ALTERNATIVES	
  TO	
  
CAPITALISM	
  
PROPOSALS	
  FOR	
  A	
  
DEMOCRATIC	
  ECONOMY	
  
	
  
	
  
	
  
	
  
Robin	
  Hahnel	
  
Erik	
  Olin	
  Wright	
  
	
  
	
  
	
  
	
  
i
CONTENTS	
  
	
  
Acknowledgements	
   ii	
  
	
   	
  
Introduction	
   iii	
  
	
   	
  
Part	
  One	
   	
  
1. The	
  Case	
  for	
  Participatory	
  Economics	
   2	
  
Robin	
  Hahnel	
   	
  
2. Participatory	
  Economics:	
  A	
  Sympathetic	
  
Critique	
  	
  
11	
  
Erik	
  Olin	
  Wright	
   	
  
3. In	
  Defence	
  of	
  Participatory	
  Economics	
   38	
  
Robin	
  Hahnel	
   	
  
	
   	
  
Part	
  Two	
   	
  
4. Socialism	
  and	
  Real	
  Utopias	
   61	
  
Erik	
  Olin	
  Wright	
   	
  
5. Breaking	
  With	
  Capitalism	
   85	
  
Robin	
  Hahnel	
   	
  
6. Final	
  Thoughts	
   107	
  
Erik	
  Olin	
  Wright	
   	
  
	
   	
  
About	
  the	
  authors	
   121	
  
ii
ACKNOWLEDGEMENTS	
  
	
  
	
  
	
  
Robin	
  would	
  like	
  to	
  thank	
  Mesa	
  Refuge,	
  a	
  writers	
  retreat	
  in	
  Point	
  Reyes	
  Station,	
  California,	
  
where	
  he	
  was	
  a	
  resident	
  for	
  two	
  weeks	
  during	
  this	
  last	
  year.	
  
	
  
iii
INTRODUCTION	
  
	
  
New	
  Left	
  Project	
  
	
  
	
  
Poverty,	
   exploitation,	
   instability,	
   hierarchy,	
   subordination,	
   environmental	
  
exhaustion,	
   radical	
   inequalities	
   of	
   wealth	
   and	
   power—it	
   is	
   not	
   difficult	
   to	
   list	
  
capitalism’s	
  myriad	
  injustices.	
  But	
  is	
  there	
  a	
  preferable	
  and	
  workable	
  alternative?	
  
What	
  would	
  a	
  viable	
  free	
  and	
  democratic	
  free	
  society	
  look	
  like?	
  
Alternatives	
  to	
  Capitalism:	
  Proposals	
  for	
  a	
  Democratic	
  Economy	
  presents	
  a	
  debate	
  
between	
  two	
  such	
  possibilities:	
  Robin	
  Hahnel’s	
  “participatory	
  economics”	
  and	
  Erik	
  
Olin	
   Wright’s	
   “real	
   utopian”	
   socialism.	
   It	
   is	
   a	
   detailed	
   and	
   at	
   times	
   technical	
  
discussion	
  that	
  rewards	
  careful	
  engagement.	
  Those	
  who	
  put	
  the	
  effort	
  in	
  will,	
  we	
  
hope,	
  find	
  that	
  it	
  illuminates	
  a	
  range	
  of	
  issues	
  and	
  dilemmas	
  of	
  crucial	
  importance	
  
to	
  any	
  serious	
  effort	
  to	
  build	
  a	
  better	
  world.	
  
Is	
  it	
  worth	
  devoting	
  energy	
  to	
  thinking	
  about	
  alternatives	
  to	
  capitalism?	
  There	
  is	
  a	
  
tradition	
   within	
   anti-­‐capitalist	
   politics	
   which	
   thinks	
   not.	
   It	
   is	
   argued	
   that	
   idle	
  
speculation	
  distracts	
  from	
  what	
  really	
  matters:	
  the	
  struggles	
  emerging	
  in	
  the	
  here	
  
and	
   now,	
   which	
   are	
   the	
   soil	
   from	
   which	
   any	
   emancipatory	
   future	
   will	
   spring.	
  
Moreover,	
   if	
   participation	
   in	
   those	
   struggles	
   is	
   done	
   on	
   the	
   basis	
   of	
   a	
  
preconceived	
  vision,	
  their	
  creativity	
  and	
  experimentation	
  may	
  be	
  inhibited.	
  	
  
However,	
   a	
   compelling	
   case	
   can	
   be	
   made	
   that	
   engaging	
   with	
   the	
   visionary	
  
approach	
   could	
   invigorate	
   and	
   strengthen	
   radical	
   politics.	
   The	
   most	
   powerful	
  
movements	
   of	
   the	
   left	
   in	
   the	
   twentieth	
   century	
   failed	
   to	
   produce	
   a	
   desirable	
  
alternative	
   to	
   capitalism,	
   leading	
   instead	
   to	
   the	
   authoritarian,	
   statist	
   forms	
   of	
  
“really	
  existing	
  socialism”	
  in	
  the	
  USSR	
  and	
  its	
  satellites,	
  on	
  the	
  one	
  hand,	
  and	
  the	
  
“humanised	
   capitalism”	
   of	
   social	
   democracy,	
   on	
   the	
   other.	
   This	
   has	
   led	
   to	
   a	
  
widespread	
   lack	
   of	
   conviction	
   in	
   the	
   possibility	
   of	
   transcending	
   capitalism	
   and,	
  
indeed,	
  a	
  difficulty	
  in	
  even	
  imagining	
  such	
  a	
  task.	
  This	
  anxiety	
  is	
  pervasive	
  even	
  
among	
  radical	
  movements	
  and	
  their	
  sympathisers.	
  By	
  contrast,	
  a	
  left	
  animated	
  by	
  
a	
  shared	
  vision,	
  resting	
  on	
  the	
  kind	
  of	
  credible	
  intellectual	
  foundations	
  that	
  Robin	
  
and	
  Erik	
  seek	
  to	
  supply,	
  could	
  act	
  with	
  a	
  confidence	
  and	
  strategic	
  direction	
  that	
  is	
  
so	
  conspicuously	
  absent	
  today.	
  Not	
  only	
  would	
  this	
  strengthen	
  the	
  prospects	
  of	
  
	
  
the	
  creation	
  of	
  a	
  desirable	
  post-­‐capitalist	
  future,	
  a	
  left	
  that	
  genuinely	
  threatened	
  
the	
  ruling	
  order	
  would	
  also	
  be	
  able	
  to	
  win	
  important	
  reforms	
  to	
  ameliorate	
  the	
  
harms	
  of	
  capitalism	
  in	
  the	
  immediate	
  term.	
  	
  
In	
  this	
  dialogue	
  New	
  Left	
  Project	
  brings	
  together	
  two	
  writers	
  who,	
  motivated	
  by	
  
such	
   considerations,	
   have	
   devoted	
   substantial	
   efforts	
   to	
   thinking	
   systematically	
  
about	
  alternative	
  models	
  of	
  social	
  order.	
  Both	
  Robin	
  and	
  Erik	
  began	
  this	
  process	
  
in	
  a	
  focused	
  way	
  in	
  the	
  1990s,	
  when	
  the	
  collapse	
  of	
  the	
  USSR	
  heralded	
  a	
  new	
  era	
  
of	
  capitalist	
  triumphalism.	
  Robin	
  and	
  his	
  collaborator	
  Michael	
  Albert	
  built	
  on	
  ideas	
  
that	
   had	
   emerged	
   within	
   the	
   libertarian	
   socialist	
   tradition	
   in	
   the	
   twentieth	
  
century—including	
  from	
  council	
  communists,	
  anarcho-­‐syndicalists	
  and	
  elements	
  
of	
   the	
   New	
   Left—to	
   develop	
   a	
   plausible	
   and	
   robustly	
   anti-­‐capitalist	
   economic	
  
model	
   known	
   as	
   “participatory	
   economics”.	
   This	
   system	
   dispenses	
   with	
   the	
  
defining	
   features	
   of	
   a	
   capitalist	
   economy	
   -­‐	
   markets,	
   private	
   ownership	
   and	
   a	
  
hierarchical	
   division	
   of	
   labour	
   -­‐	
   proposing	
   instead	
   a	
   system	
   of	
   participatory	
  
planning,	
  worker	
  control	
  and	
  an	
  egalitarian	
  division	
  of	
  labour.	
  His	
  latest	
  book	
  on	
  
the	
  subject	
  is	
  Of	
  the	
  People,	
  By	
  the	
  People:	
  The	
  Case	
  for	
  a	
  Participatory	
  Economy	
  
(AK	
   Press,	
   2012),	
   where	
   he	
   sets	
   out	
   a	
   comprehensive,	
   accessible	
   and	
   refined	
  
account	
  of	
  the	
  model.	
  	
  
In	
   the	
   1990s	
   Erik	
   initiated	
   the	
   Real	
   Utopias	
   Project,	
   editing	
   a	
   series	
   of	
   books	
  
canvassing	
   and	
   assessing	
   a	
   range	
   of	
   proposals	
   for	
   emancipatory	
   institutional	
  
arrangements.	
  This	
  eventually	
  led	
  to	
  the	
  publication	
  of	
  his	
  own	
  work,	
  Envisioning	
  
Real	
   Utopias	
   (Verso,	
   2010).	
   By	
   far	
   the	
   most	
   ambitious	
   book	
   in	
   the	
   series,	
  
developed	
   in	
   part	
   through	
   a	
   speaking	
   tour	
   of	
   18	
   countries	
   over	
   four	
   years,	
   it	
  
outlines	
   a	
   novel	
   conception	
   of	
   socialism,	
   anchored	
   in	
   the	
   concept	
   of	
   “social	
  
empowerment”,	
   a	
   variety	
   of	
   general	
   institutional	
   configurations	
   that	
   could	
  
facilitate	
   its	
   realisation,	
   and	
   a	
   detailed	
   discussion	
   of	
   strategy	
   for	
   social	
  
transformation.	
  	
  
In	
  Alternatives	
  to	
  Capitalism	
  Erik	
  and	
  Robin	
  bring	
  to	
  bear	
  the	
  ideas	
  developed	
  in	
  
Of	
  the	
  People,	
  By	
  the	
  People	
  and	
  Envisioning	
  Real	
  Utopias.	
  Its	
  two	
  parts	
  focus	
  on	
  
participatory	
   economics	
   and	
   real	
   utopian	
   socialism,	
   respectively,	
   each	
   opening	
  
with	
  a	
  lead	
  essay	
  that	
  summarises	
  the	
  key	
  ideas	
  of	
  the	
  approach	
  in	
  question.	
  The	
  
distinctive	
  nature	
  of	
  this	
  text	
  is	
  the	
  depth	
  of	
  the	
  dialogue	
  that	
  emerges.	
  Although	
  
new	
  arguments	
  and	
  ideas	
  surface	
  in	
  each	
  of	
  the	
  six	
  contributions,	
  key	
  issues	
  are	
  
also	
  revisited	
  throughout	
  and	
  subjected	
  to	
  sustained	
  critical	
  evaluation.	
  The	
  result	
  
is	
  a	
  work	
  that,	
  even	
  as	
  it	
  covers	
  a	
  range	
  of	
  issues	
  in	
  economics,	
  social	
  theory	
  and	
  
history,	
  achieves	
  a	
  rare	
  degree	
  of	
  depth	
  and	
  thoroughness	
  of	
  debate.	
  	
  	
  
v
Important	
  points	
  of	
  disagreement	
  emerge.	
  These	
  concern,	
  among	
  other	
  things,	
  
the	
   level	
   of	
   detail	
   to	
   which	
   post-­‐capitalist	
   visions	
   should	
   aspire,	
   the	
   future	
   of	
  
markets,	
  and	
  whether	
  a	
  revolutionary	
  strategy	
  has	
  a	
  credible	
  role	
  to	
  play	
  in	
  anti-­‐
capitalist	
   politics.	
   Readers	
   will	
   have	
   to	
   make	
   their	
   own	
   judgements	
   about	
   the	
  
competing	
  arguments	
  on	
  these	
  issues	
  –	
  a	
  task	
  made	
  easier	
  by	
  the	
  constructive	
  
spirit	
  with	
  which	
  Erik	
  and	
  Robin	
  pursue	
  their	
  disagreements,	
  with	
  no	
  time	
  wasted	
  
on	
   straw-­‐manning	
   or	
   point	
   scoring.	
   This	
   reflects	
   the	
   genuine	
   political	
   desire,	
  
shared	
   by	
   the	
   authors	
   and	
   New	
   Left	
   Project,	
   that	
   motivates	
   Alternatives	
   to	
  
Capitalism:	
  to	
  strengthen	
  the	
  intellectual	
  resources	
  of	
  anti-­‐capitalist	
  politics.	
  We	
  
hope	
  it	
  makes	
  a	
  worthwhile	
  contribution	
  to	
  this	
  most	
  vital	
  of	
  tasks.	
  	
  
	
  
Part	
  One
THE	
  CASE	
  FOR	
  PARTICIPATORY	
  ECONOMICS	
  
	
  
Robin	
  Hahnel	
  
	
  
	
  
Curious	
  Jane:	
  “So,	
  if	
  you	
  don’t	
  like	
  capitalism,	
  what	
  do	
  you	
  want	
  instead?”	
  
Modern	
  anti-­‐capitalist:	
  “Certainly	
  not	
  old-­‐style	
  bureaucratic	
  Communism!”	
  	
  
Curious	
  Jane:	
  “Fine.…	
  But	
  then	
  what	
  DO	
  you	
  want?”	
  
Modern	
   anti-­‐capitalist:	
   “I	
   want	
   an	
   economic	
   system	
   that	
   promotes	
   economic	
  
democracy,	
  economic	
  justice,	
  and	
  human	
  solidarity,	
  without	
  sacrificing	
  economic	
  
efficiency.”	
  
Curious	
   Jane:	
   “Who	
   wouldn’t!	
   …	
   But	
   people	
   sometimes	
   mean	
   different	
   things	
  
when	
  they	
  use	
  these	
  words.	
  Can	
  you	
  be	
  more	
  specific?”	
  
Supporter	
  of	
  participatory	
  economics:	
  “Yes	
  I	
  can	
  –	
  and	
  you	
  are	
  quite	
  correct	
  to	
  
demand	
  clarification,	
  because	
  often	
  disagreements	
  over	
  how	
  best	
  to	
  organise	
  the	
  
economic	
  system	
  stem	
  from	
  different	
  conceptions	
  of	
  what	
  these	
  words	
  mean.	
  	
  By	
  
economic	
  democracy,	
  I	
  mean	
  having	
  decision	
  making	
  power	
  in	
  proportion	
  to	
  the	
  
degree	
  one	
  is	
  affected	
  by	
  a	
  decision.	
  By	
  economic	
  justice	
  I	
  mean	
  economic	
  reward	
  
commensurate	
   with	
   sacrifice,	
   or	
   effort.	
   By	
   human	
   solidarity	
   I	
   mean	
   having	
  
concern	
   for	
   the	
   wellbeing	
   of	
   others.	
   And	
   by	
   economic	
   efficiency	
   I	
   mean	
   using	
  
scarce	
   productive	
   resources	
   where	
   they	
   are	
   most	
   socially	
   beneficial	
   and	
   not	
  
wasting	
  people’s	
  hard	
  work.”	
  
Curious	
  Jane:	
  “That	
  is	
  all	
  well	
  and	
  good….	
  I’m	
  not	
  sure	
  I	
  agree	
  entirely	
  with	
  your	
  
definitions,	
  but	
  let’s	
  suppose	
  for	
  now	
  that	
  I	
  did.	
  Exactly	
  how	
  would	
  you	
  organise	
  
the	
  economy	
  to	
  achieve	
  these	
  goals?”	
  
The	
  model	
  of	
  a	
  participatory	
  economy	
  –	
  which	
  I	
  briefly	
  summarise	
  below	
  –	
  is	
  an	
  
answer	
  to	
  Jane’s	
  last	
  question.	
  It	
  is	
  not	
  an	
  answer	
  to	
  other	
  important	
  questions,	
  
such	
  as:	
  In	
  the	
  short-­‐run	
  what	
  can	
  we	
  do	
  in	
  the	
  here	
  and	
  now	
  to	
  best	
  promote	
  the	
  
above	
  goals?	
  Or,	
  in	
  the	
  long-­‐run	
  what	
  strategy	
  might	
  maximise	
  our	
  chances	
  of	
  
making	
  a	
  successful	
  transition	
  from	
  the	
  economics	
  of	
  competition	
  and	
  greed	
  to	
  an	
  
economics	
   of	
   equitable	
   cooperation?	
   These	
   are	
   important,	
   but	
   quite	
   different	
  
questions.	
  Participatory	
  economics	
  is	
  simply	
  a	
  coherent	
  description	
  of	
  how	
  a	
  fully	
  
Robin	
  Hahnel	
  
	
  
developed	
  system	
  of	
  equitable	
  cooperation	
  could	
  function.	
  It	
  is	
  not	
  a	
  transition	
  
strategy	
  or	
  political	
  program.	
  
	
  
A	
  PARTICIPATORY	
  ECONOMY1
	
  
The	
  major	
  institutions	
  “we”2
	
  propose	
  to	
  achieve	
  economic	
  democracy,	
  economic	
  
justice,	
   and	
   human	
   solidarity	
   while	
   protecting	
   the	
   environment	
   and	
   ensuring	
  
efficiency	
  are:	
  (1)	
  self-­‐governing	
  democratic	
  councils	
  of	
  workers	
  and	
  consumers	
  
where	
   each	
   member	
   has	
   one	
   vote,	
   (2)	
   jobs	
   balanced	
   for	
   empowerment	
   and	
  
desirability	
   by	
   the	
   members	
   of	
   worker	
   councils	
   themselves,	
   (3)	
   compensation	
  
according	
  to	
  effort	
  as	
  judged	
  by	
  one’s	
  workmates,	
  and	
  (4)	
  a	
  participatory	
  planning	
  
procedure	
  in	
  which	
  councils	
  and	
  federations	
  of	
  workers	
  and	
  consumers	
  propose	
  
and	
  revise	
  their	
  own	
  interrelated	
  activities	
  without	
  central	
  	
  planners	
  or	
  markets,	
  
under	
   rules	
   designed	
   to	
   generate	
   outcomes	
   that	
   are	
   efficient,	
   equitable,	
   and	
  
environmentally	
  sustainable.	
  
Over	
   the	
   past	
   twenty	
   years	
   some	
   critics	
   have	
   disagreed	
   with	
   our	
   goals	
   while	
  
others	
   have	
   objected	
   to	
   one	
   or	
   another	
   of	
   our	
   recommendations	
   for	
   how	
   to	
  
achieve	
  them.	
  Erik	
  has	
  offered	
  his	
  own	
  evaluation	
  of	
  participatory	
  economics	
  on	
  
pages	
   252-­‐265	
   of	
   Envisioning	
   Real	
   Utopias.3
	
  In	
   my	
   reading	
   Erik	
   seems	
   to	
   agree	
  
with	
   our	
   goals	
   –	
   although,	
   as	
   one	
   would	
   expect	
   his	
   formulation	
   and	
   argument	
  
differ	
   in	
   some	
   regards.	
   Most	
   importantly,	
   and	
   unlike	
   many	
   who	
   have	
   criticised	
  
participatory	
   economics,	
   Erik	
   seems	
   to	
   share	
   our	
   views	
   about	
   what	
   economic	
  
justice	
  and	
  economic	
  democracy	
  mean	
  and	
  require.	
  
1
	
  The	
   “model”	
   of	
   a	
   participatory	
   economy	
   briefly	
   presented	
   here	
   was	
   initially	
   developed	
   jointly	
   by	
  
myself	
  and	
  Michael	
  Albert	
  in	
  the	
  1990s,	
  and	
  is	
  now	
  often	
  referred	
  to	
  as	
  ‘Parecon’.	
  	
  I	
  do	
  not	
  use	
  this	
  
acronym	
  because	
  I	
  believe	
  it	
  conveys	
  an	
  otherworldly	
  impression	
  and	
  fosters	
  a	
  cultish	
  mentality	
  I	
  find	
  
detrimental	
   to	
   advancing	
   discussions	
   like	
   this	
   one	
   among	
   people	
   thinking	
   seriously	
   about	
   economic	
  
system	
  change.	
  
2
	
  When	
  I	
  say	
  “we”	
  I	
  mean	
  not	
  only	
  myself	
  and	
  Michael	
  Albert,	
  but	
  also	
  a	
  growing	
  network	
  of	
  people	
  
around	
   the	
   world	
   who,	
   without	
   necessarily	
   agreeing	
   on	
   every	
   detail,	
   nonetheless	
   refer	
   to	
   the	
  
participatory	
   economic	
   “model”	
   as	
   the	
   kind	
   of	
   alternative	
   to	
   capitalism	
   they	
   favour.	
   In	
   short,	
   “we”	
  
includes	
  all	
  of	
  us	
  who	
  answer	
  Jane’s	
  question	
  by	
  explaining	
  how	
  a	
  participatory	
  economy	
  could	
  work.	
  As	
  
should	
   be	
   expected,	
   “we”	
   do	
   not	
   always	
   agree	
   about	
   short-­‐run	
   programs	
   or	
   long-­‐run	
   transition	
  
strategies	
  for	
  getting	
  there!	
  
3
	
  Erik	
  Olin	
  Wright,	
  Envisioning	
  Real	
  Utopias.	
  Verso,	
  2010.	
  Hereafter	
  ERU.	
  
The	
  Case	
  for	
  Participatory	
  Economics	
  
3
Unless	
  I	
  am	
  mistaken,	
  Erik	
  is	
  also	
  supportive	
  of	
  compensation	
  based	
  on	
  effort	
  and	
  
trying	
  to	
  balance	
  jobs	
  for	
  desirability	
  and	
  empowerment,	
  although	
  he	
  worries	
  it	
  
may	
  prove	
  difficult	
  to	
  achieve	
  these	
  goals.	
  To	
  be	
  specific,	
  we	
  propose	
  that	
  each	
  
worker	
  council	
  come	
  up	
  with	
  its	
  own	
  procedures	
  for	
  assigning	
  what	
  we	
  call	
  “effort	
  
ratings”	
  to	
  one	
  another,	
  which	
  become	
  the	
  basis	
  for	
  their	
  members’	
  consumption	
  
rights	
   in	
   neighbourhood	
   consumption	
   councils.	
   We	
   call	
   this	
   an	
   effort	
   rating	
  
committee,	
  but	
  its	
  composition	
  and	
  procedures	
  are	
  left	
  up	
  to	
  each	
  council,	
  and	
  
we	
  fully	
  expect	
  different	
  worker	
  councils	
  to	
  come	
  up	
  with	
  very	
  different	
  ways	
  to	
  
go	
  about	
  this.	
  In	
  particular,	
  compensation	
  is	
  not	
  something	
  that	
  can	
  be	
  negotiated	
  
when	
   new	
   members	
   are	
   hired	
   by	
   worker	
   councils	
   in	
   a	
   participatory	
   economy.	
  
Everyone	
  is	
  free	
  to	
  apply	
  for	
  membership	
  in	
  any	
  worker	
  council	
  of	
  her	
  choice,	
  and	
  
worker	
  councils	
  are	
  free	
  to	
  hire	
  whomever	
  they	
  wish	
  from	
  their	
  applicant	
  pools	
  –	
  
subject	
   to	
   strict	
   rules	
   outlawing	
   discrimination	
   of	
   course.	
   However,	
   since	
  
remuneration	
  is	
  determined	
  only	
  after	
  someone	
  has	
  worked,	
  and	
  is	
  to	
  be	
  based	
  
only	
  on	
  differences	
  in	
  efforts,	
  or	
  sacrifices,	
  as	
  judged	
  by	
  co-­‐workers,	
  the	
  hiring	
  
decision	
   is	
   completely	
   separate	
   from	
   decisions	
   about	
   compensation	
   levels	
   in	
   a	
  
participatory	
  economy.	
  
While	
   some	
   market	
   socialists	
   do	
   not	
   favour	
   self-­‐management	
   with	
   one	
   worker	
  
one	
  vote,	
  Erik	
  agrees	
  with	
  most	
  advocates	
  for	
  market	
  socialism	
  who	
  see	
  worker	
  
self-­‐management	
  as	
  one	
  of	
  its	
  major	
  virtues.4
	
  However,	
  to	
  ensure	
  that	
  formally	
  
equal	
   rights	
   to	
   participate	
   in	
   decision	
   making	
   in	
   one’s	
   workplace	
   translate	
   into	
  
truly	
   equal	
   opportunities	
   to	
   participate,	
   supporters	
   of	
   participatory	
   economics	
  
propose	
   that	
   in	
   addition	
   to	
   one	
   member	
   one	
   vote,	
   jobs	
   within	
   workplaces	
   be	
  
balanced	
  for	
  empowerment.	
  We	
  argue	
  that	
  as	
  long	
  as	
  some	
  workers	
  sweep	
  floors	
  
all	
  day,	
  every	
  day,	
  while	
  others	
  attend	
  meetings	
  of	
  various	
  kinds	
  all	
  day,	
  every	
  
day,	
   formally	
   equal	
   rights	
   to	
   participate	
   at	
   worker	
   council	
   meetings	
   will	
   not	
  
translate	
   into	
   truly	
   equal	
   opportunities	
   to	
   influence	
   firm	
   decisions.	
   Again,	
   we	
  
refer	
  to	
  a	
  job	
  balancing	
  committee	
  and	
  discuss	
  how	
  it	
  might	
  function,	
  but	
  leave	
  
4
	
  The	
  first	
  model	
  of	
  market	
  socialism	
  developed	
  by	
  Oscar	
  Lange	
  and	
  Abba	
  Lerner	
  in	
  the	
  1930s	
  proposed	
  
that	
   enterprise	
   managers	
   be	
   appointed	
   by	
   the	
   state,	
   not	
   chosen	
   by	
   a	
   self-­‐governing	
   worker	
   council	
  
where	
   every	
   member	
   has	
   one	
   vote.	
   In	
   the	
   1990s	
   John	
   Roemer	
   proposed	
   a	
   different	
   variant	
   of	
  
“managerial	
  market	
  socialism”	
  in	
  which	
  workers	
  also	
  were	
  not	
  “sovereign”	
  over	
  their	
  own	
  workplace.	
  
However,	
   the	
   majority	
   of	
   market	
   socialists	
   have	
   historically	
   supported	
   worker	
   self-­‐management.	
  
Jaroslav	
  Vanek	
  and	
  Branko	
  Horvat	
  proposed	
  models	
  of	
  “worker	
  self-­‐managed	
  market	
  socialism”	
  in	
  the	
  
1960s.	
  David	
  Schweickart	
  and	
  Michael	
  Howard	
  have	
  proposed	
  slightly	
  different	
  versions	
  of	
  worker	
  self-­‐
managed	
   market	
   socialism	
   in	
   the	
   past	
   twenty	
   years.	
   Erik	
   strongly	
   supports	
   a	
   “worker	
   self-­‐managed”	
  
rather	
  than	
  a	
  “managerial”	
  version	
  of	
  market	
  socialism.	
  
Robin	
  Hahnel	
  
	
  
particulars	
  up	
  to	
  individual	
  worker	
  councils,	
  and	
  expect	
  wide	
  variations	
  in	
  how	
  
they	
   would	
   try	
   to	
   combine	
   tasks	
   in	
   job	
   descriptions	
   so	
   that	
   everyone’s	
   work	
  
experience	
  contains	
  some	
  empowering	
  tasks,	
  and	
  pleasant	
  and	
  unpleasant	
  tasks	
  
are	
  shared	
  by	
  all.	
  Unlike	
  many	
  other	
  market	
  socialists	
  who	
  object	
  to	
  job	
  balancing	
  
as	
  inefficient	
  and	
  an	
  infringement	
  on	
  individual	
  economic	
  freedoms,	
  Erik	
  seems	
  to	
  
agree	
   with	
   us	
   that	
   these	
   objections	
   are	
   not	
   compelling,	
   and	
   that	
   achieving	
  
meaningful	
  economic	
  democracy	
  requires	
  job	
  balancing.	
  
Which	
  means	
  that	
  while	
  many	
  other	
  market	
  socialists	
  object	
  to	
  our	
  proposals	
  for	
  
how	
   to	
   reward	
   work	
   and	
   organise	
   the	
   production	
   process,	
   the	
   major	
   area	
   of	
  
disagreement	
  between	
  Erik	
  and	
  supporters	
  of	
  participatory	
  economics	
  has	
  to	
  do	
  
with	
   the	
   best	
   way	
   to	
   coordinate	
   the	
   interrelated	
   activities	
   of	
   different	
   worker	
  
councils	
   and	
   consumers	
   –	
   or	
   what	
   economists	
   call	
   the	
   economy’s	
   “allocative	
  
mechanism.”	
  
	
  
WHAT	
  IS	
  PARTICIPATORY	
  PLANNING?	
  	
  
Erik’s	
   principal	
   objection	
   to	
   the	
   “model”	
   of	
   a	
   participatory	
   economy	
   is	
   the	
  
proposal	
   to	
   replace	
   markets	
   with	
   a	
   procedure	
   we	
   call	
   “participatory	
   planning.”	
  
Here	
  the	
  distinction	
  between	
  a	
  long-­‐run	
  goal	
  and	
  a	
  transition	
  strategy	
  is	
  crucial.	
  I	
  
have	
  never	
  been	
  under	
  the	
  illusion	
  that	
  we	
  can	
  replace	
  markets	
  with	
  participatory	
  
planning	
  immediately.	
  The	
  market	
  system	
  has	
  been	
  growing	
  and	
  deepening	
  for	
  
hundreds	
   of	
   years,	
   and	
   regrettably	
   still	
   has	
   the	
   allegiance	
   of	
   an	
   overwhelming	
  
majority	
   of	
   the	
   population.	
   Since	
   the	
   “system	
   change”	
   we	
   seek	
   is	
   highly	
  
democratic	
  it	
  can	
  only	
  happen	
  when	
  we	
  have	
  convinced	
  a	
  significant	
  majority	
  to	
  
support	
   replacing	
   the	
   market	
   system	
   with	
   participatory	
   planning.	
   	
   Therefore,	
   I	
  
personally	
  have	
  long	
  argued	
  that	
  while	
  the	
  market	
  system	
  persists	
  much	
  of	
  our	
  
transition	
  strategy	
  necessarily	
  consists	
  of	
  various	
  ways	
  to	
  “socialise”	
  markets	
  –	
  as	
  
Erik	
  and	
  other	
  proponents	
  of	
  market	
  socialism	
  put	
  it	
  –	
  in	
  order	
  to	
  ameliorate	
  their	
  
detrimental	
  effects.	
  This	
  is	
  why	
  I	
  believe	
  supporters	
  of	
  participatory	
  economics	
  
can	
  work	
  together	
  with	
  market	
  socialists	
  on	
  many	
  campaigns	
  to	
  “tame”	
  markets	
  
in	
  the	
  here	
  and	
  now.	
  In	
  other	
  words,	
  in	
  my	
  view	
  the	
  difference	
  is	
  not	
  that	
  market	
  
socialists	
  fight	
  to	
  tame	
  markets	
  while	
  proponents	
  of	
  participatory	
  economics	
  do	
  
not.	
   The	
   difference	
   is	
   that	
   advocates	
   of	
   participatory	
   economics	
   fight	
   to	
   tame	
  
markets	
  until	
  a	
  majority	
  supports	
  replacing	
  them	
  altogether	
  with	
  something	
  far	
  
better,	
  while	
  market	
  socialists	
  fight	
  to	
  tame	
  markets	
  to	
  keep	
  them.	
  
The	
  case	
  for	
  eventually	
  replacing	
  markets	
  altogether	
  logically	
  has	
  two	
  parts:	
  (1)	
  
Demonstrating	
   how	
   and	
   why	
   markets	
   –	
   even	
   if	
   “tamed”	
   –	
   would	
   still	
   have	
  
The	
  Case	
  for	
  Participatory	
  Economics	
  
5
undesirable	
  consequences.	
  (2)	
  Demonstrating	
  that	
  there	
  is	
  an	
  alternative	
  way	
  to	
  
coordinate	
   a	
   productive	
   division	
   of	
   labor	
   that	
   is	
   both	
   feasible	
   and	
   less	
  
problematic.	
  I	
  can	
  postpone	
  the	
  first	
  part	
  of	
  this	
  “case	
  against	
  markets”	
  until	
  after	
  
Erik	
   presents	
   his	
   reasons	
   for	
   believing	
   that	
   eliminating	
   markets	
   entirely	
   is	
  
unnecessary	
  and	
  undesirable.	
  Here	
  I	
  confine	
  myself	
  to	
  the	
  second	
  part	
  –	
  the	
  “how	
  
and	
  wherefores”	
  of	
  the	
  participatory	
  planning	
  alternative.	
  To	
  keep	
  things	
  simple	
  I	
  
will	
  confine	
  myself	
  to	
  the	
  annual	
  participatory	
  planning	
  procedure,	
  taking	
  care	
  to	
  
correct	
  some	
  common	
  misconceptions.	
  
	
  
THE	
  PLANNING	
  PROCEDURE	
  
The	
   annual	
   participatory	
   planning	
   procedure	
   takes	
   place	
   in	
   the	
   context	
   of	
   an	
  
investment	
   plan	
   that	
   has	
   already	
   decided	
   what	
   investment	
   goods	
   will	
   be	
  
produced	
   this	
   year	
   and	
   how	
   they	
   will	
   be	
   distributed	
   to	
   increase	
   capacities	
   of	
  
different	
  industries	
  at	
  year’s	
  end.	
  It	
  also	
  takes	
  place	
  when	
  the	
  stocks	
  of	
  all	
  kinds	
  of	
  
natural	
   capital	
   (e.g.	
   acres	
   of	
   fertile	
   land),	
   produced	
   capital	
   (e.g.	
   lathes),	
   and	
  
human	
  capital	
  (e.g.	
  people-­‐hours	
  of	
  welding	
  labor)	
  available	
  for	
  use	
  during	
  the	
  
year	
  are	
  known.5
	
  What	
  the	
  annual	
  planning	
  procedure	
  “decides”	
  is	
  which	
  worker	
  
councils	
  will	
  use	
  which	
  productive	
  resources,	
  what	
  those	
  worker	
  councils	
  will	
  use	
  
their	
   primary	
   and	
   intermediate	
   inputs	
   to	
   produce,	
   how	
   intermediate	
   goods	
  
produced	
  will	
  be	
  distributed	
  among	
  worker	
  councils,	
  and	
  how	
  consumption	
  goods	
  
produced	
  will	
  be	
  distributed	
  among	
  consumer	
  councils	
  and	
  federations.	
  In	
  other	
  
words,	
   the	
   procedure	
   yields	
   what	
   economists	
   call	
   a	
   comprehensive,	
   annual	
  
production-­‐consumption	
  plan.	
  
Only	
   worker	
   councils	
   and	
   consumer	
   councils	
   and	
   federations	
   participate	
   in	
   the	
  
annual	
   planning	
   procedure.	
   Each	
   worker	
   and	
   consumer	
   council,	
   and	
   each	
  
federation	
  of	
  consumer	
  councils	
  participates	
  by	
  submitting	
  a	
  proposal	
  for	
  what	
  
that	
  council	
  or	
  federation	
  wants	
  to	
  do,	
  i.e.	
  councils	
  and	
  federations	
  make	
  what	
  
we	
   call	
   “self-­‐activity	
   proposals.”	
   There	
   is	
   a	
   single	
   “iteration	
   facilitation	
   board”	
  
(IFB)	
   that	
   performs	
   one,	
   very	
   simple	
   function.	
   The	
   IFB	
   announces	
   current	
  
estimates	
   of	
   the	
   opportunity	
   costs	
   of	
   using	
   each	
   kind	
   of	
   “capital”	
   –	
   natural,	
  
produced,	
  and	
  human	
  –	
  the	
  social	
  cost	
  of	
  producing	
  every	
  produced	
  good	
  and	
  
service,	
  and	
  the	
  damage	
  caused	
  by	
  every	
  pollutant.	
  The	
  IFB	
  raises	
  its	
  estimate	
  of	
  
5
	
  In	
  other	
  words,	
  the	
  “demand”	
  for	
  each	
  investment	
  good	
  to	
  be	
  produced	
  this	
  year,	
  and	
  the	
  “supply”	
  of	
  
every	
  input	
  that	
  cannot	
  be	
  produced	
  this	
  year	
  are	
  “givens”	
  when	
  annual	
  planning	
  begins.	
  
Robin	
  Hahnel	
  
	
  
the	
  “indicative	
  price”	
  for	
  anything	
  in	
  excess	
  demand	
  in	
  the	
  previous	
  round	
  of	
  the	
  
planning	
  procedure,	
  and	
  lowers	
  its	
  price	
  for	
  anything	
  in	
  excess	
  supply,	
  after	
  which	
  
councils	
  and	
  federations	
  revise	
  and	
  resubmit	
  new	
  “self-­‐activity”	
  proposals	
  until	
  a	
  
feasible	
  plan	
  is	
  reached,	
  i.e.	
  until	
  there	
  is	
  no	
  longer	
  excess	
  demand	
  for	
  any	
  natural	
  
resource,	
  any	
  kind	
  of	
  physical	
  capital,	
  any	
  category	
  of	
  labor,	
  any	
  intermediate	
  or	
  
final	
  good	
  or	
  service,	
  or	
  any	
  pollutant.6
	
  
Individual	
   workers	
   participate	
   only	
   within	
   their	
   own	
   worker	
   council	
   helping	
  
formulate	
   and	
   revise	
   their	
   own	
   worker	
   council	
   proposal.	
   Individual	
   consumers	
  
participate	
  only	
  within	
  their	
  own	
  neighbourhood	
  consumer	
  council	
  (a)	
  voting	
  for	
  
delegates	
  to	
  higher	
  level	
  consumer	
  federations	
  responsible	
  for	
  requesting	
  higher	
  
level	
   public	
   goods,	
   (b)	
   making	
   their	
   own	
   and	
   approving	
   the	
   individual	
  
consumption	
  requests	
  of	
  others,	
  and	
  (c)	
  deciding	
  on	
  requests	
  for	
  neighbourhood	
  
public	
  goods.	
  The	
  process	
  whereby	
  individual	
  consumption	
  requests	
  are	
  approved	
  
is	
   internal	
   to	
   each	
   neighbourhood	
   consumption	
   council,	
   and	
   not	
   part	
   of	
   the	
  
participatory	
   planning	
   procedure	
   itself.	
   The	
   process	
   whereby	
   federations	
   of	
  
consumer	
  councils	
  decide	
  what	
  higher	
  level	
  public	
  goods	
  to	
  ask	
  for	
  is	
  also	
  up	
  to	
  
them,	
  and	
  not	
  part	
  of	
  the	
  planning	
  procedure.	
  	
  
Each	
   round	
   in	
   this	
   social,	
   iterative	
   procedure	
   begins	
   with	
   new,	
   more	
   accurate	
  
estimates	
  of	
  opportunity	
  and	
  social	
  costs,	
  followed	
  by	
  revised	
  proposals	
  from	
  all	
  
6
	
  Note:	
   A	
   great	
   deal	
   of	
   what	
   has	
   been	
   written	
   about	
   the	
   need	
   for	
   supercomputers	
   and	
   modern	
  
information	
   technologies	
   for	
   a	
   participatory	
   economy	
   to	
   work	
   is	
   simply	
   wrong.	
   For	
   example,	
   the	
   IFB	
  
does	
  not	
  need	
  a	
  powerful	
  computer	
  at	
  all.	
  It	
  merely	
  adds	
  up	
  and	
  compares	
  the	
  demand	
  and	
  supply	
  for	
  
each	
  natural	
  resource,	
  each	
  category	
  of	
  labor,	
  each	
  final,	
  intermediate,	
  and	
  capital	
  good	
  or	
  service,	
  and	
  
each	
   pollutant.	
   	
   In	
   terms	
   of	
   “technology”	
   the	
   IFB	
   might	
   want	
   an	
   abacus	
   but	
   has	
   no	
   need	
   for	
   a	
  
supercomputer!	
   Nor	
   do	
   actors	
   in	
   the	
   planning	
   procedure	
   need	
   to	
   do	
   anything	
   other	
   than	
   multiply	
  
quantities	
  by	
  “indicative	
  prices”	
  and	
  add	
  them	
  up	
  to	
  calculate	
  the	
  estimated	
  social	
  costs	
  of	
  consumption	
  
requests	
  and	
  the	
  social	
  benefit	
  to	
  cost	
  ratios	
  of	
  production	
  proposals.	
  Again,	
  nothing	
  requiring	
  fancy	
  
computer	
  capabilities.	
  
Assuming	
   central	
   planners	
   could	
   obtain	
   accurate,	
   detailed	
   information	
   about	
   the	
   capabilities	
   of	
   all	
  
production	
   units,	
   in	
   order	
   to	
   be	
   efficient	
   central	
   planning	
   does	
   require	
   supercomputers	
   capable	
   of	
  
solving	
  very	
  large	
  mathematical	
  programming	
  problems	
  –	
  which,	
  incidentally,	
  have	
  been	
  available	
  for	
  
decades	
   now.	
   However,	
   this	
   is	
   not	
   the	
   case	
   for	
   participatory	
   planning.	
   Nobody	
   in	
   a	
   participatory	
  
economy	
  needs	
  to	
  acquire	
  detailed	
  information	
  about	
  the	
  production	
  capabilities	
  of	
  production	
  units,	
  
and	
  nobody	
  requires	
  the	
  services	
  of	
  supercomputers.	
  Where	
  relatively	
  new	
  modern	
  technology	
  would	
  
be	
  helpful	
  in	
  running	
  a	
  participatory	
  economy	
  is	
  in	
  adjusting	
  for	
  changes	
  during	
  the	
  year	
  from	
  what	
  was	
  
planned	
  and	
  approved.	
  Computerised	
  inventory	
  management	
  systems	
  and	
  “real	
  time”	
  supply	
  chains	
  –	
  
which	
  are	
  now	
  fixtures	
  in	
  the	
  global	
  economy	
  –	
  make	
  adjustments	
  during	
  the	
  year	
  much	
  smoother	
  than	
  
they	
  would	
  have	
  been	
  a	
  few	
  decades	
  ago.	
  
The	
  Case	
  for	
  Participatory	
  Economics	
  
7
councils	
   and	
   federations	
   in	
   light	
   of	
   new	
   information	
   about	
   how	
   their	
   desires	
  
affect	
   others.	
   Each	
   council	
   and	
   federation	
   must	
   revise	
   and	
   resubmit	
   its	
   own	
  
proposal	
   until	
   it	
   meets	
   with	
   approval	
   from	
   the	
   other	
   councils.	
   Consumption	
  
council	
   and	
   federation	
   proposals	
   are	
   evaluated	
   by	
   multiplying	
   the	
   quantity	
   of	
  
every	
  good	
  or	
  service	
  requested	
  by	
  the	
  estimated	
  social	
  cost	
  of	
  producing	
  a	
  unit	
  
of	
   the	
   good	
   or	
   service,	
   to	
   be	
   compared	
   to	
   the	
   average	
   effort	
   rating	
   of	
   the	
  
members	
   of	
   the	
   consumption	
   council	
   or	
   federation	
   requesting	
   the	
   goods	
   and	
  
services.	
   If,	
   for	
   example,	
   the	
   average	
   effort	
   rating	
   for	
   a	
   neighbourhood	
  
consumption	
   council	
   is	
   equal	
   to	
   the	
   social	
   average,	
   this	
   should	
   entitle	
   them	
   to	
  
consume	
  goods	
  and	
  services	
  whose	
  production	
  costs	
  society	
  an	
  amount	
  equal	
  to	
  
the	
   average	
   cost	
   of	
   providing	
   a	
   neighbourhood	
   consumption	
   request.	
   A	
  
neighbourhood	
   council	
   with	
   higher	
   than	
   average	
   effort	
   ratings	
   (indicating	
   that	
  
they	
  had	
  made	
  greater	
  than	
  average	
  sacrifices	
  as	
  workers)	
  is	
  presumably	
  entitled	
  
to	
   a	
   consumption	
   bundle	
   which	
   costs	
   society	
   more	
   than	
   the	
   average;	
   a	
  
neighbourhood	
  council	
  with	
  lower	
  than	
  average	
  effort	
  ratings	
  should	
  presumably	
  
only	
  be	
  entitled	
  to	
  a	
  consumption	
  bundle	
  which	
  costs	
  less	
  than	
  the	
  average.	
  	
  
The	
   estimates	
   of	
   opportunity	
   and	
   social	
   costs	
   generated	
   during	
   the	
   planning	
  
procedure	
  make	
  it	
  easy	
  to	
  calculate	
  the	
  social	
  cost	
  of	
  consumption	
  requests.	
  This	
  
is	
   important	
   information	
   for	
   councils	
   and	
   federations	
   making	
   consumption	
  
requests	
  since	
  otherwise	
  they	
  have	
  no	
  way	
  of	
  knowing	
  the	
  extent	
  to	
  which	
  they	
  
are	
  asking	
  others	
  to	
  bear	
  burdens	
  on	
  their	
  behalf.	
  It	
  is	
  also	
  important	
  for	
  councils	
  
and	
  federations	
  which	
  must	
  vote	
  to	
  approve	
  or	
  disapprove	
  consumption	
  requests	
  
of	
   others,	
   since	
   otherwise	
   they	
   have	
   no	
   way	
   of	
   knowing	
   if	
   a	
   request	
   is	
   fair	
  
(consistent	
   with	
   sacrifices	
   those	
   making	
   the	
   request	
   have	
   made)	
   or	
   unfair	
   (in	
  
excess	
  of	
  sacrifices	
  made).	
  
Production	
  proposals	
  are	
  evaluated	
  by	
  comparing	
  the	
  estimated	
  social	
  benefits	
  of	
  
outputs	
   to	
   the	
   estimated	
   social	
   cost	
   of	
   inputs.	
   In	
   any	
   round	
   of	
   the	
   planning	
  
procedure	
  the	
  social	
  benefits	
  of	
  a	
  production	
  proposal	
  are	
  calculated	
  simply	
  by	
  
multiplying	
  quantities	
  of	
  proposed	
  outputs	
  by	
  their	
  “indicative”	
  prices—including	
  
negative	
  prices	
  for	
  proposed	
  emissions	
  of	
  pollutants	
  –	
  and	
  summing.	
  The	
  social	
  
costs	
  of	
  a	
  production	
  proposal	
  are	
  calculated	
  by	
  multiplying	
  inputs	
  requested	
  by	
  
their	
   “indicative”	
   prices	
   and	
   summing.	
   If	
   the	
   social	
   benefits	
   exceed	
   the	
   social	
  
costs—that	
  is,	
  if	
  the	
  social	
  benefit	
  to	
  cost	
  ratio	
  of	
  a	
  production	
  proposal	
  exceeds	
  
one—	
   everyone	
   else	
   is	
   presumably	
   made	
   better	
   off	
   by	
   allowing	
   the	
   worker	
  
council	
  to	
  do	
  what	
  they	
  have	
  proposed.	
  On	
  the	
  other	
  hand,	
  if	
  the	
  social	
  benefit	
  to	
  
cost	
  ratio	
  is	
  less	
  than	
  one,	
  the	
  rest	
  of	
  society	
  would	
  presumably	
  be	
  worse	
  off	
  if	
  
the	
  workers	
  go	
  ahead	
  and	
  do	
  what	
  they	
  have	
  proposed,	
  unless	
  there	
  is	
  something	
  
Robin	
  Hahnel	
  
	
  
“the	
   numbers”	
   fail	
   to	
   capture.	
   Again,	
   the	
   “indicative”	
   prices	
   make	
   it	
   easy	
   to	
  
calculate	
   the	
   social	
   benefit	
   to	
   cost	
   ratio	
   for	
   any	
   production	
   proposal,	
   allowing	
  
worker	
  councils	
  making	
  proposals	
  to	
  determine	
  if	
  their	
  own	
  proposals	
  are	
  socially	
  
responsible,	
   and	
   giving	
   all	
   councils	
   who	
   must	
   vote	
   to	
   approve	
   or	
   disapprove	
  
production	
   proposals	
   of	
   others	
   an	
   easy	
   way	
   to	
   assess	
   whether	
   or	
   not	
   those	
  
proposals	
  are	
  socially	
  responsible.	
  
This	
   procedure	
   “whittles”	
   overly	
   ambitious	
   proposals	
   submitted	
   by	
   worker	
   and	
  
consumer	
  councils	
  about	
  what	
  they	
  would	
  like	
  to	
  do	
  down	
  to	
  a	
  “feasible”	
  plan	
  
where	
   everything	
   someone	
   is	
   expecting	
   to	
   be	
   able	
   to	
   use	
   will	
   actually	
   be	
  
available.	
   Consumers	
   requesting	
   more	
   than	
   their	
   effort	
   ratings	
   and	
   allowances	
  
warrant	
   are	
   forced	
   to	
   either	
   reduce	
   the	
   amounts	
   they	
   request,	
   or	
   shift	
   their	
  
requests	
   to	
   less	
   socially	
   costly	
   items	
   if	
   they	
   expect	
   to	
   win	
   the	
   approval	
   of	
   other	
  
councils	
  who	
  have	
  no	
  reason	
  to	
  approve	
  consumption	
  requests	
  whose	
  social	
  costs	
  
are	
  not	
  justified	
  by	
  the	
  sacrifices	
  of	
  those	
  making	
  them.	
  Similarly,	
  worker	
  councils	
  
are	
  forced	
  to	
  either	
  increase	
  their	
  efforts,	
  shift	
  toward	
  producing	
  a	
  more	
  desirable	
  
mix	
   of	
   outputs,	
   or	
   shift	
   to	
   a	
   less	
   costly	
   mix	
   of	
   inputs	
   to	
   win	
   approval	
   for	
   their	
  
proposals	
  from	
  other	
  councils	
  who	
  have	
  no	
  reason	
  to	
  approve	
  production	
  proposals	
  
whose	
  social	
  costs	
  exceed	
  their	
  social	
  benefits.	
  Efficiency	
  is	
  promoted	
  as	
  consumers	
  
and	
  workers	
  attempt	
  to	
  shift	
  their	
  proposals	
  in	
  response	
  to	
  updated	
  information	
  
about	
  opportunity	
  and	
  social	
  costs	
  in	
  order	
  to	
  avoid	
  reductions	
  in	
  consumption	
  or	
  
increases	
  in	
  work	
  effort.	
  Equity	
  is	
  promoted	
  when	
  further	
  shifting	
  is	
  insufficient	
  to	
  
win	
   approval	
   from	
   fellow	
   consumers	
   and	
   workers	
   which	
   can	
   eventually	
   only	
   be	
  
achieved	
   through	
   consumption	
   reduction	
   or	
   greater	
   work	
   effort.	
   As	
   iterations	
  
proceed,	
   consumption	
   and	
   production	
   proposals	
   move	
   closer	
   to	
   mutual	
  
feasibility,	
  and	
  estimates	
  more	
  closely	
  approximate	
  true	
  opportunity	
  and	
  social	
  
costs	
  as	
  the	
  procedure	
  generates	
  equity	
  and	
  efficiency	
  simultaneously.	
  
