Читать книгу Alternatives to Capitalism - Robin Hahnel - Страница 9

Erik Olin Wright

Let me begin, like Robin did in his opening contribution to this dialogue, by affirming a very broad range of issues on which we are in deep agreement:¹

Strong egalitarianism is a core value. We both adopt a radical egalitarian understanding of social justice, although we use slightly different language to express our views. A just system of economic distribution is one that combines an unconditional guarantee of income, sufficient to provide for (generously interpreted) basic needs, with additional income that is proportionate to some broadly understood notion of effort or sacrifice. Robin refers to the first of these conditions as a condition for a humane economy, not a just economy, and treats only the second condition as a matter of justice, whereas I feel it is unjust to deny people equal access to the material means necessary to live a flourishing life. But this makes no practical difference in our views about what constitutes a desirable system of distribution.² We both reject inequalities in material conditions of life that are the result of talents or contributions or brute luck and certainly of power.

The quality of work, not just the material rewards from work, is an issue in justice. Robin expresses this concern in his principle of “balancing jobs”—the idea that all jobs, to the extent possible, should contain the same mix of tedious and enjoyable tasks, pleasant and unpleasant activities, routine and “empowered” responsibilities. As an ideal, all jobs should be equally desirable from the point of view of whatever qualities people value within work. This is a complex regulative ideal, and while in practice it will never be fully realized, deviations are a matter of injustice. People in jobs that, for pragmatic reasons, have more burdens in this sense (i.e. a less desirable balance of tasks) should thus be compensated with greater income or more leisure or in some other appropriate way.

Radical, substantively meaningful democracy. Democracy, if taken seriously, means that people should be able to meaningfully participate in making decisions over things that affect their lives. Robin correctly argues that the full realization of that principle means that the weight of individuals’ preferences in decisions should be roughly proportional to how much any given decision affects them. This is obviously a very complex idea to put into practice in a fine-grained way, and any practical implementation will at best be a rough approximation of the ideal itself. This conception of democracy provides grounding for the kind of nested system of participatory decision-making bodies that is at the heart of the institutional design of Robin’s model.

Capitalism has destructive effects on all of these values. Finally, we both argue that capitalism systematically contradicts the realization of all of these values, and while it is sometimes possible to mitigate some of the deficits with various kinds of public policies within capitalism, transcending capitalism is a necessary condition for the fullest possible realization of democratic-egalitarian values.

That is a lot of agreement. Where we differ is in our views of certain important aspects of the institutional design of an alternative that is best suited to realize these common values.

Robin feels very confident that a complex, large-scale, well-functioning economic system—in principle even a global economy—could exist in which markets have been completely replaced by participatory planning. While he acknowledges that the actual design of economic institutions in a post-capitalist participatory economy will evolve through experimentation and democratic deliberation, he nevertheless argues that the goal should be the complete elimination of markets, and his hypothesis is that such an economy would function in ways that would be robustly sustainable. Sustainability, in the context of a democratic-egalitarian economy, means that the institutional configuration in question would be continually endorsed by the broad majority of participants in the economy since they have the power to change the rules of the game if they don’t like the way things are working. There will inevitably be trade-offs across the different values that a participatory economy hopes to realize. A particular set of institutional rules of the game is a way of navigating those trade-offs. A stable system is one in which the continual over-time results of the operation of the system reinforce the actors’ commitment to those rules. Robin’s hypothesis, then, is that a participatory economy in which markets play no role would be sustainable in this sense.

My position is that the optimal institutional configuration of a democratic-egalitarian economy is much more likely to be a mix of diverse forms of participatory planning, state regulatory mechanisms, and markets. I, like Robin, am disposed to give great weight to the participatory mechanisms because of the ways these embody values of equality and democracy, but I am very skeptical that these could ever completely displace markets, or even, really, that this should be some bottom-line goal to which we aspire. I want a robustly and sustainably democratic-egalitarian economy, but my expectation is that the institutional designs that people in such an economy would actually choose (through experimentation and learning) will include a significant role for markets. This is a prediction rather than a prescription. I do not know what institutional configuration of different forms of economic organization would work best, nor what, in practice, the trade-offs will be between different configurations. What I predict, then, is that a configuration in which markets play no role would not be sustainable in the sense I am describing.³

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 individual households submit to their neighborhood consumer councils their requests for all the things they anticipate consuming in the following year, given the household budget constraints. In effect, they pre-order their annual household consumption.

