes altered instructions up comes more information. Down goes final instructions up comes obedience.
It was evident from both history and description that central planning was authoritarian. More, as we saw in the old
Central planning by the unavoidable effects of its roles would conflict with self managing councils, equitable remuneration, and balanced job complexes. It would violate parecon's values, especially self management. Robin and I thus had to reject central planning as unfit for pareconish allocation.
Markets
Markets are similar to central planning in their unworthiness. The case is more important, however, because markets have so much more support around the world, and nowadays on the left too.
First, even without capitalist ownership, and even with councils and self management and all the rest that we have arrived at so far, markets in a future economy would destroy equitable remuneration by rewarding output and bargaining power instead of rewarding only effort and sacrifice.
Second, markets, again even without capitalist ownership, would force buyers and sellers to try to buy cheap and sell dear. They would force workers and consumers to try to maximally fleece each other to ensure private advance and even economic survival. Markets would subvert solidarity.
Third, markets, also with or without capitalist ownership, would mis-price transactions. They would take into account only impacts on immediate buyers and sellers but not on those affected by harmful pollution or, for that matter, by positive side effects. This meant markets would routinely violate ecological balance and sustainability as well as collective benefits.
Fourth, markets would create a competitive context in which workers councils would have to cut costs and seek market share regardless of implications for others. To do this, however, even new workplaces with self managing councils that were in favor of equitable remuneration and that utilized balanced job complexes, would have to maximize revenues in order to outstrip competitors. This would undo other gains.
For example, if we in this room were a workers council in a factory, say, and we were connected to all other workplaces and to consumers by a market, we would have to dump our costs on others, not cleaning up after ourselves, choosing cheap but dirty methods over more expensive but clean methods. We would have to gain revenues by inducing excessive consumption. We would have to cut production costs at our own expense of working too long and too intensely and under cheap but harsh conditions. It we didn't do all this, we'd go out of business.
Do you think you would be good at oppressing yourself in order to cut costs? I don't think I would be good at that. To aggressively make cost-cutting decisions would require someone with both a managerial surplus-seeking mindset, but who was also freed from suffering the pains that his or her managerial choices would impose.
We would thus hire folks who business schools instilled with appropriately callous and calculating minds. We would call them managers, engineers, lawyers, and so on. We would give them air conditioned offices and comfortable surroundings. We would tell them, okay, take away our air conditioning. Reduce the quality of our environments. Cut our costs. Keep us competitive.
Due to the pressure of markets, we would, in other words, impose on ourselves a coordinator class. It would not happen due to natural law. It would not happen because we desire to be subservient. It would happen because markets would force us to do it against our true values. We would have to do it to compete effectively and to avoid going out of business.
As the Noble Prize winning economist Robert Solow noted, rarely if ever have markets been as competitive as those of
Solow went on to say that "well-functioning markets have no innate tendency to promote excellence in any form. They offer no resistance to forces making for a descent into cultural barbarity or moral depravity."
I thin