Because	
  estimates	
  of	
  opportunity	
  and	
  social	
  costs	
  are	
  available	
  to	
  all	
  it	
  is	
  easy	
  for	
  
anyone	
   to	
   calculate	
   whether	
   or	
   not	
   a	
   consumption	
   or	
   production	
   proposal	
   is	
  
socially	
  responsible.	
  This	
  means	
  there	
  is	
  no	
  need	
  for	
  a	
  central	
  planner	
  to	
  be	
  the	
  
final	
   arbiter,	
   approving	
   or	
   disapproving	
   proposals.	
   Councils	
   can	
   vote	
   “yea”	
   or	
  
“nay”	
   on	
   other	
   councils’	
   proposals	
   without	
   time	
   consuming	
   evaluations	
   or	
  
contentious	
  meetings,	
  except	
  in	
  occasional	
  cases	
  requiring	
  special	
  review.	
  
There	
  are	
  important	
  technical	
  issues	
  of	
  concern	
  to	
  economists.	
  In	
  this	
  regard	
  it	
  
has	
   been	
   demonstrated	
   that	
   the	
   participatory	
   procedure	
   outlined	
   above	
   will	
  
eventually	
  reach	
  a	
  feasible	
  plan	
  that	
  is	
  a	
  Pareto	
  optimum	
  under	
  less	
  restrictive	
  
assumptions	
  about	
  technologies	
  and	
  preferences	
  than	
  those	
  necessary	
  to	
  prove	
  
The	
  Case	
  for	
  Participatory	
  Economics	
  
9
that	
  the	
  general	
  equilibrium	
  of	
  a	
  private	
  enterprise,	
  market	
  economy	
  will	
  do	
  so.	
  In	
  
particular,	
   participatory	
   planning	
   accommodates	
   externalities	
   and	
   public	
   goods	
  
efficiently,	
   and	
   generates	
   reasonably	
   accurate	
   estimates	
   of	
   damages	
   from	
  
pollution	
  whereas	
  market	
  economies	
  do	
  not.7
	
  But	
  this	
  is	
  what	
  it	
  boils	
  down	
  to:	
  
When	
  worker	
  councils	
  make	
  proposals	
  they	
  are	
  asking	
  permission	
  to	
  use	
  particular	
  
parts	
  of	
  the	
  productive	
  resources	
  that	
  belong	
  to	
  everyone.	
  In	
  effect	
  their	
  proposals	
  
say:	
   “If	
   the	
   rest	
   of	
   you,	
   with	
   whom	
   we	
   are	
   engaged	
   in	
   a	
   cooperative	
   division	
   of	
  
labor,	
  agree	
  to	
  allow	
  us	
  to	
  use	
  productive	
  resources	
  belonging	
  to	
  all	
  of	
  us	
  as	
  inputs,	
  
then	
  we	
  promise	
  to	
  deliver	
  the	
  following	
  goods	
  and	
  services	
  as	
  outputs	
  for	
  others	
  to	
  
use.”	
   When	
   consumer	
   councils	
   make	
   proposals	
   they	
   are	
   asking	
   permission	
   to	
  
consume	
  goods	
  and	
  services	
  whose	
  production	
  entails	
  social	
  costs.	
  In	
  effect	
  their	
  
proposals	
  say:	
  “We	
  believe	
  the	
  effort	
  ratings	
  we	
  received	
  from	
  co-­‐workers	
  indicate	
  
that	
  we	
  deserve	
  the	
  right	
  to	
  consume	
  goods	
  and	
  services	
  whose	
  production	
  entails	
  
an	
  equivalent	
  level	
  of	
  social	
  costs.”	
  	
  
The	
   planning	
   procedure	
   is	
   designed	
   to	
   make	
   it	
   clear	
   when	
   a	
   worker	
   council	
  
production	
   proposal	
   is	
   inefficient	
   and	
   when	
   a	
   consumption	
   council	
   proposal	
   is	
  
unfair,	
   and	
   allows	
   other	
   worker	
   and	
   consumer	
   councils	
   to	
   deny	
   approval	
   for	
  
proposals	
   when	
   they	
   seem	
   to	
   be	
   inefficient	
   or	
   unfair.	
   But	
   initial	
   self-­‐activity	
  
proposals,	
   and	
   all	
   revisions	
   of	
   proposals,	
   are	
   entirely	
   up	
   to	
   each	
   worker	
   and	
  
consumer	
  council	
  itself.	
  In	
  other	
  words,	
  if	
  a	
  worker	
  council	
  production	
  proposal	
  or	
  
neighbourhood	
   council	
   consumption	
   proposal	
   is	
   not	
   approved,	
   the	
   council	
   that	
  
made	
  the	
  proposal	
  –	
  nobody	
  else	
  –	
  can	
  revise	
  its	
  proposal	
  for	
  resubmission	
  in	
  the	
  
next	
   round	
   of	
   the	
   planning	
   procedure.	
   This	
   aspect	
   of	
   the	
   participatory	
   planning	
  
procedure	
  distinguishes	
  it	
  from	
  all	
  other	
  planning	
  models,	
  which	
  advocates	
  believe	
  
is	
  crucial	
  if	
  workers	
  and	
  consumers	
  are	
  to	
  enjoy	
  meaningful	
  self-­‐management.	
  
	
  
	
  
	
  
7
	
  Readers	
  interested	
  in	
  these	
  technical	
  issues	
  should	
  see	
  chapter	
  5	
  in	
  Albert	
  and	
  Hahnel,	
  The	
  Political	
  
Economy	
   of	
   Participatory	
   Economics	
   (Princeton	
   University	
   Press,	
   1991),	
   “Socialism	
   As	
   It	
   Was	
   Always	
  
Meant	
   to	
   Be,”	
   Review	
   of	
   Radical	
   Political	
   Economics	
   (24,	
   3&4),	
   Fall	
   and	
   Winter	
   1992:	
   46-­‐66,	
  
“Participatory	
   Planning,”	
   Science	
   &	
   Society	
   (56,	
   1),	
   Spring	
   1992:	
   39-­‐59,	
   and	
   Hahnel,	
   	
   “Wanted:	
   A	
  
Pollution	
   Damage	
   Revealing	
   Mechanism,”	
   available	
   from	
   me	
   upon	
   request	
   and	
   under	
   review	
   at	
   the	
  
Review	
  of	
  Radical	
  Political	
  Economics.	
  
PARTICIPATORY	
  ECONOMICS:	
  A	
  SYMPATHETIC	
  
CRITIQUE	
  
	
  
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:8
	
  
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	
  which	
  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.9
	
  	
  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	
  
8
	
  My	
   analysis	
   here	
   is	
   based	
   more	
   on	
   Robin’s	
   book,	
   Of	
   The	
   People,	
   By	
   The	
   People:	
   The	
   Case	
   for	
   a	
  
Participatory	
  Economy,	
  rather	
  than	
  simply	
  his	
  initial	
  contribution	
  to	
  this	
  dialogue.	
  
9
	
  Using	
   the	
   term	
   “justice”	
   in	
   a	
   more	
   restrictive	
   way	
   only	
   really	
   matters	
   if	
   one	
   also	
   believes	
   that	
  
considerations	
  of	
  justice	
  always	
  trump	
  other	
  values.	
  Some	
  liberal	
  political	
  theorists	
  seem	
  to	
  argue	
  this	
  –	
  
that	
  whenever	
  there	
  is	
  a	
  conflict	
  of	
  values	
  between	
  justice	
  and	
  something	
  else,	
  justice	
  decides;	
  it	
  has,	
  to	
  
use	
  the	
  philosophers’	
  term,	
  “lexical	
  priority.”	
  Neither	
  Robin	
  nor	
  I	
  give	
  justice	
  that	
  kind	
  of	
  over-­‐riding	
  
weight.	
  In	
  Robin’s	
  terms	
  it	
  is	
  just	
  as	
  important	
  that	
  a	
  society	
  be	
  humane	
  as	
  just,	
  and	
  in	
  places	
  in	
  his	
  
analysis	
  he	
  is	
  willing	
  to	
  accept	
  as	
  a	
  legitimate	
  trade-­‐off	
  some	
  departures	
  from	
  justice	
  in	
  the	
  name	
  of	
  
efficiency	
  (see	
  my	
  discussion	
  below	
  of	
  the	
  problem	
  of	
  innovation).	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
11
tasks,	
   pleasant	
   and	
   unpleasant	
   activities,	
   routine	
   and	
   “empowered”	
  
responsibilities.	
  As	
  an	
  ideal,	
  all	
  jobs	
  should	
  be	
  equally	
  desirable	
  from	
  the	
  point	
  the	
  
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	
  which,	
  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	
  which	
  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	
  
Erik	
  Olin	
  Wright	
  
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.10
	
  
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	
  
10
	
  Contrary	
   to	
   what	
   some	
   people	
   argue,	
   sustainability	
   of	
   a	
   post-­‐capitalist	
   democratic	
   egalitarian	
  
economic	
   system	
   of	
   the	
   sort	
   proposed	
   by	
   Robin	
   would	
   not	
   require	
   that	
   it	
   generate	
   high	
   rates	
   of	
  
economic	
  growth	
  (unless,	
  of	
  course,	
  it	
  were	
  also	
  the	
  case	
  that	
  the	
  participants	
  within	
  such	
  an	
  economy	
  
would	
  be	
  sufficiently	
  dissatisfied	
  with	
  the	
  rates	
  of	
  growth	
  –	
  or	
  non-­‐growth	
  –	
  that	
  an	
  alternative	
  was	
  
seen	
  as	
  preferable).	
  What	
  sustainability	
  requires	
  is	
  that	
  the	
  participants’	
  commitment	
  to	
  the	
  institutions	
  
is	
  not	
  undermined	
  by	
  the	
  effects	
  of	
  its	
  operation.	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
13
adjustments	
  in	
  one	
  period	
  constitute	
  inputs	
  for	
  subsequent	
  planning,	
  it	
  is	
  not	
  so	
  
clear	
  that	
  the	
  marketish	
  processes	
  would	
  play	
  an	
  only	
  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	
   priories,	
   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	
   nonmarket	
   mechanisms.	
   Or	
   to	
   take	
   a	
  
different	
  kind	
  of	
  example,	
  in	
  my	
  usage	
  of	
  the	
  term	
  “markets,”	
  garage	
  sales	
  (and	
  
their	
  internet	
  equivalents	
  like	
  Craig’s	
  list)	
  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: 11
	
  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.	
  
	
  
	
  
	
  
11
	
  Throughout	
   this	
   paper	
   I	
   will	
   address	
   my	
   comments	
   strictly	
   to	
   Robin’s	
   writing	
   on	
   participatory	
  
economics.	
  I	
  recognize,	
  of	
  course,	
  that	
  many	
  of	
  the	
  ideas	
  were	
  developed	
  jointly	
  with	
  Michael	
  Albert.	
  
Erik	
  Olin	
  Wright	
  
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	
   over	
   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.12
	
  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	
  
12
	
  Like	
   Robin,	
   I	
   reject	
   the	
   narrow	
   meaning	
   of	
   efficiency	
   adopted	
   by	
   many	
   economists	
   as	
   the	
   profit-­‐
maximizing	
   use	
   of	
   resources	
   on	
   a	
   market.	
   Rather,	
   efficiency	
   refers	
   to	
   the	
   allocation	
   all	
   resources	
  
(including	
  the	
  time	
  of	
  all	
  participants)	
  that	
  best	
  reflects	
  the	
  optimal	
  trade-­‐offs	
  for	
  alternative	
  uses	
  of	
  
those	
  resources.	
  Efficiency	
  must	
  include	
  a	
  full	
  account	
  of	
  positive	
  and	
  negative	
  externalities.	
  	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
15
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	
  
and	
  a	
  few	
  other	
  discussions	
  of	
  these	
  issues,	
  but	
  nevertheless	
  there	
  are	
  parts	
  of	
  
the	
   exposition	
   which,	
   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.13
	
  	
  
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	
  
13
	
  I	
  don’t	
  think	
  my	
  lack	
  of	
  intuition	
  here	
  is	
  because	
  I	
  have	
  not	
  read	
  the	
  technical	
  economic	
  papers	
  that	
  
Robin	
   refers	
   to	
   in	
   his	
   essay,	
   papers	
   which	
   he	
   describes	
   as	
   proving	
   that	
   his	
   planning	
   mechanism	
  
generates	
  optimal	
  outcomes.	
  	
  I	
  am	
  not	
  skeptical	
  that	
  the	
  mathematical	
  models	
  that	
  are	
  elaborated	
  in	
  
those	
   papers	
   show	
   these	
   things.	
   What	
   I	
   am	
   skeptical	
   about	
   is	
   that	
   the	
   mathematical	
   models	
   can	
  
adequately	
  represent	
  the	
  way	
  these	
  institutions	
  would	
  actually	
  function	
  over	
  time.	
  I	
  suppose	
  this	
  is	
  in	
  
part	
  the	
  skepticism	
  of	
  a	
  sociologist	
  about	
  the	
  empirical	
  robustness	
  of	
  conclusions	
  that	
  can	
  be	
  drawn	
  
from	
  formal	
  mathematical	
  models	
  of	
  complex	
  social	
  processes.	
  	
  
Erik	
  Olin	
  Wright	
  
interwoven	
  with	
  an	
  account	
  of	
  production	
  planning	
  as	
  well.	
  For	
  my	
  purposes	
  it	
  is	
  
useful	
  to	
  distill	
  the	
  consumption	
  planning	
  process,	
  which	
  I	
  take	
  to	
  be	
  as	
  follows:	
  
1. At	
  the	
  beginning	
  of	
  the	
  process	
  the	
  Iteration	
  Facilitation	
  Board	
  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.	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
17
7. On	
  the	
  basis	
  of	
  all	
  of	
  the	
  consumption	
  proposals	
  along	
  with	
  the	
  production	
  
proposals	
  from	
  workers	
  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%	
   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-­‐87)	
  
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	
  
Erik	
  Olin	
  Wright	
  
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	
  per	
  cent	
  of	
  their	
  
budget	
  on	
  clothing;	
  they	
  need	
  to	
  have	
  some	
  idea	
  of	
  how	
  many	
  shirts	
  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%	
  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	
  
workers	
   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	
  simply	
  to	
  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	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
19
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	
  sales14
	
  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	
  on-­‐going	
  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	
  workers	
  councils,	
  it	
  will	
  be	
  easier	
  for	
  them	
  to	
  get	
  full	
  
and	
  detailed	
  on-­‐going	
  data	
  on	
  consumer	
  choices	
  relevant	
  to	
  their	
  on-­‐going	
  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?	
  	
  
14
	
  I	
  use	
  the	
  term	
  “sales”	
  here	
  for	
  convenience,	
  since	
  strictly	
  speaking	
  in	
  Robin’s	
  model	
  of	
  participatory	
  
economics	
  the	
  nature	
  of	
  the	
  exchange	
  between	
  consumer	
  and	
  worker	
  is	
  not	
  exactly	
  buying	
  and	
  selling	
  
in	
  the	
  usual	
  market	
  sense.	
  	
  
Erik	
  Olin	
  Wright	
  
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	
   effects	
  
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	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
21
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	
  
Erik	
  Olin	
  Wright	
  
systems,	
   and	
   certainly	
   the	
   fact	
   that	
   purchasing	
   power	
   is	
   based	
   on	
   effort-­‐
expenditures	
  is	
  not	
  based	
  on	
  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	
   publics	
   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	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
23
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.15
	
  
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	
  workers	
  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	
  on	
  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	
  
15
	
  If	
  these	
  councils	
  are	
  also	
  meant	
  to	
  deal	
  with	
  the	
  problem	
  of	
  negotiating	
  pollution	
  prices,	
  then	
  this	
  
could	
  be	
  treated	
  as	
  the	
  planning	
  of	
  “public	
  bads”	
  consumption.	
  The	
  mandate	
  for	
  these	
  councils	
  would	
  
thus	
  revolve	
  around	
  the	
  dual	
  task	
  of	
  planning	
  both	
  public	
  goods	
  and	
  public	
  bads.	
  
	
  	
  
Erik	
  Olin	
  Wright	
  
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	
  iteration	
  
facilitation	
   board’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	
   on	
   their	
   own	
   to	
   adequately	
   take	
   account	
   of	
   negative	
   and	
   positive	
  
externalities	
  of	
  production.	
  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.16
	
  But	
   of	
  
course,	
  there	
  are	
  substantial	
  positive	
  and	
  negative	
  externalities.	
  Among	
  the	
  most	
  
16
	
  The	
  mix	
  of	
  public	
  goods	
  and	
  private	
  goods	
  would,	
  of	
  course,	
  be	
  likely	
  to	
  be	
  very	
  different	
  under	
  any	
  
system	
  of	
  democratic	
  planning.	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
25
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,	
   in	
   the	
   case	
   of	
   environmental	
   negative	
   externalities,	
   this	
   involves	
  
identifying	
  the	
  amounts	
  of	
  different	
  pollutants	
  generated	
  in	
  a	
  given	
  production	
  
process,	
   and	
   scientifically	
   showing	
   what	
   are	
   the	
   ill-­‐effects	
   of	
   given	
   levels.	
  
Producers,	
  of	
  course,	
  have	
  to	
  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%	
  if	
  you	
  increase	
  my	
  consumption	
  by	
  20%.	
  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	
  
Erik	
  Olin	
  Wright	
  
federation
17
….	
  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	
  the	
  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	
  
17
	
  This	
  particular	
  detail	
  –	
  that	
  the	
  federations	
  corresponding	
  to	
  a	
  region	
  affected	
  by	
  pollution	
  have	
  its	
  
own	
  R&D	
  department	
  employing	
  scientists	
  –	
  does	
  not	
  seem	
  like	
  a	
  workable	
  institutional	
  design	
  for	
  the	
  
technical	
  issues	
  involved	
  in	
  assessing	
  environmental	
  externalities.	
  The	
  boundaries	
  of	
  regions	
  impacted	
  
by	
  given	
  pollutants	
  will	
  vary	
  enormously.	
  Some	
  will	
  be	
  smaller	
  than	
  cities,	
  some	
  much	
  larger	
  regions.	
  It	
  
does	
  not	
  seem	
  necessary	
  that	
  consumer	
  federations	
  in	
  each	
  region	
  have	
  its	
  own	
  R&D	
  department	
  and	
  
hire	
  its	
  own	
  scientists.	
  It	
  is	
  not	
  clear	
  to	
  me	
  why,	
  for	
  these	
  kinds	
  of	
  technical	
  regulatory	
  matters,	
  state	
  
institutions	
  with	
  field	
  offices	
  and	
  extension	
  services	
  wouldn’t	
  do	
  this	
  job	
  more	
  effectively.	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
27
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	
  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	
  
Erik	
  Olin	
  Wright	
  
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	
   which	
  
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	
  workers	
  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	
  crowd-­‐sourcing	
  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	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
29
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	
  Iteration	
  Facilitation	
  Board.	
  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	
  
start-­‐up	
  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.’	
  (p.	
  111-­‐2)	
  
Mostly,	
  I	
  suppose,	
  industry	
  federations	
  will	
  make	
  sound	
  judgments.	
  After	
  all,	
  they	
  
have	
  no	
  incentives	
  to	
  block	
  creative,	
  well-­‐thought	
  out	
  proposals.	
  But	
  they	
  may	
  be	
  
excessively	
   risk	
   averse	
   and	
   be	
   subject	
   to	
   other	
   kinds	
   of	
   biases.	
   And,	
   of	
   course,	
  
there	
   could	
   be	
   factions,	
   in-­‐groups	
   and	
   out-­‐groups,	
   and	
   other	
   forms	
   of	
   social	
  
exclusion	
   which	
   marginalize	
   some	
   kinds	
   of	
   projects.	
   Certainly	
   around	
   artistic	
  
endeavors	
   this	
   is	
   likely	
   to	
   happen	
   periodically.	
   In	
   Robin’s	
   model	
   if	
   a	
   group	
   of	
  
Erik	
  Olin	
  Wright	
  
workers	
  fail	
  to	
  get	
  permission	
  from	
  a	
  federation,	
  they	
  are	
  out	
  of	
  luck	
  (this	
  is	
  how	
  I	
  
interpret	
  the	
  expression	
  “otherwise	
  not”	
  in	
  the	
  above	
  quotation).18
	
  
I	
  think	
  more	
  flexibility	
  than	
  this	
  is	
  likely	
  to	
  be	
  desirable.	
  One	
  thing,	
  I	
  think,	
  would	
  
be	
  pretty	
  certain:	
  if	
  such	
  processes	
  are	
  allowed,	
  a	
  fair	
  number	
  of	
  projects	
  outside	
  
of	
  the	
  ordinary	
  planning	
  process	
  are	
  likely	
  to	
  emerge,	
  and	
  this	
  potentially	
  could	
  
generate	
  undesirable	
  inegalitarian	
  dynamics.	
  Clearly	
  a	
  set	
  of	
  rules	
  would	
  have	
  to	
  
be	
  in	
  place	
  to	
  counteract	
  such	
  forces.	
  They	
  could	
  take	
  the	
  form	
  of	
  strict	
  caps	
  on	
  
the	
  amount	
  of	
  extra	
  income	
  that	
  could	
  be	
  generated	
  as	
  returns	
  on	
  such	
  “private”	
  
investments	
  as	
  well	
  as	
  on	
  the	
  income	
  generated	
  by	
  the	
  projects	
  for	
  the	
  workers.	
  
There	
   could	
   be	
   rules	
   by	
   which	
   once	
   the	
   viability	
   of	
   an	
   investment	
   project	
   is	
  
demonstrated,	
  it	
  had	
  to	
  gradually	
  fold	
  into	
  the	
  ordinary	
  annual	
  planning	
  model	
  
for	
  future	
  inputs.	
  The	
  firms	
  created	
  through	
  these	
  outside-­‐of-­‐planning	
  processes	
  
could	
   still	
   be	
   required	
   to	
   be	
   internally	
   governed	
   democratically.	
   And	
   of	
   course	
  
they	
   would	
   be	
   subjected	
   to	
   the	
   same	
   externalities	
   taxes	
   (or	
   their	
   functional	
  
equivalent)	
  like	
  any	
  other	
  productive	
  activity.	
  	
  
My	
   prediction	
   is	
   that	
   in	
   a	
   vigorously	
   democratic	
   participatory	
   economy,	
   the	
  
participants	
   themselves	
   would	
   be	
   likely	
   to	
   endorse	
   a	
   space	
   for	
   something	
   like	
  
unplanned	
  risk-­‐taking	
  of	
  this	
  sort.	
  People	
  would	
  come	
  to	
  recognize	
  certain	
  kinds	
  
of	
   rigidities	
   and	
   blind	
   spots	
   that	
   occur	
   whenever	
   all	
   projects	
   need	
   to	
   seek	
  
permission	
  from	
  formally	
  constituted	
  collective	
  bodies,	
  and	
  that	
  a	
  looser,	
  more	
  
free-­‐wheeling	
   alternative	
   could	
   make	
   the	
   system	
   as	
   a	
   whole	
   more	
   dynamic.	
  	
  
While	
  this	
  means	
  that	
  there	
  will	
  be	
  modest	
  deviations	
  from	
  the	
  purest	
  model	
  of	
  
participatory	
  planning	
  and	
  effort-­‐based	
  remuneration,	
  my	
  prediction	
  is	
  that	
  most	
  
people	
   will	
   see	
   this	
   as	
   worthwhile.	
   Under	
   the	
   background	
   conditions	
   of	
   strong	
  
equality	
  of	
  material	
  conditions	
  and	
  democratic	
  control	
  over	
  the	
  rules	
  of	
  the	
  game,	
  
a	
   certain	
   amount	
   of	
   capitalism	
   between	
   consenting	
   adults	
   might	
   be	
   seen	
   as	
   a	
  
good	
  thing.	
  
18
	
  It	
   is	
   worth	
   noting	
   that	
   in	
   capitalism	
   there	
   is	
   a	
   very	
   wide	
   range	
   of	
   ways	
   that	
   small	
   businesses	
   can	
  
acquire	
  the	
  necessary	
  capital	
  for	
  projects:	
  There	
  are	
  ordinary	
  banks,	
  of	
  course,	
  but	
  in	
  many	
  countries	
  
there	
  are	
  a	
  wide	
  variety	
  of	
  specialized	
  banks	
  with	
  different	
  criteria	
  for	
  making	
  loans,	
  including	
  some	
  with	
  
social	
  and	
  environmental	
  mandates.	
  Community	
  banks	
  are	
  different	
  from	
  national	
  banks,	
  and	
  German	
  
state	
   banks	
   are	
   different	
   from	
   multinational	
   banks.	
   There	
   are	
   also	
   government	
   agencies	
   in	
   many	
  
countries	
  that	
  give	
  far	
  below	
  market-­‐rate	
  loans	
  for	
  targeted	
  purposes	
  and	
  even	
  outright	
  grants.	
  And	
  
there	
  are	
  things	
  like	
  Kickstarter	
  and	
  other	
  unconventional	
  ways	
  of	
  raising	
  capital.	
  I	
  am	
  not	
  at	
  all	
  saying	
  
that	
  this	
  generates	
  a	
  fair	
  and	
  open	
  access	
  to	
  capital.	
  It	
  does	
  not	
  in	
  capitalism.	
  The	
  point	
  is	
  that	
  this	
  
constitutes	
  a	
  heterogeneous	
  institutional	
  environment.	
  I	
  think	
  a	
  participatory	
  economy	
  is	
  also	
  likely	
  to	
  
function	
  best	
  	
  with	
  qualitatively	
  distinct	
  devices	
  for	
  funding	
  projects.	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
31
This	
   prediction,	
   of	
   course	
   could	
   be	
   wrong.	
   It	
   could	
   turn	
   out	
   that	
   the	
   corrosive	
  
effects	
   on	
   egalitarian	
   norms	
   of	
   allowing	
   even	
   modest	
   forms	
   of	
   market-­‐like	
  
investments	
  would	
  be	
  seen	
  as	
  so	
  unpalatable	
  that	
  an	
  absolute	
  prohibition	
  of	
  such	
  
practices	
  might	
  be	
  the	
  democratic	
  decision	
  after	
  a	
  period	
  of	
  experimentation.	
  But	
  
I	
   think	
   this	
   is	
   unlikely.	
   The	
   optimal	
   economic	
   “ecosystem”	
   for	
   a	
   democratic	
  
egalitarian	
  economy,	
  I	
  predict,	
  would	
  probably	
  have	
  something	
  like	
  participatory	
  
democratic	
   planning	
   processes	
   as	
   the	
   dominant	
   mechanism	
   for	
   allocating	
  
investments,	
   but	
   this	
   would	
   be	
   combined	
   with	
   a	
   variety	
   of	
   other	
   economic	
  
allocation	
  processes,	
  including	
  some	
  with	
  a	
  strong	
  market	
  character.	
  
Even	
  though	
  my	
  specific	
  views	
  on	
  this	
  matter	
  differ	
  from	
  Robin’s,	
  in	
  other	
  places	
  
in	
  his	
  analysis	
  Robin	
  acknowledges	
  that	
  in	
  a	
  real	
  participatory	
  economy	
  people	
  
might	
   well	
   decide,	
   democratically,	
   to	
   deviate	
   from	
   the	
   core	
   principles	
   of	
   the	
  
system	
  in	
  order	
  to	
  solve	
  certain	
  incentive	
  problems.	
  In	
  discussing	
  the	
  problem	
  of	
  
dynamic	
   efficiency,	
   for	
   example,	
   Robin	
   carefully	
   explores	
   the	
   problem	
   of	
   the	
  
incentives	
  for	
  innovation.	
  He	
  asks,	
  about	
  innovation:	
  
…	
   since	
   innovations	
   are	
   shared	
   with	
   all	
   immediately	
   [because	
   there	
   are	
   no	
   patent	
  
protections],	
   where	
   is	
   the	
   incentive	
   for	
   individual	
   worker	
   councils	
   to	
   innovate	
   rather	
  
than	
  wait	
  for	
  special	
  R&D	
  units	
  or	
  other	
  worker	
  councils	
  to	
  do	
  so?	
  In	
  particular,	
  will	
  it	
  
prove	
   desirable	
   to	
   provide	
   material	
   rewards	
   to	
   innovating	
   workplaces,	
   above	
   and	
  
beyond	
  what	
  their	
  members’	
  sacrifices	
  entitle	
  them	
  to?	
  (p.108)	
  	
  
He	
  answers	
  as	
  follows:	
  
There	
  is	
  good	
  reason	
  to	
  believe	
  in	
  an	
  economy	
  where	
  it	
  is	
  unlikely	
  that	
  status	
  will	
  be	
  
achieved	
   through	
   conspicuous	
   consumption,	
   and	
   where	
   social	
   serviceability	
   will	
   be	
  
more	
   highly	
   esteemed,	
   that	
   rewarding	
   workers	
   in	
   highly	
   innovative	
   enterprises	
   with	
  
consumption	
  rights	
  in	
  excess	
  of	
  sacrifices	
  may	
  not	
  be	
  necessary.	
  However,	
  if	
  people	
  in	
  a	
  
participatory	
   economy	
   come	
   to	
   the	
   conclusion	
   that	
   extra	
   rewards	
   for	
   workers	
   in	
  
innovating	
  enterprises	
  are	
  needed,	
  any	
  such	
  rewards	
  will	
  be	
  determined	
  democratically	
  
by	
  all	
  citizens.	
  (p.109,	
  italics	
  added)	
  
I	
   agree	
   completely	
   with	
   this	
   formulation.	
   It	
   affirms	
   the	
   idea	
   democratic	
   choice	
  
over	
   the	
   rules-­‐of-­‐the-­‐game	
   is	
   the	
   decisive	
   principle	
   at	
   work	
   in	
   a	
   participatory	
  
economy.	
   In	
   this	
   case,	
   if	
   there	
   is	
   a	
   trade-­‐off	
   between	
   strict	
   adherence	
   to	
   the	
  
remuneration	
   according	
   to	
   effort	
   principle	
   and	
   dynamic	
   efficiency,	
   then	
   it	
   is	
  
reasonable	
  for	
  citizens	
  to	
  decide	
  to	
  allow	
  some	
  inequality	
  in	
  income	
  to	
  emerge.	
  In	
  
effect,	
  this	
  means,	
  they	
  would	
  be	
  willing	
  to	
  allow	
  some	
  injustice	
  in	
  the	
  income	
  
mechanisms	
  in	
  exchange	
  for	
  improvements	
  in	
  the	
  rate	
  of	
  innovation.	
  I	
  am	
  making	
  
the	
  same	
  point	
  with	
  respect	
  to	
  planning	
  and	
  an	
  investment	
  market.	
  	
  
	
  
Erik	
  Olin	
  Wright	
  
THE	
  ORGANIZATION	
  OF	
  WORK	
  AND	
  PAY	
  
In	
  terms	
  of	
  the	
  underlying	
  normative	
  principles,	
  I	
  fully	
  support	
  the	
  central	
  ideas	
  of	
  
Robin’s	
  framework	
  for	
  both	
  the	
  organization	
  of	
  work	
  and	
  for	
  pay:	
  balanced	
  job	
  
complexes	
  and	
  pay	
  determined	
  by	
  effort	
  rather	
  than	
  contribution.	
  Where	
  I	
  would	
  
like	
  to	
  raise	
  some	
  issues	
  is	
  with	
  the	
  practical	
  implementation	
  of	
  the	
  ideals.	
  
Balanced	
  Jobs	
  
In	
  my	
  book,	
  Envisioning	
  Real	
  Utopias,	
  I	
  define	
  the	
  equality	
  principle	
  of	
  justice	
  this	
  
way:	
   “In	
   a	
   just	
   society,	
   all	
   people	
   have	
   equal	
   access	
   to	
   the	
   social	
   and	
   material	
  
conditions	
   necessary	
   to	
   live	
   a	
   flourishing	
   life.”	
   This	
   is	
   entirely	
   in	
   keeping	
   with	
  
Robin’s	
  proposal	
  for	
  the	
  organization	
  of	
  work	
  in	
  terms	
  of	
  “balanced	
  jobs”.	
  One	
  of	
  
the	
  social	
  conditions	
  for	
  a	
  flourishing	
  life	
  is	
  meaningful	
  and	
  interesting	
  work,	
  and	
  
the	
  idea	
  of	
  equal	
  access	
  to	
  those	
  conditions	
  of	
  work	
  means	
  that	
  the	
  work	
  of	
  all	
  
members	
  of	
  a	
  workplace	
  should	
  have	
  relatively	
  equal	
  mixes	
  of	
  tasks	
  with	
  positive	
  
and	
  negative	
  attributes	
  (e.g.	
  tedious	
  and	
  enjoyable	
  tasks,	
  stressful	
  and	
  relaxing	
  
tasks,	
  etc.).	
  	
  Significant	
  deviations	
  from	
  this	
  ideal	
  constitute	
  violations	
  of	
  justice.	
  	
  
The	
  fact	
  that	
  in	
  practice	
  it	
  will	
  often	
  be	
  very	
  difficult	
  to	
  fully	
  implement	
  this	
  ideal	
  
does	
  not	
  in	
  any	
  way	
  invalidate	
  the	
  principle	
  itself.	
  It	
  simply	
  suggests	
  that	
  where	
  
this	
   occurs,	
   some	
   kind	
   of	
   compensation	
   might	
   be	
   required.	
   For	
   example,	
   a	
   job	
  
with	
  an	
  above	
  average	
  density	
  of	
  unpleasant	
  or	
  tedious	
  work	
  might	
  get	
  a	
  higher	
  
effort	
  rating	
  per	
  hour,	
  so	
  that	
  a	
  person	
  could	
  work	
  fewer	
  hours	
  to	
  receive	
  the	
  
standard	
  full	
  time	
  pay.	
  
But	
   there	
   is	
   another	
   issue	
   around	
   balanced	
   jobs	
   that	
   is	
   not	
   mainly	
   about	
   the	
  
practical	
  difficulty	
  of	
  creating	
  balanced	
  jobs.	
  There	
  are	
  situations	
  in	
  which	
  people	
  
in	
  a	
  community	
  may	
  value	
  the	
  specific	
  skills	
  and	
  contributions	
  of	
  certain	
  people	
  
that	
  they	
  consider	
  it	
  a	
  waste	
  of	
  the	
  time	
  and	
  talents	
  of	
  these	
  people	
  for	
  them	
  to	
  
do	
  as	
  much	
  tedious	
  work	
  as	
  others.	
  This	
  does	
  not	
  imply	
  that	
  they	
  should	
  be	
  paid	
  
more	
   for	
   their	
   time	
   or	
   effort:	
   the	
   principle	
   that	
   pay	
   differentials	
   should	
   reflect	
  
differences	
  in	
  effort,	
  not	
  contributions,	
  is	
  an	
  entirely	
  different	
  matter.	
  But	
  it	
  could	
  
well	
   mean	
   that	
   the	
   community	
   could	
   decide,	
   democratically,	
   not	
   to	
   strive	
   for	
  
“balance”	
  in	
  the	
  mix	
  of	
  tasks	
  for	
  some	
  people	
  or	
  some	
  kinds	
  of	
  jobs.	
  This	
  is	
  similar	
  
to	
   the	
   issue	
   of	
   deciding	
   to	
   give	
   workers	
   extra	
   pay	
   for	
   innovations,	
   or	
   to	
   allow	
  
privately	
   recruited	
   investments	
   for	
   projects	
   rejected	
   by	
   sector	
   federations.	
  
Balanced	
  jobs	
  may	
  best	
  reflect	
  the	
  specific	
  ideal	
  of	
  justice	
  in	
  the	
  organization	
  of	
  
work,	
  but	
  justice	
  is	
  not	
  the	
  only	
  value	
  people	
  in	
  a	
  participatory	
  economy	
  will	
  care	
  
about,	
  and	
  so	
  it	
  is	
  reasonable	
  for	
  people	
  to	
  be	
  willing	
  to	
  trade-­‐off	
  some	
  deviations	
  
from	
  justice	
  in	
  order	
  to	
  better	
  realize	
  some	
  other	
  value.	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
33
How	
  frequent	
  is	
  this	
  situation	
  likely	
  to	
  be?	
  I	
  really	
  have	
  no	
  idea.	
  If	
  the	
  income	
  
consequences	
  of	
  such	
  deviations	
  are	
  modest	
  (because	
  pay	
  continues	
  to	
  be	
  tied	
  to	
  
effort),	
  and	
  if	
  the	
  amount	
  of	
  paid	
  work	
  people	
  do	
  declines	
  significantly	
  because	
  of	
  
a	
   broader	
   reordering	
   of	
   work	
   and	
   leisure	
   for	
   both	
   environmental	
   and	
   life-­‐style	
  
reasons,	
  then	
  balanced	
  jobs	
  may	
  simply	
  not	
  be	
  an	
  issue	
  that	
  people	
  worry	
  about	
  
so	
  much.	
  There	
  is	
  a	
  very	
  big	
  difference	
  between	
  how	
  salient	
  this	
  problem	
  is	
  in	
  a	
  
world	
  where	
  the	
  average	
  work	
  week	
  was	
  15	
  hours	
  compared	
  to	
  40	
  hours.19
	
  	
  
Effort-­‐rating	
  as	
  the	
  basis	
  for	
  pay	
  differentials	
  
A	
  fairly	
  broadly	
  held	
  position	
  among	
  people	
  holding	
  liberal	
  egalitarian	
  views	
  of	
  
justice	
   is	
   that	
   inequalities	
   due	
   to	
   “brute	
   luck”	
   –	
   things	
   over	
   which	
   one	
   has	
   no	
  
control	
  –	
  are	
  unjust.	
  This	
  is	
  fairly	
  close	
  to	
  Robin’s	
  position,	
  because	
  it	
  means	
  that	
  
inequalities	
   connected	
   to	
   natural	
   talents	
   are	
   unjust.	
   This	
   also	
   implies	
   that	
  
inequalities	
   in	
   income	
   due	
   to	
   education	
   would	
   be	
   largely	
   unjustified	
   except	
  
insofar	
   as	
   acquiring	
   education	
   involves	
   real	
   sacrifices	
   on	
   the	
   part	
   of	
   students,	
  
which	
  –	
  as	
  Robin	
  points	
  out	
  –	
  would	
  generally	
  not	
  be	
  the	
  case	
  in	
  a	
  participatory	
  
economy	
  in	
  which	
  education	
  is	
  free	
  and	
  students	
  receive	
  an	
  appropriate	
  stipend	
  
for	
   the	
   effort	
   involved	
   in	
   their	
   studies.	
   Robin	
   goes	
   one	
   step	
   further	
   by	
  
categorically	
   rejecting	
   any	
   inequality	
   connected	
   to	
   “contribution,”	
   even	
   if	
  
everyone	
   has	
   the	
   full	
   opportunity	
   to	
   acquire	
   the	
   skills	
   that	
   enhance	
   their	
  
productivity	
   and	
   thus	
   their	
   contribution.	
   I	
   broadly	
   agree	
   with	
   this	
   very	
   general	
  
idea.20
	
  	
  
There	
  are	
  a	
  number	
  of	
  issues	
  in	
  the	
  implementation	
  of	
  this	
  ideal,	
  however,	
  which	
  
I	
  do	
  think	
  are	
  very	
  difficult	
  and	
  which	
  may,	
  in	
  the	
  end,	
  mean	
  that	
  simply	
  paying	
  
everyone	
   the	
   same	
   hourly	
   remuneration	
   may	
   be	
   better	
   than	
   trying	
   to	
   really	
  
evaluate	
  their	
  “effort.”	
  
Robin	
  argues	
  that	
  within	
  workplaces	
  people	
  generally	
  have	
  a	
  pretty	
  good	
  idea	
  of	
  
how	
   much	
   effort	
   different	
   workmates	
   expend	
   since	
   they	
   will	
   all	
   be	
   engaged	
   in	
  
19
	
  It	
  is	
  worth	
  noting	
  that	
  the	
  massive	
  reduction	
  of	
  the	
  work	
  week	
  was	
  basically	
  Marx’s	
  conception	
  of	
  
how	
  this	
  problem	
  would	
  be	
  dealt	
  with	
  in	
  a	
  communist	
  society:	
  the	
  “realm	
  of	
  necessity”	
  –	
  the	
  amount	
  of	
  
work	
   that	
   needed	
   to	
   be	
   done	
   to	
   satisfy	
   needs	
   –	
   would	
   be	
   dramatically	
   reduced	
   and	
   the	
   “realm	
   of	
  
freedom”	
  would	
  expand.	
  	
  
20
	
  As	
  in	
  the	
  earlier	
  discussion	
  of	
  Robin’s	
  potential	
  willingness,	
  on	
  the	
  grounds	
  of	
  incentives,	
  to	
  accept	
  
pay	
   differentials	
   for	
   innovative	
   behavior	
   even	
   though	
   this	
   violates	
   effort-­‐based	
   pay,	
   I	
   assume	
   more	
  
generally	
  that	
  he	
  would	
  regard	
  some	
  contribution-­‐based	
  pay	
  differentials	
  as	
  legitimate	
  if	
  this	
  was	
  the	
  
result	
  of	
  a	
  robust	
  democratic	
  decision.	
  
Erik	
  Olin	
  Wright	
  
roughly	
  similar	
  jobs	
  and	
  they	
  closely	
  observe	
  each	
  other.	
  Workers	
  should	
  thus	
  be	
  
able	
   to	
   make	
   meaningful	
   effort-­‐ratings	
   of	
   fellow	
   workers.	
   Undoubtedly	
   this	
   is	
  
sometimes	
  the	
  case,	
  but	
  there	
  are	
  many	
  kinds	
  of	
  work	
  in	
  which	
  it	
  is	
  very	
  difficult	
  
to	
  really	
  know	
  how	
  much	
  effort	
  someone	
  is	
  expending.	
  The	
  problem	
  is	
  that	
  the	
  
relevant	
  meaning	
  of	
  “effort”	
  for	
  purposes	
  of	
  assigning	
  remuneration	
  is	
  “sacrifice”	
  
or	
   “burden”.	
   The	
   basic	
   idea	
   is	
   that	
   in	
   a	
   cooperative	
   endeavor	
   people	
   should	
  
equally	
  share	
  rewards	
  and	
  burdens,	
  so	
  if	
  some	
  people	
  don’t	
  “pull	
  their	
  weight”	
  
then	
  it	
  is	
  legitimate	
  to	
  reward	
  them	
  less.	
  But	
  different	
  people	
  can	
  experience	
  the	
  
exact	
  same	
  intensity	
  of	
  work	
  as	
  very	
  different	
  levels	
  of	
  burden.	
  	
  Some	
  professors	
  
find	
  sitting	
  at	
  a	
  desk	
  and	
  writing	
  intensively	
  for	
  eight	
  hours	
  exhilarating;	
  others	
  
find	
  it	
  torture.	
  This	
  is	
  not	
  just	
  that	
  some	
  people	
  find	
  writing	
  easy	
  and	
  other	
  hard;	
  
some	
  just	
  find	
  it	
  more	
  enjoyable	
  and	
  exciting,	
  and	
  thus	
  less	
  of	
  a	
  burden.	
  The	
  same	
  
issue	
  can	
  apply	
  to	
  physical	
  exertion	
  as	
  well:	
  depending	
  on	
  one’s	
  level	
  of	
  fitness	
  
and	
  one’s	
  endorphins,	
  intense	
  physical	
  labor	
  can	
  be	
  a	
  greater	
  or	
  lesser	
  burden.	
  	
  Of	
  
course,	
  sometimes	
  it	
  is	
  possible	
  to	
  make	
  roughly	
  reliable	
  judgments	
  that	
  someone	
  
is	
  goofing	
  off,	
  not	
  putting	
  their	
  mind	
  to	
  the	
  task,	
  not	
  trying	
  very	
  hard.	
  But	
  this	
  
probably	
  has	
  more	
  to	
  do	
  with	
  a	
  sense	
  of	
  their	
  lack	
  of	
  diligence	
  or	
  responsibility,	
  
then	
  actually	
  effort	
  or	
  burden	
  or	
  sacrifice.	
  If	
  the	
  morally	
  salient	
  issue	
  is	
  paying	
  
people	
  according	
  to	
  real	
  burden,	
  then	
  even	
  within	
  workplaces	
  this	
  will	
  often	
  not	
  
at	
  all	
  be	
  easy	
  to	
  do	
  to.	
  
This	
   problem	
   of	
   meaningfully	
   comparing	
   people’s	
   efforts	
   becomes	
   even	
   more	
  
intractable	
   across	
   workplaces,	
   at	
   least	
   if	
   different	
   workplaces	
   involve	
   very	
  
different	
   kinds	
   of	
   tasks.21
	
  I	
   honestly	
   don’t	
   know	
   if	
   a	
   diligent	
   musician	
   who	
  
practices	
  five	
  hours	
  a	
  day	
  expends	
  more	
  effort	
  or	
  less	
  effort	
  than	
  a	
  diligent	
  waiter	
  
in	
  a	
  restaurant	
  or	
  a	
  diligent	
  taxi-­‐driver	
  who	
  works	
  the	
  same	
  number	
  of	
  hours.	
  But	
  
simply	
   saying	
   that	
   the	
   average	
   work	
   effort	
   is	
   the	
   same	
   across	
   workplaces	
   also	
  
doesn’t	
  seem	
  plausible.	
  I	
  would	
  find	
  it	
  an	
  excruciating	
  burden	
  to	
  collect	
  tolls	
  at	
  a	
  
bridge	
  four	
  hours	
  a	
  day,	
  but	
  I	
  find	
  it	
  a	
  pleasure	
  to	
  write	
  and	
  lecture	
  60	
  hours	
  a	
  
week.	
  Which	
  involves	
  more	
  “effort”?	
  I	
  would	
  rather	
  work	
  60	
  hours	
  a	
  week	
  at	
  my	
  
job	
  than	
  20	
  hours	
  a	
  week	
  as	
  a	
  toll	
  collector	
  even	
  for	
  the	
  same	
  overall	
  pay,	
  but	
  
21
	
  This	
   problem	
   of	
   non-­‐comparability	
   of	
   effort	
   measures	
   across	
   workplaces	
   is	
   especially	
   important	
  
because	
  of	
  the	
  way	
  aggregate	
  effort	
  ratings	
  figure	
  in	
  all	
  sorts	
  of	
  planning	
  processes,	
  not	
  just	
  individual	
  
remuneration.	
   The	
   resources	
   available	
   to	
   a	
   community	
   for	
   neighborhood	
   public	
   goods,	
   for	
   example,	
  
depend	
  significantly	
  on	
  the	
  aggregate	
  effort	
  rating	
  of	
  people	
  in	
  the	
  neighborhood.	
  	
  
Participatory	
  Economics:	
  A	
  Sympathetic	
  Critique	
  
35
many	
  toll	
  collectors	
  would	
  find	
  it	
  an	
  enormous	
  burden	
  to	
  spend	
  as	
  many	
  hours	
  a	
  
week	
  as	
  I	
  do	
  doing	
  the	
  “work”	
  I	
  do.22
	
  	
  	
  
I’m	
  not	
  sure	
  what	
  is	
  the	
  best	
  way	
  of	
  dealing	
  with	
  these	
  kinds	
  of	
  measurement	
  
problems.	
   Robin’s	
   proposed	
   solution	
   to	
   the	
   possibility	
   that	
   average	
   workplace	
  
effort	
  levels	
  vary	
  significantly	
  across	
  workplaces	
  is	
  to	
  calibrate	
  the	
  average	
  effort	
  
in	
  a	
  workplace	
  in	
  terms	
  of	
  what	
  he	
  calls	
  “the	
  social	
  benefit	
  to	
  cost	
  ratio	
  of	
  each	
  
enterprise”.	
  	
  We	
  don’t	
  need	
  to	
  go	
  into	
  the	
  technical	
  details	
  here,	
  but	
  basically	
  he	
  
assumes	
  that	
  the	
  only	
  reason	
  this	
  ratio	
  could	
  be	
  greater	
  than	
  1.0	
  is	
  if	
  workers	
  are	
  
expending	
   more	
   effort.23
	
  But	
   as	
   I	
   have	
   argued,	
   workers	
   may	
   be	
   working	
   more	
  
intensively	
  without	
  this	
  meaning	
  that	
  they	
  are	
  experiencing	
  any	
  greater	
  burden	
  or	
  
sacrifice.	
  Paying	
  them	
  extra	
  in	
  this	
  situation	
  is	
  directly	
  paying	
  them	
  extra	
  for	
  the	
  
greater	
  contribution	
  they	
  are	
  making	
  per	
  hour	
  of	
  work	
  (i.e.	
  their	
  more	
  intense	
  
work	
  does	
  produce	
  more	
  output	
  per	
  hour),	
  but	
  not	
  necessarily	
  paying	
  them	
  more	
  
for	
  extra	
  burden	
  or	
  sacrifice.	
  This	
  may	
  be	
  desirable	
  for	
  motivational	
  purposes,	
  but	
  
it	
  may	
  end	
  up	
  being	
  closer	
  to	
  a	
  contribution-­‐based	
  remuneration	
  scheme	
  than	
  a	
  
burden-­‐based	
  scheme.	
  	
  
Another	
  way	
  of	
  assessing	
  the	
  burden	
  of	
  work	
  in	
  different	
  kinds	
  of	
  workplace,	
  of	
  
course,	
  would	
  simply	
  to	
  see	
  how	
  difficult	
  it	
  is	
  to	
  recruit	
  people	
  to	
  different	
  work	
  
settings.	
  To	
  the	
  extent	
  that	
  balanced	
  jobs	
  make	
  work	
  as	
  interesting	
  and	
  enjoyable	
  
as	
   possible	
   within	
   a	
   workplace,	
   the	
   main	
   reason	
   why	
   it	
   would	
   be	
   difficult	
   to	
  
recruit	
  people	
  to	
  some	
  kinds	
  of	
  workplaces	
  was	
  that	
  the	
  work	
  itself	
  was,	
  over	
  all,	
  
less	
  attractive	
  –	
  i.e.	
  more	
  of	
  a	
  burden.	
  Extra	
  remuneration	
  could	
  be	
  used	
  then	
  to	
  
recruit	
   workers.	
   This	
   is	
   not	
   exactly	
   the	
   same	
   sense	
   of	
   effort-­‐burden	
   Robin	
   is	
  
talking	
   about	
   –	
   this	
   is	
   more	
   like	
   experience-­‐burden	
   –	
   but	
   it	
   still	
   might	
   better	
  
capture	
  the	
  ideal	
  in	
  question.	
  It	
  does,	
  however,	
  introduce	
  something	
  that	
  looks	
  
more	
   like	
   a	
   market	
   mechanism	
   for	
   regulating	
   the	
   labor	
   market:	
   using	
   higher	
  
wages	
  to	
  attract	
  workers.	
  