4.The powers of neighborhood consumption councils with respect to household consumption include: authorizing borrowing and saving of households; approving their consumption requests; discussing and proposing neighborhood public goods. The household proposals are reviewed by neighborhood consumption councils. If they fall within the budget constraint of the household, then they would normally be approved automatically. If there is a request for consumption above this level—in effect a request for a loan—this would normally be reviewed more closely. If the proposals are rejected, households revise them.

5.Neighborhood consumption councils aggregate the approved individual consumption requests of all households in the neighborhood, append requests for whatever neighborhood public goods they want, and submit the total list as the neighborhood consumption council’s request in the planning process.

6.Higher-level federations of consumption councils make requests for whatever public goods are consumed by their membership.

7.On the basis of all of the consumption proposals along with the production proposals from worker councils, the IFB recalculates the indicative prices and, where necessary, sends proposals back to the relevant councils for revision.

8.This iterative process continues until no revisions are needed.

There are two issues that I would like to raise with this account about how household consumption planning would actually work in practice: (1) How useful is household consumption planning? (2) How marketish are “adjustments”?

How Useful Is Household Consumption Planning?

Robin argues that this planning process would not be especially demanding on people. In his words:

We are well aware that consumers will misestimate what they ask for and need to make changes during the year, and that some consumers will prove more reliable and others more fickle. As a matter of fact, being quite lazy about such matters, I would not bother to update my consumption proposal at all! And being very irresponsible about communication I would also, in all likelihood, fail to respond to the prompt from my neighborhood consumption council reminding me to send in a new proposal for the coming year. I would simply allow my neighborhood council to re-enter what their records show I actually ended up consuming last year as my pre-order again for this year. Sound difficult?

The easiest way to think about this is to imagine each consumer with a swipe card that records what they consume during the year as they pick it up, and compares their rate of consumption for items against the amount they had asked for. If one’s rate of consumption for an item deviates by say 20 percent from the rate implied by the annual request, consumers could be “prompted” and asked if they want to make a change. If at the end of the year the total social cost of someone’s actual consumption differs from the social cost of what they had asked, and been approved for, they would simply be credited or debited appropriately in their savings account. (pp. 86–7)

Here is one of the things I don’t understand about this process as described: A key issue for any meaningful planning process is the classification of the items in the consumption bundle. When a consumer submits a plan, how fine-grained are these categories? For example, is “clothing” a category, or is the relevant category “shirts,” or “dress shirts,” or “highly tailored dress shirts” or “highly tailored silk dress shirts”? Among food items, is “jam” a category, or is “imported French blueberry jam” a category? For something like “books”, is it enough to estimate how much I plan to spend on books in a year, or do I have to know which titles I am likely to buy? Also: if I travel, then my consumption of certain things will extend far beyond the boundaries of my immediate location. If I estimate how much of the value of my consumption will be in restaurants, does it matter that some of these might be in Paris or New York rather than in the city where my neighborhood consumption council is located? I can certainly imagine making gross estimates of very large categories of consumption—like clothing or travel or food—but not of fine-grained items.