Given	
  this	
  array	
  of	
  problems,	
  the	
  best	
  approximation	
  of	
  a	
  remuneration	
  system	
  
that	
  tries	
  to	
  equalize	
  the	
  connection	
  of	
  rewards	
  to	
  burdens	
  across	
  workers	
  may	
  
be	
  simply	
  to	
  pay	
  everyone	
  the	
  same	
  hourly	
  pay,	
  perhaps	
  with	
  caps	
  on	
  the	
  number	
  
22
	
  I	
  put	
  the	
  word	
  “work”	
  in	
  quotes	
  here	
  because	
  if	
  I	
  were	
  independently	
  wealthy	
  and	
  my	
  income	
  had	
  
nothing	
  to	
  do	
  with	
  my	
  job,	
  I	
  would	
  still	
  pretty	
  much	
  do	
  exactly	
  what	
  I	
  currently	
  do	
  connected	
  to	
  my	
  job.	
  
23
	
  The	
  idea	
  is	
  basically	
  that	
  if	
  the	
  qualities	
  and	
  costs	
  of	
  all	
  inputs	
  (especially	
  labor)	
  and	
  outputs	
  have	
  
been	
  properly	
  measured,	
  then	
  the	
  only	
  thing	
  that	
  could	
  generate	
  more	
  total	
  social	
  benefit	
  per	
  unit	
  of	
  
input	
  cost	
  would	
  be	
  that	
  workers	
  are	
  working	
  harder.	
  
Erik	
  Olin	
  Wright	
  
of	
  hours	
  that	
  can	
  be	
  counted	
  as	
  “work”,	
  and	
  then	
  allow	
  modest	
  deviations	
  for	
  
pragmatic	
  reasons.24
	
  This	
  does	
  not	
  mean	
  abandoning	
  the	
  moral	
  premises	
  of	
  the	
  
burden/reward	
  equation.	
  This	
  principle	
  could	
  still	
  play	
  a	
  role	
  of	
  a	
  regulative	
  ideal	
  
in	
  the	
  democratic	
  deliberations	
  over	
  appropriate	
  pay	
  schemes,	
  but	
  it	
  would	
  not	
  
be	
  the	
  direct	
  basis	
  for	
  differentiating	
  pay	
  across	
  workers.	
  	
  
	
  
CONCLUDING	
  COMMENTS	
  
Robin’s	
   exploration	
   of	
   the	
   normative	
   principles	
   and	
   institutional	
   designs	
   of	
   a	
  
participatory	
  economy,	
  along	
  with	
  his	
  earlier	
  joint	
  work	
  with	
  Michael	
  Albert	
  and	
  
Albert’s	
   own	
   treatise,	
   Parecon,	
   constitute	
   one	
   of	
   the	
   very	
   few	
   systematic	
  
contemporary	
   attempts	
   at	
   elaborating	
   a	
   comprehensive	
   model	
   of	
   an	
  
emancipatory	
   alternative	
   to	
   capitalism.	
   Even	
   if	
   it	
   is	
   the	
   case	
   that	
   the	
   specific	
  
institutional	
   proposals	
   would	
   be	
   unlikely	
   to	
   ever	
   be	
   adopted,	
   even	
   if	
   ordinary	
  
people	
   were	
   fully	
   empowered	
   to	
   do	
   so,	
   nevertheless	
   elements	
   of	
   the	
   models	
  
should	
  certainly	
  be	
  part	
  of	
  any	
  sustained	
  discussion	
  of	
  transcending	
  capitalism	
  in	
  
a	
  democratic,	
  egalitarian	
  direction.	
  Perhaps	
  even	
  more	
  crucially,	
  since	
  we	
  are	
  so	
  
distant	
   from	
   such	
   a	
   world,	
   many	
   of	
   the	
   ideas	
   connected	
   to	
   participatory	
  
economics	
   can	
   be	
   embodied	
   in	
   concrete	
   projects	
   of	
   building	
   alternative	
  
institutions	
   inside	
   of	
   our	
   existing	
   socio-­‐economic	
   system.	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   .	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
24
	
  The	
   large,	
   successful	
   worker-­‐owned	
   construction	
   cooperative	
   in	
   Copenhagen,	
   Logik	
   &	
   Co,	
   pays	
  
everyone	
  exactly	
  the	
  same	
  hourly	
  wage	
  –	
  from	
  the	
  most	
  senior	
  to	
  the	
  most	
  junior	
  member,	
  regardless	
  
of	
  skills	
  –	
  but	
  does	
  not	
  allow	
  anyone	
  to	
  be	
  paid	
  for	
  more	
  than	
  40	
  hours	
  a	
  week.	
  People	
  often	
  work	
  more	
  
than	
  that,	
  but	
  this	
  is	
  treated	
  as	
  reflecting	
  how	
  much	
  they	
  enjoy	
  the	
  process.	
  Real	
  slackers	
  –	
  which	
  are	
  
rare	
  –	
  are	
  dealt	
  with	
  through	
  social	
  sanctions	
  and,	
  potentially,	
  expulsion.	
  (This	
  information	
  was	
  given	
  me	
  
by	
  a	
  senior	
  member	
  of	
  the	
  cooperative	
  during	
  a	
  visit	
  there	
  in	
  2012.	
  I	
  have	
  not	
  verified	
  this	
  account	
  with	
  
more	
  detailed	
  research).	
  
IN	
  DEFENCE	
  OF	
  PARTICIPATORY	
  ECONOMICS	
  
	
  
Robin	
  Hahnel	
  
	
  
	
  
THE	
  MAJOR	
  POINT	
  OF	
  CONTENTION	
  
Let	
   me	
   begin	
   by	
   accepting	
   Erik’s	
   characterisation	
   of	
   our	
   disagreement	
   about	
  
markets.	
  In	
  Erik’s	
  words:	
  	
  
Robin	
   feels	
   very	
   confident	
   that	
   a	
   complex,	
   large-­‐scale,	
   well-­‐functioning	
   economic	
  
system…	
  could	
  exist	
  in	
  which	
  markets	
  have	
  been	
  completely	
  replaced	
  by	
  participatory	
  
planning.	
  
Yes,	
  I	
  do.	
  
Erik’s	
  writes:	
  	
  
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.	
  
That	
  is	
  the	
  proposal	
  I	
  assume	
  Erik	
  will	
  defend	
  in	
  greater	
  detail	
  in	
  round	
  two	
  of	
  this	
  
dialogue.	
  It	
  is	
  what	
  I	
  regard	
  as	
  a	
  pragmatic,	
  nuanced	
  version	
  of	
  market	
  socialism	
  –	
  
even	
  if	
  Erik	
  objects	
  to	
  being	
  categorised	
  as	
  a	
  market	
  socialist	
  –	
  which	
  hopefully	
  I	
  
will	
  criticise	
  in	
  the	
  same	
  thoughtful	
  and	
  comradely	
  spirit	
  that	
  Erik	
  has	
  criticised	
  
participatory	
  economics.	
  
Erik	
  goes	
  on	
  to	
  clarify:	
  	
  
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….	
  This	
  way	
  of	
  thinking	
  about	
  the	
  issues	
  implies	
  that	
  the	
  concept	
  of	
  
‘markets’	
  is	
  not	
  a	
  binary	
  –	
  you	
  either	
  have	
  markets	
  or	
  you	
  don’t.	
  
I	
  understand	
  that	
  Erik	
  does	
  not	
  recommend	
  a	
  system	
  where	
  economic	
  activity	
  is	
  
organised	
  by	
  markets	
  alone.	
  Nonetheless,	
  there	
  either	
  will	
  be	
  or	
  there	
  will	
  not	
  be	
  
markets	
  in	
  the	
  system	
  Erik	
  recommends.	
  That	
  is	
  a	
  “binary”	
  choice,	
  to	
  use	
  Erik’s	
  
words,	
  about	
  which	
  we	
  disagree.	
  	
  	
  
Robin	
  Hahnel	
  
At	
   the	
   beginning	
   of	
   the	
   twentieth	
   century	
   virtually	
   all	
   who	
   opposed	
   capitalism	
  
saw	
   the	
   market	
   system	
   as	
   a	
   destructive	
   force	
   that	
   required	
   replacement	
   by	
  
democratic	
   planning.	
   Not	
   only	
   did	
   they	
   believe	
   we	
   needed	
   to	
   replace	
   private	
  
ownership	
   with	
   social	
   ownership	
   of	
   the	
   “means	
   of	
   production,”	
   they	
   also	
  
envisioned	
  replacing	
  the	
  impersonal	
  rule	
  of	
  market	
  forces	
  with	
  a	
  self-­‐conscious	
  
system	
  of	
  democratic	
  planning.	
  During	
  the	
  middle	
  third	
  of	
  the	
  twentieth	
  century	
  
social	
  democratic	
  political	
  parties	
  changed	
  their	
  position	
  on	
  this	
  issue,	
  and	
  came	
  
out	
  in	
  support	
  of	
  the	
  view	
  that	
  Erik	
  expresses	
  above	
  –	
  a	
  system	
  that	
  combines	
  
markets	
  with	
  state	
  regulation	
  and	
  planning	
  through	
  the	
  political	
  system.25
	
  During	
  
the	
  last	
  fifth	
  of	
  the	
  twentieth	
  century	
  many	
  radicals	
  from	
  the	
  generation	
  to	
  which	
  
Erik	
  and	
  I	
  both	
  belong	
  reacted	
  to	
  the	
  demise	
  of	
  the	
  planned	
  economies	
  and	
  free	
  
market	
   triumphalism	
   by	
   joining	
   social	
   democrats	
   in	
   support	
   of	
   a	
   vision	
   of	
  
“socialised	
   markets”	
   while	
   endorsing	
   the	
   “tacit	
   knowledge”	
   critique	
   of	
  
comprehensive	
   planning	
   voiced	
   by	
   conservative	
   champions	
   of	
   free	
   market	
  
capitalism	
  like	
  Von	
  Mises	
  and	
  Hayek	
  fifty	
  years	
  earlier.	
  I	
  believe	
  the	
  participatory	
  
planning	
   procedure	
   that	
   is	
   a	
   key	
   part	
   of	
   the	
   participatory	
   economic	
   model	
  	
  
demonstrates	
  that	
  these	
  concessions	
  to	
  the	
  practical	
  necessity	
  of	
  markets	
  were	
  
unwarranted,	
  which	
  is	
  fortunate,	
  since	
  the	
  pernicious	
  effects	
  of	
  markets	
  become	
  
ever	
  more	
  apparent	
  as	
  the	
  global	
  market	
  system	
  continues	
  to	
  spread	
  its	
  influence	
  
destroying	
  community	
  and	
  natural	
  environment	
  alike.	
  
As	
  I	
  said	
  in	
  my	
  opening	
  piece,	
  the	
  case	
  against	
  markets	
  logically	
  consists	
  of	
  two	
  
parts:	
  (1)	
  How	
  bad	
  are	
  markets?	
  And,	
  (2)	
  is	
  there	
  a	
  more	
  desirable	
  alternative	
  that	
  
is	
  feasible?	
  Here	
  I	
  respond	
  to	
  Erik’s	
  specific	
  criticisms	
  of	
  the	
  alternative	
  to	
  markets	
  
we	
  have	
  proposed	
  –	
  participatory	
  planning.	
  I	
  postpone	
  until	
  a	
  second	
  round	
  in	
  
this	
  dialogue	
  my	
  full	
  argument	
  against	
  the	
  use	
  of	
  markets	
  until	
  after	
  Erik	
  presents	
  
in	
   more	
   detail	
   his	
   case	
   for	
   how	
   and	
   why	
   he	
   believes	
   markets	
   are	
   part	
   of	
   a	
  
desirable	
   economy.	
   But	
   let	
   me	
   foreshadow	
   my	
   objection	
   to	
   markets	
   in	
   the	
  
broadest	
  terms:	
  When	
  a	
  division	
  of	
  labour	
  is	
  coordinated	
  by	
  markets	
  those	
  who	
  
take	
  advantage	
  of	
  others	
  are	
  often	
  rewarded	
  while	
  those	
  who	
  behave	
  in	
  socially	
  
responsible	
  ways	
  are	
  often	
  punished	
  for	
  having	
  done	
  so.	
  For	
  this	
  reason	
  markets	
  
act	
   like	
   a	
   cancer	
   that	
   undermines	
   efforts	
   to	
   build	
   and	
   deepen	
   participatory,	
  
equitable	
   cooperation.	
   In	
   my	
   view	
   those	
   who	
   admire	
   the	
   convenience	
   markets	
  
afford	
   individuals	
   fail	
   to	
   appreciate	
   the	
   magnitude	
   of	
   the	
   socially	
   destructive	
  
effects	
  markets	
  unleash.	
  I	
  claim	
  we	
  can	
  provide	
  for	
  the	
  desirable	
  conveniences	
  
25
	
  Later	
   social	
   democrats	
   also	
   dropped	
   their	
   opposition	
   to	
   private	
   enterprise	
   and	
   instead	
   favored	
   a	
  
“mixed	
  economy,”	
  i.e.	
  a	
  mixture	
  of	
  private	
  and	
  public	
  enterprises.	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
39
markets	
  afford	
  through	
  participatory	
  planning,	
  and	
  thereby	
  avoid	
  the	
  cancerous	
  
effects	
  market	
  interactions	
  have	
  on	
  social	
  relations.	
  Erik	
  has	
  challenged	
  this	
  claim	
  
in	
  specific	
  regards,	
  which	
  I	
  will	
  now	
  address.	
  
	
  
HOUSEHOLD	
  CONSUMPTION	
  PLANNING	
  
Erik	
  raises	
  two	
  issues	
  about	
  household	
  consumption	
  planning:	
  (1)	
  How	
  useful	
  is	
  it	
  
anyway?	
   And	
   (2)	
   aren’t	
   mid-­‐year	
   adjustments	
   really	
   just	
   forms	
   of	
   market	
  
behaviour?	
  In	
  the	
  process	
  he	
  raises	
  questions	
  about	
  how	
  detailed	
  consumption	
  
pre-­‐ordering	
   can	
   or	
   should	
   be	
   that	
   other	
   critics	
   have	
   raised	
   before	
   him.	
   David	
  
Schweickart	
   ridiculed	
   household	
   consumption	
   planning	
   in	
   his	
   book	
   review	
   of	
  
Parecon:	
  Life	
  After	
  Capitalism	
  titled	
  “Nonsense	
  on	
  Stilts”	
  in	
  2006.	
  Seth	
  Ackerman	
  
rejected	
  participatory	
  economics	
  for	
  this	
  reason	
  alone	
  in	
  “The	
  Red	
  and	
  the	
  Black”	
  
published	
   in	
   Jacobin	
   (9)	
   in	
   2013.	
   Aware	
   of	
   the	
   prevalence	
   of	
   this	
   objection,	
  
Stephen	
  Shalom	
  made	
  this	
  his	
  first	
  question	
  in	
  a	
  Q&A	
  session	
  with	
  me	
  about	
  Of	
  
the	
  People,	
  By	
  the	
  People:	
  The	
  Case	
  for	
  a	
  Participatory	
  Economy	
  posted	
  on	
  the	
  
New	
   Politics	
   website	
   on	
   January	
   14,	
   2013.	
   I	
   can	
   also	
   testify	
   that	
   it	
   is	
   the	
   most	
  
frequent	
  issue	
  raised	
  by	
  students	
  in	
  my	
  classes	
  over	
  the	
  past	
  twenty	
  years	
  when	
  
they	
  are	
  mulling	
  over	
  whether	
  they	
  would	
  personally	
  like	
  to	
  live	
  in	
  a	
  participatory	
  
economy.	
  
David	
  Schweickart	
  put	
  it	
  this	
  way:	
  	
  
Unless	
  requests	
  are	
  made	
  in	
  excruciating	
  detail	
  producers	
  won’t	
  know	
  what	
  to	
  produce.	
  
In	
  any	
  event,	
  they	
  have	
  little	
  motivation	
  to	
  find	
  out	
  what	
  people	
  really	
  want.	
  
Seth	
   Ackerman	
   thought	
   it	
   sufficient	
   to	
   dismiss	
   comprehensive	
   planning	
   of	
   any	
  
kind	
  as	
  a	
  practical	
  impossibility	
  by	
  simply	
  pointing	
  out:	
  	
  
There	
   are	
   more	
   than	
   two	
   million	
   products	
   in	
   Amazon.com's	
   “kitchen	
   and	
   dining”	
  
category	
  alone!	
  
And	
  most	
  recently	
  Erik	
  put	
  it	
  this	
  way:	
  	
  
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	
  per	
  cent	
  of	
  their	
  budget	
  on	
  clothing;	
  they	
  need	
  to	
  
have	
  some	
  idea	
  of	
  how	
  many	
  shirts	
  of	
  what	
  style	
  and	
  quality	
  to	
  produce	
  since	
  these	
  
have	
  very…	
  different	
  opportunity	
  costs.	
  
Robin	
  Hahnel	
  
Since	
  this	
  concern	
  features	
  so	
  prominently	
  in	
  critics	
  minds	
  let’s	
  give	
  it	
  a	
  name.	
  I’m	
  
going	
  to	
  call	
  it	
  the	
  “size	
  6½	
  purple	
  women’s	
  high-­‐heeled	
  leatherless	
  shoe	
  with	
  a	
  
yellow	
  toe	
  problem.”	
  
Quite	
  simply	
  the	
  problem	
  is	
  this:	
  A	
  shoe	
  producer	
  must	
  know	
  to	
  produce	
  a	
  size	
  6½	
  
purple	
  women’s	
  high-­‐heeled	
  leatherless	
  shoe	
  with	
  a	
  yellow	
  toe.	
  It	
  must	
  know	
  that	
  
size	
   6	
   will	
   not	
   do,	
   a	
   red	
   toe	
   will	
   not	
   do,	
   a	
   low	
   heel	
   will	
   not	
   do.	
   However,	
   it	
   is	
  
unreasonable	
   to	
   expect	
   the	
   consumer	
   who	
   will	
   eventually	
   discover	
   she	
   or	
   he	
  
wants	
  a	
  size	
  6½	
  purple	
  women’s	
  high-­‐heeled	
  leatherless	
  shoe	
  with	
  a	
  yellow	
  toe	
  to	
  
specify	
   this	
   at	
   the	
   beginning	
   of	
   the	
   year	
   as	
   part	
   of	
   her	
   annual	
   consumption	
  
request.	
  
How	
   does	
   a	
   shoe	
   producer	
   in	
   any	
   economy	
   know	
   to	
   produce	
   a	
   size	
   6½	
   purple	
  
women’s	
   high-­‐heeled	
   leatherless	
   shoe	
   with	
   a	
   yellow	
   toe,	
   rather	
   than	
   a	
   slightly	
  
different	
  shoe?	
  In	
  a	
  market	
  economy	
  shoe	
  producers	
  guess	
  what	
  shoe	
  consumers	
  
will	
   want	
   when	
   they	
   decide	
   to	
   go	
   shoe	
   shopping.	
   They	
   guess	
   based	
   on	
   their	
  
experience.	
  They	
  guess	
  based	
  on	
  any	
  consumer	
  research	
  they	
  engage	
  in,	
  perhaps	
  
including	
  information	
  culled	
  from	
  focus	
  groups.	
  They	
  guess	
  based	
  on	
  government	
  
projections	
  of	
  changes	
  in	
  relevant	
  economic	
  variables	
  such	
  as	
  the	
  distribution	
  of	
  
income	
  among	
  households.	
  And	
  recently,	
  many	
  large	
  companies	
  have	
  started	
  to	
  
use	
   newly	
   available	
   data	
   gathering	
   and	
   processing	
   capabilities	
   to	
   predict	
   what	
  
products	
  particular	
  customers	
  will	
  want	
  in	
  the	
  future.	
  When	
  I	
  go	
  to	
  the	
  Amazon	
  
website	
  to	
  inquire	
  about	
  some	
  book,	
  Amazon	
  now	
  tells	
  me	
  what	
  other	
  books	
  I	
  
might	
   be	
   interested	
   in	
   buying.	
   Only	
   when	
   I	
   go	
   on	
   the	
   internet	
   from	
   my	
   wife’s	
  
email	
  address	
  does	
  Amazon	
  provide	
  me	
  with	
  book	
  suggestions	
  that	
  do	
  not	
  match	
  
my	
  preferences.	
  In	
  our	
  brave	
  new	
  market	
  economy	
  producers	
  often	
  know	
  what	
  
we	
  will	
  want	
  before	
  we	
  do!	
  In	
  market	
  economies	
  producers	
  also	
  try	
  to	
  influence	
  
what	
  I	
  will	
  want	
  to	
  buy	
  through	
  advertising.	
  In	
  other	
  words,	
  a	
  shoe	
  company	
  will	
  
decide	
  to	
  produce	
  a	
  certain	
  style	
  shoe	
  and	
  use	
  advertising	
  to	
  make	
  people	
  want	
  
to	
  buy	
  the	
  style	
  they	
  have	
  decided	
  to	
  produce.	
  
In	
  sum:	
  In	
  market	
  economies	
  producers	
  guess	
  what	
  to	
  produce	
  –	
  because	
  many	
  
sales	
  are	
  not	
  arranged	
  through	
  pre-­‐orders	
  –	
  and	
  producers	
  use	
  advertising	
  to	
  try	
  
to	
   influence	
   consumers	
   to	
   buy	
   what	
   they	
   have	
   produced.	
   New	
   technologies	
   of	
  
automated	
   inventory	
   supply	
   line	
   management	
   and	
   consumer	
   data	
   base	
   mining	
  
have	
   made	
   their	
   guess	
   work	
   more	
   accurate,	
   but	
   in	
   the	
   end	
   producers	
   are	
   still	
  
guessing.	
  	
  
There	
  is	
  often	
  a	
  great	
  deal	
  of	
  inefficiency	
  that	
  results	
  from	
  this	
  guessing	
  game	
  that	
  
is	
  an	
  intrinsic	
  feature	
  of	
  market	
  economies.	
  Unlike	
  planned	
  economies,	
  in	
  market	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
41
economies	
  there	
  is	
  no	
  attempt	
  to	
  coordinate	
  all	
  the	
  production	
  and	
  consumption	
  
decisions	
   actors	
   make	
   before	
   those	
   decisions	
   are	
   translated	
   into	
   actions.	
   As	
   a	
  
result	
  a	
  great	
  deal	
  of	
  what	
  economists	
  call	
  “false	
  trading”	
  occurs.	
  False	
  trades	
  are	
  
trades	
  individual	
  parties	
  make	
  at	
  prices	
  that	
  fail	
  to	
  equate	
  supply	
  and	
  demand	
  –	
  
which	
  actually	
  occurs	
  more	
  often	
  than	
  not!	
  While	
  seldom	
  emphasised,	
  competent	
  
economic	
   theorists	
   know	
   that	
   all	
   false	
   trading	
   generates	
   inefficiency	
   to	
   some	
  
extent,	
   and	
   disequilibrating	
   forces	
   operate	
   in	
   market	
   systems	
   alongside	
  
equilibrating	
  forces	
  when	
  quantities	
  adjust	
  as	
  well	
  as	
  prices.	
  The	
  notion	
  that	
  in	
  
market	
   economies	
   the	
   convenience	
   consumers	
   enjoy	
   of	
   not	
   having	
   to	
   pre-­‐plan	
  
their	
   consumption	
   with	
   producers	
   comes	
   at	
   no	
   price	
   is	
   based	
   on	
   the	
   grossly	
  
inaccurate	
  assumption	
  that	
  market	
  economies	
  are	
  always	
  in	
  general	
  equilibrium.	
  
For	
   all	
   their	
   faults,	
   twentieth	
   century	
   planned	
   economies	
   did	
   not	
   experience	
  
major	
  depressions,	
  or	
  even	
  significant	
  recessions	
  caused	
  by	
  mutually	
  reinforcing	
  
disequilibrating	
   forces	
   in	
   markets	
   that	
   all	
   too	
   often	
   go	
   unchecked	
   by	
   sufficient	
  
countervailing	
  fiscal	
  and	
  monetary	
  policies	
  in	
  market	
  economies.	
  	
  
But	
   how	
   will	
   all	
   this	
   work	
   in	
   a	
   participatory	
   economy	
   where	
   there	
   is	
   a	
   self-­‐
conscious	
   attempt	
   to	
   coordinate	
   production	
   and	
   consumption	
   decisions	
   before	
  
production	
  begins?	
  
Let’s	
   begin	
   with	
   information	
   consumers	
   will	
   have	
   about	
   what	
   is	
   available.	
  
Ironically,	
   the	
   two	
   million	
   products	
   in	
   the	
   Amazon.com	
   “kitchen	
   and	
   dining”	
  
section	
   is	
   not	
   an	
   insurmountable	
   problem	
   rendering	
   comprehensive	
   economic	
  
planning	
  of	
  any	
  kind	
  impossible	
  at	
  all.	
  Instead	
  it	
  is	
  a	
  wonderful	
  example	
  of	
  how	
  
consumers	
  today	
  can	
  easily	
  be	
  made	
  aware	
  of	
  the	
  tremendous	
  variety	
  of	
  products	
  
that	
   will	
   be	
   available	
   in	
   a	
   participatory	
   economy.	
   Just	
   as	
   Amazon.com	
   can	
   list	
  
millions	
  of	
  products	
  –	
  providing	
  pictures	
  and	
  details	
  about	
  their	
  characteristics	
  –	
  
consumer	
   federations	
   can	
   provide	
   this	
   service	
   to	
   consumers	
   in	
   a	
   participatory	
  
economy	
  for	
  any	
  who	
  wish	
  to	
  shop	
  online.	
  And	
  for	
  those	
  who	
  prefer	
  what	
  some	
  
of	
   my	
   students	
   once	
   told	
   me	
   were	
   “the	
   pleasures	
   of	
   malling	
   it,”	
   consumer	
  
federations	
  can	
  host	
  shopping	
  malls	
  where	
  anyone	
  who	
  wishes	
  can	
  go	
  to	
  see	
  and	
  
be	
   seen,	
   and	
   walk	
   away	
   with	
   whatever	
   strikes	
   their	
   fancy.	
   Information	
   about	
  
product	
  improvements	
  can	
  be	
  provided	
  by	
  consumer	
  federations	
  as	
  well.	
  The	
  fact	
  
that	
  it	
  will	
  be	
  consumer	
  federations	
  providing	
  information	
  about	
  products,	
  rather	
  
than	
   producers	
   singing	
   their	
   own	
   praises	
   as	
   is	
   the	
   case	
   in	
   market	
   economies,	
  
Robin	
  Hahnel	
  
seems	
  to	
  me	
  to	
  be	
  a	
  significant	
  change	
  for	
  the	
  better.26
	
  But,	
  how,	
  critics	
  ask,	
  will	
  
consumers	
  pre-­‐order?	
  	
  
It	
  is	
  important	
  to	
  distinguish	
  between	
  what	
  we	
  need	
  to	
  accomplish	
  and	
  what	
  we	
  
do	
  not	
  need	
  to	
  accomplish	
  in	
  the	
  annual	
  participatory	
  planning	
  process.	
  When	
  the	
  
year	
  starts	
  any	
  shoemaking	
  worker	
  council	
  with	
  an	
  approved	
  proposal	
  knows	
  it	
  
should	
  start	
  making	
  shoes.	
  It	
  also	
  knows	
  how	
  much	
  cloth,	
  leather,	
  rubber,	
  etc.	
  it	
  
has	
  been	
  pre-­‐authorised	
  for	
  during	
  the	
  year,	
  and	
  how	
  many	
  shoes	
  it	
  has	
  said	
  it	
  
can	
  make.	
  It	
  also	
  knows	
  that	
  X%	
  of	
  the	
  shoes	
  it	
  made	
  last	
  year	
  were	
  women’s	
  
shoes,	
  and	
  Y%	
  of	
  the	
  women’s	
  shoes	
  it	
  made	
  last	
  year	
  were	
  size	
  6½.	
  How	
  does	
  it	
  
know	
   whether	
   to	
   make	
   size	
   6½	
   purple	
   women’s	
   high-­‐heeled	
   leatherless	
   shoes	
  
with	
  a	
  yellow	
  toe,	
  or	
  size	
  6½	
  purple	
  women’s	
  high-­‐heeled	
  leatherless	
  shoe	
  with	
  a	
  
red	
  toe?	
  It	
  does	
  just	
  what	
  a	
  shoemaking	
  company	
  in	
  a	
  market	
  economy	
  does:	
  It	
  
makes	
   an	
   educated	
   guess.	
   Then,	
   as	
   soon	
   as	
   actual	
   consumption	
   begins	
   new	
  
information	
   becomes	
   available.	
   Suppose	
   purchases	
   of	
   size	
   6½	
   purple	
   women’s	
  
high-­‐heeled	
   leatherless	
   shoes	
   with	
   a	
   yellow	
   toe	
   are	
   lower	
   than	
   producers	
  
expected	
  while	
  the	
  red	
  toed	
  shoes	
  are	
  disappearing	
  like	
  hot	
  cakes.	
  This	
  kind	
  of	
  
new	
  information	
  is	
  what	
  helps	
  worker	
  councils	
  answer	
  the	
  question:	
  Exactly	
  what	
  
kind	
  of	
  shoe	
  should	
  I	
  be	
  producing,	
  just	
  as	
  it	
  does	
  in	
  market	
  economies.	
  So	
  much	
  
for	
   the	
   claim	
   that	
   a	
   planned	
   economy	
   has	
   no	
   answer	
   to	
   the	
   size	
   6½	
   purple	
  
women’s	
  high-­‐heeled	
  leatherless	
  shoe	
  with	
  a	
  yellow	
  toe	
  problem.	
  It	
  has	
  the	
  same	
  
answer	
   a	
   market	
   system	
   does	
   with	
   regard	
   to	
   moving	
   from	
   a	
   “coarse”	
   decision	
  
about	
   shoe	
   production	
   to	
   a	
   “detailed”	
   decision	
   about	
   size	
   6½	
   purple	
   women’s	
  
high-­‐heeled	
  leatherless	
  shoe	
  with	
  a	
  yellow	
  toe	
  production.	
  
This	
  first	
  kind	
  of	
  new	
  information	
  fills	
  in	
  the	
  details	
  producers	
  need	
  to	
  know	
  about	
  
exactly	
  what	
  kinds	
  of	
  shoes	
  people	
  want,	
  which	
  is	
  why	
  consumers	
  do	
  not	
  need	
  to	
  
specify	
  these	
  details	
  when	
  submitting	
  their	
  personal	
  consumption	
  requests	
  during	
  
the	
   planning	
   procedure.	
   Submitting	
   personal	
   consumption	
   requests	
   during	
  
planning	
   is	
   not	
   impossibly	
   burdensome	
   because	
   the	
   form	
   would	
   only	
   need	
   to	
  
have	
  an	
  entry	
  called	
  “shoes”	
  for	
  one	
  to	
  put	
  a	
  number	
  after,	
  not	
  an	
  entry	
  called	
  
“size	
  6½	
  purple	
  women’s	
  high-­‐heeled	
  leatherless	
  shoes	
  with	
  a	
  yellow	
  toe!”	
  Those	
  
kinds	
  of	
  details	
  are	
  revealed	
  by	
  actual	
  purchases	
  as	
  the	
  year	
  proceeds.	
  In	
  other	
  
words,	
  Erik	
  misreads	
  our	
  proposal	
  when	
  he	
  writes:	
  “Since	
  the	
  coarse	
  categories	
  
would	
  not	
  be	
  useful	
  for	
  planning	
  by	
  federations	
  of	
  workers	
  councils,	
  and	
  this	
  is	
  
26
	
  We	
   have	
   also	
   suggested	
   that	
   consumer	
   federations	
   be	
   primarily	
   responsible	
   for	
   research	
   and	
  
development	
   of	
   new	
   and	
   better	
   products	
   in	
   a	
   participatory	
   economy,	
   rather	
   than	
   leave	
   product	
  
innovation	
  to	
  producers	
  as	
  is	
  it	
  is	
  in	
  market	
  economies.	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
43
the	
   fundamental	
   purpose	
   for	
   pre-­‐ordering	
   consumption,	
   I	
   will	
   assume	
   that	
   the	
  
finest	
   level	
   of	
   detail	
   is	
   required.”	
   Consumption	
   proposals	
   during	
   planning	
   are	
  
made	
   using	
   what	
   Erik	
   calls	
   “coarse	
   categories”	
   because	
   the	
   fine	
   level	
   of	
   detail	
  
producers	
  require	
  is	
  revealed	
  as	
  the	
  plan	
  is	
  actually	
  implemented.	
  Whether	
  filling	
  
out	
  even	
  this	
  reduced	
  list	
  of	
  items	
  is	
  beyond	
  people’s	
  capabilities	
  or	
  desires	
  I	
  will	
  
return	
  to	
  shortly.27
	
  
What	
  about	
  David	
  Schweickart’s	
  claim	
  that	
  worker	
  councils	
  “have	
  little	
  motivation	
  
to	
  find	
  out	
  what	
  people	
  really	
  want,”	
  disenfranchising	
  consumers	
  as	
  the	
  centrally	
  
planned	
   Soviet	
   economy	
   certainly	
   did	
   for	
   decades?	
   Here	
   it	
   is	
   important	
   to	
  
distinguish	
   between	
   the	
   worker	
   council	
   production	
   plan	
   that	
   was	
   approved	
   as	
  
“socially	
   responsible”	
   before	
   the	
   year	
   began,	
   and	
   what	
   the	
   worker	
   council	
   is	
  
credited	
   for	
   at	
   the	
   end	
   of	
   the	
   year.	
   Plan	
   approval	
   is	
   based	
   on	
   projected	
   social	
  
benefit	
  to	
  cost	
  ratios.	
  However,	
  worker	
  councils	
  are	
  credited	
  for	
  the	
  social	
  benefit	
  
to	
   cost	
   ratio	
   of	
   actual	
   outputs	
   delivered	
   and	
   accepted,	
   and	
   actual	
   inputs	
   used	
  
during	
  the	
  year.28
	
  
It	
  is	
  last	
  year’s	
  actual	
  social	
  benefit	
  to	
  cost	
  ratio	
  that	
  serves	
  as	
  a	
  cap	
  on	
  average	
  
effort	
   ratings	
   worker	
   councils	
   can	
   award	
   members.	
   So	
   if	
   their	
   approved	
  
production	
  plan	
  had	
  a	
  SB/SC	
  ratio	
  of	
  1.09	
  but	
  their	
  actual	
  ratio	
  at	
  year’s	
  end	
  turns	
  
out	
  to	
  be	
  1.03	
  the	
  cap	
  on	
  average	
  effort	
  ratings	
  for	
  workers	
  in	
  the	
  council	
  next	
  
year	
   is	
   1.03	
   not	
   1.09.	
   Therefore,	
   a	
   worker	
   council	
   that	
   failed	
   to	
   reduce	
   yellow	
  
toed	
   shoe	
   production	
   and	
   increase	
   red	
   toed	
   shoe	
   production	
   in	
   response	
   to	
  
signals	
   that	
   become	
   available	
   during	
   the	
   year	
   about	
   what	
   consumers	
   truly	
   like	
  
would	
  end	
  up	
  with	
  a	
  lower	
  actual	
  social	
  benefit	
  to	
  cost	
  ratio,	
  and	
  consequently	
  a	
  
lower	
  average	
  effort	
  rating	
  for	
  the	
  following	
  year.29
	
  	
  
27
	
  If	
  a	
  consumer	
  knows	
  she	
  wants	
  women’s	
  shoes,	
  or	
  size	
  6½	
  shoes,	
  there	
  is	
  no	
  reason	
  for	
  her	
  not	
  to	
  add	
  
this	
  information	
  when	
  filing	
  out	
  her	
  consumption	
  order	
  –	
  since	
  it	
  is	
  useful	
  for	
  producers.	
  The	
  point	
  is	
  
simply	
  that	
  she	
  does	
  not	
  have	
  to	
  if	
  this	
  is	
  too	
  burdensome,	
  and	
  she	
  can	
  change	
  her	
  mind	
  later	
  if	
  she	
  
wants.	
  
28
	
  Similarly,	
   consumers,	
   and	
   consumer	
   councils	
   and	
   federations	
   are	
   charged	
   for	
   what	
   they	
   actually	
  
consume	
  during	
  the	
  year,	
  not	
  what	
  was	
  approved	
  for	
  them	
  in	
  the	
  plan.	
  Any	
  differences	
  are	
  recorded	
  as	
  
increases	
   or	
   decreases	
   in	
   the	
   debt	
   or	
   savings	
   of	
   individual	
   consumers,	
   neighbourhood	
   councils,	
   and	
  
consumer	
  federations.	
  
29
	
  There	
   are	
   endless	
   details	
   one	
   could	
   pursue	
   in	
   this,	
   as	
   in	
   other	
   areas,	
   regarding	
   exactly	
   how	
   a	
  
participatory	
  economy	
  would	
  actually	
  function.	
  Suppose	
  a	
  worker	
  council	
  delivers	
  yellow	
  toed	
  shoes	
  to	
  
the	
  consumer	
  federation.	
  Suppose	
  the	
  consumer	
  federation	
  accepts	
  them	
  anticipating	
  that	
  they	
  will	
  sell,	
  
only	
  to	
  discover	
  later	
  that	
  nobody	
  bought	
  them	
  because	
  they	
  bought	
  red	
  toed	
  shoes	
  instead.	
  Who	
  takes	
  
responsibility?	
   Does	
   the	
   worker	
   council	
   get	
   credit	
   for	
   them	
   because	
   they	
   were	
   accepted	
   by	
   the	
  
Robin	
  Hahnel	
  
Actual	
  purchase	
  patterns	
  during	
  the	
  year	
  reveal	
  more	
  than	
  needed	
  details	
  about	
  
consumer	
  desires.	
  They	
  also	
  signal	
  when	
  consumers	
  have	
  changed	
  their	
  minds.	
  At	
  
the	
  individual	
  level	
  people	
  reveal	
  by	
  their	
  purchases	
  that	
  they	
  want	
  more	
  of	
  some	
  
things	
  and	
  less	
  of	
  others	
  than	
  they	
  indicated	
  during	
  planning.	
  At	
  the	
  aggregate	
  
level	
   individual	
   increases	
   and	
   decreases	
   sometimes	
   cancel	
   out	
   and	
   therefore	
  
require	
  no	
  changes	
  in	
  production.	
  When	
  they	
  do	
  not	
  cancel	
  out,	
  how	
  to	
  increase	
  
or	
  decrease	
  production	
  of	
  shoes	
  because	
  consumers	
  have	
  changed	
  their	
  minds	
  
must	
   be	
   negotiated	
   between	
   the	
   shoe	
   industry	
   federation	
   and	
   the	
   national	
  
consumer	
  federation.	
  Again,	
  there	
  are	
  different	
  ways	
  these	
  adjustments	
  could	
  be	
  
handled,	
  each	
  with	
  its	
  pros	
  and	
  cons.	
  But	
  the	
  relevant	
  point	
  is	
  that	
  adjustments	
  
can	
  be	
  made.30
	
  The	
  difference	
  between	
  a	
  planned	
  economy	
  and	
  an	
  unplanned,	
  
market	
   economy,	
   is	
   that	
   to	
   the	
   extent	
   that	
   consumers	
   submit	
   proposals	
   that	
  
reflect	
   their	
   changed	
   circumstances	
   and	
   tastes,	
   and	
   to	
   the	
   extent	
   that	
   worker	
  
councils	
   submit	
   proposals	
   that	
   reflect	
   their	
   new	
   technologies	
   and	
   work	
  
preferences,	
  the	
  plan	
  creates	
  an	
  initial	
  situation	
  that	
  reduces	
  the	
  number	
  and	
  size	
  
of	
  adjustments	
  that	
  are	
  necessary.	
  All	
  mechanisms	
  for	
  making	
  adjustments	
  in	
  a	
  
market	
  economy	
  are	
  available	
  if	
  wanted	
  in	
  a	
  planned	
  economy	
  as	
  well,	
  although	
  
presumably	
   a	
   participatory	
   economy	
   would	
   put	
   a	
   higher	
   priority	
   on	
   using	
  
mechanisms	
  that	
  distribute	
  the	
  costs	
  of	
  adjustments	
  more	
  fairly.	
  	
  
Finally,	
   how	
   burdensome	
   is	
   it	
   for	
   consumers	
   to	
   put	
   numbers	
   next	
   to	
   a	
   list	
   of	
  
“coarse	
  categories?”	
  Perhaps	
  I	
  was	
  too	
  flip	
  when	
  I	
  explained	
  in	
  my	
  most	
  recent	
  
book	
  how	
  a	
  lazy	
  person	
  such	
  as	
  myself	
  might	
  spend	
  no	
  time	
  on	
  submitting	
  a	
  new	
  
consumption	
   request	
   without	
   impinging	
   on	
   the	
   ability	
   of	
   my	
   neighbourhood	
  
consumer	
  federation?	
  Or	
  does	
  the	
  consumer	
  federation	
  notify	
  the	
  worker	
  council	
  at	
  the	
  end	
  of	
  the	
  year	
  
that	
  it	
  does	
  not	
  get	
  credit	
  for	
  some	
  of	
  the	
  yellow	
  toed	
  shoes	
  it	
  produced?	
  Selling	
  is	
  different	
  from	
  selling	
  
on	
   consignment.	
   The	
   important	
   question	
   is	
   not	
   which	
   option	
   will	
   be	
   chosen	
   –	
   because	
   that	
   will	
   be	
  
decided	
  by	
  the	
  people	
  who	
  live	
  in	
  a	
  participatory	
  economy.	
  The	
  issue	
  before	
  us	
  now	
  is	
  simply	
  if	
  there	
  
are	
   perfectly	
   straightforward	
   solutions	
   to	
   these	
   problems,	
   and	
   therefore	
   a	
   participatory	
   economy	
   is,	
  
indeed,	
  a	
  practical	
  possibility.	
  
30
	
  The	
  crucial	
  questions	
  are:	
  (1)	
  To	
  what	
  extent	
  will	
  the	
  shoe	
  industry	
  or	
  consumers	
  bear	
  the	
  burden	
  of	
  
adjustments?	
  (2)	
  Will	
  shoe	
  customers	
  who	
  change	
  their	
  demand	
  for	
  shoes	
  be	
  treated	
  any	
  differently	
  
from	
  shoe	
  customers	
  who	
  do	
  not?	
  In	
  the	
  case	
  of	
  excess	
  supply	
  the	
  issue	
  reduces	
  to	
  whether	
  or	
  not	
  
producers	
  will	
  be	
  credited	
  for	
  shoes	
  that	
  are	
  added	
  to	
  inventories,	
  and	
  if	
  so	
  how	
  much.	
  The	
  case	
  of	
  
excess	
  demand	
  is	
  more	
  complicated.	
  To	
  raise	
  shoe	
  production	
  more	
  resources	
  will	
  have	
  to	
  be	
  drawn	
  out	
  
of	
  inventories	
  or	
  away	
  from	
  industries	
  experiencing	
  excess	
  supply.	
  Beyond	
  crediting	
  shoe	
  workers	
  for	
  
working	
  longer	
  hours,	
  will	
  the	
  indicative	
  prices	
  of	
  shoes	
  and	
  those	
  resources	
  be	
  increased	
  above	
  their	
  
levels	
  in	
  the	
  plan,	
  or	
  not?	
  If	
  shoe	
  production	
  is	
  not	
  raised	
  sufficiently	
  to	
  satisfy	
  all	
  who	
  now	
  want	
  shoes,	
  
will	
  those	
  who	
  did	
  not	
  increase	
  their	
  demand	
  above	
  what	
  they	
  ordered	
  be	
  given	
  preference?	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
45
council	
   to	
   participate	
   in	
   the	
   planning	
   procedure,	
   and	
   without	
   serious	
   personal	
  
repercussions.	
   If	
   a	
   person	
   does	
   not	
   fill	
   out	
   and	
   submit	
   a	
   consumption	
   request	
  
form	
  their	
  neighbourhood	
  council	
  can	
  simply	
  use	
  their	
  actual	
  consumption	
  last	
  
year	
  as	
  their	
  new	
  consumption	
  request	
  for	
  this	
  year.	
  If	
  their	
  effort	
  rating	
  for	
  this	
  
year	
   warrants	
   this	
   level	
   of	
   consumption,	
   their	
   request	
   will	
   be	
   approved	
   and	
  
included	
  in	
  the	
  neighbourhood	
  proposal.	
  If	
  not,	
  and	
  if	
  a	
  person	
  continues	
  to	
  fail	
  to	
  
respond	
  to	
  requests	
  for	
  a	
  new	
  proposal,	
  the	
  neighbourhood	
  council	
  can	
  reduce	
  
every	
  item	
  in	
  their	
  last	
  year	
  consumption	
  by	
  the	
  same	
  percent	
  until	
  the	
  reduced	
  
request	
   is	
   covered	
   by	
   their	
   lower	
   effort	
   rating	
   this	
   year.	
   In	
   this	
   way	
  
neighbourhood	
   consumption	
   councils,	
   who	
   must	
   submit	
   neighbourhood	
  
proposals	
  during	
  the	
  planning	
  procedure,	
  can	
  do	
  what	
  they	
  have	
  to	
  do	
  even	
  if	
  
some	
  of	
  their	
  members	
  fail	
  to	
  provide	
  personal	
  consumption	
  proposals.	
  
In	
   the	
   end	
   Erik	
   seems	
   to	
   understand	
   how	
   signalling	
   necessary	
   details	
   to	
  
producers,	
  and	
  making	
  adjustments	
  because	
  consumers	
  changed	
  their	
  minds	
  can	
  
work	
  in	
  a	
  participatory	
  economy.	
  He	
  writes:	
  	
  
Production…in	
  effect	
  would	
  be	
  done	
  pretty	
  much	
  as…	
  now:	
  producers	
  would	
  examine	
  
the	
  sales	
  and	
  trends	
  of	
  sales	
  in	
  the	
  recent	
  past,	
  and	
  make	
  their	
  best	
  estimate	
  of	
  what	
  to	
  
produce…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	
  on-­‐going	
  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.	
  
	
  This	
  is	
  accurate	
  enough,	
  although	
  I	
  don’t	
  see	
  why	
  Erik	
  dismisses	
  household	
  pre-­‐
orders	
   as	
   “uninformative.”	
   They	
   certainly	
   provide	
   industry	
   federations	
   more	
  
useful	
   information	
   at	
   the	
   start	
   of	
   the	
   year	
   than	
   the	
   zero	
   information	
   market	
  
systems	
  provide	
  producers	
  about	
  changes	
  in	
  consumer	
  intentions.	
  	
  
From	
  year	
  to	
  year	
  consumers’	
  incomes	
  change,	
  and	
  consumers’	
  desires	
  change.	
  
Signalling	
  producers	
  about	
  these	
  changes	
  is	
  what	
  pre-­‐ordering	
  is	
  for	
  and	
  why	
  it	
  is	
  
quite	
   useful	
   for	
   producers.	
   Necessary	
   details	
   can	
   be	
   filled	
   in	
   from	
   consumer	
  
profiles	
  and	
  actual	
  purchases	
  during	
  the	
  year,	
  and	
  adjustments	
  can	
  be	
  negotiated	
  
with	
   the	
   aid	
   of	
   instantaneous	
   inventory	
   supply	
   line	
   prompts	
   at	
   the	
   disposal	
   of	
  
worker	
  councils	
  and	
  federations.	
  But	
  just	
  because	
  pre-­‐ordering	
  lacks	
  detail	
  and	
  
people	
  change	
  their	
  minds	
  does	
  not	
  mean	
  the	
  planning	
  process	
  is	
  pointless.	
  If	
  we	
  
want	
   consumers	
   to	
   influence	
   what	
   is	
   produced	
   in	
   the	
   economy,	
   and	
   if	
   we	
   are	
  
going	
  to	
  decide	
  what	
  is	
  produced	
  in	
  large	
  part	
  through	
  a	
  planning	
  procedure,	
  then	
  
we	
  need	
  consumers	
  to	
  provide	
  their	
  best	
  guesses	
  about	
  what	
  they	
  will	
  want.	
  We	
  
Robin	
  Hahnel	
  
don’t	
   need	
   them	
   to	
   agonise	
   over	
   their	
   proposals,	
   and	
   we	
   certainly	
   can	
  
accommodate	
  them	
  when	
  they	
  change	
  their	
  minds.	
  
Erik	
  also	
  asks:	
  	
  
I	
   don’t	
   understand	
   why	
   my	
   personal	
   consumption	
   should	
   be	
   the	
   business	
   of	
   a	
  
neighbourhood	
   council,	
   even	
   apart	
   from	
   the	
   problem	
   already	
   discussed	
   of	
   the	
  
usefulness	
  of	
  the	
  procedures	
  involved.	
  
This	
  question	
  has	
  been	
  raised	
  before,	
  and	
  fortunately,	
  therefore,	
  I	
  have	
  a	
  name	
  
for	
   it.	
   I	
   call	
   it	
   the	
   “kinky	
   underwear	
   problem.”	
   One	
   may	
   not	
   want	
   one’s	
  
neighbours	
  gossiping	
  about	
  what	
  kind	
  of	
  underwear	
  one	
  has	
  ordered.31
	
  In	
  recent	
  
expositions	
   I	
   have	
   tried	
   to	
   explain	
   that	
   it	
   was	
   never	
   our	
   intent	
   that	
   one’s	
  
neighbours	
  should	
  sit	
  in	
  judgment	
  over	
  one’s	
  consumption	
  requests,	
  and	
  offered	
  
several	
   suggestions	
   for	
   how	
   consumer	
   privacy	
   could	
   be	
   protected.	
   The	
   bottom	
  
line	
  is	
  that	
  personal	
  consumption	
  requests	
  must	
  be	
  approved	
  or	
  disapproved,	
  and	
  
this	
   must	
   occur	
   before	
   neighbourhood	
   consumption	
   councils	
   can	
   submit	
   their	
  
aggregated	
  neighbourhood	
  consumption	
  requests	
  during	
  the	
  planning	
  procedure.	
  
Since	
  neighbourhood	
  councils	
  must	
  aggregate	
  their	
  members’	
  approved	
  requests	
  
we	
   talked	
   about	
   them	
   as	
   also	
   approving	
   them.	
   But	
   even	
   in	
   our	
   earliest	
  
presentation	
  we	
  specified	
  that	
  as	
  long	
  as	
  one’s	
  effort	
  rating	
  plus	
  any	
  allowance	
  
was	
  sufficient	
  to	
  cover	
  the	
  social	
  cost	
  of	
  one’s	
  request	
  it	
  could	
  not	
  be	
  denied.	
  In	
  
1991	
  we	
  also	
  wrote	
  of	
  neighbours’	
  having	
  the	
  opportunity	
  to	
  provide	
  constructive	
  
feedback	
   and	
   suggestions	
   about	
   particulars,	
   which	
   in	
   retrospect	
   was	
   probably	
  
overly	
  enthusiastic	
  on	
  our	
  part.	
  Over	
  the	
  years	
  it	
  has	
  become	
  apparent,	
  at	
  least	
  to	
  
me,	
  that	
  for	
  most	
  people	
  today	
  concern	
  for	
  privacy	
  is	
  far	
  greater	
  than	
  any	
  desire	
  
for	
  constructive	
  feedback	
  from	
  one’s	
  neighbours.	
  
In	
  any	
  case,	
  there	
  are	
  a	
  number	
  of	
  ways	
  to	
  protect	
  privacy.	
  (1)	
  Eliminate	
  review	
  
and	
  make	
  approval	
  or	
  disapproval	
  of	
  individual	
  consumption	
  requests	
  automatic	
  
based	
  on	
  effort	
  rating	
  and	
  allowances	
  –	
  which	
  seems	
  to	
  be	
  Erik’s	
  preference.	
  (2)	
  
There	
  is	
  no	
  reason	
  to	
  attach	
  names	
  to	
  personal	
  consumption	
  proposals.	
  Review	
  
only	
  requires	
  an	
  effort	
  rating,	
  any	
  allowance,	
  and	
  a	
  personal	
  consumption	
  request	
  
form	
   that	
   is	
   filled	
   out.	
   Submissions	
   can	
   be	
   by	
   number,	
   not	
   name.	
   (3)	
   Personal	
  
requests	
  –	
  with	
  or	
  without	
  names	
  attached	
  –	
  could	
  be	
  reviewed	
  by	
  consumption	
  
councils	
   that	
   are	
   not	
   geographically	
   based.	
   So	
   any	
   information	
   about	
   one’s	
  
31
	
  Since	
   one	
   simply	
   puts	
   a	
   number	
   after	
   the	
   category	
   “underwear”	
   when	
   submitting	
   personal	
  
consumption	
  requests	
  kinky	
  underwear	
  is	
  really	
  not	
  an	
  issue	
  –	
  although	
  the	
  point	
  remains:	
  Why	
  should	
  
one’s	
  neighbours	
  pass	
  judgment	
  on	
  one’s	
  consumption	
  request.	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
47
consumption	
   request	
   would	
   be	
   available	
   only	
   to	
   strangers.	
   In	
   this	
   case	
   the	
  
decision	
   to	
   approve	
   or	
   disapprove	
   would	
   have	
   to	
   be	
   passed	
   on	
   from	
   the	
   non-­‐
geographical	
  council	
  to	
  one’s	
  neighbourhood	
  consumption	
  council	
  so	
  it	
  could	
  be	
  
added	
  to	
  other	
  individual	
  requests	
  and	
  requests	
  for	
  neighborhood	
  public	
  goods.	
  
Similar	
  issues	
  arise	
  regarding	
  who	
  approves	
  special	
  need	
  requests	
  and	
  requests	
  
for	
   loans.	
   To	
   enhance	
   building	
   strong,	
   local,	
   neighbourhood	
   communities	
   we	
  
suggested	
  that	
  special	
  need	
  requests,	
  and	
  loan	
  applications	
  be	
  handled	
  by	
  one’s	
  
neighbourhood	
   consumption	
   councils.	
   But	
   that	
   is	
   not	
   the	
   only	
   option.	
   These	
  
functions	
  could	
  be	
  de-­‐localised	
  if	
  people	
  felt	
  that	
  was	
  more	
  advantageous.	
  
Finally,	
  is	
  the	
  adjustment	
  process	
  really	
  just	
  a	
  market	
  after	
  all,	
  as	
  Erik	
  suggests?	
  
Approved	
   consumption	
   plans	
   are	
   not	
   treated	
   as	
   binding	
   contracts	
   since	
  
individuals	
   are	
   free	
   to	
   change	
   their	
   minds	
   as	
   the	
   year	
   proceeds.	
   One	
   possible	
  
option	
  for	
  making	
  adjustments	
  would	
  allow	
  indicative	
  prices	
  to	
  rise	
  when	
  excess	
  
demand	
  for	
  something	
  appears	
  during	
  the	
  year,	
  and	
  indicative	
  prices	
  to	
  fall	
  in	
  the	
  
case	
  of	
  excess	
  supply.	
  If	
  it	
  looks	
  like	
  a	
  market,	
  and	
  smells	
  like	
  a	
  market,	
  doesn’t	
  
that	
  mean	
  it	
  is	
  a	
  market?	
  
In	
  this	
  case	
  the	
  answer	
  is	
  “no.”	
  Here	
  are	
  the	
  crucial	
  differences:	
  
(1)	
  In	
  market	
  economies	
  there	
  is	
  no	
  plan	
  that	
  has	
  been	
  agreed	
  to	
  at	
  the	
  beginning	
  
of	
   the	
   year.	
   There	
   is	
   no	
   plan	
   where	
   people	
   had	
   an	
   opportunity	
   to	
   affect	
  
production	
   and	
   consumption	
   decisions	
   at	
   least	
   roughly	
   in	
   proportion	
   to	
   the	
  
degree	
  they	
  are	
  affected.	
  There	
  is	
  no	
  plan	
  that	
  incorporates	
  effects	
  on	
  “external	
  
parties”	
   which	
   are	
   ignored	
   by	
   buyers	
   and	
   sellers	
   who	
   make	
   the	
   decisions	
   in	
  
market	
   economies.	
   There	
   is	
   no	
   plan	
   that	
   would	
   be	
   efficient,	
   fair,	
   and	
  
environmentally	
   sustainable	
   if	
   carried	
   out.	
   Instead,	
   in	
   a	
   market	
   economy	
   all	
  
decisions	
  about	
  how	
  to	
  organise	
  a	
  division	
  of	
  labour	
  and	
  distribute	
  the	
  benefits	
  
from	
   having	
   done	
   so	
   are	
   settled	
   by	
   agreements	
   between	
   buyer-­‐seller	
   pairs	
   –	
  
which	
   predictably	
   leads	
   to	
   outcomes	
   that	
   are	
   inequitable,	
   inefficient,	
   and	
  
environmentally	
  unsustainable.	
  
(2)	
  Even	
  when	
  adjustments	
  are	
  made	
  during	
  the	
  year	
  in	
  a	
  participatory	
  economy	
  
individual	
   buyers	
   and	
   sellers	
   do	
   not	
   negotiate	
   those	
   adjustments	
   between	
  
themselves	
   however	
   they	
   see	
   fit,	
   including	
   any	
   adjustment	
   in	
   prices.	
   Instead,	
  
adjustments	
  are	
  negotiated	
  socially.	
  Industry	
  and	
  consumer	
  federations	
  negotiate	
  
adjustments	
  in	
  production.	
  And	
  whether	
  or	
  not	
  to	
  adjust	
  indicative	
  prices	
  is	
  also	
  a	
  
social	
  decision,	
  so	
  that	
  fairness	
  as	
  well	
  as	
  efficiency	
  can	
  be	
  taken	
  into	
  account.	
  
Robin	
  Hahnel	
  
Markets	
  are	
  the	
  aggregate	
  sum	
  of	
  haggling	
  between	
  many	
  self-­‐selected	
  pairs	
  of	
  
buyer-­‐sellers.	
   Neither	
   participatory	
   planning	
   nor	
   the	
   adjustment	
   procedures	
   I	
  
have	
   discussed	
   above	
   permit	
   self-­‐selected	
   buyer-­‐seller	
   pairs	
   to	
   make	
   whatever	
  
deals	
  they	
  want	
  –	
  because	
  we	
  have	
  learned	
  that	
  the	
  consequences	
  of	
  allowing	
  
this	
  are	
  unacceptable.	
  
	
  
PUBLIC	
  GOODS	
  PLANNING	
  
As	
  Erik	
  says,	
  we	
  are	
  in	
  substantial	
  agreement	
  about	
  how	
  to	
  plan	
  for	
  public	
  good	
  
consumption.	
   He	
   is	
   correct	
   that	
   once	
   it	
   is	
   decided	
   how	
   much	
   of	
   consumers’	
  
income	
   will	
   go	
   toward	
   private	
   versus	
   public	
   consumption,	
   approval	
   of	
   private	
  
consumption	
   requests	
   could	
   be	
   handled	
   outside	
   neighbourhood	
   consumption	
  
councils.	
   I	
   have	
   already	
   explained	
   why	
   designating	
   neighbourhood	
   councils	
   to	
  
handle	
  private	
  consumption	
  requests,	
  as	
  well	
  as	
  requests	
  based	
  on	
  special	
  needs	
  
and	
  requests	
  for	
  loans,	
  seems	
  to	
  be	
  a	
  good	
  way	
  to	
  build	
  strong	
  local	
  communities,	
  
but	
  all	
  these	
  decisions	
  could	
  be	
  de-­‐localised	
  if	
  people	
  wanted	
  to.	
  
Erik	
  is	
  also	
  correct	
  when	
  he	
  observes	
  that	
  many	
  functions	
  performed	
  by	
  what	
  we	
  
call	
   political	
   institutions	
   today	
   are	
   performed	
   by	
   consumer	
   federations	
   in	
   a	
  
participatory	
  economy.	
  That	
  is	
  because	
  markets	
  cannot	
  be	
  relied	
  on	
  to	
  provide	
  
adequate	
  amounts	
  of	
  public	
  goods,	
  so	
  different	
  levels	
  of	
  “government”	
  must	
  step	
  
in	
  and	
  do	
  this	
  through	
  public	
  expenditures	
  on	
  public	
  goods	
  paid	
  for	
  by	
  taxes.	
  In	
  
effect,	
   market	
   economies	
   fail	
   utterly	
   to	
   provide	
   public	
   goods,	
   so	
   in	
   the	
   most	
  
egregious	
  cases	
  people	
  have	
  come	
  to	
  insist	
  that	
  government	
  institutions	
  fill	
  this	
  
void,	
  even	
  if	
  very	
  imperfectly.	
  Since	
  we	
  consider	
  public	
  goods	
  to	
  be	
  just	
  as	
  much	
  a	
  
part	
  of	
  “the	
  economy”	
  as	
  private	
  goods,	
  we	
  have	
  proposed	
  economic	
  institutions	
  
and	
  procedures	
  to	
  handle	
  them,	
  which	
  we	
  believe	
  also	
  eliminates	
  the	
  unfortunate	
  
bias	
   in	
   market	
   economies	
   against	
   public	
   goods	
   and	
   in	
   favour	
   of	
   private	
   good	
  
consumption.	
  
I	
  don’t	
  see	
  the	
  distinction	
  Erik	
  tries	
  to	
  draw	
  between	
  consumer	
  public	
  goods	
  and	
  
citizen	
  public	
  goods.	
  Not	
  all	
  goods	
  that	
  are	
  public	
  are	
  public	
  for	
  the	
  same	
  reason	
  
and	
  the	
  same	
  way.	
  And	
  “yes,”	
  each	
  of	
  us	
  is	
  consumer,	
  producer,	
  and	
  citizen.	
  And	
  
“yes,”	
  there	
  will	
  still	
  be	
  a	
  need	
  for	
  an	
  appropriate	
  set	
  of	
  political	
  institutions	
  to	
  
handle	
   political	
   issues	
   besides	
   the	
   institutions	
   we	
   have	
   proposed	
   to	
   handle	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
49
economic	
   decisions.32
	
  But	
   I	
   don’t	
   see	
   any	
   purpose	
   in	
   setting	
   up	
   a	
   separate	
  
network	
   of	
   citizen	
   councils	
   to	
   demand	
   citizen	
   public	
   goods.	
   Even	
   if	
   this	
   were	
  
done,	
  presumably	
  these	
  councils	
  would	
  function	
  just	
  as	
  our	
  consumer	
  federations	
  
do,	
   and	
   they	
   would	
   have	
   to	
   participate	
   in	
   the	
   participatory	
   planning	
   process,	
  
making	
  and	
  revising	
  proposals	
  in	
  every	
  round.	
  
	
  
EXTERNALITIES	
  
In	
   free	
   market	
   economies	
   externalities	
   go	
   completely	
   unaccounted	
   for	
   –	
  
effectively	
  disenfranchising	
  external	
  parties	
  who	
  have	
  no	
  say	
  in	
  deals	
  struck	
  by	
  
buyers	
   and	
   sellers.	
   This	
   not	
   only	
   generates	
   a	
   great	
   deal	
   of	
   inefficiency,	
   it	
   is	
  
increasingly	
  obvious	
  that	
  it	
  is	
  putting	
  the	
  natural	
  environment	
  seriously	
  at	
  risk.	
  
While	
   it	
   is	
   possible	
   to	
   ameliorate	
   damage	
   due	
   to	
   external	
   effects	
   through	
  
regulation,	
  emission	
  taxes,	
  or	
  cap	
  and	
  trade	
  policies,	
  the	
  problem	
  remains	
  that	
  
the	
  market	
  system	
  provides	
  no	
  signals	
  as	
  to	
  how	
  much	
  correction	
  is	
  warranted.	
  It	
  
is	
  well	
  known	
  that	
  in	
  theory	
  if	
  we	
  set	
  an	
  emission	
  tax	
  equal	
  to	
  the	
  sum	
  of	
  the	
  
negative	
  effects	
  on	
  all	
  external	
  parties	
  we	
  will	
  get	
  the	
  efficient	
  level	
  of	
  emissions.	
  
However,	
  the	
  market	
  provides	
  no	
  information	
  about	
  the	
  magnitude	
  of	
  damages	
  
caused	
   and	
   therefore	
   how	
   high	
   such	
   a	
   tax	
   should	
   be.	
   Moreover,	
   ad	
   hoc	
  
corrections	
  in	
  every	
  market	
  that	
  are	
  inherently	
  contestable	
  soon	
  become	
  highly	
  
impractical.	
   As	
   Erik	
   acknowledges,	
   one	
   of	
   the	
   more	
   interesting	
   features	
   of	
  
participatory	
  planning	
  is	
  how	
  it	
  handles	
  externalities.	
  As	
  I	
  explained	
  in	
  my	
  initial	
  
presentation,	
   by	
   having	
   communities	
   of	
   affected	
   parties	
   participate	
   in	
   the	
  
planning	
   procedure	
   as	
   described	
   we	
   are	
   able	
   to	
   generate	
   reasonably	
   accurate	
  
quantitative	
   estimates	
   of	
   damages	
   from	
   emissions,	
   which	
   worker	
   councils	
   can	
  
then	
   be	
   charged	
   for,	
   just	
   as	
   they	
   are	
   charged	
   for	
   using	
   scarce	
   productive	
  
resources.	
  
Erik	
  points	
  out:	
  “The	
  geographical	
  boundaries	
  of	
  a	
  particular	
  source	
  of	
  pollution	
  
may	
  or	
  may	
  not	
  correspond	
  to	
  the	
  boundaries	
  of	
  existing	
  consumer	
  federations.”	
  	
  	
  
Erik	
  is	
  absolutely	
  correct.	
  Additional	
  “communities	
  of	
  affected	
  parties,”	
  or	
  CAPs,	
  
would	
  have	
  to	
  be	
  created	
  whenever	
  the	
  effects	
  of	
  pollution	
  did	
  not	
  conform	
  to	
  
areas	
  already	
  defined	
  as	
  neighbourhood	
  consumer	
  councils	
  or	
  federations,	
  which	
  
adds	
   a	
   whole	
   new	
   institutional	
   layer	
   to	
   the	
   economy.	
   Moreover,	
   I	
   have	
  
32
	
  Stephen	
  Shalom	
  has	
  proposed	
  a	
  set	
  of	
  political	
  institutions	
  that	
  he	
  argues	
  are	
  compatible	
  with	
  the	
  
values	
  and	
  goals	
  of	
  a	
  participatory	
  economy,	
  which	
  is	
  sometimes	
  referred	
  to	
  as	
  “parpolity.”	
  
Robin	
  Hahnel	
  
acknowledged	
   that	
   the	
   most	
   difficult	
   problem	
   with	
   our	
   proposal	
   for	
   how	
   to	
  
handle	
   externalities	
   will	
   be	
   settling	
   on	
   membership	
   in	
   CAPs.33
	
  For	
   the	
   record,	
   I	
  
have	
  stated:	
  	
  
Since	
  membership	
  in	
  a	
  CAP	
  entitles	
  one	
  to	
  extra	
  consumption	
  rights	
  a	
  serious	
  problem	
  
will	
  be	
  that	
  people	
  may	
  claim	
  to	
  be	
  adversely	
  affected	
  and	
  deserve	
  membership	
  in	
  a	
  
CAP	
  even	
  though	
  they	
  are	
  not.	
  This	
  means	
  the	
  process	
  of	
  defining	
  CAPs	
  –	
  deciding	
  who	
  
should,	
  and	
  who	
  should	
  not	
  be	
  included	
  –	
  must	
  be	
  carefully	
  monitored.	
  It	
  might	
  even	
  be	
  
necessary	
  to	
  create	
  a	
  formal	
  “judicial”	
  system	
  for	
  settling	
  disputes	
  over	
  membership	
  in	
  
CAPs.	
   Presumably	
   expert	
   testimony	
   of	
   scientists	
   and	
   medical	
   personnel	
   would	
   be	
  
relevant,	
  along	
  with	
  testimony	
  on	
  the	
  part	
  of	
  individuals	
  petitioning	
  for	
  membership,	
  as	
  
well	
  as	
  testimony	
  from	
  current	
  members	
  contesting	
  their	
  claims.	
  
Unfortunately,	
  there	
  appears	
  to	
  be	
  no	
  way	
  around	
  this.	
  	
  
Erik	
  asks:	
  	
  
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?...	
   Could	
   they	
  
constitute	
  a	
  blocking	
  coalition?	
  
No.	
  This	
  is	
  a	
  misunderstanding	
  of	
  how	
  the	
  procedure	
  works.	
  Once	
  membership	
  in	
  
a	
  CAP	
  has	
  been	
  settled	
  –	
  through	
  what	
  may	
  sometimes	
  be	
  a	
  contested	
  judicial	
  
process	
  as	
  explained	
  above	
  –	
  the	
  CAP	
  must	
  come	
  up	
  with	
  a	
  single	
  answer	
  to	
  how	
  
many	
   units	
   of	
   the	
   pollutant	
   they	
   are	
   willing	
   to	
   permit	
   given	
   the	
   level	
   of	
  
compensation	
  quoted.	
  Disagreements	
  among	
  members	
  of	
  CAPs	
  about	
  how	
  much	
  
to	
  allow	
  must	
  be	
  hashed	
  out	
  among	
  themselves	
  –	
  presumably	
  through	
  discussion	
  
where	
   people	
   try	
   to	
   persuade	
   others	
   to	
   agree	
   with	
   them,	
   but	
   ultimately	
  
determined	
  by	
  democratic	
  vote.	
  There	
  will	
  be	
  disagreements	
  among	
  members	
  of	
  
CAPs	
   over	
   how	
   the	
   CAP	
   should	
   respond,	
   just	
   as	
   there	
   will	
   be	
   disagreements	
  
among	
   members	
   of	
   consumer	
   councils	
   and	
   federations	
   over	
   how	
   much	
   of	
   any	
  
public	
  good	
  to	
  request.	
  But	
  just	
  as	
  members	
  of	
  consumer	
  councils	
  and	
  federations	
  
who	
  have	
  different	
  preferences	
  and	
  opinions	
  must	
  come	
  up	
  with	
  a	
  single	
  answer	
  
for	
  which	
  public	
  goods	
  to	
  request,	
  and	
  how	
  much,	
  so	
  must	
  members	
  of	
  a	
  CAP	
  
with	
   different	
   attitudes	
   about	
   pollution	
   come	
   up	
   with	
   a	
   single	
   answer	
   to	
   how	
  
much	
  pollution	
  they	
  are	
  willing	
  to	
  permit.	
  
A	
  different	
  issue	
  is	
  whether	
  the	
  compensation	
  paid	
  the	
  CAP	
  will	
  be	
  distributed	
  
equally	
  among	
  all	
  its	
  members.	
  I	
  have	
  addressed	
  this	
  issue	
  at	
  greater	
  length	
  in	
  a	
  
33
	
  This	
   and	
   other	
   issues	
   Erik	
   raises	
   are	
   treated	
   at	
   length	
   in	
   “Wanted:	
   A	
   Pollution	
   Damage	
   Revealing	
  
Mechanism,”	
   available	
   from	
   me	
   upon	
   request	
   and	
   under	
   review	
   at	
   the	
   Review	
   of	
   Radical	
   Political	
  
Economics.	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
51
an	
  article	
  under	
  review.34
	
  The	
  simple	
  solution	
  is	
  to	
  distribute	
  equal	
  shares	
  to	
  all	
  
members	
  of	
  a	
  CAP,	
  in	
  which	
  case	
  everyone	
  has	
  an	
  incentive	
  to	
  report	
  truthfully	
  
how	
   much	
   they	
   believe	
   they	
   will	
   be	
   damaged.	
   However,	
   if	
   members	
   of	
   a	
   CAP	
  
wished	
   to	
   pay	
   greater	
   compensation	
   to	
   members	
   who	
   are	
   more	
   adversely	
  
affected	
  they	
  could	
  do	
  so	
  without	
  distorting	
  incentives	
  to	
  report	
  damage	
  by	
  using	
  
any	
  of	
  several	
  “incentive	
  compatible	
  mechanisms”	
  that	
  are	
  now	
  part	
  of	
  the	
  public	
  
good	
   literature.	
   The	
   key	
   to	
   incentive	
   compatibility	
   is	
   that	
   the	
   formula	
   for	
  
determining	
   an	
   individual’s	
   compensation	
   must	
   not	
   use	
   the	
   individual’s	
   own	
  
reported	
  damage.	
  As	
  ingenious	
  as	
  they	
  are,	
  I	
  suspect	
  people	
  would	
  usually	
  find	
  
these	
   incentive	
   compatible	
   procedures	
   for	
   distributing	
   compensation	
   unequally	
  
among	
  members	
  of	
  CAPs	
  to	
  be	
  more	
  trouble	
  than	
  they	
  are	
  worth.	
  
Erik	
  says:	
  	
  
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.	
  
While	
  true	
  that	
  in	
  Portland	
  Oregon	
  firms	
  may	
  be	
  charged	
  a	
  higher	
  amount	
  for	
  a	
  
ton	
   of	
   particulate	
   matter	
   released	
   than	
   firms	
   in	
   Dallas	
   Texas,	
   this	
   does	
   not	
  
produce	
  the	
  problem	
  Erik	
  worries	
  about.	
  What	
  it	
  does	
  is	
  induce	
  firms	
  releasing	
  
particulate	
  matter	
  to	
  locate	
  in	
  Dallas	
  rather	
  than	
  in	
  Portland.	
  The	
  charge	
  is	
  higher	
  
in	
   Portland	
   either	
   because	
   Portland	
   is	
   hemmed	
   in	
   between	
   the	
   Coastal	
   and	
  
Cascade	
  Mountains	
  so	
  the	
  particulate	
  matter	
  stays	
  in	
  the	
  air	
  longer	
  than	
  in	
  Dallas	
  
where	
  the	
  prairie	
  wind	
  sweeps	
  it	
  away	
  faster,	
  or	
  because	
  Portlanders	
  value	
  clean	
  
air	
   more	
   than	
   the	
   residents	
   of	
   Dallas.	
   In	
   either	
   case,	
   our	
   best	
   estimate	
   of	
   the	
  
social	
  cost	
  of	
  particulate	
  emissions	
  in	
  Portland	
  is	
  higher	
  than	
  in	
  Dallas,	
  and	
  that	
  is	
  
a	
  signal	
  we	
  want	
  to	
  send	
  particulate	
  emitters	
  when	
  they	
  are	
  deciding	
  where	
  to	
  
locate.	
  
What	
  happens	
  when	
  a	
  worker	
  council	
  building	
  houses	
  in	
  Portland	
  needs	
  cement?	
  
There	
   will	
   be	
   a	
   single	
   indicative	
   price	
   for	
   cement	
   nationwide	
   which	
   it	
   will	
   be	
  
34
	
  Ibid.	
  
Robin	
  Hahnel	
  
charged	
   for	
   each	
   ton	
   it	
   uses	
   no	
   matter	
   the	
   source.	
   But	
   where	
   will	
   the	
   cement	
  
come	
  from?	
  A	
  Portland	
  cement	
  factory,	
  or	
  a	
  cement	
  factory	
  in	
  Dallas?	
  If	
  the	
  social	
  
cost	
  of	
  transporting	
  the	
  cement	
  from	
  Dallas	
  to	
  Portland	
  is	
  less	
  than	
  the	
  higher	
  
social	
   cost	
   of	
   producing	
   cement	
   in	
   Portland	
   because	
   the	
   charge	
   for	
   releasing	
  
particulate	
   matter	
   in	
   Portland	
   is	
   higher,	
   the	
   cement	
   will	
   come	
   from	
   Dallas.	
  
Otherwise	
  it	
  will	
  come	
  from	
  Portland.	
  
Finally,	
  Erik	
  suggests:	
  	
  
Consumers	
  might	
  decide	
  that	
  they	
  prefer	
  a	
  simpler	
  system	
  which	
  combines	
  government	
  
regulations	
  that	
  impose	
  various	
  kinds	
  of	
  limits	
  on	
  allowable	
  pollution	
  with	
  a	
  system	
  of	
  
uniform	
  taxes	
  on	
  different	
  types	
  of	
  environmental	
  externalities.	
  
Simpler	
  is	
  always	
  better,	
  all	
  other	
  things	
  being	
  equal.	
  But	
  in	
  this	
  case	
  other	
  things	
  
are	
  not	
  equal.	
  Government	
  regulations	
  mean	
  limiting	
  emissions.	
  But	
  how	
  much	
  
should	
   the	
   government	
   require	
   polluters	
   to	
   reduce	
   emissions?	
   5%,	
   10%,	
   30%,	
  
70%?	
  A	
  market	
  system	
  provides	
  no	
  help	
  when	
  we	
  try	
  to	
  answer	
  the	
  “how	
  much”	
  
question.	
   A	
   uniform	
   tax	
   on	
   each	
   type	
   of	
   pollution?	
   The	
   example	
   above	
  
demonstrates	
  why	
  the	
  same	
  tax	
  on	
  particulate	
  emissions	
  in	
  Portland	
  and	
  Dallas	
  is	
  
actually	
   wrong.	
   But	
   even	
   if	
   a	
   uniform	
   tax	
   on	
   particulate	
   emissions	
   nationwide	
  
were	
  efficient,	
  how	
  high	
  should	
  the	
  tax	
  be?	
  $5	
  a	
  ton,	
  $10	
  a	
  ton,	
  $30	
  a	
  ton,	
  $70	
  a	
  
ton?	
  Again,	
  the	
  market	
  system	
  provides	
  no	
  help	
  when	
  we	
  try	
  to	
  answer	
  the	
  “how	
  
high”	
   question.	
   The	
   beauty	
   of	
   the	
   procedure	
   we	
   have	
   proposed,	
   as	
   Erik	
  
acknowledged,	
  is	
  that	
  it	
  generates	
  a	
  credible	
  quantitative	
  estimate	
  of	
  how	
  high	
  
emissions	
   charges	
   should	
   be,	
   and	
   induces	
   players	
   to	
   emit	
   socially	
   efficient	
  
quantities	
  as	
  a	
  result.	
  It	
  is	
  true	
  that	
  you	
  don’t	
  get	
  this	
  major	
  advantage	
  at	
  no	
  cost.	
  
But	
   the	
   cost	
   reduces	
   to	
   spending	
   some	
   extra	
   time	
   and	
   resources	
   to	
   set	
   up	
   a	
  
judicial	
   procedure	
   to	
   settle	
   foreseeable	
   disputes	
   over	
   membership	
   in	
  
communities	
  of	
  affected	
  parties.	
  
There	
  is	
  actually	
  one	
  other	
  “cost”	
  –	
  although	
  I	
  think	
  Erik	
  will	
  agree	
  with	
  me	
  that	
  it	
  
is	
   actually	
   not	
   a	
   “cost”	
   but	
   a	
   “benefit.”	
   Our	
   mechanism	
   doesn’t	
   work	
   if	
  
communities	
  have	
  significantly	
  different	
  incomes	
  because	
  it	
  would	
  lead	
  to	
  a	
  race	
  
to	
  the	
  bottom	
  effect	
  where	
  pollution	
  was	
  unfairly	
  and	
  inefficiently	
  located	
  nearer	
  
poor	
  communities.	
  Only	
  in	
  a	
  highly	
  egalitarian	
  economy	
  such	
  as	
  the	
  participatory	
  
economy	
  we	
  propose	
  does	
  it	
  appear	
  possible	
  to	
  design	
  a	
  mechanism	
  that	
  reveals	
  
accurate	
  quantitative	
  estimates	
  of	
  the	
  damage	
  from	
  pollution.	
  
	
  
	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
53
RISK	
  AND	
  INNOVATION	
  
Any	
  group	
  of	
  workers	
  who	
  can	
  submit	
  a	
  proposal	
  during	
  the	
  planning	
  procedure	
  
that	
  is	
  approved	
  as	
  socially	
  responsible,	
  i.e.	
  whose	
  social	
  benefit	
  to	
  cost	
  ratio	
  is	
  at	
  
least	
   one,	
   will	
   receive	
   the	
   inputs	
   it	
   requests	
   to	
   start	
   producing	
   when	
   the	
   year	
  
begins.	
   That	
   could	
   be	
   a	
   group	
   composed	
   mostly	
   of	
   students	
   exiting	
   the	
  
educational	
   system.	
   It	
   could	
   be	
   a	
   group	
   of	
   disgruntled	
   members	
   of	
   an	
   existing	
  
worker	
  council	
  who	
  have	
  been	
  consistently	
  outvoted	
  about	
  how	
  to	
  do	
  things,	
  and	
  
who	
  want	
  to	
  start	
  up	
  a	
  new	
  operation	
  to	
  try	
  and	
  do	
  things	
  their	
  own	
  way.	
  The	
  
problem	
   is	
   how	
   to	
   protect	
   others	
   from	
   negative	
   consequences	
   if	
   a	
   group	
   of	
  
crackpots	
   submit	
   a	
   proposal	
   that	
   looks	
   good	
   and	
   is	
   approved,	
   but	
   in	
   fact	
   is	
   a	
  
fantasy	
   because	
   they	
   will	
   not	
   be	
   able	
   to	
   comply	
   with	
   their	
   promise.	
   If	
   this	
  
happens,	
   at	
   a	
   minimum	
   resources	
   will	
   be	
   wasted,	
   and	
   in	
   all	
   likelihood	
   other	
  
worker	
  councils	
  who	
  rely	
  on	
  deliveries	
  from	
  the	
  crackpots	
  which	
  do	
  not	
  arrive	
  will	
  
be	
  unable	
  to	
  fulfil	
  their	
  plans	
  through	
  no	
  fault	
  of	
  their	
  own.	
  That	
  is	
  what	
  I	
  meant	
  
when	
  I	
  wrote	
  that	
  it	
  seems	
  wise	
  to	
  empower	
  industry	
  federations	
  to	
  verify	
  the	
  
credibility	
   of	
   new	
   groups	
   asking	
   to	
   participate	
   in	
   the	
   planning	
   process.	
   By	
  
“credible”	
  I	
  simply	
  meant	
  “not	
  obvious	
  crackpots.”	
  
I	
   sympathise	
   with	
   Erik’s	
   concern	
   that	
   industry	
   federations	
   might	
   be	
   too	
  
conservative	
   in	
   these	
   judgments,	
   and	
   act	
   like	
   old	
   fuddy	
   duddies	
   who	
   stifle	
  
creative	
  new	
  ideas.	
  And	
  I	
  would	
  look	
  kindly	
  on	
  any	
  suggestions	
  to	
  prevent	
  this	
  
from	
   happening.	
   What	
   I	
   do	
   not	
   agree	
   with	
   is	
   Erik’s	
   tendency	
   to	
   interpret	
  
democracy	
  with	
  regard	
  to	
  economic	
  system	
  design	
  as	
  “anything	
  any	
  group	
  in	
  the	
  
economy	
  wants	
  to	
  do	
  should	
  be	
  permitted	
  rather	
  than	
  disallowed.”	
  There	
  will	
  be	
  
people	
  in	
  a	
  participatory	
  economy	
  who	
  want	
  to	
  start	
  up	
  a	
  privately	
  owned	
  firm,	
  
hire	
  employees,	
  and	
  keep	
  the	
  profits.	
  When	
  a	
  solid	
  majority	
  disapprove	
  of	
  this	
  
kind	
  of	
  economic	
  relationship	
  I	
  think	
  they	
  have	
  every	
  right	
  to	
  outlaw	
  it.	
  It	
  has	
  no	
  
place	
  in	
  a	
  participatory,	
  equitable	
  economy.	
  It	
  is	
  inconsistent	
  with	
  economic	
  self-­‐
management	
  for	
  the	
  employees,	
  and	
  when	
  wages	
  commensurate	
  with	
  sacrifices	
  
are	
  not	
  forthcoming,	
  it	
  will	
  be	
  inconsistent	
  with	
  economic	
  justice	
  as	
  well.	
  Crowd	
  
sourcing	
  where	
  investors	
  earn	
  a	
  return	
  on	
  their	
  investments,	
  which	
  Erik	
  regards	
  
positively,	
   might	
   melt	
   the	
   glue	
   of	
   economic	
   justice	
   that	
   holds	
   a	
   participatory	
  
economy	
   together.	
   It	
   could	
   create	
   the	
   same	
   problem	
   the	
   Cuban	
   government	
  
creates	
   every	
   time	
   it	
   succumbs	
   to	
   pressure	
   to	
   appease	
   frustrated	
   Cuban	
  
entrepreneurial	
  desires	
  by	
  allowing	
  people	
  to	
  start	
  up	
  small	
  businesses	
  for	
  profit.	
  
When	
  a	
  trained	
  doctor	
  stops	
  doctoring	
  in	
  Cuba	
  to	
  drive	
  a	
  private	
  taxi,	
  and	
  earns	
  
ten	
  times	
  more	
  a	
  week	
  from	
  doing	
  so	
  than	
  his	
  fellow	
  doctors	
  who	
  continue	
  to	
  
work	
  in	
  public	
  clinics	
  it	
  makes	
  those	
  colleagues	
  feel	
  like	
  suckers.	
  What	
  Cuba	
  has	
  
Robin	
  Hahnel	
  
long	
  needed	
  to	
  do	
  instead	
  is	
  to	
  allow	
  frustrated	
  Cuban	
  workers	
  to	
  self-­‐manage	
  
their	
   own	
   workplaces,	
   and	
   allow	
   Cubans	
   with	
   frustrated	
   entrepreneurial	
   ideas	
  
opportunities	
  to	
  start	
  up	
  new	
  worker	
  self-­‐managed	
  enterprises	
  that	
  balance	
  jobs	
  
and	
  reward	
  effort.	
  
But	
   there	
   is	
   also	
   a	
   practical	
   problem	
   with	
   Erik’s	
   suggestions	
   about	
   risk	
   and	
  
innovation	
  when	
  applied	
  to	
  the	
  context	
  of	
  a	
  participatory	
  economy.	
  Even	
  if	
  those	
  
who	
   received	
   start-­‐up	
   funds	
   from	
   crowd	
   sourcing	
   agreed	
   that	
   the	
   enterprise	
  
would	
  be	
  run	
  according	
  to	
  participatory	
  economic	
  principles,	
  and	
  even	
  if	
  investors	
  
received	
  no	
  return	
  on	
  their	
  investment,	
  the	
  new	
  enterprise	
  would	
  have	
  to	
  obtain	
  
the	
  inputs	
  it	
  needs	
  to	
  operate	
  through	
  the	
  participatory	
  planning	
  procedure.	
  And	
  
it	
  can’t	
  do	
  this	
  without	
  being	
  certified	
  as	
  “credible.”	
  A	
  worker	
  council	
  can’t	
  buy	
  its	
  
inputs	
  with	
  funds	
  raised	
  through	
  crowd	
  sourcing	
  in	
  a	
  participatory	
  economy.	
  	
  
I	
  think	
  instead	
  what	
  is	
  needed	
  are	
  multiple	
  ways	
  for	
  groups	
  who	
  want	
  to	
  start	
  up	
  
new	
   enterprises	
   to	
   demonstrate	
   their	
   credibility	
   so	
   they	
   can	
   participate	
   in	
   the	
  
planning	
   procedure.	
   If	
   a	
   group	
   comes	
   with	
   an	
   impressive	
   display	
   of	
   crowd	
  
sourcing	
  support,	
  this	
  can	
  demonstrate	
  credibility.	
  If	
  members	
  of	
  the	
  group	
  have	
  
relevant	
  educational	
  credentials,	
  this	
  can	
  demonstrate	
  credibility.	
  If	
  members	
  of	
  
the	
  group	
  have	
  worked	
  in	
  the	
  industry	
  elsewhere	
  this	
  demonstrates	
  credibility.	
  
Another	
  option	
  would	
  be	
  to	
  create	
  a	
  review	
  board	
  separate	
  from	
  all	
  the	
  industry	
  
federations	
   where	
   groups	
   who	
   were	
   turned	
   down	
   for	
   accreditation	
   by	
   their	
  
industry	
  federation	
  could	
  appeal	
  for	
  approval.	
  We	
  could	
  even	
  order	
  this	
  board	
  to	
  
overturn	
  rulings	
  until	
  the	
  number	
  of	
  new	
  firms	
  they	
  approved	
  who	
  turned	
  out	
  to	
  
be	
  crackpots	
  reached	
  some	
  specified	
  percentage	
  –	
  demonstrating	
  that	
  we	
  were	
  
no	
  longer	
  being	
  too	
  conservative	
  in	
  accrediting	
  start-­‐ups.	
  
It	
  seems	
  to	
  me	
  better	
  to	
  think	
  along	
  these	
  lines	
  than	
  to	
  think	
  about	
  adding	
  a	
  dose	
  
of	
  capitalist	
  investment	
  to	
  a	
  participatory	
  economy.	
  Not	
  only	
  is	
  this	
  a	
  practical	
  
impossibility	
   because	
   of	
   the	
   way	
   all	
   enterprises	
   must	
   obtain	
   their	
   inputs,	
   it	
   is	
  
unnecessary	
  and	
  destructive	
  of	
  equitable	
  cooperation.	
  
	
  
THE	
  ORGANISATION	
  OF	
  WORK	
  AND	
  PAY	
  
Erik	
   and	
   I	
   are	
   clearly	
   in	
   broad	
   agreement	
   on	
   these	
   issues:	
   He	
   writes:	
   “I	
   fully	
  
support	
  the	
  central	
  ideas	
  of	
  Robin’s	
  framework	
  for	
  both	
  the	
  organisation	
  of	
  work	
  
and	
   for	
   pay:	
   balanced	
   jobs	
   and	
   pay	
   determined	
   by	
   effort	
   rather	
   than	
  
contribution.”	
   As	
   I	
   noted	
   earlier,	
   many	
   prominent	
   market	
   socialists	
   do	
   not	
  
support	
  either	
  balancing	
  jobs	
  or	
  pay	
  according	
  to	
  effort	
  rather	
  than	
  contribution,	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
55
so	
  it	
  is	
  gratifying	
  to	
  have	
  an	
  ally	
  on	
  these	
  issues	
  which	
  are	
  highly	
  contested	
  at	
  this	
  
point	
  even	
  among	
  those	
  who	
  see	
  themselves	
  as	
  staunch	
  “leftists.”	
  
Moreover,	
  since	
  I	
  was	
  never	
  under	
  any	
  illusions	
  that	
  balancing	
  jobs	
  and	
  rewarding	
  
effort	
  would	
  always	
  be	
  easy	
  to	
  achieve,	
  I	
  welcome	
  discussion	
  about	
  difficulties	
  
that	
  will	
  arise	
  in	
  what	
  Erik	
  calls	
  “the	
  practical	
  implementation	
  of	
  the	
  ideals.”	
  
As	
   I	
   see	
   it	
   there	
   are	
   two	
   practical	
   problems:	
   (1)	
   There	
   will	
   be	
   people	
   in	
   a	
  
participatory	
  economy	
  who	
  disagree	
  with	
  the	
  principles.	
  What	
  does	
  one	
  do	
  when	
  
workers	
  in	
  an	
  enterprise	
  want	
  to	
  reward	
  contribution	
  rather	
  than	
  effort?	
  What	
  
does	
  one	
  do	
  when	
  workers	
  in	
  an	
  enterprise	
  don’t	
  want	
  to	
  balance	
  jobs?	
  (2)	
  Even	
  
if	
  everyone	
  did	
  agree	
  on	
  balancing	
  jobs	
  and	
  rewarding	
  effort,	
  sometimes	
  it	
  will	
  be	
  
difficult	
  to	
  accomplish	
  because	
  effort,	
  empowerment,	
  and/or	
  desirability	
  can	
  be	
  
difficult	
  to	
  measure.	
  
Regarding	
  the	
  first	
  problem:	
  Supporters	
  of	
  participatory	
  economics	
  recommend	
  
that	
  worker	
  councils	
  try	
  to	
  balance	
  jobs	
  and	
  reward	
  effort	
  as	
  best	
  they	
  can,	
  taking	
  
practical	
   obstacles	
   into	
   account.	
   However,	
   we	
   propose	
   to	
   leave	
   this	
   up	
   to	
  
individual	
  worker	
  councils	
  to	
  work	
  out	
  as	
  they	
  see	
  fit,	
  and	
  we	
  would	
  oppose	
  any	
  
proposals	
  authorising	
  anyone	
  outside	
  a	
  workplace	
  to	
  impose	
  these	
  policies	
  on	
  a	
  
workplace	
  where	
  a	
  majority	
  of	
  members	
  did	
  not	
  wish	
  to	
  implement	
  them.	
  This	
  is	
  
why	
   we	
   expect	
   that	
   different	
   worker	
   councils	
   will	
   go	
   about	
   things	
   quite	
  
differently.	
  For	
  example,	
  some	
  may	
  decide	
  to	
  do	
  just	
  what	
  Erik	
  suggests	
  might	
  
prove	
  reasonable	
  in	
  some	
  cases	
  –	
  pay	
  everyone	
  the	
  same	
  rate	
  of	
  pay	
  per	
  hour	
  
they	
  work.	
  
What	
  does	
  one	
  do	
  then	
  when	
  a	
  majority	
  of	
  members	
  of	
  a	
  worker	
  council	
  want	
  to	
  
reward	
  contribution	
  rather	
  than	
  effort?	
  What	
  does	
  one	
  do	
  when	
  a	
  majority	
  don’t	
  
want	
   to	
   balance	
   jobs?	
   And,	
   “yes,”	
   it	
   seems	
   likely	
   that	
   in	
   the	
   early	
   years	
   of	
   a	
  
participatory	
   economy	
   there	
   will	
   be	
   worker	
   councils	
   where	
   those	
   favouring	
  
balancing	
   jobs	
   and	
   rewarding	
   effort	
   will	
   be	
   in	
   the	
   minority.	
   To	
   effect	
   a	
   full	
  
transition	
  to	
  an	
  economy	
  that	
  is	
  truly	
  based	
  on	
  economic	
  justice	
  and	
  democracy,	
  
at	
   least	
   two	
   things	
   will	
   be	
   necessary:	
   First	
   and	
   foremost,	
   other	
   workers	
   in	
   the	
  
same	
  enterprise	
  must	
  argue	
  with	
  these	
  workmates,	
  explaining	
  to	
  them	
  why	
  failing	
  
to	
   balance	
   jobs	
   will	
   erode	
   effectively	
   equal	
   rights	
   to	
   participate	
   in	
   workplace	
  
decisions,	
   and	
   why	
   rewarding	
   contribution	
   rather	
   than	
   effort	
   will	
   be	
   unfair	
   to	
  
some	
  members.	
  Secondly,	
  political	
  groups	
  who	
  champion	
  economic	
  democracy	
  
and	
  justice	
  must	
  wage	
  fierce	
  ideological	
  campaigns	
  on	
  these	
  subjects.	
  There	
  must	
  
be	
  an	
  on-­‐going	
  national	
  dialogue	
  on	
  these	
  issues	
  driven	
  by	
  political	
  parties	
  and	
  
interest	
  groups,	
  facilitated	
  by	
  the	
  formal	
  political	
  and	
  educational	
  systems,	
  until	
  
Robin	
  Hahnel	
  
what	
  may	
  start	
  as	
  a	
  slim	
  majority	
  who	
  support	
  these	
  principles	
  nationwide	
  has	
  
become	
   an	
   overwhelming	
   majority.	
   It	
   will	
   be	
   of	
   great	
   importance	
   that	
   such	
   a	
  
national	
  debate	
  form	
  the	
  backdrop	
  for	
  discussions	
  that	
  will	
  rage	
  inside	
  individual	
  
worker	
   councils.35
	
  But	
   we	
   believe,	
   and	
   I	
   suspect	
   Erik	
   agrees,	
   any	
   attempt	
   to	
  
impose	
  these	
  principles	
  on	
  unwilling	
  workers	
  will	
  only	
  prove	
  counterproductive.36
	
  
Regarding	
  measuring	
  effort:	
  I	
  admit	
  it	
  is	
  sometimes	
  difficult	
  to	
  measure	
  effort,	
  or	
  
sacrifice,	
  and	
  confine	
  myself	
  only	
  to	
  clarifying	
  one	
  issue	
  that	
  is	
  understandably	
  
confusing.	
  For	
  interested	
  readers,	
  this	
  problem	
  is	
  addressed	
  a	
  greater	
  length	
  in	
  Of	
  
the	
  People,	
  By	
  the	
  People:	
  The	
  Case	
  for	
  a	
  Participatory	
  Economy.	
  	
  
Erik	
  writes:	
  	
  
Different	
  people	
  can	
  experience	
  the	
  exact	
  same	
  intensity	
  of	
  work	
  as	
  very	
  different	
  levels	
  
of	
  burden.	
  	
  Some	
  professors	
  find	
  sitting	
  at	
  a	
  desk	
  and	
  writing	
  intensively	
  for	
  eight	
  hours	
  
exhilarating;	
  others	
  find	
  it	
  torture.	
  
And:	
  
I	
  would	
  find	
  it	
  an	
  excruciating	
  burden	
  to	
  collect	
  tolls	
  at	
  a	
  bridge	
  four	
  hours	
  a	
  day,	
  but	
  I	
  
find	
  it	
  a	
  pleasure	
  to	
  write	
  and	
  lecture	
  60	
  hours	
  a	
  week.	
  Which	
  involves	
  more	
  “effort”?	
  I	
  
would	
  rather	
  work	
  60	
  hours	
  a	
  week	
  at	
  my	
  job	
  than	
  20	
  hours	
  a	
  week	
  as	
  a	
  toll	
  collector	
  
even	
   for	
   the	
   same	
   overall	
   pay,	
   but	
   many	
   toll	
   collectors	
   would	
   find	
   it	
   an	
   enormous	
  
burden	
  to	
  spend	
  as	
  many	
  hours	
  a	
  week	
  as	
  I	
  do	
  doing	
  the	
  “work”	
  I	
  do.
37
	
  
Consider	
   this:	
   Just	
   as	
   some	
   people	
   like	
   apples	
   more	
   than	
   oranges	
   while	
   other	
  
people	
  like	
  oranges	
  more	
  than	
  apples,	
  some	
  people	
  like	
  mowing	
  lawns	
  more	
  than	
  
washing	
   windows	
   (me)	
   while	
   other	
   people	
   like	
   washing	
   windows	
   more	
   than	
  
mowing	
   lawns	
   (my	
   eldest	
   son).	
   It	
   would	
   have	
   been	
   crazy	
   –	
   economists	
   call	
   it	
  
“inefficient”	
  –	
  for	
  me	
  to	
  have	
  washed	
  the	
  windows	
  and	
  my	
  son	
  to	
  have	
  mowed	
  
35
	
  Popular	
  opinion	
  in	
  Cuba	
  about	
  what	
  constituted	
  fair	
  pay	
  was	
  changed	
  dramatically	
  in	
  less	
  than	
  ten	
  
years	
  after	
  the	
  revolution	
  by	
  just	
  the	
  kind	
  of	
  ideological	
  and	
  educational	
  campaigns	
  I	
  am	
  talking	
  about.	
  
By	
  the	
  late	
  1960s	
  most	
  Cubans	
  believed	
  that	
  those	
  who	
  had	
  the	
  good	
  fortune	
  to	
  receive	
  more	
  education	
  
owed	
  society	
  more,	
  rather	
  than	
  being	
  owed	
  more	
  by	
  society.	
  Unfortunately,	
  attitudes	
  about	
  economic	
  
justice	
  may	
  have	
  retrogressed	
  somewhat	
  in	
  Cuba	
  since	
  then.	
  
36
	
  As	
  indicated	
  previously,	
  I	
  do	
  not	
  believe	
  this	
  principle	
  should	
  be	
  applied	
  to	
  minorities	
  who	
  want	
  to	
  set	
  
up	
  private	
  businesses	
  for	
  profit.	
  A	
  participatory	
  economy	
  is	
  an	
  economy	
  where	
  the	
  role	
  of	
  employer	
  is	
  
outlawed,	
  just	
  as	
  the	
  role	
  of	
  slave	
  owner	
  has	
  been	
  outlawed	
  everywhere	
  in	
  the	
  United	
  States	
  since	
  June	
  
19,	
  1965.	
  But	
  as	
  long	
  as	
  every	
  worker	
  in	
  a	
  worker	
  council	
  has	
  one	
  vote,	
  I	
  believe	
  each	
  worker	
  council	
  
should	
  be	
  permitted	
  to	
  decide	
  how	
  to	
  organize	
  work	
  and	
  how	
  to	
  reward	
  one	
  another	
  as	
  they	
  see	
  fit.	
  
37
	
  David	
   Kotz	
   raised	
   similar	
   concerns	
   in	
   his	
   contribution	
   to	
   a	
   Symposium	
   on	
   the	
   future	
   of	
   socialism	
  
published	
  in	
  Science	
  &	
  Society	
  66(1),	
  Spring	
  2002.	
  
	
  	
  
In	
  Defence	
  of	
  Participatory	
  Economics	
  
57
the	
  lawn	
  at	
  our	
  house.	
  It	
  would	
  have	
  been	
  less	
  crazy,	
  but	
  nonetheless	
  still	
  crazy	
  
for	
   each	
   of	
   us	
   to	
   mow	
   and	
   wash	
   half	
   the	
   time.	
   So	
   of	
   course	
   we	
   agreed	
   that	
   I	
  
would	
  mow	
  four	
  hours	
  a	
  week	
  and	
  he	
  would	
  wash	
  four	
  hours	
  a	
  week	
  –	
  and	
  our	
  
jobs	
  were	
  balanced	
  for	
  both	
  desirability	
  and	
  empowerment!	
  