The problem is that the gross categories provide virtually no useful information for the actual producers of the things I will consume. It does not help shirt-makers very much to know, based on the aggregation of individual household consumption proposals, that consumers plan to spend a certain percent of their budget on clothing; they need to have some idea of how many shirts and of what style and quality to produce since these have very different indicative prices (and thus reflect different opportunity costs and positive and negative externalities). But consumers can hardly be expected to have a reasonable idea of their consumption for the future at that level of detail—how many cheap versus expensive meals I will consume in what cities, etc. Robin does not explain how detailed the consumption list is expected to be, whether it is built on categories like “food” or the list needs to be broken down into “wild-caught smoked salmon” and “gourmet organic chunky peanut butter.” In some places he seems to suggest that the categories will be quite coarse-grained, as in the above quotation when he writes: “If one’s rate of consumption for an item deviates by say 20 percent from the rate implied by the annual request, consumers could be ‘prompted’ and asked if they want to make a change.” That prompting would make sense for a broad category like clothing, but not a detailed specification like “silk neckties”.

Since the coarse categories would not be useful for planning by federations of worker councils, and this is the fundamental purpose for pre-ordering consumption, I will assume that the finest level of detail is required. This would involve for any complex economy hundreds of millions of items—basically, all of the differentiated final consumption items around which producers make decisions about how much to produce. Since it is beyond the ability of people to meaningfully specify such an inventory a year in advance, the solution, of course, is for households to simply use the list of specific items they actually consumed from the previous year. This seems to be what Robin suggests that he, and probably most people, would do: “I would simply allow my neighborhood council to re-enter what their records show I actually ended up consuming last year as my pre-order again for this year.” (p. 86) If overwhelmingly this is what people would do, then there is actually no real need for them to submit pre-ordered consumption “proposals” at all since the total consumption of specific items from the previous year is already known to producers—this equals the total of all the goods and services produced that were acquired by consumers. The plans for production for the future, then, in effect would be done pretty much as they are done now: producers would examine the sales⁷ and trends of sales in the recent past, and make their best estimate of what to produce for the next year on that basis. Indeed, since producers and their sector federations can continually and efficiently monitor these trends, they are in a position to make updates to plans in an ongoing way on the basis of the actual behavior of consumers, rather than mainly organize their planning activities around annual plans animated by uninformative household pre-orders.

There is a certain irony here. Robin argues in favor of pre-ordering by saying:

A participatory economy is a planned economy. This means we must have some idea what people want to consume in order to formulate a plan for how to produce it. In market economies consumers do not “pre-order,” and instead producers are left to guess what consumers will eventually demand … the convenience for consumers of never having to pre-order in market economies is actually bought at the expense of a significant amount of economic inefficiency as resources are wasted producing more of some goods and less of others than it turns out people want. (p. 84)

But if pre-ordering is really a fiction since most people will behave as Robin predicts that he will behave, then it will still be the case that “producers are left to guess what consumers will eventually demand.” Of course, in a participatory economy where there is little competition among producers and they are organized into federations of worker councils, it will be easier for them to get full and detailed ongoing data on consumer choices relevant to their ongoing plans, so their guesses are likely to be more accurate than in capitalism. But what is gained by having households submit a formal pre-order of a year’s worth of consumption, given how they are likely to behave, instead of having the producers simply use all of the relevant data from actual patterns of consumption in their sectors as the basis for estimating what will be consumed in the next year?

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 than just consumer federations. On one interpretation of Robin’s participatory economics model, virtually all government functions are replaced by consumer councils and federations and by worker councils and federations. There might still be a role for government around certain kinds of rule making and rule enforcing—for example, things like speed limits or enforcing the accurate reporting of pollution discharges so the planning process (however it is organized) has accurate information with which to deal with externalities. But the government would have no responsibility for planning and producing any kind of public goods.

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 numbers of consumers unaffected by the pollution. This undermines the sense in which the valuation of damage by the federation as a whole would reflect the subjective valuation of those most affected by the pollution in question. Would coalitions of most affected consumers be able to constitute themselves as an ad hoc federation and insist on higher prices for the rights to pollute? Furthermore, even apart from the fact that different parts of a region will have differential damage, there may be considerable heterogeneity among the population of an area with respect to how much they care about the damage in question. This is obviously a problem in any system for constructing a metric of damage from pollution, but it adds special complexity when the process is meant to be participatory and deliberative. Would consumers with stronger anti-pollution preferences be able to form an ad hoc federation to demand higher pollution prices? Could they constitute a blocking coalition?