What’s	
  the	
  trick?	
  Mowing	
  lawns	
  and	
  washing	
  windows	
  are	
  more	
  or	
  less	
  equally	
  
unempowering.	
   Mowing	
   lawns	
   and	
   washing	
   windows	
   are	
   more	
   or	
   less	
   equally	
  
undesirable	
  for	
  the	
  average	
  person.	
  Clearly	
  they	
  are	
  not	
  equally	
  undesirable	
  for	
  
either	
   me	
   or	
   my	
   son;	
   and	
   an	
   hour	
   spent	
   mowing	
   would	
   have	
   been	
   a	
   bigger	
  
sacrifice	
  for	
  my	
  son	
  than	
  for	
  me,	
  just	
  as	
  an	
  hour	
  of	
  washing	
  windows	
  would	
  have	
  
been	
  a	
  bigger	
  sacrifice	
  for	
  me	
  than	
  for	
  him.	
  But	
  if	
  you	
  advertise	
  window	
  washing	
  
and	
  lawn	
  mowing	
  jobs	
  for	
  the	
  same	
  rate	
  of	
  pay	
  the	
  line	
  of	
  applicants	
  for	
  each	
  job	
  
would	
  be	
  roughly	
  the	
  same	
  length,	
  and	
  that	
  is	
  the	
  sense	
  in	
  which	
  we	
  call	
  them	
  
equally	
  undesirable	
  forms	
  of	
  human	
  activity	
  (as	
  compared	
  to	
  leisure).	
  	
  
Erik	
  should	
  clearly	
  not	
  apply	
  for	
  a	
  job	
  collecting	
  tolls	
  in	
  a	
  participatory	
  economy,	
  
any	
  more	
  than	
  I	
  should	
  have	
  washed	
  windows	
  at	
  my	
  house.	
  However,	
  because	
  on	
  
average	
   people	
   would	
   rather	
   write	
   and	
   lecture	
   than	
   collect	
   tolls	
   Erik	
   should	
   be	
  
compensated	
  somewhat	
  less	
  for	
  an	
  hour	
  of	
  professor	
  work	
  than	
  a	
  toll	
  worker	
  is	
  
compensated	
   for	
   an	
   hour	
   of	
   toll	
   collection	
   –	
   whether	
   or	
   not	
   practical	
  
complications	
  make	
  this	
  easy	
  to	
  measure	
  and	
  achieve	
  in	
  a	
  participatory	
  economy.	
  
Nor	
  should	
  we	
  be	
  overly	
  pessimistic	
  about	
  our	
  ability	
  to	
  measure	
  differences	
  in	
  
desirability.	
   When	
   applicants	
   are	
   few,	
   a	
   job	
   is	
   probably	
   less	
   desirable	
   than	
  
average,	
   and	
   some	
   less	
   desirable	
   tasks	
   need	
   to	
   be	
   replaced	
   by	
   more	
   desirable	
  
ones;	
   and	
   when	
   applicants	
   are	
   many	
   a	
   job	
   is	
   probably	
   more	
   desirable	
   than	
  
average,	
  and	
  some	
  desirable	
  tasks	
  need	
  to	
  be	
  replaced	
  by	
  less	
  desirable	
  ones.	
  
	
  
CONCLUSION	
  
The	
  initial	
  purpose	
  of	
  elaborating	
  the	
  model	
  of	
  a	
  participatory	
  economy	
  was	
  to	
  
demonstrate	
  concretely	
  that	
  at	
  least	
  in	
  theory,	
  the	
  presumption	
  that	
  had	
  become	
  
increasingly	
   widespread	
   even	
   among	
   leftists,	
   that	
   we	
   must	
   choose	
   between	
  
authoritarian	
  planning	
  or	
  a	
  market	
  economy,	
  is	
  wrong.	
  There	
  is	
  a	
  third	
  alternative	
  
–	
  which	
  turns	
  out	
  to	
  look	
  very	
  much	
  like	
  the	
  kind	
  of	
  economy	
  socialists	
  envisioned	
  
long	
  ago,	
  but	
  were	
  only	
  able	
  to	
  describe	
  in	
  a	
  general	
  way	
  that	
  many	
  no	
  longer	
  
found	
   convincing.	
   But	
   the	
   model	
   of	
   a	
   participatory	
   economy	
   -­‐-­‐	
   which	
   I	
   believe	
  
demonstrates	
  that	
  the	
  original	
  socialist	
  vision	
  was	
  not	
  a	
  pipe	
  dream,	
  but	
  perfectly	
  
possible	
  -­‐-­‐	
  should	
  not	
  be	
  confused	
  with	
  a	
  transition	
  strategy,	
  much	
  less	
  a	
  political	
  
programme.	
  A	
  participatory	
  economy	
  is	
  only	
  a	
  coherent	
  answer	
  to	
  how	
  might	
  a	
  
Robin	
  Hahnel	
  
full-­‐fledged	
   system	
   of	
   equitable	
   cooperation	
   function	
   –	
   without	
   recourse	
   to	
  
authoritarian	
   planning	
   or	
   markets.	
   How	
   to	
   go	
   about	
   replacing	
   the	
   increasingly	
  
destructive	
  economics	
  of	
  competition	
  and	
  greed	
  with	
  an	
  economics	
  of	
  equitable	
  
cooperation	
  is	
  a	
  different,	
  more	
  difficult	
  question.	
  
Part	
  Two
SOCIALISM	
  AND	
  REAL	
  UTOPIAS	
  
	
  
Erik	
  Olin	
  Wright38
	
  
	
  
	
  
In	
   what	
   follows	
   I	
   will	
   outline	
   a	
   general	
   way	
   of	
   thinking	
   about	
   alternatives	
   to	
  
capitalism	
  that	
  is	
  anchored	
  in	
  two	
  ideas:	
  real	
  utopias	
  and	
  socialism.	
  Real	
  Utopia	
  
identifies	
   institutional	
   designs	
   that	
   simultaneously	
   attempt	
   to	
   embody	
  
emancipatory	
  ideals	
  in	
  a	
  serious	
  way	
  while	
  still	
  being	
  attentive	
  to	
  the	
  practical	
  
problems	
  of	
  viability	
  and	
  sustainability.	
  Socialism,	
  of	
  course,	
  is	
  a	
  venerable	
  term	
  
associated	
  with	
  anti-­‐capitalist	
  struggles,	
  but	
  to	
  many	
  critics	
  of	
  capitalism	
  it	
  has	
  
lost	
  its	
  appeal,	
  both	
  because	
  of	
  its	
  association	
  with	
  the	
  authoritarian	
  state	
  run	
  
economic	
   systems	
   of	
   the	
   20th
	
   century	
   and	
   its	
   association	
   with	
   many	
   political	
  
parties	
   in	
   developed	
   capitalist	
   countries	
   that	
   have	
   abandoned	
   any	
   ambition	
   of	
  
transcending	
  capitalism.	
  In	
  spite	
  of	
  this,	
  because	
  of	
  its	
  clear	
  historical	
  association	
  
with	
  anti-­‐capitalism,	
  I	
  will	
  propose	
  a	
  reconstruction	
  of	
  the	
  idea	
  of	
  socialism	
  that,	
  
when	
  combined	
  with	
  the	
  idea	
  of	
  real	
  utopias,	
  can	
  offer	
  a	
  framework	
  for	
  both	
  a	
  
vision	
  beyond	
  capitalism	
  and	
  the	
  practical	
  work	
  of	
  moving	
  in	
  that	
  direction.	
  
To	
  set	
  the	
  stage	
  for	
  this	
  discussion,	
  it	
  will	
  be	
  helpful	
  to	
  begin	
  by	
  briefly	
  examining	
  
the	
  very	
  idea	
  of	
  an	
  “alternative”	
  to	
  the	
  existing	
  social	
  world.	
  	
  This	
  will	
  be	
  followed	
  
by	
   a	
   discussion	
   of	
   a	
   particular	
   way	
   of	
   thinking	
   about	
   socialism	
   in	
   which	
   the	
  
“social”	
   in	
   socialism	
   is	
   taken	
   seriously.	
   We	
   will	
   then	
   turn	
   to	
   the	
   idea	
   of	
   “real	
  
utopias”	
   as	
   a	
   way	
   framing	
   the	
   problem	
   of	
   transforming	
   –	
   and	
   transcending	
   –	
  
capitalism.	
  
	
  
THINKING	
  ABOUT	
  SYSTEMIC	
  ALTERNATIVES	
  
One	
  of	
  the	
  striking	
  things	
  about	
  human	
  imagination	
  is	
  our	
  capacity	
  to	
  think	
  that	
  
things	
   could	
   be	
   otherwise,	
   whether	
   the	
   objects	
   of	
   such	
   imagination	
   are	
   our	
  
38
	
  Parts	
   of	
   this	
   essay	
   are	
   taken	
   from	
   “Transforming	
   Capitalism	
   through	
   Real	
   Utopias,”	
   American	
  
Sociological	
  Review,	
  February,	
  2012.	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
61
immediate	
   life	
   circumstances	
   or	
   the	
   broader	
   society	
   in	
   which	
   we	
   live.	
  39
	
  Such	
  
imagination,	
  fuelled	
  by	
  deep	
  longing,	
  easily	
  drifts	
  into	
  wishful	
  thinking,	
  fantasies	
  
of	
   what	
   a	
   better	
   world	
   would	
   be	
   like	
   unconstrained	
   by	
   difficult	
   questions	
   of	
  
whether	
   such	
   imagined	
   alternatives	
   would	
   actually	
   work.	
   Wishful	
   thinking	
   can	
  
help	
   provide	
   motivation	
   for	
   action,	
   but	
   it	
   can	
   also	
   lead	
   to	
   dead	
   ends	
   and	
  
disillusion.	
   What	
   we	
   need,	
   then,	
   is	
   utopian	
   longing	
   melded	
   to	
   realist	
   thinking	
  
about	
  the	
  dilemmas	
  and	
  constraints	
  of	
  building	
  viable	
  alternatives	
  to	
  the	
  world	
  as	
  
it	
  is.	
  
My	
   strategy	
   for	
   exploring	
   these	
   questions	
   is	
   rooted	
   in	
   three	
   very	
   general	
  
considerations	
   about	
   the	
   nature	
   of	
   social	
   systems	
   and	
   the	
   problem	
   of	
  
transforming	
  them.	
  
First,	
  what	
  precisely	
  does	
  the	
  word	
  “system”	
  mean	
  when	
  we	
  talk	
  about	
  “social	
  
systems”?	
   This	
   is	
   a	
   big	
   theme	
   in	
   social	
   theory,	
   one	
   filled	
   with	
   opaque	
  
formulations.	
   For	
   present	
   purposes,	
   a	
   contrast	
   between	
   two	
   metaphors	
   for	
  
thinking	
  about	
  systems	
  can	
  be	
  helpful.	
  One	
  metaphor	
  conceives	
  of	
  a	
  society	
  as	
  
analogous	
   to	
   an	
   organism	
   in	
   which	
   all	
   of	
   its	
   parts	
   are	
   tightly	
   integrated	
   into	
   a	
  
functioning	
  whole.	
  There	
  is	
  some	
  degree	
  of	
  freedom	
  and	
  variability	
  in	
  the	
  way	
  the	
  
parts	
   function,	
   but	
   basically	
   the	
   component	
   parts	
   of	
   an	
   organism	
   constitute	
   a	
  
totality	
  of	
  functional	
  interdependency.	
  If	
  you	
  remove	
  critical	
  parts	
  of	
  the	
  whole	
  or	
  
try	
  to	
  dramatically	
  transform	
  them,	
  the	
  whole	
  disintegrates.	
  
An	
  alternative	
  metaphor	
  is	
  that	
  a	
  social	
  system	
  is	
  more	
  like	
  an	
  ecosystem.	
  Think	
  
of	
  society	
  like	
  a	
  pond.	
  A	
  pond	
  contains	
  many	
  species	
  of	
  fish,	
  insects,	
  and	
  plants	
  
within	
  a	
  specific	
  watershed,	
  terrain	
  and	
  climate.	
  Sometimes	
  an	
  alien	
  species	
  gets	
  
introduced	
   into	
   the	
   ecosystem	
   and	
   it	
   thrives;	
   sometimes	
   it	
   does	
   not.	
   Some	
  
ecosystems	
   are	
   quite	
   fragile	
   and	
   easily	
   disrupted;	
   others	
   can	
   tolerate	
   quite	
  
significant	
  intrusions	
  of	
  invasive	
  species	
  without	
  being	
  seriously	
  affected.	
  If	
  you	
  
think	
   of	
   society	
   as	
   an	
   ecosystem,	
   it	
   still	
   is	
   the	
   case	
   that	
   everything	
   is	
  
interdependent,	
   everything	
   affects	
   everything	
   in	
   one	
   way	
   or	
   another,	
   but	
   the	
  
system	
   does	
   not	
   constitute	
   a	
   tightly	
   functionalised	
   totality.	
   This	
   opens	
   up	
   a	
  
different	
  way	
  of	
  imagining	
  alternatives.	
  One	
  way	
  to	
  transform	
  an	
  ecosystem	
  is	
  to	
  
introduce	
  an	
  alien	
  species	
  that	
  initially	
  finds	
  a	
  niche	
  and	
  then	
  gradually	
  increases,	
  
39
	
  For	
   a	
   superb	
   discussion	
   of	
   the	
   utopian	
   imagination,	
   see	
   Ruth	
   Levitas,	
   Utopia	
   as	
   Method	
   (Palgrave	
  
MacMillan,	
  2013),	
  particularly	
  her	
  discussion	
  of	
  Ernst	
  Bloch.	
  Bloch,	
  Levitas	
  writes,	
  “posited	
  the	
  existence	
  
of	
  a	
  utopian	
  impulse,	
  an	
  anthropological	
  given	
  that	
  underpins	
  the	
  human	
  propensity	
  to	
  long	
  for	
  and	
  
imagine	
  a	
  life	
  otherwise.”	
  
Erik	
  Olin	
  Wright	
  
potentially	
  even	
  displacing	
  certain	
  other	
  species.	
  The	
  idea	
  of	
  real	
  utopias	
  as	
  a	
  way	
  
of	
  transforming	
  a	
  society	
  is	
  more	
  in	
  line	
  with	
  the	
  ecosystem	
  view	
  of	
  society	
  than	
  
the	
  organismic	
  view.	
  
The	
  second	
  general	
  comment	
  about	
  alternatives	
  concerns	
  two	
  contrasting	
  ways	
  
of	
  thinking	
  about	
  how	
  to	
  make	
  the	
  world	
  a	
  better	
  place	
  –	
  ameliorative	
  reforms	
  
and	
  real	
  utopian	
  transformations.	
  Ameliorative	
  reforms	
  involve	
  looking	
  at	
  existing	
  
institutions,	
   identifying	
   their	
   flaws	
   and	
   proposing	
   improvements	
   that	
   can	
   be	
  
enacted.	
   These	
   improvements	
   matter	
   –	
   they	
   reduce	
   harms	
   and	
   enhance	
  
flourishing	
   –	
   but	
   they	
   are	
   limited	
   to	
   those	
   improvements	
   that	
   directly	
   act	
   on	
  
existing	
  structures	
  and	
  move	
  one	
  step	
  beyond.	
  Real	
  utopias,	
  in	
  contrast,	
  envision	
  
the	
   contours	
   of	
   an	
   alternative	
   social	
   world	
   that	
   embodies	
   emancipatory	
   ideals	
  
and	
  then	
  look	
  for	
  social	
  innovations	
  we	
  can	
  create	
  in	
  the	
  world	
  as	
  it	
  is	
  that	
  move	
  
us	
  towards	
  that	
  destination.	
  Now	
  sometimes	
  this	
  turns	
  out	
  to	
  be	
  the	
  same	
  as	
  an	
  
ameliorative	
   reform,	
   but	
   often	
   ameliorative	
   reforms	
   do	
   not	
   constitute	
   building	
  
blocks	
  of	
  an	
  emancipatory	
  alternative.	
  Consider,	
  for	
  example,	
  affirmative	
  action	
  
policies	
  around	
  race.	
  Affirmative	
  action	
  is	
  one	
  of	
  the	
  critical	
  policies	
  for	
  combating	
  
the	
  pernicious	
  effects	
  of	
  on-­‐going	
  racism,	
  not	
  merely	
  the	
  legacies	
  of	
  racism	
  in	
  the	
  
past.	
  But	
  affirmative	
  action	
  is	
  not	
  itself	
  a	
  building	
  block	
  of	
  a	
  world	
  of	
  racial	
  justice	
  
and	
  emancipation.	
  It	
  is	
  a	
  necessary	
  means	
  to	
  neutralise	
  severe	
  harms	
  of	
  racism	
  in	
  
the	
  world	
  as	
  it	
  exists,	
  but	
  it	
  is	
  not	
  itself	
  a	
  constitutive	
  element	
  of	
  the	
  alternative	
  
that	
   we	
   seek.	
   The	
   same	
   could	
   be	
   said	
   of	
   food	
   stamps:	
   it	
   is	
   a	
   critical	
   policy	
   for	
  
alleviating	
  hunger	
  generated	
  by	
  brutal	
  forms	
  of	
  inequality	
  generated	
  in	
  American	
  
capitalism,	
  but	
  the	
  imagined	
  world	
  of	
  social	
  emancipation	
  beyond	
  capitalism	
  is	
  
not	
  one	
  characterised	
  by	
  a	
  massive	
  expansion	
  of	
  food	
  stamps	
  for	
  all.	
  Real	
  Utopian	
  
transformations,	
  in	
  contrast,	
  consist	
  of	
  building	
  elements	
  of	
  the	
  alternative	
  world	
  
we	
  seek	
  in	
  the	
  world	
  as	
  it	
  is.	
  
Finally,	
  there	
  is	
  the	
  difficult	
  problem	
  of	
  deciding	
  how	
  much	
  concrete	
  detail	
  to	
  try	
  
to	
  specify	
  in	
  exploring	
  the	
  alternative	
  social	
  system	
  of	
  our	
  utopian	
  longing.	
  One	
  
impulse	
   is	
   try	
   to	
   create	
   a	
   detailed	
   account	
   of	
   the	
   critical	
   institutions	
   of	
   an	
  
alternative	
  system	
  and	
  making	
  arguments	
  about	
  how	
  these	
  would	
  actually	
  work.	
  
This	
  can	
  be	
  in	
  the	
  spirit	
  of	
  trying	
  to	
  paint	
  a	
  vivid,	
  compelling	
  picture	
  of	
  what	
  it	
  
would	
   be	
   like	
   to	
   live	
   in	
   such	
   an	
   alternative	
   world	
   rather	
   than	
   providing	
   a	
   rigid	
  
recipe	
  of	
  how	
  to	
  build	
  a	
  new	
  society,	
  but	
  often	
  such	
  efforts	
  look	
  something	
  like	
  a	
  
contrived	
   blueprint	
   for	
   emancipatory	
   institutions	
   and	
   practices.	
   An	
   alternative	
  
impulse	
  is	
  to	
  enunciate	
  the	
  basic	
  values	
  that	
  animate	
  the	
  search	
  for	
  alternatives	
  
and	
  the	
  core	
  principles	
  of	
  institutional	
  design	
  that	
  would	
  facilitate	
  a	
  realisation	
  of	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
63
those	
  values,	
  but	
  not	
  attempt	
  a	
  comprehensive,	
  integrated	
  design	
  model	
  of	
  the	
  
alternative	
  system	
  as	
  a	
  whole.	
  
Both	
  of	
  these	
  strategies	
  have	
  value.	
  The	
  detailed	
  model	
  building	
  strategy	
  is	
  useful	
  
and	
   sometimes	
   inspiring,	
   so	
   long	
   as	
   one	
   treats	
   these	
   as	
   speculative	
   ideas	
   to	
  
inform	
   the	
   messy	
   trial-­‐and-­‐error	
   experimentation	
   of	
   emancipatory	
   social	
  
transformation	
   rather	
   than	
   blueprints.	
   The	
   more	
   open-­‐ended	
   discussion	
   of	
  
general	
  principles	
  and	
  values	
  can	
  help	
  give	
  us	
  a	
  sense	
  of	
  the	
  direction	
  we	
  want	
  to	
  
move	
  and	
  provide	
  a	
  basis	
  for	
  critical	
  evaluation	
  of	
  our	
  experiments,	
  but	
  provides	
  
less	
   clarity	
   of	
   what	
   it	
   might	
   be	
   like	
   to	
   live	
   in	
   the	
   destination	
   itself.	
   This	
   is	
   the	
  
strategy	
  I	
  will	
  pursue	
  here.	
  
	
  
A	
  SOCIAL	
  SOCIALISM	
  
Both	
  social	
  democracy	
  and	
  socialism	
  contain	
  the	
  word	
  “social”,	
  but	
  generally	
  this	
  
term	
   is	
   invoked	
   in	
   a	
   loose	
   and	
   ill-­‐defined	
   way.	
   	
   The	
   suggestion	
   is	
   of	
   a	
   political	
  
programme	
  committed	
  to	
  the	
  broad	
  welfare	
  of	
  society	
  rather	
  than	
  the	
  narrow	
  
interests	
   of	
   particular	
   elites.	
   Sometimes,	
   especially	
   in	
   more	
   radical	
   versions	
   of	
  
socialist	
  discourse,	
  “social	
  ownership”	
  of	
  the	
  means	
  of	
  production	
  is	
  invoked	
  as	
  a	
  
contrast	
  to	
  “private	
  ownership,”	
  but	
  in	
  practice	
  this	
  has	
  generally	
  been	
  collapsed	
  
into	
   state	
   ownership,	
   and	
   the	
   term	
   social	
   itself	
   ends	
   up	
   doing	
   relatively	
   little	
  
analytical	
  work	
  in	
  the	
  elaboration	
  of	
  the	
  political	
  programme.	
  What	
  I	
  will	
  argue	
  is	
  
that	
  the	
  social	
  in	
  social	
  democracy	
  and	
  socialism	
  can	
  be	
  used	
  to	
  identify	
  a	
  cluster	
  
of	
   principles	
   and	
   visions	
   of	
   change	
   that	
   differentiate	
   socialism	
   and	
   social	
  
democracy	
  from	
  both	
  the	
  capitalist	
  project	
  of	
  economic	
  organisation	
  and	
  what	
  
could	
  be	
  called	
  a	
  purely	
  statist	
  response	
  to	
  capitalism.	
  
At	
   the	
   centre	
   of	
   the	
   analysis	
   is	
   a	
   power-­‐centred	
   framework	
   for	
   understanding	
  
capitalism	
   and	
   its	
   alternatives.	
   Power	
   is	
   an	
   especially	
   elusive	
   and	
   contested	
  
concept	
  in	
  social	
  theory,	
  often	
  formulated	
  in	
  ways	
  that	
  make	
  it	
  very	
  difficult	
  to	
  
use	
  in	
  concrete	
  discussions	
  of	
  institutions	
  and	
  their	
  transformation.	
  In	
  the	
  present	
  
context,	
  I	
  will	
  adopt	
  a	
  deliberately	
  stripped-­‐down	
  concept	
  of	
  power:	
  power	
  is	
  the	
  
capacity	
  to	
  do	
  things	
  in	
  the	
  world,	
  to	
  produce	
  effects.	
  This	
  is	
  what	
  might	
  be	
  called	
  
an	
   “agent-­‐centred”	
   notion	
   of	
   power:	
   people,	
   both	
   acting	
   individually	
   and	
  
collectively,	
  use	
  power	
  to	
  accomplish	
  things.	
  
With	
  this	
  broad	
  definition	
  of	
  power,	
  we	
  can	
  then	
  distinguish	
  three	
  kinds	
  of	
  power	
  
that	
  are	
  deployed	
  within	
  economic	
  systems:	
  economic	
  power,	
  rooted	
  in	
  control	
  
over	
   the	
   use	
   of	
   economic	
   resources;	
   state	
   power,	
   rooted	
   in	
   control	
   over	
   rule	
  
Erik	
  Olin	
  Wright	
  
making	
   and	
   rule	
   enforcing	
   over	
   territory;	
   and	
   what	
   I	
   will	
   term	
   social	
   power,	
  
rooted	
   in	
   the	
   capacity	
   to	
   mobilise	
   people	
   for	
   cooperative,	
   voluntary	
   collective	
  
actions.	
   Expressed	
   as	
   a	
   mnemonic	
   slogan,	
   you	
   can	
   get	
   people	
   to	
   do	
   things	
   by	
  
bribing	
  them,	
  forcing	
  them,	
  or	
  persuading	
  them.	
  	
  Every	
  complex	
  economic	
  system	
  
involves	
  all	
  three	
  forms	
  of	
  power,	
  connected	
  in	
  different	
  ways.	
  
Three	
  ideal	
  types	
  of	
  economic	
  structures	
  —	
  capitalism,	
  statism	
  and	
  socialism	
  —	
  
can	
   be	
   differentiated	
   in	
   terms	
   of	
   the	
   dominant	
   form	
   of	
   power	
   controlling	
  
economic	
  activity40
:	
  
• Capitalism	
  is	
  an	
  economic	
  structure	
  within	
  which	
  the	
  means	
  of	
  production	
  
are	
  privately	
  owned	
  and	
  the	
  allocation	
  and	
  use	
  of	
  resources	
  for	
  different	
  
social	
  purposes	
  is	
  accomplished	
  through	
  the	
  exercise	
  of	
  economic	
  power.	
  
Investments	
  and	
  the	
  control	
  of	
  production	
  are	
  the	
  result	
  of	
  the	
  exercise	
  of	
  
economic	
  power	
  by	
  owners	
  of	
  capital.	
  
• Statism	
  is	
  an	
  economic	
  structure	
  within	
  which	
  the	
  means	
  of	
  production	
  are	
  
owned	
   by	
   the	
   state	
   and	
   the	
   allocation	
   and	
   use	
   of	
   resources	
   for	
   different	
  
social	
  purposes	
  is	
  accomplished	
  through	
  the	
  exercise	
  of	
  state	
  power.	
  State	
  
officials	
  control	
  the	
  investment	
  process	
  and	
  production	
  through	
  some	
  sort	
  
of	
  state-­‐administrative	
  mechanism.	
  
• Socialism	
  is	
  an	
  economic	
  structure	
  within	
  which	
  the	
  means	
  of	
  production	
  
are	
  socially	
  owned41
	
  and	
  the	
  allocation	
  and	
  use	
  of	
  resources	
  for	
  different	
  
social	
  purposes	
  is	
  accomplished	
  through	
  the	
  exercise	
  of	
  “social	
  power.”	
  	
  In	
  
effect	
   this	
   is	
   equivalent	
   to	
   defining	
   socialism	
   as	
   pervasive	
   economic	
  
democracy.	
  
These	
  are	
  definitions	
  of	
  ideal	
  types.	
  In	
  the	
  world,	
  actual	
  economies	
  are	
  complex	
  
forms	
  of	
  combination	
  of	
  these	
  three	
  types.	
  They	
  are	
  hybrids	
  that	
  vary	
  according	
  
to	
  how	
  these	
  different	
  forms	
  of	
  power	
  interact	
  and	
  intermix.	
  To	
  call	
  an	
  economy	
  
40
	
  This	
  is	
  not	
  meant	
  to	
  be	
  a	
  complete	
  theoretical	
  specification	
  of	
  the	
  differences	
  between	
  these	
  three	
  
types	
   of	
   economic	
   structures,	
   but	
   only	
   their	
   differentiation	
   in	
   terms	
   of	
   power	
   relations.	
   For	
   a	
   fuller	
  
discussion,	
  see	
  Erik	
  Olin	
  Wright	
  Envisioning	
  Real	
  Utopias.	
  (London	
  and	
  New	
  York:	
  Verso,	
  2010),	
  pp.	
  11-­‐
123.	
  
41
	
  Social	
   ownership	
   should	
   be	
   distinguished	
   from	
   state	
   ownership.	
   Social	
   ownership	
   of	
   economic	
  
resources	
  means	
  that	
  these	
  are	
  owned	
  in	
  common	
  by	
  everyone	
  in	
  a	
  society,	
  and	
  thus	
  everyone	
  has	
  the	
  
collective	
  right	
  to	
  decide	
  on	
  the	
  distribution	
  of	
  the	
  net	
  income	
  generated	
  by	
  the	
  use	
  of	
  those	
  resources	
  
and	
   the	
   collective	
   right	
   to	
   dispose	
   of	
   those	
   resources.	
   Under	
   conditions	
   of	
   deep	
   and	
   pervasive	
  
democracy,	
  state	
  ownership	
  becomes	
  one	
  way	
  of	
  organizing	
  social	
  ownership.	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
65
‘capitalist’	
  is	
  thus	
  a	
  short-­‐hand	
  for	
  a	
  more	
  cumbersome	
  expression	
  such	
  as	
  “an	
  
economic	
  hybrid	
  combining	
  capitalist,	
  statist	
  and	
  socialist	
  power	
  relations	
  within	
  
which	
  capitalist	
  relations	
  are	
  dominant”.	
  	
  The	
  idea	
  of	
  a	
  structural	
  hybrid	
  can	
  be	
  
used	
  to	
  analyse	
  any	
  unit	
  of	
  analysis	
  –	
  firms,	
  sectors,	
  regional	
  economies,	
  national	
  
economies,	
  even	
  the	
  global	
  economy.	
  The	
  possibility	
  of	
  socialism	
  thus	
  depends	
  on	
  
our	
   ability	
   to	
   enlarge	
   and	
   deepen	
   the	
   socialist	
   component	
   of	
   the	
   hybrid	
   and	
  
weaken	
  the	
  capitalist	
  and	
  statist	
  components.	
  
This	
  way	
  of	
  thinking	
  about	
  economic	
  systems	
  means	
  abandoning	
  a	
  simple	
  binary	
  
notion	
  of	
  capitalism	
  versus	
  socialism.	
  An	
  economic	
  structure	
  can	
  be	
  more	
  or	
  less	
  
capitalist,	
   more	
   or	
   less	
   socialist,	
   more	
   or	
   less	
   statist.	
   	
   It	
   is	
   an	
   important,	
   but	
  
unresolved,	
   question	
   how	
   stable	
   different	
   kinds	
   of	
   hybrids	
   might	
   be.	
   One	
  
traditional	
   Marxian	
   view	
   is	
   that	
   any	
   capitalist	
   hybrid	
   with	
   significant	
   socialist	
  
elements	
   would	
   be	
   deeply	
   unstable.	
   The	
   only	
   reasonably	
   stable	
   equilibria,	
   the	
  
thinking	
  goes,	
  are	
  ones	
  in	
  which	
  socialism	
  is	
  unequivocally	
  dominant	
  or	
  ones	
  in	
  
which	
  capitalism	
  is	
  unequivocally	
  dominant	
  and	
  whatever	
  socialist	
  elements	
  exist	
  
fill	
  small	
  niches	
  in	
  the	
  economic	
  system	
  in	
  ways	
  that	
  are	
  functional	
  for	
  capitalism.	
  
This	
  is	
  consistent	
  with	
  the	
  organism	
  view	
  of	
  capitalism	
  as	
  a	
  system:	
  a	
  system	
  can	
  
be	
  either	
  capitalist	
  or	
  socialist,	
  but	
  not	
  a	
  stable	
  hybrid.	
  	
  An	
  alternative	
  view	
  is	
  that	
  
there	
   may	
   be	
   multiple	
   relatively	
   stable	
   equilibria	
   involving	
   all	
   three	
   economic	
  
forms	
  in	
  quite	
  variable	
  combinations,	
  and	
  that	
  it	
  is	
  even	
  possible	
  for	
  there	
  to	
  be	
  
an	
  equilibrium	
  involving	
  no	
  clear	
  dominance	
  among	
  them.	
  The	
  extent	
  to	
  which	
  
any	
   given	
   configuration	
   could	
   be	
   stable	
   depends	
   upon	
   a	
   complex	
   array	
   of	
  
contingent	
   historical	
   and	
   political	
   factors	
   and	
   this	
   makes	
   it	
   impossible	
   to	
   make	
  
any	
  general,	
  abstract	
  propositions	
  about	
  what	
  is	
  really	
  possible.	
  My	
  approach	
  is	
  
based	
  on	
  the	
  second	
  of	
  these	
  views.	
  
Our	
  task,	
  then,	
  is	
  to	
  clarify	
  the	
  alternative	
  ways	
  in	
  which	
  we	
  can	
  conceptualise	
  the	
  
deepening	
  of	
  the	
  socialist	
  component	
  of	
  hybrids.	
  I	
  will	
  refer	
  to	
  this	
  as	
  the	
  problem	
  
of	
  the	
  structural	
  configurations	
  of	
  social	
  empowerment.	
  
A	
  Visual	
  Vocabulary	
  
In	
   order	
   to	
   explore	
   the	
   problem	
   of	
   deepening	
   the	
   socialist	
   component	
   within	
  
hybrid	
  economic	
  systems,	
  it	
  will	
  be	
  useful	
  to	
  represent	
  visually	
  different	
  patterns	
  
of	
   interconnection	
   among	
   the	
   three	
   forms	
   of	
   power	
   within	
   economic	
   systems.	
  
The	
  visual	
  vocabulary	
  I	
  use	
  for	
  this	
  purpose	
  is	
  illustrated	
  in	
  Figure	
  1.	
  
The	
  arrows	
  in	
  Figure	
  1	
  indicate	
  the	
  direction	
  of	
  influence	
  of	
  one	
  form	
  of	
  power	
  
over	
  the	
  use	
  of	
  another;	
  the	
  width	
  of	
  the	
  arrows	
  indicates	
  the	
  strength	
  of	
  this	
  
relationship.	
  Thus,	
  in	
  the	
  first	
  illustration	
  in	
  Figure	
  1,	
  state	
  power	
  is	
  subordinated	
  	
  
Erik	
  Olin	
  Wright	
  
	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
67
to	
  social	
  power.	
  This	
  is	
  what	
  is	
  meant	
  conventionally	
  by	
  political	
  democracy	
  as	
  
“rule	
  by	
  the	
  people”.	
  The	
  expression	
  “rule	
  by	
  the	
  people”	
  does	
  not	
  really	
  mean,	
  
rule	
  by	
  the	
  atomised	
  aggregation	
  of	
  the	
  separate	
  individuals	
  of	
  the	
  society	
  taken	
  
as	
   isolated	
   persons,	
   but	
   rather,	
   rule	
   by	
   the	
   people	
   collectively	
   organised	
   into	
  
voluntary	
  associations	
  in	
  various	
  ways	
  for	
  the	
  purpose	
  of	
  controlling	
  the	
  use	
  of	
  
state	
   power,	
   especially	
   through	
   the	
   institutional	
   mechanism	
   of	
   elections.	
   In	
   a	
  
democracy	
  state	
  power	
  is	
  still	
  important	
  –	
  why	
  have	
  a	
  democracy	
  if	
  the	
  state	
  has	
  
no	
  capacity	
  to	
  do	
  anything?	
  –	
  but	
  this	
  power	
  is	
  not	
  autonomously	
  exercised	
  by	
  
state	
  officials;	
  it	
  is	
  subordinated	
  to	
  social	
  power.	
  
	
  
In	
   the	
   second	
   illustration,	
   economic	
   power	
   subordinates	
   social	
   power.	
   The	
  
unrestrained	
  use	
  of	
  donations	
  by	
  corporations	
  and	
  the	
  wealthy	
  to	
  fund	
  political	
  
parties	
  in	
  the	
  United	
  States	
  would	
  be	
  an	
  example.	
  Political	
  parties	
  still	
  matter	
  –	
  
they	
  are	
  the	
  vehicles	
  for	
  selecting	
  state	
  officials	
  who	
  directly	
  exercise	
  state	
  power	
  
–	
  but	
  the	
  social	
  power	
  mobilised	
  by	
  political	
  parties	
  is	
  itself	
  subordinated	
  by	
  the	
  
exercise	
  of	
  economic	
  power.	
  
These	
   configurations	
   can	
   be	
   connected	
   in	
   chains	
   of	
   power	
   relations,	
   as	
   in	
   the	
  
third	
  and	
  fourth	
  illustrations.	
  In	
  the	
  first	
  of	
  these,	
  corporate	
  influence	
  over	
  state	
  
power	
  occurs	
  through	
  the	
  subordination	
  of	
  political	
  parties	
  to	
  economic	
  power.	
  
Finally,	
   in	
   the	
   fourth	
   illustration,	
   social	
   power	
   subordinates	
   economic	
   power	
  
through	
  the	
  mediation	
  of	
  state	
  power.	
  This	
  is	
  the	
  ideal	
  of	
  social	
  democracy:	
  the	
  
state	
   effectively	
   regulates	
   the	
   behaviour	
   of	
   capitalist	
   firms	
   but	
   is	
   itself	
  
democratically	
  subordinated	
  to	
  social	
  power.	
  
	
  
Figure	
   2	
   illustrates	
   the	
   different	
   aggregate	
   configurations	
   of	
   forms	
   of	
   power	
  
within	
   a	
   dominant	
   capitalist	
   hybrid	
   economy	
   and	
   within	
   a	
   dominant	
   socialist	
  
hybrid	
   economy.	
   	
   In	
   these	
   diagrams,	
   the	
   arrows	
   are	
   all	
   directed	
   towards	
  
explaining	
   the	
   control	
   over	
   economic	
   activity:	
   investments,	
   production	
   and	
  
distribution	
  of	
  goods	
  and	
  services.	
  In	
  the	
  picture	
  of	
  capitalist	
  empowerment,	
  both	
  
social	
  power	
  and	
  state	
  power	
  are	
  subordinated	
  to	
  economic	
  power	
  in	
  the	
  control	
  
over	
   economic	
   activity;	
   in	
   the	
   case	
   of	
   socialist	
   empowerment,	
   both	
   economic	
  
power	
  and	
  state	
  power	
  are	
  subordinated	
  to	
  social	
  power.	
  
	
  
	
  
	
  
Erik	
  Olin	
  Wright	
  
	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
69
	
  
	
  
Configurations	
   of	
   Socialist	
   Empowerment:	
   pathways	
   for	
   building	
   a	
   socialist	
  
hybrid	
  
The	
   basic	
   purpose	
   for	
   which	
   I	
   use	
   these	
   schematic	
   representations	
   is	
   to	
  
differentiate	
   salient	
   configurations	
   of	
   social	
   empowerment.	
   Different	
   kinds	
   of	
  
progressive	
   policies,	
   institutional	
   innovations	
   and	
   proposals,	
   strategies	
   and	
  
reforms	
   can	
   be	
   located	
   within	
   these	
   various	
   configurations.	
   Seven	
   such	
  
configurations	
  are	
  particularly	
  important:	
  1.	
  Statist	
  socialism;	
  2.	
  Social	
  democratic	
  
statist	
   regulation;	
   3.	
   Associational	
   democracy;	
   4.	
   Social	
   capitalism;	
   5.	
   The	
  
solidarity	
   economy;	
   6.	
   The	
   cooperative	
   market	
   economy;	
   7.	
   Participatory	
  
socialism.	
  I	
  will	
  discuss	
  each	
  of	
  these	
  briefly.	
  
1.	
  Statist	
  Socialism	
  
The	
  configuration	
  in	
  Figure	
  3	
  corresponds	
  to	
  the	
  classical	
  definition	
  of	
  socialism	
  in	
  
which	
   social	
   power	
   controls	
   economic	
   activity	
   via	
   the	
   state.	
   	
   Investment,	
  
production	
  and	
  distribution	
  are	
  directly	
  controlled	
  by	
  the	
  exercise	
  of	
  state	
  power	
  
–	
   through,	
   for	
   example,	
   state	
   ownership	
   and	
   control	
   over	
   the	
   commanding	
  
heights	
   of	
   the	
   economy	
   –	
   while,	
   at	
   the	
   same	
   time,	
   state	
   power	
   is	
   itself	
  
subordinated	
  to	
  social	
  power	
  by	
  being	
  democratically	
  accountable	
  to	
  the	
  people.	
  	
  
This	
   is	
   the	
   configuration	
   that	
   was	
   at	
   the	
   core	
   of	
   traditional	
   Marxist	
   ideas	
   of	
  
revolutionary	
  socialism.	
  This	
  is	
  not,	
  of	
  course,	
  how	
  the	
  revolutions	
  that	
  occurred	
  
in	
  the	
  name	
  of	
  socialism	
  turned	
  out	
  in	
  the	
  Twentieth	
  Century.	
  	
  Once	
  the	
  power	
  of	
  
revolutionary	
   parties	
   was	
   consolidated	
   in	
   the	
   form	
   of	
   the	
   one-­‐party	
   state,	
  
“actually	
  existing	
  socialism”	
  became	
  a	
  form	
  of	
  authoritarian	
  statism	
  in	
  which,	
  as	
  
illustrated	
  in	
  Figure	
  4,	
  both	
  social	
  power	
  within	
  civil	
  society	
  and	
  economic	
  power	
  
were	
  subordinated	
  to	
  state	
  power.	
  
Erik	
  Olin	
  Wright	
  
	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
71
The	
   experience	
   of	
   authoritarian	
   statism	
   has	
   justifiably	
   lead	
   to	
   great	
   scepticism	
  
about	
   the	
   desirability	
   of	
   the	
   centralised	
   state	
   planning	
   model	
   of	
   socialism.	
  
Nevertheless,	
  the	
  power	
  configuration	
  of	
  statist	
  socialism	
  remains	
  an	
  important	
  
component	
   of	
   any	
   prospect	
   for	
   transcending	
   capitalism,	
   particularly	
   for	
   large	
  
infrastructure	
  projects,	
  systems	
  of	
  public	
  transportation,	
  various	
  kinds	
  of	
  natural	
  
monopolies,	
  and	
  for	
  at	
  least	
  the	
  core	
  components	
  of	
  the	
  financial	
  system.	
  
2.	
  Social	
  democratic	
  statist	
  regulation	
  
In	
   the	
   second	
   configuration	
   (Figure	
   5)	
   social	
   power	
   regulates	
   the	
   economy	
  
through	
  the	
  mediation	
  of	
  both	
  state	
  power	
  and	
  economic	
  power.	
  This	
  is	
  a	
  key	
  
aspect	
  of	
  social	
  democracy.	
  Capitalist	
  economic	
  power	
  directly	
  controls	
  economic	
  
activity	
  –	
  capitalists	
  continue	
  to	
  make	
  investments,	
  hire	
  managers	
  and	
  workers,	
  
organise	
   the	
   labour	
   process,	
   etc.	
   –	
   but	
   this	
   power	
   is	
   itself	
   regulated	
   by	
   state	
  
power,	
   which	
   is	
   in	
   turn	
   subordinated	
   to	
   social	
   power.	
   Through	
   a	
   transitivity	
   of	
  
power	
  relations,	
  this	
  means	
  that	
  social	
  power	
  exerts	
  regulative	
  control	
  over	
  the	
  
exercise	
  of	
  economic	
  power.	
  Those	
  forms	
  of	
  regulation	
  of	
  capital	
  that	
  improve	
  
working	
  conditions	
  and	
  job	
  security	
  and	
  protect	
  the	
  environment	
  generally	
  reflect	
  
this	
  kind	
  of	
  democratic	
  imposition	
  of	
  constraints.	
  
	
  
Erik	
  Olin	
  Wright	
  
In	
   and	
   of	
   itself,	
   statist	
   regulation	
   of	
   capitalist	
   economic	
   power	
   need	
   not	
   imply	
  
significant	
  social	
  empowerment.	
  As	
  in	
  the	
  case	
  of	
  statist	
  socialism,	
  the	
  issue	
  here	
  
is	
  the	
  extent	
  and	
  depth	
  to	
  which	
  the	
  power	
  of	
  the	
  state	
  is	
  a	
  genuine	
  expression	
  of	
  
democratic	
   empowerment	
   of	
   civil	
   society.	
   In	
   actual	
   capitalist	
   societies,	
   much	
  
statist	
  economic	
  regulation	
  is	
  in	
  fact	
  itself	
  subordinated	
  to	
  economic	
  power,	
  as	
  
illustrated	
  in	
  Figure	
  6.	
  In	
  capitalist	
  statist	
  regulation,	
  state	
  power	
  regulates	
  capital	
  
but	
  in	
  ways	
  that	
  are	
  systematically	
  responsive	
  to	
  the	
  power	
  of	
  capital	
  itself.	
  	
  In	
  the	
  
United	
  States,	
  the	
  heavy	
  involvement	
  of	
  industry	
  associations	
  in	
  shaping	
  the	
  rules	
  
of	
  Federal	
  regulation	
  of	
  airlines,	
  energy,	
  agriculture	
  and	
  other	
  sectors	
  would	
  be	
  
examples.	
  Perhaps	
  even	
  more	
  pervasively,	
  the	
  structural	
  dependency	
  of	
  the	
  state	
  
on	
  the	
  capitalist	
  economy	
  underwrites	
  this	
  configuration	
  of	
  power	
  relations.42
	
  
42
	
  Much	
  of	
  the	
  theory	
  of	
  the	
  capitalist	
  character	
  of	
  the	
  capitalist	
  state	
  developed	
  in	
  the	
  late	
  1960s	
  and	
  
1970s	
  can	
  be	
  interpreted	
  as	
  an	
  attempt	
  to	
  explain	
  how,	
  in	
  spite	
  of	
  the	
  democratic	
  form	
  of	
  the	
  state,	
  
much	
  –	
  perhaps	
  most	
  –	
  intervention	
  by	
  the	
  state	
  in	
  the	
  capitalist	
  economy	
  is	
  subordinated	
  to	
  the	
  needs	
  
of	
  capital	
  rather	
  than	
  the	
  collective	
  will	
  of	
  the	
  people,	
  and	
  thus,	
  in	
  the	
  present	
  terms,	
  is	
  an	
  expression	
  of	
  
economic	
  power	
  rather	
  than	
  social	
  power.	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
73
	
  
3.	
  Associational	
  Democracy.	
  
Associational	
   democracy	
   is	
   a	
   term	
   that	
   covers	
   a	
   wide	
   range	
   of	
   institutional	
  
devices	
  through	
  which	
  collective	
  associations	
  in	
  civil	
  society	
  directly	
  participate	
  in	
  
various	
  kinds	
  of	
  governance	
  activities,	
  usually	
  along	
  with	
  state	
  agencies.	
  The	
  most	
  
familiar	
   form	
   of	
   this	
   is	
   probably	
   the	
   tripartite	
   neo-­‐corporatist	
   arrangements	
   in	
  
some	
   social	
   democratic	
   societies	
   in	
   which	
   organizsed	
   labour,	
   employers’	
  
associations,	
   and	
   the	
   state	
   bargain	
   over	
   various	
   kinds	
   of	
   economic	
   regulations,	
  
especially	
  concerning	
  the	
  labour	
  market	
  and	
  employment	
  relations.	
  	
  Associational	
  
democracy	
   can	
   be	
   extended	
   to	
   many	
   other	
   domains,	
   for	
   example	
   watershed	
  
councils	
   which	
   bring	
   together	
   civic	
   associations,	
   environmental	
   groups,	
  
developers	
  and	
  state	
  agencies	
  to	
  regulate	
  ecosystems,	
  or	
  health	
  councils	
  involving	
  
medical	
  associations,	
  community	
  organisations	
  and	
  public	
  health	
  officials	
  to	
  plan	
  
various	
  aspects	
  of	
  health	
  care.	
  To	
  the	
  extent	
  that	
  the	
  associations	
  involved	
  are	
  
Erik	
  Olin	
  Wright	
  
internally	
   democratic	
   and	
   representative	
   of	
   interests	
   in	
   civil	
   society,	
   and	
   the	
  
decision-­‐making	
   process	
   in	
   which	
   they	
   are	
   engaged	
   is	
   open	
   and	
   deliberative,	
  
rather	
   than	
   heavily	
   manipulated	
   by	
   elites	
   and	
   the	
   state,	
   then	
   associational	
  
democracy	
  can	
  contribute	
  to	
  social	
  empowerment.	
  
	
  
4.	
  Social	
  Capitalism	
  	
  	
  
“Social	
   capitalism”	
   is	
   not	
   a	
   standard	
   expression.	
   I	
   use	
   it	
   to	
   describe	
   a	
   power	
  
configuration	
  in	
  which	
  secondary	
  associations	
  of	
  civil	
  society,	
  through	
  a	
  variety	
  of	
  
mechanisms,	
   directly	
   affect	
   the	
   way	
   economic	
   power	
   is	
   used	
   (Figure	
   8).	
   The	
  
“solidarity	
   funds”	
   in	
   Quebec	
   would	
   be	
   a	
   good	
   example.	
   	
   Unions	
   and	
   other	
  
organisations	
  in	
  civil	
  society	
  often	
  manage	
  pension	
  funds	
  for	
  their	
  members.	
  In	
  
effect	
   this	
   is	
   collectively	
   controlled	
   capital	
   that	
   can	
   be	
   allocated	
   on	
   various	
  
principles.	
   In	
   the	
   Quebec	
   “Solidarity	
   Fund,”	
   developed	
   by	
   the	
   labor	
   movement	
  
initially	
  in	
  the	
  1980s,	
  investment	
  is	
  used	
  deliberately	
  to	
  protect	
  and	
  create	
  jobs	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
75
rather	
   than	
   simply	
   to	
   maximize	
   returns	
   for	
   retirement.	
   One	
   way	
   the	
   Solidarity	
  
Fund	
  accomplishes	
  this	
  is	
  by	
  directly	
  investing	
  in	
  small	
  and	
  medium	
  enterprises,	
  
either	
   through	
   private	
   equity	
   investment	
   or	
   loans.	
   These	
   investments	
   are	
  
generally	
   directed	
   at	
   firms	
   that	
   are	
   strongly	
   rooted	
   in	
   the	
   region	
   and	
   satisfy	
  
various	
   criteria	
   in	
   a	
   social	
   audit.	
   The	
   Solidarity	
   Fund	
   is	
   also	
   involved	
   in	
   the	
  
governance	
  of	
  the	
  firms	
  in	
  which	
  it	
  invests,	
  often	
  by	
  having	
  representation	
  on	
  the	
  
board	
   of	
   directors.	
   Solidarity	
   finance	
   thus	
   goes	
   considerably	
   beyond	
   ordinary	
  
“socially	
  screened	
  investments”	
  in	
  being	
  much	
  more	
  actively	
  and	
  directly	
  engaged	
  
the	
   project	
   of	
   allocating	
   capital	
   on	
   the	
   basis	
   of	
   social	
   priorities.	
   	
   The	
   idea	
   for	
  
stakeholder	
  boards	
  of	
  directors	
  of	
  corporations	
  in	
  which	
  all	
  stakeholders	
  in	
  the	
  
activities	
   of	
   a	
   corporation	
   are	
   represented	
   also	
   constitutes	
   a	
   form	
   of	
   social	
  
capitalism.	
  
The	
  simple	
  fact	
  that	
  social	
  power	
  has	
  an	
  impact	
  on	
  economic	
  power,	
  however,	
  
does	
   not	
   mean	
   that	
   it	
   constitutes	
   a	
   form	
   of	
   social	
   empowerment.	
   In	
   Figure	
   9,	
  
Erik	
  Olin	
  Wright	
  
social	
  power	
  affects	
  the	
  exercise	
  of	
  economic	
  power	
  but	
  it	
  does	
  so	
  in	
  a	
  way	
  that	
  is	
  
itself	
  subordinated	
  to	
  economic	
  power.	
  	