Finally, unless I am misunderstanding the process involved, the procedures Robin advocates would likely generate considerable heterogeneity in the pollution taxes (i.e. the negative externality charges built into “indicative prices”) faced by producers of similar goods in different places. This means producers in areas where consumers don’t care so much about pollution would be able to produce at lower cost. However, there is no restriction (as far as I can tell) that they only distribute their products to the pollution-indifferent consumers. This means that the same goods will be available to consumers elsewhere at lower and higher indicative prices depending on the pollution preferences of consumers in the places where production takes place. This begins to look like a situation that generates market pressures on the high cost producers.

Given that there are many thousands of potential pollutants, and the geographical damage-boundaries of different pollutants from the same production process will often be different, the actual process by which negative externalities are dealt with through iterated annual planning by consumer federations could become extremely cumbersome and inconsistent. In such a situation, consumers might decide that they prefer a simpler system that combines government regulations that impose various kinds of limits on allowable pollution with a system of uniform taxes on different types of environmental externalities. Given that, in a participatory economy, the democratic accountability of government policy making will not be distorted by concentrations of private power as in capitalism, consumers-as-citizens might prefer the uniformity and predictability of such a regulatory system even though it would be less immediately responsive to the particular preferences for levels of pollution of citizens-as-consumers.

Risk-Taking Innovation

I have no problem with the broad principle that a great deal of investment in new projects—perhaps even a large majority of investments—could be effectively organized through some kind of participatory, democratic planning process involving various kinds of councils and federations. Whether this would be precisely organized along the lines of worker councils and sectoral federations as proposed by Robin or through some other institutional arrangement is a secondary matter; the important point is that it is plausible that much investment can be productively allocated through directly democratic processes.

What is less clear to me is whether the optimal system would eliminate all features of more market-like allocations for at least some investments. Is there good reason to believe that the optimal system would allow no investments outside of the decision-making processes of councils and federations? Consider the following example:

Suppose a group of people have an idea for some new product but they cannot convince the relevant council or federation to provide them the needed capital equipment and raw materials to produce it. There is just too much skepticism about the viability of the project. An alternative way of funding the project could be through a form of crowdsourcing finance along the lines of Kickstarter. The workers involved would post a description of the project online and explain their specific needs for material inputs. They appeal to people (in their role of consumers) to allocate part of their annual consumption allowances to the project. Consumers might decide, for example, to put in extra hours at work in order to acquire the extra funds needed for their contribution, or they might just decide to consume less of some discretionary part of their consumption bundle. Once sufficient funds are raised in this manner, the project can proceed. Such a device could be used for an experimental theater project that the relevant sector federation (which would in effect function like an arts council) thinks is a waste of resources. Or it could be used for some new manufactured product.

There are a variety of motivations that might lead people to voluntarily make this allocation. They might believe in the social value of the project and therefore be willing to give the funds as an outright grant. This is currently the motivation behind a range of Kickstarter projects in the arts. Or they might be really keen on the product, and give the funds in exchange for a promise of being the first to get the product itself at an equal value to what they gave. This would, in effect, be simply a long-term pre-order of the product, although operating outside of the mechanism of the IFB. But potential contributors to the project might also only be interested in contributing if they got a positive return on their “investment”. This would look much closer to market investment.

The question, then, is should such practices be prohibited in a participatory economy? Especially if a positive return on crowd-sourced investments is allowed, these projects would constitute a kind of quasi-market niche in the participatory economy. Robin argues that new worker councils should be prohibited from raising capital outside of the planning process. Here is what he says about new startup worker councils:

In a participatory economy new worker councils bid for the resources they need to get started in the participatory planning process. If they submit a proposal that is accepted, they’re good to go. Otherwise not … But just as banks judge the ‘credibility’ of new entrepreneur’s business plans in capitalism, industry federations judge whether or not a group who has proposed to form a new worker council are ‘credible.’ (pp. 111–2)