  An	
  example	
  would	
  be	
  trade	
  associations	
  
formed	
  by	
  voluntary	
  cooperation	
  among	
  capitalist	
  firms	
  for	
  the	
  purpose	
  of	
  setting	
  
industry	
  standards	
  and	
  in	
  other	
  ways	
  regulating	
  various	
  practices	
  of	
  firms	
  in	
  the	
  
sector.	
  This	
  kind	
  of	
  collectively	
  organised	
  self-­‐regulation	
  of	
  sectors	
  constitutes	
  a	
  
configuration	
  of	
  capitalist	
  empowerment,	
  not	
  socialist	
  empowerment.	
  
	
  
5.	
  Cooperative	
  market	
  economy	
  
In	
  a	
  fully	
  worker-­‐owned	
  cooperative	
  firm	
  in	
  a	
  capitalist	
  economy	
  the	
  egalitarian	
  
principle	
  of	
  one-­‐person	
  one-­‐vote	
  of	
  all	
  members	
  of	
  the	
  business	
  means	
  that	
  the	
  
power	
   relations	
   within	
   the	
   firm	
   are	
   based	
   on	
   voluntary	
   cooperation	
   and	
  
persuasion,	
   not	
   the	
   relative	
   economic	
   power	
   of	
   different	
   people.	
   Jointly	
   they	
  
control	
   through	
   democratic	
   means	
   the	
   economic	
   power	
   represented	
   by	
   the	
  
capital	
   in	
   the	
   firm.	
   And	
   if	
   individual	
   cooperative	
   firms	
   join	
   together	
   in	
   larger	
  
associations	
   of	
   cooperatives	
   —	
   perhaps	
   even	
   a	
   cooperative-­‐of-­‐cooperatives,	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
77
collectively	
  providing	
  finance,	
  training,	
  and	
  other	
  kinds	
  of	
  support	
  —	
  they	
  begin	
  to	
  
transcend	
  the	
  capitalist	
  character	
  of	
  their	
  economic	
  environment	
  by	
  constituting	
  
a	
  cooperative	
  market	
  economy	
  (Figure	
  10).	
  The	
  overarching-­‐cooperative	
  in	
  such	
  a	
  
market	
  stretches	
  the	
  social	
  character	
  of	
  ownership	
  within	
  individual	
  cooperative	
  
enterprises	
  and	
  moves	
  governance	
  more	
  towards	
  a	
  stakeholder	
  model,	
  in	
  which	
  
cooperative	
   enterprises	
   are	
   governed	
   by	
   democratic	
   bodies	
   representing	
   all	
  
categories	
   of	
   people	
   whose	
   lives	
   are	
   affected	
   by	
   the	
   enterprises’	
   economic	
  
activity.	
   The	
   Mondragon	
   Cooperative	
   Corporation	
   would	
   be	
   a	
   partial	
   example.	
  
Such	
   firms	
   remain	
   a	
   hybrid	
   economic	
   form,	
   combining	
   capitalist	
   and	
   socialist	
  
elements,	
  but	
  a	
  hybrid	
  in	
  which	
  the	
  socialist	
  component	
  has	
  considerable	
  weight.	
  
	
  
6.	
  The	
  solidarity	
  economy	
  	
  	
  
The	
   “solidarity	
   economy”	
   goes	
   beyond	
   other	
   forms	
   of	
   social	
   empowerment	
   by	
  
constituting	
   an	
   alternative	
   way	
   of	
   directly	
   organising	
   economic	
   activity	
   that	
   is	
  
distinct	
   from	
   capitalist	
   market	
   production,	
   state	
   organised	
   production,	
   and	
  
household	
   production	
   (Figure	
   11).43
	
  Its	
   hallmark	
   is	
   production	
   organized	
   by	
  
collectivities	
  directly	
  to	
  satisfy	
  human	
  needs	
  not	
  subject	
  to	
  the	
  discipline	
  of	
  profit-­‐
maximisation	
   or	
   state-­‐technocratic	
   rationality.	
   The	
   state	
   may	
   be	
   involved	
   in	
  
funding	
   these	
   collectivities,	
   but	
   it	
   does	
   not	
   directly	
   organise	
   them	
   or	
   their	
  
services.44
	
  The	
  system	
  of child	
  daycare	
  provision	
  in	
  Quebec	
  is	
  a	
  good	
  example.	
  In	
  
43
	
  There	
  is	
  no	
  firmly	
  established	
  use	
  of	
  terminology	
  to	
  identify	
  the	
  form	
  of	
  economic	
  organization	
  that	
  I	
  
am	
  describing	
  here.	
  Sometimes	
  the	
  terms	
  “social	
  economy”	
  and	
  “solidarity	
  economy”	
  are	
  used	
  more	
  or	
  
less	
  interchangeably.	
  Sometimes	
  they	
  are	
  coupled	
  in	
  the	
  expression	
  “the	
  social	
  and	
  solidarity	
  economy.”	
  
Generally	
  it	
  seems	
  that	
  the	
  term	
  social	
  economy	
  is	
  used	
  as	
  a	
  broader,	
  more	
  heterogeneous	
  umbrella	
  
term	
  than	
  solidarity	
  economy,	
  although	
  both	
  are	
  meant	
  to	
  identify	
  more	
  egalitarian,	
  socially-­‐oriented	
  
forms	
  of	
  economic	
  life	
  than	
  capitalism.	
  	
  Here	
  I	
  will	
  use	
  the	
  term	
  “solidarity	
  economy”	
  to	
  define	
  the	
  form	
  
of	
  social	
  economy	
  in	
  which	
  social	
  power	
  –	
  i.e.	
  voluntary	
  cooperation	
  for	
  collective	
  purposes	
  –	
  plays	
  the	
  
most	
  direct	
  and	
  unmediated	
  role	
  in	
  organizing	
  economic	
  activity,	
  and	
  use	
  the	
  term	
  social	
  economy	
  as	
  
broader	
  rubric	
  for	
  ways	
  in	
  which	
  social	
  power	
  shapes	
  economic	
  activity	
  without	
  the	
  direct	
  mediation	
  of	
  
the	
  state.	
  
44
	
  Of	
  course,	
  in	
  a	
  sense	
  the	
  state	
  is	
  always	
  involved	
  in	
  all	
  economic	
  activities	
  insofar	
  as	
  it	
  enforces	
  rules	
  
of	
  the	
  game,	
  imposes	
  taxes,	
  etc.	
  The	
  issue	
  here	
  is	
  that	
  in	
  the	
  solidarity	
  economy	
  the	
  state	
  operates	
  in	
  a	
  
relatively	
  passive	
  way	
  in	
  the	
  background	
  rather	
  than	
  directly	
  organising	
  economic	
  activity	
  or	
  regulating	
  
economic	
  power.	
  Because	
  the	
  state	
  is	
  on	
  the	
  side	
  lines,	
  political	
  conservatives	
  and	
  libertarians	
  are	
  often	
  
relatively	
  enthusiastic	
  about	
  certain	
  kinds	
  of	
  solidarity	
  economy	
  initiatives	
  (although	
  they	
  don’t	
  use	
  the	
  
term),	
   particularly	
   when	
   these	
   activities	
   are	
   anchored	
   in	
   religious	
   communities	
   or	
   other	
   socially	
  
conservative	
  organisations.	
  When	
  the	
  solidarity	
  economy	
  embodies	
  ideals	
  of	
  economic	
  democracy	
  and	
  
egalitarian	
  participation,	
  the	
  initiatives	
  pose	
  a	
  bigger	
  challenge	
  to	
  free	
  market	
  ideologies.	
  
Erik	
  Olin	
  Wright	
  
2008	
  parents	
  only	
  paid	
  seven	
  Canadian	
  dollars	
  per	
  day	
  for	
  full	
  time	
  daycare	
  for	
  
preschool	
  children	
  provided	
  by	
  community-­‐based	
  nonprofit	
  daycare	
  caneter,	
  but	
  
provincial	
  government	
  subsidies	
  ensured	
  that	
  providers	
  were	
  paid	
  a	
  living	
  wage.	
  
These	
   daycare	
   centers	
   were	
   often	
   organised	
   as	
   “solidarity	
   cooperatives”,	
   an	
  
organisational	
   form	
   governed	
   by	
   elected	
   representatives	
   of	
   staff,	
   consumers	
  
(parents	
   in	
   this	
   case)	
   and	
   community	
   members.	
   Another	
   kind	
   of	
   example	
   is	
  
Wikipedia	
  and	
  other	
  instances	
  of	
  peer-­‐to-­‐peer	
  collaborative	
  network	
  production.	
  
Wikipedia	
  produces	
  knowledge	
  and	
  disseminates	
  information	
  outside	
  of	
  markets	
  
and	
  without	
  state	
  involvement;	
  the	
  funding	
  comes	
  largely	
  from	
  donations	
  from	
  
participants	
   and	
   supporters.	
   In	
   most	
   respects,	
   the	
   system-­‐level	
   proposal	
   for	
  
participatory	
  economics	
  as	
  outlined	
  by	
  Robin	
  Hahnel	
  and	
  Michael	
  Albert	
  can	
  be	
  
thought	
  of	
  a	
  universalisation	
  of	
  the	
  solidarity	
  economy	
  configuration	
  to	
  an	
  entire	
  
economy.	
  
	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
79
7.	
  Participatory	
  socialism	
  
The	
  final	
  configuration	
  of	
  social	
  empowerment	
  combines	
  the	
  solidarity	
  economy	
  
and	
   statist	
   socialism:	
   the	
   state	
   and	
   civil	
   society	
   jointly	
   organise	
   and	
   control	
  
various	
   kinds	
   of	
   production	
   of	
   goods	
   and	
   services	
   (Figure	
   12).	
   In	
   participatory	
  
socialism	
  the	
  role	
  of	
  the	
  state	
  is	
  more	
  pervasive	
  than	
  in	
  the	
  pure	
  social	
  economy.	
  
The	
  state	
  does	
  not	
  simply	
  provide	
  funding	
  and	
  set	
  the	
  parameters;	
  it	
  is	
  also,	
  in	
  
various	
   ways,	
   directly	
   involved	
   in	
   the	
   organisation	
   and	
   production	
   of	
   the	
  
economic	
   activity.	
   On	
   the	
   other	
   hand,	
   participatory	
   socialism	
   is	
   also	
   different	
  
from	
  statist	
  socialism,	
  for	
  here	
  social	
  power	
  plays	
  a	
  role	
  not	
  simply	
  through	
  the	
  
ordinary	
  channels	
  of	
  democratic	
  control	
  of	
  state	
  policies,	
  but	
  directly	
  inside	
  the	
  
productive	
  activities	
  themselves.	
  An	
  example	
  is	
  the	
  participatory	
  budget	
  in	
  urban	
  
government.	
  Since	
  these	
  budgets	
  constitute	
  allocations	
  of	
  resources	
  to	
  produce	
  
infrastructure	
   to	
   meet	
   human	
   needs,	
   they	
   should	
   be	
   treated	
   as	
   an	
   aspect	
   of	
  
economic	
   activity,	
   and	
   thus	
   participatory	
   budgets	
   are	
   not	
   simply	
   a	
   form	
   of	
  
Erik	
  Olin	
  Wright	
  
democratic	
  participation	
  in	
  the	
  state,	
  but	
  of	
  a	
  participatory	
  socialist	
  economy.	
  
	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
81
The	
  seven	
  configurations	
  together	
   	
  
As	
  summarised	
  in	
  Figure	
  13,	
  the	
  different	
  configurations	
  of	
  social	
  empowerment	
  
we	
   have	
   been	
   examining	
   can	
   be	
   clustered	
   into	
   three	
   broad	
   groups,	
   each	
  
corresponding	
  to	
  different	
  political	
  traditions	
  of	
  socio-­‐economic	
  transformation:	
  a	
  
socialist	
  cluster,	
  a	
  social	
  economy	
  cluster,	
  and	
  a	
  social	
  democratic	
  cluster.	
  	
  These	
  
different	
  clusters	
  vary	
  in	
  the	
  role	
  they	
  accord	
  to	
  the	
  state	
  and	
  the	
  extent	
  to	
  which	
  
they	
  attempt	
  to	
  subordinate	
  rather	
  than	
  bypass	
  capitalist	
  economic	
  power.	
  What	
  
all	
  of	
  the	
  configurations	
  have	
  in	
  common	
  is	
  the	
  idea	
  of	
  democratisation	
  of	
  power	
  
over	
   economic	
   life	
   by	
   subordinating	
   both	
   economic	
   power	
   and	
   state	
   power	
   to	
  
social	
   power,	
   power	
   rooted	
   in	
   voluntary	
   cooperation	
   for	
   collective	
   action.	
   Of	
  
course,	
  the	
  ideal	
  of	
  socialism	
  involves	
  much	
  more	
  than	
  this.	
  Equality	
  and	
  social	
  
justice	
   are	
   also	
   core	
   traditional	
   socialist	
   values,	
   to	
   which	
   environmental	
  
sustainability	
   should	
   be	
   added	
   today.	
   What	
   this	
   model	
   of	
   socialism	
   stresses,	
  
however,	
   is	
   that	
   the	
   realisation	
   of	
   all	
   these	
   values	
   depends	
   upon	
   the	
  
transformation	
  of	
  the	
  power	
  relations	
  over	
  economic	
  activity,	
  both	
  in	
  terms	
  of	
  the	
  
ways	
  social	
  power	
  is	
  directly	
  involved	
  in	
  shaping	
  economic	
  activity	
  and	
  indirectly	
  
through	
  the	
  democratisation	
  of	
  the	
  state.	
  
	
  
	
  
WHAT	
  ABOUT	
  MARKETS?	
  
The	
  framework	
  elaborated	
  above	
  says	
  almost	
  nothing	
  explicitly	
  about	
  markets.	
  To	
  
be	
  sure,	
  the	
  dominance	
  of	
  economic	
  power	
  in	
  capitalism	
  rests	
  in	
  significant	
  ways	
  
on	
  the	
  centrality	
  of	
  markets	
  as	
  the	
  organising	
  principle	
  for	
  the	
  exchange	
  of	
  private	
  
property	
  rights.	
  And	
  it	
  is	
  certainly	
  the	
  case	
  that	
  the	
  subordination	
  of	
  economic	
  
power	
  to	
  social	
  power	
  –	
  either	
  directly	
  or	
  indirectly	
  via	
  the	
  state	
  –	
  would	
  entail	
  
pervasive	
  democratic	
  regulation	
  of	
  markets	
  far	
  beyond	
  the	
  kinds	
  of	
  constraints	
  on	
  
markets	
  within	
  capitalism.45
	
  	
  But	
  the	
  framework	
  itself	
  does	
  not	
  imply	
  either	
  the	
  
possibility	
   or	
   desirability	
   of	
   abolishing	
   markets.	
   	
   The	
   precise	
   scope	
   of	
   market	
  
transactions	
   and	
   market-­‐like	
   processes	
   relative	
   to	
   democratically	
   planned	
  
45
	
  Markets,	
   of	
   course,	
   are	
   always	
   regulated	
   in	
   one	
   way	
   or	
   another,	
   both	
   by	
   the	
   state	
   and	
   by	
   other	
  
mechanisms	
   (including	
   norms,	
   associational	
   regulation	
   by	
   capitalists,	
   and	
   what	
   sociologists	
   call	
   social	
  
embeddedness).	
  	
  The	
  “free”	
  market	
  in	
  the	
  sense	
  fantasised	
  by	
  many	
  defenders	
  of	
  capitalism	
  is	
  a	
  myth.	
  
But	
   the	
   character	
   and	
   depth	
   of	
   regulation	
   in	
   a	
   socialist	
   economy,	
   and	
   especially	
   the	
   purposes	
   and	
  
interests	
  served	
  by	
  regulation,	
  would	
  go	
  far	
  beyond	
  anything	
  that	
  occurs	
  within	
  capitalism.	
  
Erik	
  Olin	
  Wright	
  
allocations	
   of	
   resources	
   depends	
   on	
   the	
   practical	
   trade-­‐offs	
   people	
   face	
   under	
  
conditions	
  of	
  broad	
  democratic	
  power	
  over	
  the	
  economy	
  and	
  the	
  results	
  of	
  the	
  
continual	
   process	
   of	
   experimentation	
   with	
   alternative	
   solutions	
   to	
   these	
   trade-­‐
offs.	
  
Stating	
   the	
   problem	
   of	
   markets	
   in	
   this	
   ways	
   implies	
   that	
   I	
   do	
   not	
   see	
   market	
  
transactions	
   as	
   such	
   as	
   intrinsically	
   undesirable.	
   What	
   is	
   undesirable	
   are	
   two	
  
things	
   that	
   are	
   generally	
   strongly	
   linked	
   to	
   markets:	
   first,	
   the	
   ways	
   in	
   which	
  
markets	
  can	
  enable	
  people	
  and	
  organisations	
  with	
  specific	
  kinds	
  of	
  power	
  to	
  gain	
  
advantages	
  over	
  others,	
  and	
  second,	
  the	
  way	
  markets,	
  if	
  inadequately	
  regulated,	
  
generate	
  all	
  sorts	
  of	
  destructive	
  externalities	
  and	
  harms	
  on	
  people.	
  But	
  if	
  those	
  
problems	
   are	
   minimised	
   through	
   various	
   mechanisms,	
   then	
   the	
   sheer	
   fact	
   of	
  
buyers	
  and	
  sellers	
  of	
  goods	
  and	
  services	
  agreeing	
  to	
  exchange	
  things	
  at	
  a	
  mutually	
  
agreed-­‐upon	
  price	
  is	
  not,	
  in	
  and	
  of	
  itself,	
  objectionable.	
  
This	
  is	
  the	
  issue	
  that	
  is	
  most	
  in	
  contention	
  in	
  this	
  dialogue	
  with	
  Robin	
  Hahnel.	
  
Both	
  Robin	
  and	
  I	
  share	
  a	
  commitment	
  to	
  the	
  values	
  of	
  democracy	
  and	
  equality,	
  
and	
   both	
   of	
   us	
   understand	
   these	
   values	
   in	
   similarly	
   radical	
   ways.	
   We	
   both	
  
understand	
  democracy	
  as	
  an	
  ideal	
  in	
  which	
  people	
  should	
  be	
  able	
  to	
  participate	
  in	
  
decisions	
  to	
  the	
  extent	
  that	
  they	
  are	
  affected	
  by	
  those	
  decisions.	
  And	
  we	
  both	
  see	
  
equality	
  as	
  demanding	
  an	
  economic	
  system	
  that	
  both	
  meets	
  people’s	
  basic	
  needs	
  
to	
  live	
  a	
  flourishing	
  life	
  and	
  allocates	
  rewards	
  above	
  this	
  level	
  on	
  the	
  basis	
  of	
  the	
  
burdens	
  people	
  take	
  on	
  in	
  their	
  work	
  (or	
  “effort”	
  in	
  Robin’s	
  usual	
  formulation).46
	
  
Both	
  of	
  these	
  values	
  are	
  generally	
  violated	
  by	
  the	
  unfettered	
  operation	
  of	
  market	
  
processes:	
   markets	
   systematically	
   generate	
   unjust	
   inequalities	
   and	
   also,	
  
inherently	
  violate	
  democratic	
  principles	
  by	
  enabling	
  people	
  to	
  engage	
  in	
  exchange	
  
without	
   regard	
   to	
   social	
   costs.	
   For	
   these	
   reasons	
   Robin	
   argues	
   that	
   in	
   an	
   ideal	
  
economy	
   –	
   an	
   economy	
   that	
   fully	
   realises	
   democratic	
   and	
   egalitarian	
   values	
   –	
  
markets	
   would	
   disappear	
   and	
   be	
   replaced	
   by	
   something	
   like	
   participatory	
  
planning.	
  In	
  terms	
  of	
  my	
  categories	
  of	
  configurations	
  of	
  social	
  empowerment,	
  his	
  
model	
  for	
  an	
  alternative	
  economy	
  beyond	
  capitalism	
  would	
  fall	
  under	
  the	
  single	
  
46
	
  The	
   central	
   moral	
   idea	
   is	
   that	
   rewards	
   should	
   be	
   proportional	
   to	
   burden	
   or	
   sacrifice.	
   Sometimes	
  
people	
  use	
  the	
  term	
  effort	
  in	
  precisely	
  this	
  way,	
  as	
  something	
  unpleasant,	
  a	
  “disutility”	
  of	
  labour	
  to	
  use	
  
the	
  economist’s	
  expression.	
  But	
  sometimes	
  effort	
  simply	
  reflects	
  the	
  level	
  of	
  energy	
  and	
  enthusiasm	
  a	
  
person	
  expends	
  in	
  a	
  task,	
  which	
  may	
  not	
  at	
  all	
  imply	
  sacrifice.	
  For	
  certain	
  kinds	
  of	
  tasks	
  expending	
  a	
  
great	
  deal	
  of	
  effort	
  is	
  more	
  intrinsically	
  rewarding	
  than	
  doing	
  the	
  task	
  in	
  a	
  less	
  intense	
  way.	
  It	
  is	
  for	
  this	
  
reason	
  that	
  I	
  prefer	
  the	
  expressions	
  burden	
  or	
  sacrifice	
  in	
  talking	
  about	
  fair	
  rewards.	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
83
structural	
   configuration	
   of	
   social	
   empowerment	
   that	
   I	
   identify	
   as	
   the	
   solidarity	
  
economy	
  (Figure	
  11).47
	
  
Since	
   I	
   share	
   these	
   basic	
   values	
   and	
   also	
   acknowledge	
   that	
   markets	
   tend	
   to	
  
generate	
  these	
  moral	
  deficits,	
  why	
  then	
  do	
  I	
  take	
  the	
  position	
  that	
  in	
  a	
  democratic	
  
egalitarian	
  economy	
  beyond	
  capitalism	
  there	
  is	
  likely	
  to	
  be	
  a	
  significant	
  role	
  for	
  
markets?	
  	
  There	
  are	
  two	
  main	
  issues	
  in	
  play	
  here.	
  
The	
  first	
  issue	
  concerns	
  the	
  complex	
  trade-­‐offs	
  involved	
  in	
  the	
  actual	
  process	
  of	
  
designing	
  and	
  implementing	
  institutional	
  solutions	
  to	
  socio-­‐economic	
  problems.	
  
In	
  transcending	
  a	
  system	
  as	
  complex	
  as	
  capitalism,	
  there	
  will	
  necessarily	
  be	
  many	
  
trade-­‐offs	
  among	
  competing	
  values,	
  and	
  in	
  some	
  settings	
  and	
  contexts	
  markets	
  
may	
  play	
  a	
  positive	
  role	
  in	
  resolving	
  these	
  difficulties.	
  This	
  is	
  not	
  simply	
  the	
  case	
  
for	
   the	
   “transition	
   problem”	
   –	
   how	
   to	
   move	
   from	
   capitalism	
   to	
   a	
   democratic-­‐
egalitarian	
   alternative	
   –	
   but	
   also	
   in	
   the	
   institutional	
   configuration	
   of	
   the	
  
destination	
  itself.	
  Markets,	
  in	
  one	
  form	
  or	
  another,	
  are	
  likely	
  to	
  be	
  a	
  desirable	
  
part	
  of	
  solutions	
  to	
  some	
  of	
  the	
  design	
  problems.	
  To	
  take	
  a	
  fairly	
  simple	
  example,	
  
consider	
   the	
   problem	
   of	
   second-­‐hand	
   goods,	
   things	
   people	
   have	
   already	
  
purchased	
   and	
   no	
   longer	
   want.	
   One	
   institutional	
   solution	
   is	
   simply	
   allowing	
  
people	
  to	
  sell	
  these	
  to	
  whomever	
  wants	
  them	
  at	
  whatever	
  price	
  the	
  parties	
  agree	
  
to;	
  another	
  would	
  be	
  to	
  submit	
  proposals	
  for	
  what	
  to	
  do	
  with	
  such	
  goods	
  to	
  the	
  
consumption	
   planning	
   process.	
   In	
   a	
   world	
   in	
   which	
   people	
   are	
   ecologically	
  
conscious	
   about	
   waste,	
   a	
   market	
   in	
   second	
   hand	
   goods	
   might	
   be	
   quite	
   a	
  
significant	
  market	
  and	
  account	
  for	
  a	
  sizable	
  part	
  of	
  total	
  consumption.	
  What	
  is	
  the	
  
optimal	
   way	
   of	
   organising	
   the	
   distribution	
   of	
   second	
   hand	
   goods?	
   A	
   market	
  
solution	
  might	
  simply	
  be	
  better	
  than	
  participatory	
  planning	
  for	
  the	
  allocation	
  of	
  
second	
  hand	
  goods	
  consumption	
  –	
  less	
  hassle,	
  quicker,	
  fewer	
  transaction	
  costs,	
  
etc.	
  	
  Or	
  consider	
  a	
  quite	
  different	
  kind	
  of	
  example:	
  the	
  allocation	
  of	
  tickets	
  and	
  
seats	
  in	
  the	
  performing	
  arts.	
  Getting	
  tickets	
  to	
  a	
  particular	
  performance	
  matters	
  
much	
  more	
  to	
  some	
  people	
  than	
  to	
  others,	
  as	
  does	
  getting	
  the	
  best	
  seats.	
  As	
  long	
  
as	
  the	
  underlying	
  income	
  structure	
  is	
  just	
  by	
  egalitarian	
  standards,	
  I	
  don’t	
  see	
  any	
  
reason	
  why	
  the	
  price	
  of	
  theatre	
  tickets	
  shouldn’t	
  be	
  a	
  simple	
  reflection	
  of	
  what	
  
people	
  are	
  willing	
  to	
  pay	
  for	
  better	
  and	
  worse	
  seats	
  for	
  a	
  given	
  production.	
  This	
  
does	
  not	
  mean,	
  of	
  course,	
  that	
  the	
  performers	
  and	
  staff	
  in	
  a	
  theatre	
  collective	
  
would	
  receive	
  as	
  income	
  the	
  full	
  price	
  of	
  what	
  people	
  are	
  willing	
  to	
  pay	
  for	
  tickets	
  
47
	
  In	
  Figure	
  11	
  the	
  solidarity	
  economy	
  is	
  identified	
  as	
  the	
  direct,	
  unmediated	
  subordination	
  of	
  economic	
  
activities	
  to	
  social	
  power.	
  The	
  processes	
  of	
  participatory	
  planning	
  outlined	
  by	
  Robin	
  can	
  be	
  viewed	
  as	
  
the	
  mechanisms	
  embodied	
  in	
  the	
  arrow	
  between	
  social	
  power	
  and	
  economic	
  activities.	
  
Erik	
  Olin	
  Wright	
  
in	
  the	
  market,	
  for	
  this	
  would	
  violate	
  the	
  fair	
  rewards	
  principle.	
  Taxation	
  of	
  ticket-­‐
generated	
  income	
  could	
  prevent	
  that	
  from	
  happening.	
  But	
  having	
  ticket	
  and	
  seat	
  
prices	
  adjust	
  to	
  “market	
  demand”	
  could	
  still	
  be	
  the	
  optimal	
  way	
  of	
  distributing	
  
them.48
	
  These	
  are	
  just	
  two	
  examples	
  of	
  situations	
  in	
  which	
  market	
  solutions	
  to	
  
institutional	
  design	
  problems	
  may	
  be	
  optimal;	
  many	
  other	
  examples	
  can	
  easily	
  be	
  
given.	
  
The	
  second	
  issue	
  for	
  why	
  markets	
  may	
  be	
  a	
  significant	
  design	
  element	
  in	
  the	
  best	
  
possible	
  real	
  utopian	
  alternative	
  to	
  capitalism	
  (and	
  not	
  simply	
  in	
  the	
  transition)	
  
concerns	
   the	
   weight	
   of	
   market-­‐like	
   mechanisms	
   within	
   any	
   effective	
   planning	
  
process.	
  I	
  don’t	
  want	
  to	
  get	
  into	
  an	
  arcane	
  definitional	
  discussion	
  here	
  about	
  what	
  
counts	
  as	
  a	
  market	
  or	
  not,	
  but	
  the	
  basic	
  point	
  is	
  fairly	
  straightforward.	
  In	
  Robin’s	
  
model	
  of	
  a	
  democratic-­‐egalitarian	
  economic	
  system	
  without	
  markets,	
  allocations	
  
of	
  resources	
  to	
  alternative	
  production	
  processes	
  and	
  the	
  prices	
  for	
  the	
  outputs	
  
are	
  initially	
  determined	
  through	
  an	
  iterated	
  participatory	
  planning	
  process	
  that	
  
links	
   consumption	
   planning	
   and	
   production	
   planning.	
   	
   There	
   are	
   two	
   critical	
  
features	
   of	
   this	
   process	
   that	
   could,	
   in	
   practice,	
   assume	
   a	
   very	
   market-­‐like	
  
character.	
  First,	
  in	
  the	
  actual	
  execution	
  of	
  these	
  plans,	
  there	
  are	
  what	
  Robin	
  terms	
  
“adjustments”.	
  What	
  is	
  unspecified	
  –	
  because	
  it	
  is	
  really	
  unspecifiable	
  in	
  advance	
  
–	
   is	
   the	
   magnitude	
   of	
   these	
   adjustments	
   relative	
   to	
   the	
   initial	
   allocations,	
   and	
  
what	
  role	
  market-­‐like	
  processes	
  of	
  demand	
  and	
  supply	
  shape	
  the	
  prices	
  in	
  these	
  
adjustments.	
   If	
   these	
   adjustments	
   are	
   fairly	
   large	
   and	
   include	
   things	
   like	
  
“clearance	
   sales”	
   in	
   which	
   prices	
   drop	
   significantly	
   to	
   clear	
   inventory,	
   then	
   the	
  
adjustment	
  part	
  of	
  the	
  overall	
  allocation	
  and	
  pricing	
  process	
  could	
  look	
  very	
  much	
  
like	
  a	
  market	
  process.	
  Second,	
  in	
  the	
  initial	
  iterated	
  planning	
  process,	
  consumers	
  
submit	
   proposed	
   consumption	
   plans	
   for	
   the	
   year	
   ahead.	
   If,	
   in	
   practice,	
   nearly	
  
everyone	
  simply	
  submits	
  the	
  “default”	
  plan	
  of	
  consuming	
  the	
  same	
  pattern	
  they	
  
actually	
   did	
   in	
   the	
   previous	
   year	
   (i.e.	
   what	
   they	
   consumed	
   after	
   the	
   previous	
  
year’s	
   adjustments),	
   then	
   in	
   effect	
   the	
   initial	
   input	
   from	
   consumers	
   into	
   the	
  
48
	
  The	
  performing	
  arts	
  are,	
  of	
  course,	
  a	
  fairly	
  special	
  case,	
  but	
  it	
  can	
  be	
  considered	
  an	
  instance	
  of	
  a	
  more	
  
general	
  kind	
  of	
  problem:	
  the	
  pricing	
  of	
  services	
  that	
  vary	
  in	
  their	
  desirability	
  (or	
  quality)	
  and	
  in	
  which	
  it	
  is	
  
not	
  possible	
  to	
  simply	
  produce	
  more	
  in	
  response	
  to	
  demand.	
  Seats	
  in	
  athletic	
  events	
  of	
  a	
  popular	
  team	
  
have	
  this	
  character,	
  but	
  the	
  extent	
  of	
  the	
  demand	
  for	
  seats	
  will	
  depend	
  on	
  the	
  success	
  of	
  the	
  team.	
  
Should	
   tickets	
   be	
   available	
   by	
   lottery?	
   Should	
   a	
   secondary	
   market	
   be	
   allowed?	
   Restaurants	
   have	
  
somewhat	
  this	
  character	
  also.	
  Again,	
  if	
  the	
  background	
  conditions	
  of	
  income	
  distribution	
  are	
  fair,	
  then	
  
the	
  best	
  solution	
  to	
  these	
  problems	
  might	
  well	
  be	
  to	
  allow	
  a	
  regulated	
  market	
  to	
  function	
  where	
  access	
  
is	
   rationed	
   by	
   the	
   willingness	
   of	
   people	
   to	
   pay	
   premium	
   prices	
   for	
   the	
   best	
   seats	
   and	
   most	
   popular	
  
events.	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
85
planning	
   process	
   also	
   looks	
   very	
   much	
   like	
   the	
   information	
   a	
   market	
   provides	
  
producers:	
  producers	
  already	
  know,	
  without	
  the	
  additional	
  input	
  of	
  “plans”	
  from	
  
consumers,	
  what	
  the	
  total	
  pattern	
  of	
  consumption	
  was	
  the	
  previous	
  year.	
  
My	
   basic	
   point	
   here	
   is	
   that	
   markets	
   and	
   market-­‐like	
   arrangements	
   within	
   the	
  
planning	
   process	
   are	
   likely	
   to	
   be	
   elements	
   of	
   any	
   complex	
   democratically	
  
organised	
  economic	
  system	
  because	
  the	
  people	
  living	
  in	
  those	
  systems	
  will	
  see	
  
these	
   arrangements	
   as	
   the	
   simplest	
   and	
   most	
   effective	
   way	
   of	
   dealing	
   with	
  
certain	
   specific	
   problems.	
   Of	
   course,	
   none	
   of	
   these	
   issues	
   in	
   the	
   design	
   of	
   a	
  
democratic-­‐egalitarian	
  economy	
  implies	
  that	
  the	
  market	
  elements	
  in	
  the	
  system	
  
function	
   in	
   the	
   same	
   way	
   as	
   in	
   a	
   system	
   without	
   participatory	
   planning.	
   The	
  
planning	
  process	
  itself	
  changes	
  the	
  ramifications	
  of	
  these	
  market-­‐like	
  elements.	
  
In	
   the	
   end,	
   therefore,	
   the	
   issue	
   is	
   not	
   really	
   planning	
   versus	
   markets,	
   but	
   the	
  
specific	
  articulation	
  of	
  planning	
  mechanisms	
  and	
  market-­‐mechanisms	
  in	
  shaping	
  
the	
  way	
  allocations	
  for	
  the	
  production	
  and	
  distribution	
  of	
  different	
  kinds	
  of	
  goods	
  
and	
   services	
   occurs.	
   At	
   this	
   point	
   in	
   history,	
   when	
   we	
   are	
   so	
   far	
   from	
   the	
  
realisation	
   of	
   a	
   world	
   in	
   which	
   economic	
   democracy	
   has	
   been	
   realized	
   in	
   any	
  
form,	
  we	
  cannot	
  reasonably	
  predict	
  what	
  people	
  would	
  choose	
  (or	
  even	
  prescribe	
  
what	
  they	
  should	
  choose)	
  if	
  they	
  had	
  the	
  power	
  to	
  do	
  so.	
  How	
  much	
  markets	
  and	
  
market-­‐like	
   processes	
   will	
   be	
   part	
   the	
   institutional	
   configuration	
   for	
   stably	
  
realising	
   democratic	
   egalitarian	
   principles	
   will	
   depend	
   on	
   a	
   range	
   of	
   practical	
  
issues,	
  many	
  of	
  which	
  cannot	
  be	
  anticipated	
  in	
  advance.	
  
	
  
REAL	
  UTOPIAS	
  AND	
  TRANSFORMATION	
  
Transforming	
  capitalism	
  in	
  a	
  socialist	
  direction	
  means	
  democratising	
  the	
  economy	
  
through	
   the	
   seven	
   configurations	
   summarised	
   in	
   Figure	
   13.	
   In	
   this	
   process	
   the	
  
economic	
   structure	
   remains	
   a	
   hybrid	
   combining	
   capitalist,	
   statist	
   and	
   socialist	
  
practices	
  and	
  relations,	
  but	
  the	
  socialist	
  dimension	
  gains	
  weight	
  and	
  centrality.	
  
Extending	
  and	
  deepening	
  social	
  power	
  in	
  any	
  one	
  of	
  these	
  configurations	
  may	
  be	
  
quite	
   compatible	
   with	
   maintaining	
   the	
   dominance	
   of	
   capitalism,	
   but	
   if	
   it	
   is	
  
possible	
   to	
   increase	
   social	
   power	
   within	
   all	
   of	
   these	
   configurations,	
   the	
  
cumulative	
   effect	
   could	
   be	
   a	
   qualitative	
   transformation	
   in	
   which	
   socialism	
  
becomes	
   the	
   dominant	
   form	
   of	
   relations	
   within	
   a	
   complex	
   economic	
   hybrid,	
  
subordinating	
  both	
  capitalism	
  and	
  statism	
  within	
  democratised	
  power	
  relations.	
  
This,	
  of	
  course,	
  is	
  a	
  very	
  big	
  “if.”	
  Scepticism	
  towards	
  socialism	
  at	
  the	
  beginning	
  of	
  
the	
   21st
	
   century	
   is	
   at	
   least	
   as	
   much	
   about	
   the	
   prospects	
   of	
   challenging	
   the	
  
Erik	
  Olin	
  Wright	
  
dominance	
  of	
  capitalist	
  relations	
  as	
  it	
  is	
  in	
  the	
  viability	
  of	
  alternative	
  institutions	
  if	
  
they	
  could	
  be	
  created.	
  The	
  power	
  of	
  capital	
  seems	
  so	
  massive	
  that	
  if	
  ever	
  social	
  
power	
  seemed	
  to	
  threaten	
  the	
  dominance	
  of	
  capitalism,	
  it	
  would	
  be	
  relentlessly	
  
attacked	
   and	
   undermined.	
   Real	
   progress	
   in	
   advancing	
   the	
   project	
   of	
  
democratising	
   the	
   economy	
   through	
   these	
   configurations	
   seems	
   impossible	
   so	
  
long	
  as	
  capitalism	
  is	
  dominant.	
  For	
  this	
  reason	
  radical	
  anti-­‐capitalists	
  have	
  often	
  
felt	
  that	
  decisively	
  breaking	
  the	
  power	
  of	
  capital	
  was	
  a	
  precondition	
  for	
  significant	
  
movement	
   towards	
   socialism	
   rather	
   than	
   mainly	
   a	
   consequence	
   of	
   such	
  
movement.	
  
Marx	
  had	
  an	
  elegant	
  solution	
  to	
  this	
  problem.	
  He	
  believed	
  that	
  in	
  the	
  long	
  run	
  
capitalism	
   destroyed	
   its	
   own	
   conditions	
   of	
   existence:	
   the	
   laws	
   of	
   motion	
   and	
  
contradictions	
  of	
  capitalism	
  ultimately	
  make	
  capitalism	
  an	
  increasingly	
  fragile	
  and	
  
vulnerable	
  system	
  in	
  which	
  the	
  ability	
  of	
  the	
  ruling	
  class	
  and	
  its	
  political	
  allies	
  to	
  
block	
   transformation	
   becomes	
   progressively	
   weaker	
   over	
   time.	
   Eventually	
  
capitalism	
   has	
   so	
   weakened	
   its	
   own	
   conditions	
   of	
   existence	
   that	
   it	
   becomes	
  
overthrowable.	
  This	
  was	
  a	
  strong	
  prediction,	
  not	
  simply	
  a	
  weak	
  claim	
  about	
  future	
  
possibilities. 49
	
  This	
   doesn’t	
   solve	
   the	
   problem	
   of	
   exactly	
   how	
   to	
   build	
   the	
  
emancipatory	
   alternative	
   to	
   capitalism,	
   but	
   at	
   least	
   it	
   makes	
   the	
   problem	
   of	
  
overcoming	
  the	
  obstacles	
  of	
  existing	
  power	
  relations	
  much	
  less	
  daunting	
  in	
  the	
  
long	
  run.	
  
Relatively	
   few	
   people	
   today	
   –	
   even	
   those	
   who	
   still	
   work	
   within	
   the	
   Marxist	
  
tradition	
   –	
   feel	
   confident	
   that	
   capitalism	
   will	
   destroy	
   itself.	
   Capitalism	
   may	
   be	
  
crisis-­‐ridden	
   and	
   cause	
   great	
   suffering	
   in	
   the	
   world,	
   but	
   it	
   also	
   has	
   enormous	
  
resilience	
   and	
   capacity	
   to	
   effectively	
   block	
   alternatives.	
   The	
   problem	
   of	
   its	
  
transformation,	
  at	
  least	
  in	
  the	
  developed	
  world,	
  therefore	
  cannot	
  be	
  treated	
  as	
  
mainly	
   the	
   problem	
   of	
   “seizing	
   the	
   time”	
   when	
   capitalism	
   through	
   its	
   own	
  
contradictions	
   becomes	
   so	
   weak	
   and	
   chaotic	
   that	
   it	
   is	
   vulnerable	
   to	
   being	
  
overthrown.	
  Rather,	
  the	
  problem	
  of	
  transformation	
  requires	
  understanding	
  the	
  
49
	
  While	
  there	
  is	
  considerable	
  debate	
  on	
  this	
  matter,	
  I	
  think	
  Marx	
  was	
  largely	
  a	
  determinist	
  about	
  the	
  
ultimate	
   demise	
   of	
   capitalism,	
   even	
   if	
   he	
   was	
   not	
   a	
   determinist	
   about	
   the	
   process	
   of	
   actually	
  
constructing	
  socialism.	
  Capitalism	
  could	
  not,	
  he	
  believed,	
  survive	
  indefinitely	
  in	
  the	
  face	
  of	
  the	
  inevitable	
  
intensification	
   of	
   the	
   contradictions	
   generated	
   by	
   its	
   laws	
   of	
   motion.	
   This	
   does	
   not	
   mean	
   that	
   the	
  
overthrow	
   of	
   capitalism	
   must	
   wait	
   until	
   the	
   literal	
   collapse	
   of	
   capitalism,	
   but	
   it	
   does	
   mean	
   that	
   it	
  
progressively	
  becomes	
  more	
  vulnerable	
  to	
  overthrow	
  as	
  its	
  sustainability	
  becomes	
  ever	
  more	
  fragile.	
  For	
  
my	
  assessment	
  of	
  this	
  argument,	
  see	
  Envisioning	
  Real	
  Utopias,	
  chapter	
  4.	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
87
ways	
  in	
  which	
  strategies	
  of	
  transformation	
  have	
  some	
  prospect	
  in	
  the	
  long	
  term	
  
of	
  eroding	
  capitalist	
  power	
  relations	
  and	
  building	
  up	
  socialist	
  alternatives.	
  
Three	
   strategic	
   logics	
   of	
   transformation	
   have	
   characterised	
   the	
   history	
   of	
   anti-­‐
capitalist	
   struggle.	
   I	
   refer	
   to	
   these	
   as	
   ruptural,	
   interstitial,	
   and	
   symbiotic	
  
strategies:	
  
• Ruptural	
   transformations	
   envision	
   creating	
   new	
   emancipatory	
   institutions	
  
through	
  a	
  sharp	
  break	
  with	
  existing	
  institutions	
  and	
  social	
  structures.	
  The	
  
central	
  image	
  is	
  very	
  much	
  that	
  of	
  a	
  war	
  in	
  which	
  ultimately	
  victory	
  depends	
  
on	
  the	
  decisive	
  defeat	
  of	
  the	
  enemy	
  in	
  a	
  direct	
  confrontation.	
  The	
  result	
  of	
  
victory	
  is	
  a	
  radical	
  disjuncture	
  in	
  which	
  existing	
  institutions	
  are	
  destroyed	
  
and	
  new	
  ones	
  built	
  in	
  a	
  fairly	
  rapid	
  way.	
  In	
  most	
  versions,	
  this	
  revolutionary	
  
scenario	
  involves	
  seizing	
  state	
  power,	
  rapidly	
  transforming	
  state	
  structures	
  
and	
  then	
  using	
  these	
  new	
  apparatuses	
  of	
  state	
  power	
  to	
  destroy	
  the	
  power	
  
of	
  the	
  dominant	
  class	
  within	
  the	
  economy.	
  
• Interstitial	
  transformations	
  seek	
  to	
  build	
  new	
  forms	
  of	
  social	
  empowerment	
  
in	
  the	
  niches	
  and	
  margins	
  of	
  capitalist	
  society	
  where	
  this	
  is	
  possible,	
  often	
  
where	
  they	
  do	
  not	
  seem	
  to	
  pose	
  any	
  immediate	
  threat	
  to	
  dominant	
  classes	
  
and	
   elites.	
   Prodhoun’s	
   vision	
   of	
   building	
   a	
   cooperative	
   alternative	
   to	
  
capitalism	
   within	
   capitalism	
   itself	
   is	
   a	
   19th
	
   century	
   version	
   of	
   this	
  
perspective.	
   The	
   many	
   experiments	
   in	
   the	
   social	
   economy	
   today	
   are	
   also	
  
examples.	
  The	
  central	
  theoretical	
  idea	
  is	
  that	
  building	
  alternatives	
  on	
  the	
  
ground	
   in	
   whatever	
   spaces	
   are	
   possible	
   both	
   serves	
   a	
   critical	
   ideological	
  
function	
  of	
  showing	
  that	
  alternative	
  ways	
  of	
  working	
  and	
  living	
  are	
  possible,	
  
and	
  potentially	
  erodes	
  the	
  constraints	
  on	
  the	
  spaces	
  themselves.50
	
  
• Symbiotic	
  transformations	
  involve	
  strategies	
  which	
  use	
  the	
  state	
  to	
  extend	
  
and	
  deepen	
  the	
  institutional	
  forms	
  of	
  social	
  empowerment	
  in	
  ways	
  which	
  
also	
  solve	
  certain	
  practical	
  problems	
  faced	
  by	
  dominant	
  classes	
  and	
  elites.	
  
The	
  basic	
  idea	
  here	
  is	
  that	
  there	
  are	
  multiple	
  institutional	
  equilibria	
  within	
  
capitalism,	
  all	
  of	
  which	
  are	
  functionally	
  compatible	
  with	
  capitalism	
  (i.e.	
  they	
  
contribute	
   to	
   solving	
   problems	
   of	
   capitalist	
   reproduction),	
   but	
   some	
   of	
  
50
	
  The	
  idea	
  of	
  interstitial	
  transformation	
  resonates	
  with	
  various	
  strands	
  of	
  nonviolent	
  activism	
  in	
  which	
  
people	
  are	
  exhorted	
  (in	
  words	
  apocryphally	
  attributed	
  to	
  Gandhi)	
  to	
  “be	
  the	
  change	
  you	
  want	
  to	
  see	
  in	
  
the	
   world”.	
   The	
   difference	
   is	
   that	
   interstitial	
   transformation	
   involves	
   collectively	
   building	
   new	
  
institutions	
  embodying	
  the	
  kind	
  of	
  changed	
  world	
  you	
  want,	
  not	
  just	
  individually	
  behaving	
  in	
  a	
  dignified,	
  
value-­‐affirming	
  way.	
  
Erik	
  Olin	
  Wright	
  
which	
  are	
  better	
  for	
  capitalists	
  than	
  others	
  and	
  some	
  of	
  which	
  involve	
  more	
  
social	
   empowerment	
   than	
   others.	
   A	
   symbiotic	
   transformation	
   is	
   one	
   that	
  
seeks	
  to	
  expand	
  social	
  empowerment	
  while	
  still	
  achieving	
  an	
  institutional	
  
configuration	
  that	
  contributes	
  to	
  an	
  adequately	
  well-­‐functioning	
  capitalism.	
  
This	
  is	
  what	
  in	
  the	
  1970s	
  was	
  called	
  “non-­‐reformist	
  reforms”	
  –	
  reforms	
  that	
  
simultaneously	
   make	
   life	
   better	
   within	
   the	
   existing	
   economic	
   system	
   and	
  
expand	
   the	
   potential	
   for	
   future	
   advances	
   of	
   democratic	
   power.	
   It	
   is	
   also	
  
reflected	
  in	
  a	
  variety	
  of	
  forms	
  of	
  civic	
  activism	
  in	
  which	
  social	
  movements,	
  
local	
  leaders	
  and	
  city	
  governments	
  collaborate	
  in	
  ways	
  that	
  both	
  enhance	
  
democracy	
  and	
  solve	
  practical	
  problems.	
  
All	
  three	
  of	
  these	
  strategic	
  logics	
  have	
  historically	
  had	
  a	
  place	
  within	
  anti-­‐capitalist	
  
social	
   movements	
   and	
   politics.	
   Ruptural	
   strategies	
   are	
   most	
   closely	
   associated	
  
with	
   revolutionary	
   socialism	
   and	
   communism,	
   interstitial	
   strategies	
   with	
   some	
  
strands	
  of	
  anarchism,	
  and	
  symbiotic	
  strategies	
  with	
  social	
  democracy.	
  	
  It	
  is	
  easy	
  to	
  
raise	
  objections	
  to	
  each	
  of	
  them.	
  Ruptural	
  strategies	
  have	
  a	
  grandiose,	
  romantic	
  
appeal	
  to	
  critics	
  of	
  capitalism,	
  but	
  the	
  historical	
  record	
  is	
  pretty	
  dismal.	
  There	
  are	
  
no	
  cases	
  in	
  which	
  socialism	
  as	
  defined	
  here	
  –	
  a	
  deeply	
  democratic	
  and	
  egalitarian	
  
organisation	
  of	
  power	
  relations	
  within	
  an	
  economy	
  –	
  has	
  been	
  a	
  robust	
  result	
  of	
  a	
  
ruptural	
   strategy	
   of	
   transformation	
   of	
   capitalism.	
   Ruptural	
   strategies	
   seem	
   in	
  
practice	
  more	
  prone	
  to	
  result	
  in	
  authoritarian	
  statism	
  than	
  democratic	
  socialism.	
  
Interstitial	
   strategies	
   may	
   produce	
   improvements	
   in	
   the	
   lives	
   of	
   people	
   and	
  
pockets	
   of	
   more	
   democratic	
   egalitarian	
   practices,	
   but	
   they	
   also	
   have	
   nowhere	
  
succeeded	
   in	
   significantly	
   eroding	
   capitalist	
   power	
   relations.	
   As	
   for	
   symbiotic	
  
strategies,	
   in	
   the	
   most	
   successful	
   instances	
   of	
   social	
   democracy	
   they	
   have	
  
certainly	
  resulted	
  in	
  a	
  more	
  humane	
  capitalism,	
  with	
  less	
  poverty,	
  less	
  inequality,	
  
and	
  less	
  insecurity,	
  but	
  they	
  have	
  done	
  so	
  in	
  ways	
  which	
  stabilise	
  capitalism	
  and	
  
leave	
   intact	
   the	
   core	
   powers	
   of	
   capital.	
   Any	
   advance	
   of	
   symbiotic	
   strategies	
  
historically	
   that	
   appeared	
   to	
   potentially	
   threaten	
   those	
   core	
   powers	
   was	
  
massively	
  resisted	
  by	
  capital.	
  The	
  reaction	
  of	
  Swedish	
  capitalists	
  to	
  proposals	
  for	
  
serious	
  union	
  involvement	
  in	
  control	
  over	
  investment	
  in	
  the	
  late	
  1970s	
  is	
  one	
  of	
  
the	
  best	
  known	
  examples.	
  	
  These	
  are	
  all	
  reasonable	
  objections.	
  Taken	
  together	
  
they	
  suggest	
  to	
  many	
  people	
  that	
  transcending	
  capitalism	
  through	
  some	
  kind	
  of	
  
long	
  term	
  coherent	
  strategy	
  is	
  simply	
  not	
  possible.	
  
Pessimism	
  is	
  intellectually	
  easy,	
  perhaps	
  even	
  intellectually	
  lazy.	
  It	
  often	
  reflects	
  a	
  
simple	
   extrapolation	
   of	
   past	
   experience	
   into	
   the	
   future.	
   Our	
   theories	
   of	
   the	
  
future,	
  however,	
  are	
  far	
  too	
  weak	
  to	
  really	
  make	
  confident	
  claims	
  that	
  we	
  know	
  
what	
   can’t	
   happen.	
   The	
   appropriate	
   orientation	
   towards	
   strategies	
   of	
   social	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
89
transformation,	
  therefore,	
  is	
  to	
  do	
  things	
  now	
  which	
  put	
  us	
  in	
  the	
  best	
  position	
  to	
  
do	
   more	
   later	
   by	
   working	
   to	
   create	
   those	
   institutions	
   and	
   structures	
   which	
  
increase,	
   rather	
   than	
   decrease,	
   the	
   prospects	
   of	
   taking	
   advantage	
   of	
   whatever	
  
historical	
   opportunities	
   emerge.	
   Building	
   real	
   utopias	
   can	
   both	
   prefigure	
   more	
  
comprehensive	
  alternatives	
  and	
  move	
  us	
  in	
  the	
  direction	
  of	
  those	
  alternatives.	
  
In	
   these	
   terms	
   I	
   think	
   the	
   best	
   prospect	
   for	
   the	
   future	
   in	
   developed	
   capitalist	
  
countries	
   is	
   a	
   strategic	
   orientation	
   mainly	
   organised	
   around	
   the	
   interplay	
   of	
  
interstitial	
   and	
   symbiotic	
   strategies,	
   with	
   perhaps	
   periodic	
   episodes	
   involving	
  
elements	
   of	
   ruptural	
   strategy.	
   Through	
   interstitial	
   strategies	
   activists	
   and	
  
communities	
   can	
   build	
   and	
   strengthen	
   real	
   utopian	
   economic	
   institutions	
  
embodying	
   democratic	
   egalitarian	
   principles	
   where	
   this	
   is	
   possible.	
   Symbiotic	
  
strategies	
  through	
  the	
  state	
  can	
  help	
  open	
  up	
  greater	
  space	
  and	
  support	
  for	
  these	
  
interstitial	
  innovations.	
  The	
  interplay	
  between	
  interstitial	
  and	
  symbiotic	
  strategies	
  
could	
  then	
  create	
  a	
  trajectory	
  of	
  deepening	
  socialist	
  elements	
  within	
  the	
  hybrid	
  
capitalist	
  economic	
  ecosystem.	
  
Worker	
   cooperatives	
   are	
   a	
   good	
   example.	
   Under	
   existing	
   conditions,	
   worker	
  
cooperatives	
   face	
   serious	
   obstacles	
   to	
   becoming	
   a	
   significant	
   component	
   of	
  
market	
   economies:	
   credit	
   markets	
   are	
   sceptical	
   of	
   worker-­‐owned	
   firms;	
   risk-­‐
averse	
   workers	
   are	
   reluctant	
   to	
   sink	
   their	
   savings	
   in	
   a	
   venture	
   that	
   has	
   low	
  
probability	
  of	
  success;	
  cooperatives	
  face	
  supply	
  chains	
  in	
  which,	
  because	
  of	
  scale,	
  
they	
   face	
   higher	
   costs	
   than	
   capitalist	
   corporate	
   rivals;	
   and	
   so	
   on.	
   Symbiotic	
  
strategies	
  directed	
  at	
  public	
  policy	
  could	
  address	
  all	
  of	
  these	
  issues.	
  	
  Given	
  the	
  
potential	
   for	
   worker-­‐owned	
   cooperatives	
   to	
   help	
   solve	
   problems	
   of	
  
unemployment,	
  deteriorating	
  tax	
  bases,	
  and	
  unstable	
  communities,	
  new	
  rules	
  of	
  
the	
  game	
  to	
  support	
  cooperatives	
  could	
  gain	
  political	
  traction.	
  Even	
  within	
  the	
  
logic	
   of	
   market	
   economies,	
   the	
   positive	
   externalities	
   of	
   worker	
   cooperatives	
  
provide	
  a	
  justification	
  for	
  public	
  subsidies	
  and	
  insurance	
  schemes	
  to	
  increase	
  their	
  
viability.	
   Such	
   policies	
   could,	
   over	
   time,	
   expand	
   the	
   weight	
   of	
   a	
   cooperative	
  
market	
  economy	
  within	
  the	
  broader	
  capitalist	
  economic	
  hybrid.	
  	
  	
  
Many	
   other	
   real	
   utopian	
   institutions	
   and	
   innovations	
   could	
   contribute	
   to	
  
deepening	
  the	
  forms	
  of	
  social	
  empowerment	
  over	
  economic	
  life.	
  Some	
  of	
  these	
  
can	
   take	
   place	
   with	
   little	
   or	
   no	
   state	
   involvement;	
   others	
   would	
   be	
   greatly	
  
Erik	
  Olin	
  Wright	
  
enhanced	
   by	
   various	
   kinds	
   of	
   state	
   support.	
   	
   Here	
   are	
   a	
   few	
   additional	
  
examples:51
	
  
• Peer-­‐to-­‐peer	
  collaborative	
  production:	
  Wikipedia,	
  open-­‐source	
  software.	
  
• Urban	
  agriculture	
  with	
  community	
  land	
  trusts.	
  
• Community	
   owned	
   fab	
   labs	
   for	
   advanced	
   customised	
   small-­‐batch	
  
cooperative	
  manufacturing	
  
• Open-­‐access	
   intellectual	
   property:	
   creative	
   commons,	
   copy-­‐left,	
   open	
  
source	
  pharmaceuticals,	
  free	
  downloadable	
  blueprints	
  for	
  3-­‐D	
  printing	
  
• Free	
  Publicly	
  provided	
  goods/services:	
  libraries,	
  free	
  public	
  transport	
  
• Unconditional	
  basic	
  income	
  
• Policy	
  juries	
  and	
  “randomocracy”	
  
• Eco-­‐villages	
  and	
  Transition	
  towns	
  
Such	
  a	
  combination	
  of	
  symbiotic	
  and	
  interstitial	
  strategies	
  does	
  not	
  imply	
  that	
  the	
  
process	
   of	
   transformation	
   could	
   ever	
   follow	
   a	
   smooth	
   path	
   of	
   enlightened	
  
cooperation	
  between	
  conflicting	
  class	
  forces.	
  What	
  is	
  ultimately	
  at	
  stake	
  here	
  is	
  a	
  
transformation	
  of	
  the	
  core	
  power	
  relations	
  of	
  capitalism,	
  and	
  this	
  does	
  ultimately	
  
threaten	
   the	
   interests	
   of	
   capitalists.	
   While	
   elites	
   may	
   become	
   resigned	
   to	
   a	
  
diminution	
  of	
  power,	
  they	
  are	
  unlikely	
  to	
  gracefully	
  embrace	
  the	
  prospects.	
  While	
  
symbiotic	
  transformations	
  help	
  solve	
  problems	
  within	
  capitalism,	
  they	
  often	
  are	
  
not	
   optimal	
   for	
   elites	
   and	
   are	
   thus	
   resisted.	
   This	
   means	
   that	
   a	
   key	
   element	
   of	
  
ruptural	
  strategies	
  –	
  confrontations	
  between	
  opposing	
  organised	
  social	
  forces	
  in	
  
which	
  there	
  are	
  winners	
  and	
  losers	
  –	
  will	
  be	
  a	
  part	
  of	
  any	
  plausible	
  trajectory	
  of	
  
sustainable	
  social	
  empowerment.	
  The	
  purpose	
  of	
  such	
  confrontations,	
  however,	
  
is	
   not	
   a	
   systemic	
   rupture	
   with	
   capitalist	
   dominance,	
   but	
   rather	
   creating	
   more	
  
space	
  for	
  the	
  interplay	
  of	
  interstitial	
  and	
  symbiotic	
  strategies.	
  
	
  
	
  
CONCLUSION	
  
51
	
  Most	
  of	
  these	
  are	
  discussed	
  at	
  length	
  in	
  Envisioning	
  Real	
  Utopias,	
  chapters	
  6	
  and	
  7.	
  
	
  Socialism	
  and	
  Real	
  Utopias	
  
91
The	
   framework	
   proposed	
   here	
   for	
   a	
   socialism	
   rooted	
   in	
   social	
   empowerment	
  
involves	
  a	
  commitment	
  to	
  institutional	
  pluralism	
  and	
  heterogeneity.	
  Instead	
  of	
  a	
  
unitary	
   institutional	
   design	
   for	
   transcending	
   capitalism,	
   the	
   configurations	
   of	
  
social	
   empowerment	
   open	
   up	
   space	
   for	
   a	
   wide	
   diversity	
   of	
   institutional	
   forms.	
  	
  
Worker-­‐cooperatives	
   and	
   local	
   social	
   economy	
   projects,	
   state-­‐run	
   banks	
   and	
  
enterprises,	
   social	
   democratic	
   regulation	
   of	
   private	
   corporations,	
   solidarity	
  
finance,	
  and	
  participatory	
  budgeting	
  all	
  potentially	
  undermine	
  the	
  dominance	
  of	
  
capitalism	
  and	
  increase	
  the	
  weight	
  of	
  social	
  power	
  within	
  the	
  hybrid	
  economic	
  
ecosystem.	
  These	
  diverse	
  forms	
  all	
  increase	
  social	
  power,	
  but	
  they	
  do	
  not	
  point	
  to	
  
an	
   integrated,	
   comprehensive	
   system	
   driven	
   by	
   a	
   single	
   institutional	
   design	
  
principle	
  of	
  the	
  sort	
  proposed	
  by	
  Robin	
  in	
  his	
  analysis	
  of	
  participatory	
  economics.	
  
The	
  institutional	
  pluralism	
  of	
  the	
  destination	
  also	
  suggests	
  strategic	
  pluralism	
  in	
  
the	
   practices	
   of	
   transformation.	
   Within	
   some	
   of	
   these	
   configurations,	
   to	
  
strengthen	
  social	
  power	
  requires	
  access	
  to	
  state	
  power.	
  But	
  other	
  configurations	
  
can	
  be	
  advanced	
  even	
  without	
  state	
  power.	
  This	
  is	
  especially	
  true	
  for	
  the	
  social	
  
economy	
  initiatives	
  –	
  workers	
  cooperatives,	
  community-­‐based	
  urban	
  agriculture,	
  
solidarity	
   finance,	
   community	
   land	
   trusts,	
   etc.	
   Activists	
   on	
   the	
   left,	
   especially	
  
those	
   on	
   the	
   radical	
   left,	
   have	
   often	
   regarded	
   these	
   kinds	
   of	
   locally-­‐oriented,	
  
community-­‐based	
  initiatives	
  as	
  not	
  being	
  very	
  “political”,	
  since	
  they	
  do	
  not	
  always	
  
involve	
  direct	
  confrontation	
  with	
  political	
  power.	
  This	
  is	
  a	
  narrow	
  view	
  of	
  politics.	
  
Interstitial	
  strategies	
  to	
  create	
  real	
  utopias	
  involve	
  showing	
  that	
  another	
  world	
  is	
  
possible	
  by	
  building	
  it	
  in	
  the	
  spaces	
  available,	
  and	
  then	
  pushing	
  against	
  the	
  state	
  
and	
   public	
   policy	
   to	
   expand	
   those	
   spaces.	
   For	
   many	
   people	
   these	
   kinds	
   of	
  
interstitial	
  initiatives	
  also	
  have	
  the	
  advantage	
  of	
  generating	
  immediate,	
  tangible	
  
results	
   in	
   which	
   each	
   person’s	
   contribution	
   clearly	
   matters.	
  	
   A	
   vision	
   of	
  
emancipatory	
   alternatives	
   that	
   is	
   anchored	
   in	
   the	
   multidimensional	
   and	
  
multiscalar	
  problem	
  of	
  deepening	
  democracy	
  can	
  encompass	
  this	
  wide	
  range	
  of	
  
strategies	
  and	
  projects	
  of	
  transformation.	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
Erik	
  Olin	
  Wright	
  
	
  
	
  
BREAKING	
  WITH	
  CAPITALISM	
  
	
  
Robin	
  Hahnel	
  
	
  
	
  
	
  
In	
  “Socialism	
  and	
  Real	
  Utopias”	
  Erik	
  comments	
  on	
  how	
  to	
  think	
  about	
  systemic	
  
alternatives,	
   argues	
   that	
   markets	
   can	
   play	
   a	
   positive	
   role	
   in	
   a	
   fully	
   desirable	
  
economy,	
  and	
  discusses	
  transition	
  strategy.	
  Below	
  I	
  comment	
  briefly	
  on	
  questions	
  
of	
  methodology	
  and	
  social	
  theory	
  before	
  going	
  on	
  to	
  discuss	
  markets	
  at	
  greater	
  
length.	
  After	
  identifying	
  large	
  areas	
  of	
  agreement	
  with	
  only	
  minor	
  disagreements	
  
with	
  regard	
  to	
  transition	
  strategy,	
  I	
  close	
  with	
  some	
  personal	
  observations	
  about	
  
the	
  response	
  to	
  our	
  model	
  of	
  a	
  participatory	
  economy	
  over	
  the	
  past	
  twenty	
  years.	
  
	
  	
  
THINKING	
  ABOUT	
  SYSTEMIC	
  ALTERNATIVES	
  
Both	
  Erik	
  and	
  I	
  have	
  contributed	
  to	
  a	
  vast	
  literature	
  on	
  “social	
  theory.”52
	
  All	
  either	
  
of	
  us	
  can	
  hope	
  to	
  do	
  in	
  this	
  dialogue	
  is	
  briefly	
  discuss	
  a	
  few	
  insights	
  we	
  believe	
  are	
  
particularly	
  relevant.	
  
(1)	
   Erik	
   distinguishes	
   between	
   an	
   “organism”	
   vs.	
   “ecological”	
   view	
   of	
   human	
  
societies,	
  and	
  observes	
  that	
  “the	
  idea	
  of	
  real	
  utopias	
  as	
  a	
  way	
  of	
  transforming	
  a	
  
society	
  is	
  more	
  in	
  line	
  with	
  the	
  ecosystems	
  view”	
  where	
  transformation	
  results	
  
from	
   introducing	
   “an	
   alien	
   species	
   which	
   finds	
   a	
   niche	
   and	
   then	
   gradually	
  
increases,	
  potentially	
  even	
  displacing	
  certain	
  other	
  species.”	
  
52
	
  As	
   an	
   alternative	
   to	
   Marxist	
   historical	
   materialism	
   I	
   helped	
   develop	
   a	
   social	
   theory	
   known	
   as	
  
“complimentary	
  holism”	
  which	
  purports	
  to	
  provide	
  a	
  more	
  realistic	
  and	
  useful	
  framework	
  for	
  thinking	
  
about	
   relations	
   between	
   the	
   “human	
   center”	
   and	
   “institutional	
   boundary”	
   of	
   societies,	
   the	
   political,	
  
kinship,	
  community,	
  and	
  economic	
  “spheres	
  of	
  social	
  life,”	
  and	
  the	
  conscious	
  and	
  unconscious	
  forces	
  
that	
  operate	
  to	
  stabilise	
  and	
  destabilise	
  societies.	
  This	
  is	
  not	
  the	
  place	
  for	
  Erik	
  or	
  me	
  to	
  explain	
  our	
  full	
  
thoughts	
  on	
  social	
  theory.	
  Readers	
  interested	
  in	
  mine	
  should	
  see	
  Marxism	
  and	
  Socialist	
  Theory	
  (Boston:	
  
South	
  End	
  Press,	
  1981)	
  with	
  Michael	
  Albert,	
  Liberating	
  Theory	
  (Boston:	
  South	
  End	
  Press,	
  1986),	
  written	
  
with	
  Michael	
  Albert,	
  Leslie	
  Cagan,	
  Noam	
  Chomsky,	
  Mel	
  King,	
  Lydia	
  Sargent,	
  and	
  Holly	
  Sklar,	
  and	
  chapter	
  
one	
  in	
  The	
  ABCs	
  of	
  Political	
  Economy:	
  A	
  Modern	
  Approach,	
  2nd	
  edition	
  (London:	
  Pluto	
  Press,	
  2014).	
  
Robin	
  Hahnel	
  
The	
  problem	
  with	
  the	
  “society	
  as	
  ecological	
  system”	
  metaphor	
  is	
  that	
  there	
  are	
  
cases	
  where	
  the	
  “society	
  as	
  organic	
  system”	
  metaphor	
  is	
  more	
  apt.	
  For	
  example,	
  
what	
  if	
  an	
  "alien	
  species"	
  of	
  socially	
  empowering	
  institutions	
  we	
  seek	
  to	
  introduce	
  
into	
   a	
   capitalist	
   economy	
   cannot	
   survive,	
   or	
   if	
   survival	
   requires	
   becoming	
   co-­‐
opted?	
  A	
  “pure	
  cooperativist”	
  strategy	
  for	
  social	
  change	
  is	
  to	
  introduce	
  more	
  and	
  
more	
   “alien”	
   cooperative	
   “species”	
   into	
   capitalism	
   until	
   “native”	
   private	
  
enterprise	
  “species”	
  are	
  all	
  replaced.	
  But	
  there	
  are	
  many	
  who	
  have	
  argued	
  that	
  
simply	
   introducing	
   more	
   cooperatives	
   into	
   capitalism	
   cannot	
   achieve	
   “system	
  
change”	
  precisely	
  because	
  they	
  will	
  either	
  fail	
  or	
  become	
  co-­‐opted.	
  
I	
   do	
   not	
   bring	
   this	
   up	
   because	
   I	
   believe	
   Erik	
   and	
   I	
   actually	
   disagree	
   about	
  
cooperatives.	
   We	
   both	
   believe	
   they	
   can	
   play	
   a	
   positive	
   role	
   as	
  one	
   part	
  of	
   a	
  
successful	
   transition	
   strategy,	
   while	
   neither	
   of	
   us	
   thinks	
   “one,	
   two,	
   many	
  
cooperatives”	
  can	
  be	
  a	
  successful	
  strategy	
  all	
  by	
  itself.	
  My	
  point	
  is	
  simply	
  that	
  the	
  
analogy	
  Erik	
  offers	
  does	
  not	
  settle	
  any	
  of	
  the	
  issues	
  that	
  –	
  to	
  use	
  Erik’s	
  words	
  –	
  
“rupturalists,”	
   “interstitialists,”	
   and	
   “symbiotics”	
   argue	
   over.	
   It	
   is	
   merely	
   an	
  
analogy	
   that	
   inclines	
   one	
   to	
   think	
   more	
   along	
   interstitial	
   and	
   symbiotic	
   lines,	
  
which	
  is	
  Erik’s	
  inclination.	
  
(2)	
  Erik	
  distinguishes	
  between	
  “ameliorative	
  reforms”	
  –	
  which,	
  to	
  his	
  credit,	
  he	
  
argues	
  deserve	
  our	
  full	
  support	
  because	
  they	
  are	
  beneficial	
  even	
  though	
  they	
  are	
  
not	
  “transformative”	
  –	
  and	
  “real	
  utopian	
  transformations”	
  –	
  which	
  he	
  claims	
  are	
  
both	
  beneficial	
  in	
  the	
  here	
  and	
  now	
  and	
  transformative.	
  Elsewhere	
  I	
  have	
  angered	
  
most	
  of	
  my	
  closest	
  radical	
  friends	
  by	
  disputing	
  that	
  “non-­‐reformist	
  reforms”	
  can	
  
be	
  meaningfully	
  distinguished	
  from	
  “reformist	
  reforms.”53
	
  In	
  brief,	
  I	
  argue	
  that	
  it	
  
is	
  a	
  mistake	
  to	
  think	
  that	
  the	
  key	
  to	
  fighting	
  for	
  reforms	
  in	
  ways	
  that	
  undermines	
  
the	
  system	
  lies	
  in	
  picking	
  a	
  particular	
  kind	
  of	
  reform,	
  i.e.	
  choosing	
  reforms	
  that	
  
are	
  somehow	
  particularly	
  deadly	
  silver	
  bullets.	
  I	
  argue	
  instead	
  that	
  the	
  key	
  is	
  how	
  
53
	
  
	
  
See	
  “The	
  Myth	
  of	
  Non-­‐reformist	
  Reforms,”	
  in	
  Economic	
  Justice	
  and	
  Democracy:	
  From	
  Competition	
  to	
  
Cooperation	
  (NY:	
  Routledge,	
  2005):	
  154-­‐156.	
  To	
  be	
  blunt,	
  I	
  think	
  the	
  idea	
  of	
  “non-­‐reformist	
  reforms”	
  is	
  
intellectually	
  vacuous,	
  but	
  often	
  a	
  socially	
  useful	
  psychological	
  crutch	
  for	
  radicals.	
  All	
  too	
  often	
  those	
  
who	
   want	
   system	
   change	
   find	
   it	
   difficult	
   to	
   motivate	
   themselves	
   to	
   participate	
   whole	
   heartedly	
   in	
  
reform	
   campaigns	
   even	
   though	
   they	
   should.	
   However,	
   if	
   radicals	
   convince	
   themselves	
   it	
   is	
   a	
   “non-­‐
reformist	
   reform”	
   they	
   have	
   less	
   trouble	
   motivating	
   themselves	
   to	
   pitch	
   in.	
   Apparently	
   radicals,	
   like	
  
most	
  humans,	
  must	
  sometimes	
  resort	
  to	
  “necessary	
  illusions”	
  to	
  motivate	
  themselves	
  to	
  do	
  what	
  they	
  
should.	
  In	
  which	
  case,	
  what	
  I	
  probably	
  should	
  say	
  to	
  my	
  radical	
  comrades	
  is:	
  If	
  labelling	
  a	
  reform	
  “non-­‐
reformist”	
  helps	
  motivate	
  you	
  to	
  get	
  off	
  the	
  side	
  line	
  and	
  participate	
  whole	
  heartedly,	
  be	
  my	
  guest!	
  
Breaking	
  With	
  Capitlaism	
  
95
we	
  go	
  about	
  waging	
  the	
  fight	
  for	
  whatever	
  reform	
  we	
  are	
  working	
  for,	
  rather	
  than	
  
what	
  the	
  particular	
  reform	
  happens	
  to	
  be.	
  
Any	
   successful	
   reform	
   campaign	
   will	
   make	
   capitalism	
   less	
   harmful	
   to	
   some	
  
extent.	
  There	
  is	
  no	
  way	
  around	
  this,	
  and	
  even	
  if	
  there	
  were	
  such	
  a	
  thing	
  as	
  a	
  non-­‐
reformist	
   reform,	
   it	
   would	
   not	
   change	
   this	
   fact.	
  However,	
   just	
   because	
   every	
  
reform	
   success	
   makes	
   capitalism	
   less	
   harmful	
   need	
   not	
   prolong	
   the	
   life	
   of	
  
capitalism	
  –	
  although	
  it	
  might,	
  and	
  this	
  is	
  something	
  I	
  argue	
  anti-­‐capitalists	
  must	
  
learn	
  to	
  accept	
  without	
  regret.54
	
  But	
  if	
  winning	
  a	
  reform	
  further	
  empowers	
  those	
  
who	
   challenged	
   the	
   status	
   quo,	
   if	
   it	
   fortifies	
   emancipating	
   institutions	
   and	
  
weakens	
   oppressive	
   institutions,	
   if	
   it	
   whets	
   reformers’	
   appetite	
   for	
   more	
  
economic	
   democracy,	
   more	
   economic	
   justice,	
   and	
   more	
   environmental	
  
protection	
   than	
   capitalism	
   can	
   provide,	
   then	
   a	
   successful	
   reform	
   campaign	
   can	
  
also	
  help	
  lead	
  to	
  system	
  change.	
  In	
  sum,	
  any	
  reform	
  can	
  be	
  fought	
  for	
  in	
  ways	
  
that	
  diminish	
  the	
  chances	
  of	
  further	
  gains,	
  and	
  any	
  reform	
  can	
  be	
  fought	
  for	
  in	
  
ways	
  that	
  make	
  further	
  progress	
  more	
  likely.	
  
(3)	
  Erik	
  compares	
  trying	
  to	
  “create	
  a	
  detailed	
  account	
  of	
  the	
  critical	
  institutions	
  of	
  
an	
  alternative	
  system,”	
  to	
  limiting	
  ourselves	
  to	
  “enunciate	
  the	
  basic	
  values	
  that	
  
animate	
   the	
   search	
   for	
   alternatives	
   and	
   the	
   core	
   principles	
   of	
   institutional	
  
design,”	
  and	
  argues	
  that	
  while	
  “both	
  of	
  these	
  strategies	
  have	
  value”	
  he	
  is	
  more	
  
inclined	
   to	
   the	
   second	
   approach.	
   I	
   would	
   add	
   one	
   consideration	
   he	
   fails	
   to	
  
mention	
  when	
  evaluating	
  the	
  pros	
  and	
  cons	
  of	
  the	
  two	
  approaches.	
  
The	
   second	
   approach	
   runs	
   a	
   greater	
   risk	
   of	
   permitting	
   people	
   to	
   dream	
   about	
  
things	
  that	
  are	
  actually	
  not	
  possible.	
  Because	
  it	
  keeps	
  discussion	
  at	
  the	
  level	
  of	
  
“values,”	
  and	
  tolerates	
  imprecision	
  about	
  how	
  something	
  would	
  actually	
  be	
  done,	
  
it	
  can	
  permit	
  people	
  to	
  continue	
  to	
  hold	
  onto	
  views	
  that	
  are	
  self-­‐contradictory.	
  
For	
  example,	
  limiting	
  discussion	
  to	
  basic	
  values	
  can	
  delude	
  people	
  into	
  thinking	
  
that	
  markets	
  are	
  compatible	
  with	
  economic	
  justice	
  and	
  democracy,	
  or	
  that	
  central	
  
planning	
   is	
   compatible	
   with	
   worker	
   self-­‐management.	
   Requiring	
   visionaries	
   to	
  
spell	
  out	
  exactly	
  how	
  they	
  propose	
  decisions	
  be	
  made	
  can	
  serve	
  as	
  an	
  important	
  
bulwark	
   against	
   this	
   kind	
   of	
   self-­‐deception,	
   which	
   I	
   believe	
   has	
   been	
   all	
   too	
  
common	
  on	
  the	
  left.	
  It	
  is	
  also	
  the	
  only	
  way	
  I	
  know	
  to	
  convince	
  people	
  that	
  this	
  
54
	
  Those	
  who	
  foolishly	
  root	
  for	
  worsening	
  conditions	
  because	
  they	
  believe	
  it	
  will	
  drive	
  people	
  to	
  rebel	
  
more	
  quickly	
  are	
  prime	
  examples	
  of	
  radicals	
  who	
  have	
  failed	
  to	
  learn	
  this	
  important	
  lesson.	
  Those	
  who	
  
capitalism	
  victimises	
  learn	
  quickly	
  to	
  despise	
  any	
  who	
  display	
  this	
  attitude,	
  as	
  they	
  should.	
  
Robin	
  Hahnel	
  
time	
  anti-­‐capitalists	
  really	
  do	
  have	
  a	
  better	
  idea	
  how	
  to	
  make	
  dreams	
  come	
  true,	
  
because	
  everyone	
  knows	
  that	
  last	
  time	
  we	
  did	
  not.	
  
	
  
A	
  SOCIAL	
  SYSTEM	
  
Since	
  he	
  does	
  not	
  discuss	
  political,	
  cultural,	
  or	
  kinship	
  systems,	
  Erik	
  is	
  only	
  talking	
  
about	
   economic	
   systems,	
   not	
   entire	
   social	
   systems,	
   when	
   he	
   talks	
   of	
   three	
  
traditional	
   “ideal	
   types”	
   and	
   seven	
   non-­‐traditional	
   ideal	
   types.	
   As	
   a	
   long-­‐time	
  
comparative	
  economic	
  systems	
  professor	
  I	
  classify	
  economic	
  systems	
  differently,	
  
based	
  on	
  who	
  owns	
  productive	
  assets,	
  who	
  manages	
  production	
  processes,	
  and	
  
how	
  any	
  division	
  of	
  labour	
  is	
  coordinated.55
	
  But	
  in	
  the	
  interest	
  of	
  brevity,	
  let	
  me	
  
comment	
  briefly	
  on	
  how	
  Erik	
  puts	
  his	
  frameworks	
  to	
  use.	
  
Erik	
  points	
  out	
  that	
  most	
  real	
  world	
  economies	
  are	
  hybrids	
  in	
  the	
  sense	
  that	
  they	
  
contain	
   elements	
   from	
   more	
   than	
   one	
   ideal	
   type.	
   Using	
   his	
   three	
   system	
  
framework	
  he	
  suggests:	
  “The	
  possibility	
  of	
  socialism	
  thus	
  depends	
  on	
  our	
  ability	
  
to	
   enlarge	
   and	
   deepen	
   the	
   socialist	
   component	
   of	
   the	
   hybrid	
   and	
   weaken	
   the	
  
capitalist	
  and	
  statist	
  components.	
  This	
  way	
  of	
  thinking	
  about	
  economic	
  systems	
  
means	
   abandoning	
   a	
   simple	
   binary	
   notion	
   of	
   capitalism	
   versus	
   socialism.”	
  
Sometimes	
  this	
  is	
  useful,	
  but	
  it	
  ignores	
  thorny	
  problems	
  about	
  compatibility,	
  and	
  
contains	
  an	
  implicit	
  bias	
  toward	
  an	
  incremental	
  approach	
  to	
  social	
  change.	
  
For	
  example,	
  the	
  Chavez	
  government	
  chose	
  to	
  leave	
  the	
  private	
  and	
  state	
  sectors	
  
of	
  the	
  Venezuelan	
  economy	
  largely	
  in	
  place,	
  and	
  concentrate	
  instead	
  on	
  building	
  
a	
   new	
   sector	
   they	
   call	
   “the	
   social	
   economy”	
   comprised	
   of	
   worker-­‐owned	
  
cooperatives,	
   neighbourhood	
   clinics,	
   food	
   stores,	
   	
   educational	
   “misiones,”	
  
municipal	
  assemblies,	
  and	
  most	
  recently	
  communal	
  councils.	
  In	
  that	
  context	
  Erik’s	
  
approach	
  makes	
  all	
  the	
  sense	
  in	
  the	
  world.	
  In	
  Venezuela	
  socialism	
  depended	
  on	
  
their	
   “ability	
   to	
   enlarge	
   and	
   deepen”	
   the	
   new	
   social	
   economy	
   and	
   reduce	
   the	
  
capitalist	
  and	
  state	
  sectors	
  of	
  the	
  old	
  economy.	
  But	
  Erik’s	
  framework	
  does	
  not	
  
help	
  us	
  understand	
  how	
  and	
  why	
  it	
  may	
  be	
  unrealistic	
  to	
  expect	
  people	
  to	
  behave	
  
55
	
  It	
   is	
   rather	
   straightforward	
   to	
   classify	
   all	
   the	
   economic	
   “models”	
   in	
   the	
   literature	
   as	
   different	
  
combinations	
   of	
   a	
   few	
   possible	
   institutional	
   choices	
   in	
   each	
   of	
   the	
   three	
   areas	
   –	
   ownership,	
  
management,	
   and	
   coordination	
   of	
   any	
   division	
   of	
   labour.	
   For	
   example,	
   the	
   model	
   of	
   a	
   participatory	
  
economy	
   can	
   be	
   classified	
   as:	
   social	
   ownership	
   (not	
   private	
   ownership),	
   worker	
   self-­‐managed	
   (not	
  
“other”	
  directed),	
  with	
  a	
  particular	
  democratic	
  planning	
  procedure	
  to	
  coordinate	
  a	
  significant	
  division	
  of	
  
labour	
  (rather	
  than	
  leaving	
  coordination	
  of	
  a	
  significant	
  division	
  of	
  labour	
  to	
  markets,	
  or	
  an	
  authoritarian	
  
planning	
  procedure,	
  or	
  minimizing	
  the	
  division	
  of	
  labour	
  by	
  making	
  communities	
  largely	
  self-­‐sufficient.)	
  
Breaking	
  With	
  Capitlaism	
  
97
in	
  socially	
  responsible	
  ways	
  in	
  the	
  social	
  economy	
  while	
  others	
  are	
  permitted	
  to	
  
profit	
   from	
   socially	
   irresponsible	
   behaviour	
   in	
   the	
   capitalist	
   sector,	
   or	
   when	
  
society’s	
  most	
  valuable	
  resources,	
  in	
  the	
  case	
  of	
  Venezuela	
  oil,	
  are	
  reserved	
  for	
  
the	
   state	
   sector.	
   Incrementalism	
   also	
   has	
   no	
   answers	
   for	
   situations	
   where	
   one	
  
must	
  either	
  make	
  a	
  qualitative	
  change	
  or	
  accept	
  eventual	
  re-­‐stabilisation	
  back	
  to	
  
the	
   old	
   status	
   quo.	
   An	
   entirely	
   incremental	
   strategy	
   implicitly	
   assumes	
   that	
   no	
  
such	
  bridges	
  will	
  ever	
  present	
  themselves.	
  
However,	
  let	
  me	
  be	
  clear:	
  Right	
  now	
  in	
  the	
  United	
  States,	
  where	
  we	
  are	
  nowhere	
  
near	
   having	
   sufficient	
   popular	
   support	
   for	
   change	
   to	
   a	
   highly	
   democratic	
  
economic	
   system,	
   and	
   where	
   radicals	
   and	
   reformers	
   must	
   both	
   become	
   much	
  
stronger	
  in	
  a	
  number	
  of	
  areas,	
  like	
  Erik,	
  I	
  am	
  an	
  unapologetic	
  incrementalist	
  and	
  
think	
   rupturalist	
   talk	
   is	
   premature.	
   However,	
   let	
   me	
   flag	
   two	
   situations	
   where	
  
incremental	
  strategies	
  become	
  problematic	
  and	
  I	
  would	
  not	
  support	
  them.	
  
(1)	
   Different	
   economic	
   systems	
   rely	
   on	
   different	
   ways	
   to	
   motivate	
   people.	
   At	
  
some	
  point	
  I	
  believe	
  Venezuela	
  will	
  have	
  to	
  choose	
  between	
  motivating	
  people	
  
through	
   greed	
   and	
   fear	
   –	
   as	
   they	
   do	
   in	
   their	
   private	
   sector	
   –	
   ordering	
   people	
  
around	
  –	
  as	
  they	
  do	
  in	
  their	
  state	
  sector	
  –	
  and	
  motivating	
  people	
  by	
  letting	
  them	
  
decide	
  what	
  they	
  want	
  to	
  do	
  as	
  long	
  as	
  it	
  is	
  socially	
  responsible,	
  and	
  rewarding	
  
people	
  according	
  to	
  their	
  work	
  efforts	
  –	
  as	
  they	
  are	
  trying	
  to	
  do	
  in	
  their	
  “social	
  
economy.”	
  In	
  other	
  words,	
  once	
  the	
  social	
  economy	
  has	
  proved	
  its	
  superiority	
  to	
  
a	
  majority	
  of	
  Venezuelans,	
  because	
  their	
  incentive	
  systems	
  are	
  not	
  only	
  different	
  
but	
  contradictory,	
  I	
  think	
  it	
  would	
  be	
  a	
  mistake	
  not	
  to	
  extend	
  the	
  social	
  economy	
  
system	
  to	
  the	
  entire	
  economy	
  in	
  a	
  non-­‐incremental	
  way.	
  
(2)	
  Those	
  who	
  benefit	
  from	
  the	
  status	
  quo	
  can	
  become	
  very	
  aggressive	
  when	
  they	
  
feel	
  their	
  privileges	
  slipping	
  away.	
  Failure	
  to	
  take	
  decisive	
  action	
  to	
  defend	
  our	
  
right	
   to	
   continue	
   making	
   progress	
   which	
   a	
   majority	
   supports	
   is	
   a	
   recipe	
   for	
  
disaster.	
  In	
  cases	
  where	
  privileged	
  economic	
  elites	
  refuse	
  to	
  accept	
  the	
  will	
  of	
  the	
  
majority	
  the	
  best	
  decisive	
  action	
  is	
  often	
  to	
  strip	
  them	
  of	
  their	
  power	
  by	
  making	
  a	
  
dramatic	
  and	
  qualitative	
  change	
  in	
  how	
  the	
  economic	
  system	
  functions.	
  Failure	
  to	
  
disarm	
  defeated	
  enemies	
  is	
  poor	
  military	
  strategy.	
  
I	
   am	
   also	
   concerned	
   that	
   Erik	
   may	
   render	
   the	
   useful	
   notions	
   of	
   “stability”	
   and	
  
“instability”	
  vacuous.	
  He	
  writes:	
  	
  
One…view	
   is	
   that	
   any	
   capitalist	
   hybrid	
   with	
   significant	
   socialist	
   elements	
   would	
   be	
  
deeply	
  unstable.	
  The	
  only	
  reasonably	
  stable	
  equilibria,	
  the	
  thinking	
  goes,	
  are	
  ones	
  in	
  
which	
  socialism	
  is	
  unequivocally	
  dominant	
  or	
  ones	
  in	
  which	
  capitalism	
  is	
  unequivocally	
  
dominant….	
  An	
  alternative	
  view	
  is	
  that	
  there	
  may	
  be	
  multiple	
  relatively	
  stable	
  equilibria	
  
Robin	
  Hahnel	
  
involving	
  all	
  three	
  economic	
  forms	
  in	
  quite	
  variable	
  combinations….	
  The	
  arguments	
  of	
  
this	
  paper	
  are	
  based	
  on	
  the	
  second	
  of	
  these	
  views.	
  
If	
  this	
  is	
  my	
  choice,	
  then	
  I	
  am	
  more	
  inclined	
  to	
  the	
  first	
  view	
  which	
  Erik	
  rejects.	
  For	
  
example,	
  to	
  expect	
  a	
  mixture	
  of	
  one	
  third	
  capitalism,	
  one	
  third	
  statism,	
  and	
  one	
  
third	
  socialism	
  to	
  be	
  as	
  stable	
  as	
  a	
  mix	
  of	
  nine	
  tenths	
  capitalism,	
  one	
  twentieth	
  
statism,	
  and	
  one	
  twentieth	
  socialism	
  seems	
  to	
  me	
  farfetched.	
  As	
  a	
  general	
  rule	
  I	
  
think	
   the	
   more	
   hybrid	
   a	
   system	
   is	
   the	
   less	
   stable	
   it	
   is	
   likely	
   to	
   be.	
   Of	
   course	
   a	
  
strongly	
  hybrid	
  system	
  could	
  be	
  poised	
  on	
  a	
  knife	
  edge	
  for	
  quite	
  some	
  time,	
  just	
  
as	
   a	
   largely	
   pure	
   system	
   might	
   be	
   transformed.	
   But	
   there	
   is	
   a	
   reason	
   that	
  
hybridisation	
   breeds	
   instability,	
   and	
   it	
   is	
   the	
   same	
   reason	
   that	
   incrementalism	
  
does	
  not	
  always	
  work.	
  
Any	
   economic	
   system	
   relies	
   on	
   people	
   to	
   think	
   and	
   behave	
   in	
   particular	
   ways.	
  
Different	
  economic	
  systems	
  require	
  people	
  to	
  think	
  and	
  behave	
  in	
  different	
  ways.	
  
The	
   kind	
   of	
   humans	
   capitalism	
   requires,	
   and	
   the	
   kind	
   of	
   humans	
   we	
   tend	
   to	
  
become	
   when	
   we	
   play	
   our	
   appointed	
   roles	
   under	
   capitalist	
   institutions,	
   are	
  
different	
  from	
  the	
  kind	
  of	
  humans	
  socialism	
  requires,	
  and	
  participation	
  in	
  socialist	
  
institutions	
   tends	
   to	
   create.	
   In	
   other	
   words,	
   when	
   we	
   choose	
   to	
   use	
   particular	
  
institutions	
  to	
  organise	
  and	
  govern	
  our	
  economic	
  activities	
  we	
  are	
  also	
  choosing	
  
to	
  some	
  extent	
  what	
  kind	
  of	
  people	
  we	
  want	
  to	
  become.	
  And	
  this	
  is	
  why	
  hybrids	
  
are	
  generally	
  less	
  stable.	
  In	
  a	
  capitalist-­‐socialist	
  hybrid	
  when	
  capitalist	
  institutions	
  
mould	
  people	
  to	
  better	
  conform	
  with	
  the	
  roles	
  they	
  must	
  play	
  for	
  the	
  capitalist	
  
part	
  to	
  function	
  effectively	
  and	
  smoothly	
  they	
  rob	
  the	
  socialist	
  part	
  of	
  the	
  kind	
  of	
  
personnel	
   needed	
   to	
   play	
   the	
   roles	
   required	
   for	
   the	
   socialist	
   part	
   to	
   function	
  
effectively	
  and	
  smoothly.	
  Or,	
  to	
  put	
  it	
  differently,	
  we	
  humans	
  find	
  it	
  difficult	
  to	
  
serve	
  two	
  different	
  masters.	
  
But	
  let	
  me	
  conclude	
  this	
  part	
  on	
  a	
  note	
  of	
  agreement.	
  Erik	
  writes:	
  	
  
Relatively	
  few	
  people	
  today	
  –	
  even	
  those	
  who	
  still	
  work	
  within	
  the	
  Marxist	
  tradition	
  –	
  
feel	
   confident	
   that	
   capitalism	
   will	
   destroy	
   itself.	
   Capitalism	
   may	
   be	
   crisis-­‐ridden	
   and	
  
cause	
  great	
  suffering	
  in	
  the	
  world,	
  but	
  it	
  also	
  has	
  an	
  enormous	
  capacity	
  to	
  effectively	
  
block	
  alternatives.	
  The	
  problem	
  of	
  its	
  transformation,	
  at	
  least	
  in	
  the	
  developed	
  world,	
  
therefore	
  cannot	
  be	
  treated	
  as	
  mainly	
  the	
  problem	
  of	
  ‘seizing	
  the	
  time’	
  when	
  capitalism	
  
through	
   its	
   own	
   contradictions	
   becomes	
   so	
   weak	
   and	
   chaotic	
   that	
   it	
   is	
   vulnerable	
   to	
  
being	
  overthrown.	
  Rather,	
  the	
  problem	
  of	
  transformation	
  requires	
  understanding	
  the	
  
ways	
   in	
   which	
  strategies	
  of	
   transformation	
   have	
   some	
   prospect	
   in	
   the	
   long	
   term	
   of	
  
eroding	
  capitalist	
  power	
  relations	
  and	
  building	
  up	
  socialist	
  alternatives.	
  
I	
   could	
   not	
   agree	
   more.	
   Disavowing	
   theories	
   that	
   capitalism	
   is	
   programmed	
   to	
  
self-­‐destruct	
   due	
   to	
   internal	
   contradictions	
   as	
   ill-­‐conceived	
   and	
   untrue	
   is	
  
Breaking	
  With	
  Capitlaism	
  
99
extremely	
  important	
  if	
  we	
  are	
  to	
  have	
  a	
  realistic	
  view	
  of	
  the	
  nature	
  of	
  the	
  task	
  
before	
  us.56
	
  	
  
	
  
WHAT	
  ABOUT	
  MARKETS?	
  
Points	
  of	
  Agreement	
  
I	
   agree	
   with	
   Erik	
   that	
   markets	
   are	
   “the	
   issue	
   that	
   is	
   most	
   in	
   contention	
   in	
   this	
  
dialogue.”	
   I	
   also	
   think	
   he	
   is	
   correct	
   that	
   we	
   do	
   not	
   disagree	
   about	
   markets	
  
because	
   we	
   disagree	
   about	
   what	
   economic	
   democracy	
   and	
   economic	
   justice	
  
mean.	
  As	
  Erik	
  points	
  out:	
  “Both	
  Robin	
  and	
  I…	
  understand	
  democracy	
  as	
  an	
  ideal	
  in	
  
which	
  people	
  should	
  be	
  able	
  to	
  participate	
  in	
  decisions	
  to	
  the	
  extent	
  that	
  they	
  are	
  
affected	
  by	
  those	
  decisions.	
  And	
  we	
  both	
  see	
  equality	
  as	
  demanding	
  an	
  economic	
  
system	
  that	
  both	
  meets	
  people’s	
  basic	
  needs	
  to	
  live	
  a	
  flourishing	
  life	
  and	
  allocates	
  
rewards	
   above	
   this	
   level	
   on	
   the	
   basis	
   of	
   the	
   burdens	
   people	
   take	
   on	
   in	
   their	
  
work.”	
  This	
  is	
  important	
  because	
  most	
  often	
  people	
  who	
  disagree	
  about	
  markets	
  
do	
  so	
  because	
  they	
  disagree	
  about	
  what	
  economic	
  justice	
  and	
  democracy	
  require.	
  
I	
  also	
  endorse	
  Erik’s	
  summary	
  of	
  my	
  position:	
  	
  
Both	
   of	
   these	
   values	
   are	
   generally	
   violated	
   by	
   the	
   unfettered	
   operation	
   of	
   market	
  
processes:	
   markets	
   systematically	
   generate	
   unjust	
   inequalities	
   and	
   also,	
   inherently	
  
violate	
  democratic	
  principles	
  by	
  enabling	
  people	
  to	
  engage	
  in	
  exchange	
  without	
  regard	
  
to	
  social	
  costs.	
  For	
  these	
  reasons	
  Robin	
  argues	
  that	
  in	
  an	
  ideal	
  economy	
  –	
  an	
  economy	
  
that	
  fully	
  realises	
  democratic	
  and	
  egalitarian	
  values	
  –	
  markets	
  would	
  disappear	
  and	
  be	
  
replaced	
  by	
  something	
  like	
  participatory	
  planning.	
  	
  
This	
  is	
  what	
  I	
  mean	
  when	
  I	
  call	
  myself	
  a	
  market	
  “abolitionist.”	
  In	
  contrast,	
  Erik	
  is	
  
“agnostic”	
   with	
   regard	
   to	
   markets,	
   whose	
   use	
   he	
   argues	
   should	
   depend	
   on	
  
56
	
  
	
  
As	
   an	
   aside,	
   I	
   think	
   there	
   is	
   a	
   link	
   between	
   the	
   view	
   of	
   capitalism	
   as	
   doomed	
   by	
   internal	
  
contradictions	
  –	
  which	
  Erik	
  and	
  I	
  both	
  reject	
  –	
  and	
  the	
  notion	
  of	
  “non-­‐reformist	
  reforms”	
  that	
  has	
  gone	
  
unnoticed.	
   Aside	
   from	
   the	
   crucial	
   question	
   of	
   how	
   reforms	
   are	
   fought	
   for,	
   if	
   all	
   reforms	
   improve	
  
outcomes	
  there	
  are	
  only	
  two	
  ways	
  a	
  reform,	
  itself,	
  could	
  be	
  “non-­‐reformist.”	
  Either	
  it	
  “heightens”	
  some	
  
internal	
  contradiction	
  and	
  thereby	
  undermines	
  the	
  system,	
  or	
  it	
  “prefigures”	
  a	
  solution	
  that	
  is	
  part	
  of	
  a	
  
post-­‐capitalist	
  system.	
  I	
  think	
  any	
  who	
  believes	
  in	
  non-­‐reformist	
  reforms	
  for	
  the	
  first	
  reason	
  is	
  chasing	
  a	
  
myth.	
   On	
   the	
   other	
   hand,	
   I	
   think	
   the	
   second	
   strategic	
   idea	
   makes	
   all	
   the	
   sense	
   in	
   the	
   world.	
   My	
  
argument	
  for	
  the	
  importance	
  of	
  creating	
  real	
  world	
  examples	
  of	
  “imperfect	
  experiments	
  in	
  equitable	
  
cooperation”	
   which	
   others	
   frequently	
   call	
   “prefigurative”	
   organizing,	
   in	
   combination	
   with	
   reform	
  
organizing	
  is	
  discussed	
  further	
  below.	
  I	
  think	
  Erik	
  and	
  I	
  agree	
  on	
  this	
  and	
  that	
  when	
  he	
  distinguishes	
  
between	
   “ameliorative	
   reforms”	
   and	
   “real	
   utopian	
   transformations”	
   he	
   is	
   talking	
   about	
   what	
   I	
   call	
  
“reform	
  organizing”	
  as	
  distinct	
  from	
  building	
  real	
  world	
  “experiments	
  in	
  equitable	
  cooperation.”	
  
Robin	
  Hahnel	
  
“practical	
   trade-­‐offs,”	
   not	
   just	
   during	
   transition	
   but	
   also	
   “in	
   the	
   institutional	
  
configuration	
  of	
  the	
  destination	
  itself.”	
  
To	
  be	
  clear,	
  I	
  have	
  never	
  questioned	
  whether	
  or	
  not	
  markets	
  will	
  continue	
  to	
  play	
  
a	
  role	
  during	
  a	
  transition	
  to	
  a	
  desirable	
  economic	
  future	
  –	
  which	
  seems	
  obvious	
  to	
  
me	
  –	
  nor	
  whether	
  during	
  transition	
  we	
  should	
  often	
  participate	
  in	
  campaigns	
  to	
  
“tame”	
   markets	
   to	
   reduce	
   their	
   negative	
   consequences	
   –	
   which	
   also	
   seems	
  
obvious	
  to	
  me.	
  So	
  if	
  we	
  do	
  not	
  disagree	
  about	
  goals,	
  and	
  we	
  are	
  not	
  talking	
  about	
  
markets	
  and	
  the	
  need	
  to	
  tame	
  them	
  during	
  transition,	
  why	
  do	
  we	
  disagree	
  about	
  
whether	
  there	
  is	
  a	
  place	
  for	
  markets	
  in	
  a	
  truly	
  desirable	
  economy?	
  As	
  I	
  said	
  in	
  the	
  
first	
   round	
   of	
   this	
   dialogue,	
   the	
   case	
   against	
   markets	
   logically	
   consists	
   of	
   two	
  
parts:	
  How	
  bad	
  are	
  markets?	
  And,	
  is	
  there	
  a	
  more	
  desirable	
  alternative	
  that	
  is	
  
feasible?	
  I	
  have	
  presented	
  my	
  case	
  for	
  what	
  I	
  believe	
  is	
  a	
  feasible	
  and	
  desirable	
  
alternative.	
  I	
  will	
  now	
  outline	
  the	
  case	
  for	
  why	
  we	
  should	
  embrace	
  the	
  desirable	
  
alternative	
  that	
  is	
  feasible	
  and	
  eventually	
  eliminate	
  markets	
  altogether.	
  
The	
  Dispassionate	
  Case	
  Against	
  Markets	
  
Efficiency:	
  It	
  is	
  well	
  known	
  among	
  professional	
  economists	
  that	
  markets	
  allocate	
  
resources	
   inefficiently	
   when	
   they	
   are	
   out	
   of	
   equilibrium,	
   when	
   they	
   are	
   non-­‐
competitive,	
   and	
   when	
   there	
   are	
   external	
   effects.	
   When	
   the	
   fundamental	
  
theorem	
  of	
  welfare	
  economics	
  is	
  read	
  critically	
  it	
  says	
  as	
  much:	
  Only	
  if	
  there	
  are	
  
no	
  external	
  effects,	
  only	
  if	
  all	
  markets	
  are	
  competitive,	
  and	
  only	
  when	
  all	
  markets	
  
are	
   in	
   equilibrium	
   is	
   it	
   true	
   that	
   a	
   market	
   economy	
   will	
   yield	
   a	
   Pareto	
   optimal	
  
outcome.	
  But	
  despite	
  these	
  clear	
  warnings,	
  market	
  enthusiasts	
  insist	
  that	
  if	
  left	
  
alone	
  markets	
  generally	
  allocate	
  resources	
  very	
  efficiently.	
  This	
  can	
  only	
  be	
  true	
  
if:	
  (1)	
  disequilibrating	
  forces	
  are	
  weak,	
  (2)	
  non-­‐competitive	
  market	
  structures	
  are	
  
uncommon,	
  and	
  (3)	
  externalities	
  are	
  the	
  exception,	
  rather	
  than	
  the	
  rule.	
  There	
  
are	
  good	
  theoretical	
  and	
  empirical	
  reasons	
  to	
  believe	
  exactly	
  the	
  opposite	
  in	
  all	
  
three	
   cases.	
   A	
   second	
   line	
   of	
   defence	
   holds	
   that	
   while	
   free	
   markets	
   may	
   be	
  
plagued	
  by	
  inefficiencies,	
  it	
  is	
  possible	
  to	
  correct	
  market	
  failures	
  through	
  a	
  variety	
  
of	
  policies	
  and	
  thereby	
  render	
  them	
  “reasonably”	
  efficient.	
  However,	
  there	
  are	
  
good	
  practical	
  reasons	
  to	
  believe	
  it	
  is	
  unrealistic	
  to	
  expect	
  such	
  policies	
  could	
  ever	
  
render	
  market	
  systems	
  even	
  “reasonably”	
  efficient.57
	
  	
  
57
	
  For	
  my	
  full	
  argument	
  regarding	
  efficiency	
  interested	
  readers	
  should	
  see	
  “The	
  Case	
  Against	
  there	
  is	
  a	
  
spacing	
  problem	
  here(Markets,”	
  Journal	
  of	
  Economic	
  Issues	
  (41,	
  4),	
  December	
  2007:	
  1139-­‐1159.
	
  
	
  
Breaking	
  With	
  Capitlaism	
  
101
Equity:	
  Not	
  only	
  do	
  markets	
  for	
  natural,	
  produced,	
  and	
  financial	
  capital	
  distribute	
  
income	
   unfairly	
   to	
   their	
   owners	
   who	
   expend	
   no	
   effort	
   whatsoever,	
   labour	
  
markets	
   distribute	
   income	
   unfairly	
   to	
   people	
   with	
   different	
   amounts	
   of	
   human	
  
capital	
  as	
  well.	
  If	
  the	
  last	
  hour	
  of	
  welding	
  labour	
  hired	
  raises	
  output	
  and	
  therefore	
  
revenue	
   by	
   more	
   than	
   the	
   last	
   hour	
   of	
   floor	
   sweeping	
   does,	
   when	
   employers	
  
compete	
  with	
  one	
  another	
  in	
  labour	
  markets	
  for	
  welders	
  and	
  sweepers	
  they	
  will	
  
bid	
   the	
   wage	
   rate	
   for	
   welders	
   up	
   higher	
   than	
   the	
   wage	
   rate	
   for	
   sweepers	
   –	
  
whether	
   or	
   not	
   they	
   are	
   capitalist	
   employers	
   trying	
   to	
   maximise	
   enterprise	
  
profits,	
   or	
   worker-­‐owned	
   enterprises	
   trying	
   to	
   maximise	
   profits	
   per	
  
member.58
	
  This	
   means	
   that	
   when	
   labour	
   is	
   hired	
   in	
   labour	
   markets	
   those	
   who	
  
have	
   more	
   human	
   capital,	
   and	
   therefore	
   contribute	
   more	
   to	
   enterprise	
   output	
  
and	
  revenues,	
  will	
  receive	
  higher	
  wages	
  than	
  those	
  with	
  less	
  human	
  capital.	
  This	
  
is	
   problematic	
   because	
   it	
   means	
   that	
   a	
   welder	
   and	
   sweeper	
   who	
   work	
   equally	
  
hard	
   in	
   equally	
   unpleasant	
   circumstances	
   will	
   not	
   be	
   rewarded	
   equally	
   even	
  
though	
   they	
   make	
   what	
   we	
   might	
   call	
   equal	
   “sacrifices.”	
   In	
   a	
   market	
   economy	
  
those	
  with	
  more	
  human	
  capital	
  will	
  receive	
  more,	
  even	
  if	
  they	
  make	
  no	
  greater	
  
sacrifices,	
  and	
  those	
  with	
  less	
  human	
  capital	
  will	
  receive	
  less,	
  even	
  if	
  they	
  sacrifice	
  
just	
  as	
  much	
  or	
  more.59
	
  	
  
Moreover,	
  there	
  is	
  no	
  way	
  to	
  fix	
  this	
  problem	
  in	
  a	
  market	
  system	
  without	
  creating	
  
a	
   great	
   deal	
   of	
   inefficiency.	
   If	
   we	
   intervene	
   in	
   the	
   labour	
   market	
   and	
   legislate	
  
wage	
  rates	
  we	
  consider	
  to	
  be	
  fair,	
  but	
  allow	
  markets	
  to	
  determine	
  how	
  resources	
  
are	
  allocated,	
  not	
  only	
  will	
  different	
  kinds	
  of	
  labour	
  be	
  allocated	
  inefficiently,	
  the	
  
entire	
  price	
  structure	
  of	
  the	
  economy	
  will	
  fail	
  to	
  reflect	
  the	
  opportunity	
  costs	
  of	
  
producing	
  different	
  goods	
  and	
  services	
  leading	
  to	
  further	
  inefficiencies.	
  There	
  is	
  
no	
  getting	
  around	
  the	
  dilemma:	
  In	
  a	
  market	
  economy	
  we	
  must	
  either	
  allow	
  the	
  
58
	
  Worker-­‐owned	
  cooperatives	
  may	
  well	
  have	
  goals	
  other	
  than	
  maximizing	
  profits	
  per	
  member,	
  but	
  as	
  
long	
  as	
  this	
  is	
  one	
  of	
  their	
  concerns	
  the	
  argument	
  holds.	
  
59
	
  Most	
   fail	
   to	
   understand	
   how	
   arbitrary	
   differences	
   in	
   what	
   economists	
   call	
   the	
   “marginal	
   revenue	
  
product”	
  of	
  different	
  categories	
  of	
  labour	
  truly	
  are,	
  and	
  how	
  little	
  of	
  those	
  differences	
  are	
  due	
  to	
  how	
  
hard	
  people	
  work.	
  Not	
  only	
  do	
  differences	
  in	
  talent,	
  education,	
  and	
  training	
  come	
  into	
  play,	
  differences	
  
in	
   the	
   quantity	
   and	
   quality	
   of	
   complimentary	
   inputs,	
   and	
   differences	
   in	
   the	
   scarcity	
   of	
   different	
  
categories	
  of	
  labour	
  are	
  all	
  important	
  in	
  determining	
  differences	
  in	
  marginal	
  revenue	
  products	
  of	
  labour.	
  
The	
  important	
  point	
  is	
  that	
  unlike	
  the	
  amount	
  of	
  effort	
  someone	
  puts	
  into	
  his	
  or	
  her	
  work,	
  all	
  these	
  
other	
  influences	
  on	
  the	
  value	
  of	
  output	
  are	
  largely	
  beyond	
  an	
  individual’s	
  control.	
  
Robin	
  Hahnel	
  
market	
  system	
  to	
  reward	
  people	
  unfairly,	
  or,	
  if	
  we	
  try	
  to	
  correct	
  for	
  inequities	
  we	
  
must	
  tolerate	
  even	
  greater	
  inefficiencies.60
	
  	
  
Democracy:	
  When	
  all	
  else	
  fails	
  –	
  when	
  they	
  can	
  no	
  longer	
  claim	
  that	
  markets	
  lead	
  
to	
  efficient	
  or	
  equitable	
  outcomes	
  –	
  enthusiasts	
  fall	
  back	
  on	
  the	
  claim	
  that	
  free	
  
markets	
  promote	
  economic	
  and	
  political	
  democracy.	
  But	
  this	
  defence	
  of	
  markets	
  
does	
  not	
  stand	
  up	
  under	
  analysis	
  any	
  better	
  than	
  the	
  others.	
  Once	
  we	
  realise	
  that	
  
economic	
   freedom	
   –	
   the	
   freedom	
   to	
   do	
   as	
   you	
   wish	
   with	
   your	
   person	
   and	
  
property	
  –	
  is	
  quite	
  different	
  from	
  economic	
  democracy	
  –	
  decision	
  making	
  power	
  
in	
   proportion	
   to	
   the	
   degree	
   one	
   is	
   affected	
   -­‐-­‐	
   the	
   case	
   that	
   markets	
   promote	
  
economic	
   democracy	
   quickly	
   unravels.	
   Markets	
   disenfranchise	
   “third	
   parties”	
  
affected	
  by	
  decisions	
  a	
  buyer	
  and	
  seller	
  agree	
  on.	
  In	
  a	
  market	
  “election”	
  to	
  decide	
  
what	
  goods	
  to	
  produce	
  a	
  wealthy	
  person	
  gets	
  to	
  vote	
  thousands	
  of	
  times	
  more	
  
than	
  a	
  poor	
  person.	
  Pretending	
  that	
  when	
  market	
  exchanges	
  are	
  voluntary	
  there	
  
can	
  be	
  no	
  coercion	
  ignores	
  the	
  fact	
  that	
  a	
  buyer	
  or	
  seller	
  is	
  often	
  in	
  a	
  position	
  to	
  
impose	
  his	
  will	
  on	
  the	
  other	
  who	
  may	
  have	
  severely	
  limited	
  “outside”	
  options.	
  
Finally,	
  as	
  every	
  child	
  knows,	
  unequal	
  economic	
  power	
  breeds	
  unequal	
  political	
  
power,	
  so	
  Milton	
  Friedman’s	
  defence	
  of	
  markets	
  on	
  grounds	
  that	
  the	
  economic	
  
inequality	
  markets	
  generate	
  is	
  a	
  virtue	
  because	
  any	
  political	
  cause	
  can	
  appeal	
  for	
  
support	
  from	
  a	
  wealthy	
  benefactor	
  is	
  patently	
  absurd.61
	
  	
  
Markets	
  Never?	
  	
  
In	
  a	
  song	
  in	
  a	
  famous	
  Gilbert	
  &	
  Sullivan	
  opera	
  the	
  captain	
  of	
  the	
  H.M.S.	
  Pinafore	
  
insists	
  that	
  he	
  never	
  swears	
  when	
  talking	
  to	
  his	
  crew.	
  His	
  crew	
  responds,	
  “What	
  
never?”	
  to	
  which	
  the	
  captain	
  replies,	
  “Not	
  ever!”	
  to	
  which	
  his	
  crew	
  asks	
  again,	
  
“Not	
  ever?”	
   to	
   which	
   the	
   captain	
   finally	
   replies	
   “…	
   Well,	
  hardly	
  ever.”	
  Erik's	
  
position	
  is	
  that	
  to	
  deny	
  that	
  markets	
  should	
  feature	
  in	
  an	
  economic	
  system	
  even	
  
hardly	
  ever	
   is	
   misguided	
   and	
   inflexible.	
   In	
   his	
   words,	
  because	
   “there	
   will	
  
necessarily	
  be	
  many	
  trade-­‐offs	
  among	
  competing	
  values…	
  markets,	
  in	
  one	
  form	
  or	
  
another,	
   are	
   likely	
   to	
   be	
   a	
   desirable	
   part	
   of	
   solutions	
   to	
   some	
   of	
   the	
   design	
  
problems.”	
   He	
  argues	
   that	
   markets	
   may	
   be	
  “a	
   desirable	
   part	
   of	
   solutions”	
  to	
  
problems	
   that	
   a	
   participatory	
   economy	
   would	
   encounter.	
   Given	
   that	
   a	
  
participatory	
  economy	
  is	
  designed	
  to	
  eliminate	
  the	
  need	
  for	
  markets,	
  if	
  it	
  can	
  be	
  
60
	
  For	
  my	
  full	
  argument	
  regarding	
  equity	
  see	
  “Against	
  the	
  Market	
  Economy,”	
  Monthly	
  Review	
  (59,	
  8),	
  
January	
  2008.	
  
61
	
  
	
  
For	
   my	
   full	
   argument	
   regarding	
   democracy	
   see	
   “Why	
   the	
   Market	
   Subverts	
   Democracy,”	
  American	
  
Behavioral	
  Scientist	
  (52,	
  7),	
  March	
  2009:	
  1006	
  –	
  1022.	
  
Breaking	
  With	
  Capitlaism	
  
103
shown	
   that	
   they	
   are	
   needed	
   even	
   here,	
   it	
   appears	
   to	
   follow	
   that	
   they	
   are	
  
unavoidable	
  in	
  any	
  system.	
  The	
  two	
  situations	
  he	
  identifies	
  as	
  requiring	
  markets	
  
are	
  (1)	
   during	
   the	
   implementation	
   of	
   the	
   plan	
   where	
   coarse	
   categories	
   are	
  
refined,	
  and	
  adjustments	
  to	
  unanticipated	
  circumstances	
  are	
  made,	
  and	
  (2)	
  for	
  
the	
  exchange	
  of	
  second	
  hand	
  goods	
  and	
  tickets	
  for	
  entertainment	
  events.	
  
In	
  round	
  one	
  I	
  explained	
  how	
  refining	
  coarse	
  categories	
  and	
  making	
  adjustments	
  
to	
  a	
  comprehensive	
  plan	
  could	
  be	
  done	
  as	
  the	
  plan	
  was	
  being	
  implemented.	
  My	
  
purpose	
   at	
   the	
   time	
   was	
   to	
   refute	
   the	
   claim	
   that	
   practical	
   problems	
   of	
  
implementation	
  were	
  overwhelming	
  and	
  without	
  solution,	
  thereby	
  rendering	
  any	
  
kind	
   of	
   comprehensive	
   planning	
   impossible,	
   or	
   at	
   least	
   highly	
   undesirable,	
   by	
  
outlining	
   several	
   solutions,	
   any	
   of	
   which	
   would	
   be	
   adequate.	
   In	
   doing	
   so	
   I	
  
identified	
   the	
   important	
   questions	
   to	
   consider	
   when	
   choosing	
   among	
   different	
  
possibilities:	
  (a)	
  to	
  what	
  extent	
  producers	
  or	
  consumers	
  will	
  bear	
  the	
  burden	
  of	
  
adjustments,	
  and	
  (b)	
  whether	
  customers	
  who	
  change	
  their	
  demand	
  for	
  a	
  good	
  are	
  
treated	
  any	
  differently	
  from	
  customers	
  who	
  did	
  not.	
  I	
  went	
  on	
  to	
  point	
  out	
  that	
  
adjustments	
  in	
  supply	
  and	
  demand	
  could	
  be	
  made	
  with	
  or	
  without	
  adjusting	
  the	
  
planned	
   “indicative”	
   price	
   used	
   to	
   credit	
   producers	
   and	
   charge	
   buyers,	
   with	
  
different	
  implications	
  for	
  who	
  was	
  bearing	
  the	
  burden	
  of	
  making	
  adjustments.	
  So,	
  
is	
  it	
  true	
  that	
  in	
  a	
  participatory	
  economy	
  we	
  never	
  have	
  any	
  markets?	
  
The	
  easy	
  answer	
  would	
  be	
  to	
  take	
  my	
  queue	
  from	
  the	
  captain	
  of	
  the	
  Pinafore	
  and	
  
sing	
  “…	
  well,	
  hardly	
  ever.”	
  And	
  if	
  anyone	
  wants	
  to	
  claim	
  this	
  means	
  there	
  may	
  be	
  
a	
  desirable	
  role	
  for	
  markets	
  in	
  a	
  participatory	
  economy,	
  so	
  be	
  it.	
  However,	
  as	
  I	
  
pointed	
   out	
   when	
   discussing	
   the	
   pros	
   and	
   cons	
   of	
   adjusting	
   prices,	
   in	
   a	
  
participatory	
   economy	
   the	
   purpose	
   of	
   making	
   or	
   not	
   making	
   adjustments	
   in	
  
prices,	
  and	
  how	
  much	
  to	
  adjust	
  them,	
  is	
  to	
  share	
  the	
  burdens	
  of	
  adjustments	
  to	
  
the	
  plan	
  more	
  equitably.	
  I	
  also	
  explained	
  three	
  reasons	
  why	
  I	
  do	
  not	
  believe	
  in	
  
this	
  case	
  just	
  because	
  it	
  may	
  “look	
  like	
  a	
  market	
  and	
  smell	
  like	
  a	
  market,”	
  it	
  truly	
  is	
  
a	
  market	
  in	
  any	
  meaningful	
  sense,	
  which	
  I	
  need	
  not	
  repeat	
  here	
  because	
  readers	
  
can	
  revisit	
  those	
  arguments	
  in	
  my	
  second	
  contribution	
  to	
  the	
  first	
  round	
  of	
  our	
  
dialogue	
  if	
  need	
  be.	
  
As	
   for	
   the	
   second	
   situation,	
   exchanging	
   second	
   hand	
   goods	
   and	
   tickets	
   for	
  
entertainment	
   events	
   have	
   nothing	
   to	
   do	
   with	
   what	
   goods	
   to	
   produce,	
   what	
  
events	
  to	
  schedule,	
  or	
  how	
  many	
  seats	
  of	
  different	
  qualities	
  there	
  should	
  be	
  at	
  
events.	
  So	
  these	
  exchanges	
  have	
  nothing	
  to	
  do	
  with	
  any	
  decisions	
  that	
  planning	
  
addresses.	
   However,	
   Erik	
   is	
   correct	
   that	
   absent	
   alternative	
   solutions	
   that	
   are	
  
equally	
  convenient	
  people	
  will	
  want	
  to	
  trade	
  used	
  goods	
  and	
  tickets,	
  as	
  many	
  do	
  
Robin	
  Hahnel	
  
today	
   over	
   ebay.	
   Again,	
   the	
   easy	
  response	
  would	
   be	
  “…	
   well	
  hardly	
  ever,”	
  
and	
  concede	
  that	
  markets	
  may	
  have	
  a	
  role	
  to	
  play	
  here	
  as	
  well.	
  And	
  when	
  the	
  
time	
   comes	
   if	
   people	
   want	
   an	
   ebay	
   in	
   a	
   participatory	
   economy,	
   I	
   am	
   not	
   so	
  
“inflexible”	
  as	
  to	
  object.	
  
However,	
  even	
  in	
  this	
  very	
  limited	
  context	
  that	
  has	
  nothing	
  to	
  do	
  with	
  deciding	
  
what	
   to	
   produce,	
   how	
   to	
   produce	
   it,	
   or	
   how	
   to	
   distribute	
   what	
   has	
   just	
   been	
  
produced,	
  I	
  think	
  it	
  is	
  worth	
  considering	
  non-­‐market	
  alternatives,	
  or,	
  at	
  the	
  very	
  
least,	
   monitoring	
   an	
   ebay	
   “solution”	
   to	
   prevent	
   inequities	
   and	
   discourage	
  
antisocial	
  behaviour.	
  A	
  leading	
  figure	
  in	
  Parecon	
  Sweden	
  is	
  currently	
  working	
  on	
  a	
  
proposal	
  for	
  how	
  to	
  credit	
  people	
  for	
  returning	
  used	
  goods	
  to	
  distribution	
  centres	
  
where	
  redistribution	
  can	
  then	
  be	
  handled	
  through	
  normal	
  participatory	
  economic	
  
procedures.	
   And	
   a	
   leading	
   figure	
   in	
   the	
   International	
   Organization	
   for	
   a	
  
Participatory	
  Society,	
  IOPS,	
  in	
  the	
  UK	
  is	
  setting	
  up	
  an	
  ebay	
  for	
  cooperatives	
  to	
  use	
  
that	
   helps	
   them	
   express	
   cooperative	
   values	
   concretely	
   in	
   exchanges	
   among	
  
themselves	
   and	
   minimise	
   inequities	
   and	
   dangers	
   of	
   anti-­‐social	
   behaviour.	
   I	
   am	
  
happy	
   there	
   are	
   others	
   sufficiently	
   concerned	
   over	
   whether	
   or	
   not	
   convenient	
  
trading	
   can	
   foster	
   antisocial	
   behaviour	
   to	
   be	
   looking	
   for	
   alternatives	
   even	
   in	
  
situations	
  like	
  those	
  Erik	
  has	
  raised.	
  
The	
  Socialist	
  Case	
  Against	
  Markets	
  
The	
   dispassionate	
   case	
   against	
   markets	
   is	
   clearly	
   not	
   enough.	
   Erik	
   was	
   already	
  
aware	
  of	
  the	
  dispassionate	
  arguments	
  that	
  markets	
  are	
  inefficient,	
  inequitable,	
  
and	
  anti-­‐democratic	
  which	
  I	
  and	
  others	
  have	
  voiced,	
  when	
  he	
  wrote:	
  “I	
  do	
  not	
  see	
  
market	
  transactions	
  as	
  such	
  as	
  intrinsically	
  undesirable.	
  What	
  is	
  undesirable	
  are	
  
two	
  things	
  that	
  are	
  generally	
  strongly	
  linked	
  to	
  markets:	
  first,	
  the	
  ways	
  in	
  which	
  
markets	
  can	
  enable	
  people	
  and	
  organisations	
  with	
  specific	
  kinds	
  of	
  power	
  to	
  gain	
  
advantages	
  over	
  others,	
  and	
  second,	
  the	
  way	
  markets,	
  if	
  inadequately	
  regulated,	
  
generate	
  all	
  sorts	
  of	
  destructive	
  externalities	
  and	
  harms	
  on	
  people.	
  But	
  if	
  those	
  
problems	
   are	
   minimised	
   through	
   various	
   mechanisms,	
   then	
   the	
   sheer	
   fact	
   of	
  
buyers	
  and	
  sellers	
  of	
  goods	
  and	
  services	
  agreeing	
  to	
  exchange	
  things	
  at	
  a	
  mutually	
  
agreed-­‐upon	
  price	
  is	
  not,	
  in	
  and	
  of	
  itself,	
  objectionable.”	
  The	
  problem	
  with	
  this	
  
attitude	
  –	
  which	
  the	
  dispassionate	
  case	
  against	
  markets	
  is	
  powerless	
  to	
  affect	
  –	
  is	
  
that	
  it	
  is	
  insufficiently	
  fearful.	
  
This	
  attitude	
  mistakenly	
  assumes	
  that	
  only	
  the	
  bad	
  outcomes	
  are	
  problematic	
  –	
  
the	
   inefficiencies,	
   inequities,	
   and	
   violations	
   of	
   democracy	
   –	
   which	
   therefore	
  
should	
   be	
   addressed	
   through	
   appropriate	
   means.	
   However,	
   beyond	
   the	
   bad	
  
outcomes	
  there	
  is	
  a	
  more	
  fundamental	
  problem.	
  I	
  tried	
  to	
  flag	
  this	
  problem	
  in	
  the	
  
Breaking	
  With	
  Capitlaism	
  
105
first	
  round	
  of	
  our	
  dialogue	
  by	
  expressing	
  my	
  concern	
  in	
  a	
  very	
  simple	
  way:	
  “When	
  
a	
  division	
  of	
  labour	
  is	
  coordinated	
  by	
  markets	
  those	
  who	
  take	
  advantage	
  of	
  others	
  
are	
  often	
  rewarded	
  while	
  those	
  who	
  behave	
  in	
  socially	
  responsible	
  ways	
  are	
  often	
  
punished	
   for	
   having	
   done	
   so.	
   For	
   this	
   reason	
   markets	
   act	
   like	
   a	
   cancer	
   that	
  
undermines	
   efforts	
   to	
   build	
   and	
   deepen	
   participatory,	
   equitable	
   cooperation.”	
  
Why?	
  
In	
  every	
  market	
  transaction	
  the	
  seller	
  is	
  trying	
  to	
  take	
  advantage	
  of	
  the	
  buyer,	
  and	
  
the	
  buyer	
  is	
  trying	
  to	
  take	
  advantage	
  of	
  the	
  seller.	
  If	
  we	
  play	
  “word	
  association”	
  
and	
   say	
   “market”	
   economists	
   are	
   likely	
   to	
   respond	
   with	
   “mutual	
   benefit,”	
  
whereas	
   normal	
   people	
   would	
   be	
   more	
   likely	
   to	
   respond	
   with	
   “haggle.”	
   The	
  
problem	
   is	
   not	
   that	
   one	
   response	
   is	
   right	
   and	
   one	
   is	
   wrong.	
   The	
   problem	
   is	
  
that	
  both	
  responses	
  are	
  correct!	
  Moreover,	
  in	
  every	
  market	
  transaction	
  both	
  the	
  
buyer	
  and	
  seller	
  have	
  every	
  incentive	
  to	
  ignore	
  the	
  interests	
  of	
  anyone	
  else	
  who	
  
might	
  be	
  affected	
  by	
  their	
  decision.	
  This	
  is	
  not	
  only	
  undemocratic	
  and	
  inefficient,	
  
it	
  is	
  a	
  second	
  way	
  in	
  which	
  market	
  relations	
  not	
  only	
  fail	
  to	
  provide	
  means	
  for	
  
people	
  to	
  take	
  the	
  interests	
  of	
  others	
  into	
  account,	
  they	
  systematically	
  punish	
  any	
  
who	
  attempt	
  to	
  practice	
  solidarity.	
  In	
  other	
  words,	
  markets	
  “work”	
  by	
  stimulating	
  
greed	
   and	
   fear	
   while	
   undermining	
   trust	
   and	
   solidarity	
   needed	
   to	
   build	
   the	
  
economics	
  of	
  equitable	
  cooperation.	
  In	
  short,	
  markets	
  are	
  cancer	
  to	
  the	
  socialist	
  
project.	
  
I	
  use	
  the	
  word	
  “cancer”	
  not	
  to	
  evoke	
  powerful	
  negative	
  emotions,	
  but	
  because	
  
cancer	
  begins	
  as	
  a	
  small	
  malignancy,	
  a	
  cellular	
  dysfunction,	
  which	
  spreads	
  until	
  it	
  
destroys	
  an	
  entire	
  organism.	
  And	
  that	
  is	
  the	
  image	
  I	
  wished	
  to	
  convey	
  for	
  why	
  we	
  
should	
   fear	
   permitting	
   markets	
   to	
   continue	
   to	
   play	
   a	
   role	
   in	
   a	
   truly	
   desirable	
  
economy.	
  That	
  is	
  why	
  we	
  should	
  search	
  for	
  other	
  ways	
  to	
  respond	
  to	
  situations	
  
that	
   make	
   markets	
   tempting.	
   As	
   Erik	
   pointed	
   out,	
   people	
  will	
  spontaneously	
  
engage	
  in	
  market	
  behaviour,	
  and	
  using	
  markets	
  for	
  particular	
  purposes	
  even	
  in	
  an	
  
economy	
  where	
  what	
  to	
  produce	
  and	
  how	
  to	
  produce	
  it	
  is	
  first	
  determined	
  by	
  a	
  
comprehensive	
   production	
   plan,	
  will	
  often	
   appear	
   convenient.	
   So	
   it	
   is	
   easy	
   to	
  
understand	
  why	
  people	
  may	
  feel	
  that	
  objecting	
  to	
  even	
  “a	
  dash”	
  of	
  markets	
  is	
  
overly	
  zealous	
  and	
  inflexible.	
  Which	
  would	
  indeed	
  be	
  true	
  if	
  a	
  dash	
  of	
  markets	
  
were	
  like	
  a	
  dash	
  of	
  salt.	
  But	
  if	
  instead	
  a	
  dash	
  of	
  markets	
  is	
  like	
  a	
  dash	
  of	
  cancer	
  
that	
  can	
  spread	
  to	
  undermine	
  the	
  socialist	
  project,	
  that	
  is	
  quite	
  another	
  matter	
  
altogether.	
  
In	
  a	
  sense	
  this	
  is	
  a	
  debate	
  over	
  what	
  is	
  a	
  realistic	
  attitude	
  regarding	
  markets.	
  Is	
  
there	
  good	
  reason	
  to	
  fear	
  them?	
  The	
  dispassionate	
  case	
  against	
  markets	
  refutes	
  
Robin	
  Hahnel	
  
every	
  positive	
  claim	
  made	
  on	
  markets	
  behalf	
  except	
  that	
  people	
  often	
  find	
  them	
  
convenient,	
  which	
  I	
  do	
  not	
  deny.	
  But	
  when	
  presented	
  in	
  this	
  way	
  the	
  case	
  against	
  
markets	
  fails	
  to	
  convey	
  what	
  I	
  believe	
  is	
  a	
  fully	
  warranted	
  sense	
  of	
  danger.	
  And	
  
acknowledging	
  that	
  there	
  are	
  policies	
  available	
  to	
  mitigate	
  damages,	
  which	
  I	
  also	
  
do	
   not	
   deny,	
   leaves	
   the	
   impression	
   that	
   in	
   a	
   world	
   that	
   is	
   inevitably	
   imperfect	
  
some	
   markets	
   can	
   hardly	
   be	
   problematic.	
  This	
   is	
   the	
   attitude	
   of	
   someone	
   who	
  
argues	
  that	
  markets	
  are	
  not	
  intrinsically	
  bad,	
  it	
  is	
  only	
  the	
  negative	
  consequences	
  
of	
  markets,	
  not	
  markets	
  themselves	
  that	
  are	
  problematic.	
  Nobody	
  would	
  say	
  that	
  
about	
  cancer.	
  This	
  is	
  the	
  attitude	
  of	
  someone	
  who	
  points	
  out	
  that	
  we	
  can	
  correct	
  
for	
   inequities,	
   externalities,	
   and	
   market	
   disequilibria,	
   even	
   if	
   only	
   imperfectly.	
  
Nobody	
   would	
   agree	
   to	
   introduce	
   a	
   little	
   cancer	
   if	
   it	
   were	
   convenient	
   because	
  
chemotherapy	
   treatments	
   are	
   available.	
   This	
   is	
   the	
   attitude	
   of	
   someone	
   who	
  
reasons	
   there	
   must	
   surely	
   be	
   a	
   role	
   for	
   markets	
   as	
   well	
   as	
   planning	
   in	
   the	
  
“optimal”	
  economy	
  because	
  planning	
  has	
  its	
  weaknesses	
  as	
  well	
  as	
  strengths,	
  just	
  
as	
   markets	
   do.	
   Nobody	
   would	
   say	
   that	
   an	
   optimal	
   life	
   includes	
   exposure	
   to	
  
cancer.	
  	
  
While	
  this	
  is	
  not	
  the	
  place	
  to	
  go	
  into	
  particulars,	
  I	
  believe	
  there	
  is	
  overwhelming	
  
historical	
  evidence	
  to	
  back	
  my	
  fears.	
  Despite	
  strong	
  measures	
  favouring	
  worker	
  
self-­‐management	
   and	
   retention	
   of	
   public	
   ownership,	
   because	
   the	
   Basic	
   Law	
   of	
  
Worker	
  Self-­‐Management	
  also	
  replaced	
  planning	
  with	
  markets	
  in	
  1951	
  it	
  gave	
  rise	
  
to	
   increasingly	
   anti-­‐social	
   behaviour	
   and	
   rising	
   inequality	
   in	
   Yugoslavia.	
   Market	
  
reforms	
   which	
   retained	
   public	
   ownership	
   but	
   did	
   not	
   grant	
   workers	
   self-­‐
management	
  in	
  the	
  Soviet	
  Union,	
  Eastern	
  Europe,	
  China,	
  and	
  Vietnam	
  invariably	
  
generated	
   similar	
   anti-­‐social	
   behaviour	
   and	
   rising	
   inequality.	
   And	
   the	
   dilemma	
  
worker-­‐owned	
   cooperatives	
   face	
   as	
   they	
   try	
   to	
   reconcile	
   commercial	
   and	
  
cooperative	
  goals	
  when	
  subjected	
  to	
  market	
  competition	
  are	
  well	
  documented.	
  
	
  
REAL	
  UTOPIAS	
  AND	
  TRANSFORMATION	
  
While	
  Erik	
  and	
  I	
  use	
  different	
  language	
  our	
  thinking	
  about	
  what	
  he	
  calls	
  “social	
  
transformation”	
   and	
   I	
   call	
   “transition	
   strategy”	
   is	
   very	
   similar.	
   Erik	
   talks	
   of	
  
“ruptural”	
  vs.	
  “symbiotic”	
  strategies.	
  I	
  talk	
  of	
  “system	
  change”	
  vs.	
  “reform,”	
  and	
  
how	
   radicals	
   and	
   reformers	
   better	
   learn	
   to	
   work	
   more	
   productively	
   with	
   each	
  
other.	
   Erik	
   talks	
   of	
   “interstitial”	
   strategies.	
   I	
   talk	
   of	
   creating	
   “imperfect	
  
experiments	
  in	
  equitable	
  cooperation,”	
  or	
  “prefigurative”	
  organising.	
  But	
  we	
  are	
  
talking	
   about	
   the	
   same	
   things,	
   making	
   the	
   same	
   distinctions,	
   and	
   for	
   the	
   most	
  
part	
   we	
   come	
   to	
   the	
   same	
   conclusions.	
   Since	
   I	
   concur	
   with	
   Erik’s	
   summary	
  
Breaking	
  With	
  Capitlaism	
  
107
evaluation	
  of	
  the	
  historical	
  record	
  regarding	
  weaknesses	
  in	
  each	
  strategy,	
  I	
  will	
  
concentrate	
  on	
  digging	
  deeper	
  into	
  why	
  each	
  has	
  failed	
  historically.	
  
Regarding	
  ruptural	
  strategies,	
  Erik	
  writes:	
  	
  
Ruptural	
  strategies	
  have	
  a	
  grandiose,	
  romantic	
  appeal	
  to	
  critics	
  of	
  capitalism,	
  but	
  the	
  
historical	
  record	
  is	
  pretty	
  dismal.	
  There	
  are	
  no	
  cases	
  in	
  which	
  socialism	
  as	
  defined	
  here	
  –	
  
a	
  deeply	
  democratic	
  and	
  egalitarian	
  organisation	
  of	
  power	
  relations	
  within	
  an	
  economy	
  
–	
   has	
   been	
   a	
   robust	
   result	
   of	
   a	
   ruptural	
   strategy	
   of	
   transformation	
   of	
   capitalism.	
  
Ruptural	
  strategies	
  seem	
  in	
  practice	
  more	
  prone	
  to	
  result	
  in	
  authoritarian	
  statism	
  than	
  
democratic	
  socialism.	
  
True,	
   but	
   the	
   important	
   question	
   is	
   why?	
   Many	
   conclude	
   that	
   “ruptural,”	
   or	
  
wholesale	
   system	
   change	
   is	
   incompatible	
   with	
   changes	
   that	
   are	
   “deeply	
  
democratic	
  and	
  egalitarian.”	
  I	
  think	
  the	
  problem	
  lies	
  elsewhere	
  if	
  a	
  build	
  up	
  to	
  
“ruptural”	
   system	
   change	
   does	
   not	
   involve	
   enough	
   people	
   fighting	
   for	
   reforms	
  
and	
   lacks	
   enough	
   experiments	
   creating	
   institutions	
   that	
   “prefigure”	
   deeply	
  
democratic	
   and	
   egalitarian	
   behaviour.	
  Overall,	
   therefore,	
   I	
   am	
   more	
   positive	
  
about	
   the	
   prospects	
   of	
   ruptural	
   strategies	
   when	
   movements	
   committed	
   to	
  
democratic	
   societies	
   prepare	
   for	
   them	
   properly	
   –	
   which	
   is	
   fortunate	
   because	
   I	
  
also	
  believe	
  they	
  are	
  more	
  likely	
  to	
  play	
  a	
  necessary	
  role	
  in	
  achieving	
  desirable	
  
“system	
  change”	
  as	
  explained	
  below.	
  	
  
As	
  for	
  interstitial	
  strategies,	
  Erik	
  writes	
  that	
  they	
  “may	
  produce	
  improvements	
  in	
  
the	
  lives	
  of	
  people	
  and	
  pockets	
  of	
  more	
  democratic	
  egalitarian	
  practices,	
  but	
  they	
  
also	
  have	
  nowhere	
  succeeded	
  in	
  significantly	
  eroding	
  capitalist	
  power	
  relations.”	
  
True,	
  but	
  again	
  the	
  important	
  question	
  is	
  why?	
  I	
  think	
  it	
  is	
  because	
  concentrating	
  
exclusively	
  on	
  building	
  prefigurative	
  institutions	
  has	
  two	
  predictable	
  pitfalls:	
  First	
  
and	
   foremost,	
   exclusive	
   focus	
   on	
   building	
   alternatives	
   to	
   capitalism	
   is	
   too	
  
isolating.	
  Until	
  the	
  non-­‐capitalist	
  sector	
  is	
  large,	
  the	
  livelihoods	
  of	
  most	
  people	
  
will	
   depend	
   on	
   winning	
   reforms	
   in	
   the	
   capitalist	
   sector,	
   and	
   therefore	
   that	
   is	
  
where	
   most	
   people	
   will	
   become	
   engaged.	
   But	
   concentrating	
   exclusively	
   on	
  
experiments	
   in	
   equitable	
   cooperation	
   will	
   also	
   not	
   work	
   because	
   the	
   rules	
   of	
  
capitalism	
   put	
   alternative	
   institutions	
   at	
   a	
   disadvantage	
   compared	
   to	
   capitalist	
  
firms	
  they	
  must	
  compete	
  against,	
  and	
  because	
  market	
  forces	
  drive	
  non-­‐capitalist	
  
institutions	
   to	
   abandon	
   cooperative	
   principles.	
   Unlike	
   liberated	
   territories	
   in	
  
third-­‐world	
   countries	
   fighting	
   to	
   overthrow	
   imperialism	
   last	
   century,	
   in	
   the	
  
advanced	
   economies	
   we	
   will	
   have	
   to	
   build	
   our	
   experiments	
   in	
   equitable	
  
cooperation	
  inside	
  our	
  capitalist	
  economies.	
  So	
  our	
  experiments	
  will	
  always	
  be	
  
fully	
  exposed	
  to	
  competitive	
  pressures	
  and	
  the	
  culture	
  of	
  capitalism.	
  Maintaining	
  
cooperative	
  principles	
  in	
  alternative	
  experiments	
  under	
  these	
  conditions	
  requires	
  
Robin	
  Hahnel	
  
high	
  levels	
  of	
  political	
  commitment,	
  which	
  it	
  is	
  reasonable	
  to	
  expect	
  from	
  activists	
  
committed	
  to	
  building	
  “a	
  new	
  world,”	
  but	
  unreasonable	
  to	
  expect	
  from	
  everyone.	
  
Erik	
  writes	
  about	
  the	
  failures	
  of	
  reform	
  organising	
  at	
  greater	
  length:	
  
As	
  for	
  symbiotic	
  strategies,	
  in	
  the	
  most	
  successful	
  instances	
  of	
  social	
  democracy	
  they	
  
have	
  certainly	
  resulted	
  in	
  a	
  more	
  humane	
  capitalism,	
  with	
  less	
  poverty,	
  less	
  inequality,	
  
and	
  less	
  insecurity,	
  but	
  they	
  have	
  done	
  so	
  in	
  ways	
  which	
  stabilise	
  capitalism	
  and	
  leave	
  
intact	
  the	
  core	
  powers	
  of	
  capital.	
  Any	
  advance	
  of	
  symbiotic	
  strategies	
  historically	
  that	
  
appeared	
  to	
  potentially	
  threaten	
  those	
  core	
  powers	
  was	
  massively	
  resisted	
  by	
  capital.	
  
The	
  reaction	
  of	
  Swedish	
  capitalists	
  to	
  proposals	
  for	
  serious	
  union	
  involvement	
  in	
  control	
  
over	
   investment	
   in	
   the	
   late	
   1970s	
   is	
   one	
   of	
   the	
   best	
   known	
   examples.	
   These	
   are	
   all	
  
reasonable	
  objections.	
  
In	
  my	
  own	
  critique	
  of	
  Swedish	
  social	
  democracy62
	
  I	
  also	
  finger	
  the	
  failure	
  to	
  push	
  
through	
   with	
   the	
   Meidner	
   plan	
   and	
   wage	
   earner	
   fund	
   in	
   the	
   mid-­‐1970s,	
   when	
  
progressive	
   forces	
   arguably	
   had	
   Swedish	
   capitalists	
   “on	
   the	
   run,”	
   as	
   a	
   critical	
  
mistake.	
   Progressives	
   should	
   have	
   disarmed	
   Swedish	
   capitalists	
   by	
   taking	
   away	
  
their	
  power	
  over	
  jobs	
  and	
  investment.	
  Whether	
  Swedish	
  social	
  democrats	
  could	
  
have	
  won	
  a	
  political	
  “stare	
  down”	
  with	
  Swedish	
  capitalists	
  in	
  1975	
  we	
  will	
  never	
  
know	
  because	
  they	
  never	
  tried.	
  But	
  with	
  hindsight	
  we	
  do	
  know	
  that	
  the	
  rollback	
  
of	
   social	
   democratic	
   reforms	
   that	
   took	
   decades	
   to	
   win	
   began	
   soon	
   afterwards,	
  
and	
  neoliberalism	
  in	
  Sweden	
  has	
  become	
  ever	
  more	
  ascendant.	
  More	
  generally	
  I	
  
point	
   to	
   what	
   Michael	
   Harrington	
   called	
   the	
   “grand	
   social	
   democratic	
  
compromise,”	
   which	
   he	
   defined	
   as	
   “settling	
   for	
   a	
   situation	
   in	
   which	
   social	
  
democrats	
   would	
   regulate	
   and	
   tax	
   capitalism	
   but	
   not	
   challenge	
   it	
   in	
   any	
  
fundamental	
  way.”	
  However,	
  I	
  believe	
  not	
  even	
  Harrington	
  appreciated	
  the	
  full	
  
consequences	
  of	
  the	
  compromise.	
  It	
  is	
  one	
  thing	
  to	
  say:	
  We	
  are	
  committed	
  to	
  
democracy	
  above	
  all	
  else.	
  Therefore	
  we	
  promise	
  that	
  as	
  long	
  as	
  a	
  majority	
  of	
  the	
  
population	
  does	
  not	
  want	
  to	
  replace	
  capitalism	
  we	
  have	
  no	
  intentions	
  of	
  trying	
  to	
  
do	
  so.	
  It	
  is	
  quite	
  another	
  thing	
  to	
  say:	
  Despite	
  our	
  best	
  efforts	
  we	
  have	
  failed	
  to	
  
convince	
   a	
   majority	
   of	
   the	
   population	
   that	
   capitalism	
   is	
   fundamentally	
  
incompatible	
   with	
   economic	
   justice	
   and	
   democracy	
   and	
   environmental	
  
sustainability.	
  Therefore	
  we	
  will	
  cease	
  to	
  challenge	
  the	
  legitimacy	
  of	
  the	
  capitalist	
  
system	
  and	
  confine	
  our	
  efforts	
  to	
  reforming	
  it.	
  The	
  first	
  position	
  is	
  one	
  I	
  believe	
  
the	
  movement	
  for	
  equitable	
  cooperation	
  must	
  abide	
  by	
  in	
  the	
  future,	
  while	
  the	
  
second	
  is	
  one	
  we	
  must	
  learn	
  from	
  history	
  to	
  reject.	
  
62
	
  See	
   chapter	
   five,	
   “Social	
   Democracy:	
   Losing	
   the	
   Faith,”	
   in	
  Economic	
   Justice	
   and	
   Democracy:	
   From	
  
Competition	
  to	
  Cooperation	
  (Routledge,	
  2005).	
  
Breaking	
  With	
  Capitlaism	
  
109
In	
  any	
  case,	
  reforms	
  alone	
  cannot	
  achieve	
  equitable	
  cooperation	
  because	
  as	
  long	
  
as	
  the	
  institutions	
  of	
  private	
  enterprise	
  and	
  markets	
  are	
  left	
  in	
  place	
  to	
  reinforce	
  
anti-­‐social	
   behaviour	
   based	
   on	
   greed	
   and	
   fear,	
   progress	
   toward	
   equitable	
  
cooperation	
  will	
  be	
  limited,	
  and	
  the	
  danger	
  of	
  retrogression	
  will	
  be	
  ever	
  present.	
  
Moreover,	
   reform	
   campaigns	
   undermine	
   their	
   leaders’	
   commitment	
   to	
   full	
  
economic	
   justice	
   and	
   democracy	
   in	
   a	
   number	
   of	
   ways,	
   and	
   do	
   little	
   to	
  
demonstrate	
  that	
  equitable	
  cooperation	
  is	
  possible,	
  or	
  establish	
  new	
  norms	
  and	
  
expectations.	
  
However,	
   most	
   importantly	
   I	
   agree	
   with	
   Erik’s	
   conclusion	
   about	
   what	
   the	
   best	
  
strategy	
  seems	
  to	
  be	
  for	
  the	
  moment,	
  at	
  least	
  in	
  the	
  United	
  States:	
  “I	
  think	
  the	
  
best	
   prospect	
   for	
   the	
   future	
   in	
   developed	
   capitalist	
   countries	
   is	
   a	
   strategic	
  
orientation	
   mainly	
   organised	
   around	
   the	
   interplay	
   of	
   interstitial	
   and	
   symbiotic	
  
strategies,	
   with	
   perhaps	
   periodic	
   episodes	
   involving	
   elements	
   of	
   ruptural	
  
strategy.”	
   I	
   have	
   argued	
   at	
   length	
   elsewhere	
   that	
   in	
   the	
   United	
   States:	
   (1)	
  
Desirable	
  system	
  change	
  –	
  a	
  “ruptural	
  transformation”	
  –	
  will	
  not	
  come	
  until	
  we	
  
have	
   strengthened	
   our	
   forces	
   through	
   much	
   more	
   successful	
   reform	
   and	
  
prefigurative	
   organising.	
   (2)	
   Reform	
   and	
   prefigurative	
   organising	
   each	
   play	
   a	
  
critical	
   role	
   the	
   other	
   cannot.	
   And	
   (3)	
   each	
   of	
   these	
   kinds	
   of	
   organising	
   help	
  
counter	
  the	
  predictable	
  pitfalls	
  of	
  the	
  other	
  when	
  pursued	
  alone.63
	
  	
  
Erik	
   also	
   sees	
   symbiotic	
   and	
   interstitial	
   organising	
   complementing	
   each	
   other:	
  
“Through	
   interstitial	
   strategies	
   activists	
   and	
   communities	
   can	
   build	
   and	
  
strengthen	
  real	
  utopian	
  economic	
  institutions	
  embodying	
  democratic	
  egalitarian	
  
principles	
  where	
  this	
  is	
  possible.	
  Symbiotic	
  strategies	
  through	
  the	
  state	
  can	
  help	
  
open	
  up	
  greater	
  space	
  and	
  support	
  for	
  these	
  interstitial	
  innovations.	
  The	
  interplay	
  
between	
   interstitial	
   and	
   symbiotic	
   strategies	
   could	
   then	
   create	
   a	
   trajectory	
   of	
  
deepening	
  socialist	
  elements	
  within	
  the	
  hybrid	
  capitalist	
  economic	
  ecosystem.”	
  I	
  
agree	
  -­‐	
  reform	
  campaigns	
  counteract	
  the	
  tendency	
  for	
  prefigurative	
  projects	
  to	
  be	
  
self-­‐isolating,	
   while	
   expanding	
   experiments	
   in	
   equitable	
   cooperation	
   helps	
  
activists	
  fighting	
  for	
  system	
  change	
  “keep	
  the	
  faith,”	
  demonstrates	
  concretely	
  to	
  
sceptics	
  that	
  equitable	
  cooperation	
  works,	
  and	
  allows	
  us	
  to	
  discover	
  how	
  we	
  can	
  
cooperate	
  with	
  one	
  another	
  more	
  effectively	
  through	
  experimentation.	
  
Erik	
  and	
  I	
  both	
  understand	
  that	
  elites	
  can	
  force	
  confrontation.	
  He	
  writes:	
  “While	
  
elites	
   may	
   become	
   resigned	
   to	
   a	
   diminution	
   of	
   power,	
   they	
   are	
   unlikely	
   to	
  
63
	
  For	
  a	
  more	
  extensive	
  presentation	
  of	
  my	
  suggestions	
  regarding	
  transition	
  strategy	
  see	
  the	
  last	
  four	
  
chapters	
  of	
  Economic	
  Justice	
  and	
  Democracy:	
  From	
  Competition	
  to	
  Cooperation	
  (Routledge,	
  2005).	
  
Robin	
  Hahnel	
  
gracefully	
   embrace	
   the	
   prospects.	
   While	
   symbiotic	
   transformations	
   help	
   solve	
  
problems	
   within	
   capitalism,	
   they	
   often	
   are	
   not	
   optimal	
   for	
   elites	
   and	
   are	
   thus	
  
resisted.	
  This	
  means	
  that	
  a	
  key	
  element	
  of	
  ruptural	
  strategies	
  –	
  confrontations	
  
between	
  opposing	
  organised	
  social	
  forces	
  in	
  which	
  there	
  are	
  winners	
  and	
  losers	
  –	
  
will	
  be	
  a	
  part	
  of	
  any	
  plausible	
  trajectory	
  of	
  sustainable	
  social	
  empowerment.”	
  As	
  I	
  
have	
  already	
  said,	
  we	
  should	
  not	
  be	
  surprised	
  if	
  elites	
  refuse	
  to	
  abide	
  by	
  majority	
  
opinion	
  when	
  reform	
  and	
  prefigurative	
  organising	
  threatens	
  their	
  privileges	
  and	
  
power,	
  and	
  we	
  should	
  not	
  hesitate	
  to	
  disarm	
  them	
  precisely	
  in	
  order	
  to	
  be	
  able	
  to	
  
continue	
  with	
  programs	
  that	
  have	
  majority	
  support.	
  However,	
  I	
  am	
  disappointed	
  
with	
  Erik’s	
  formulation	
  of	
  how	
  we	
  should	
  behave	
  when	
  such	
  situations	
  arise:	
  “The	
  
purpose	
  of	
  such	
  confrontations,	
  however,	
  is	
  not	
  a	
  systemic	
  rupture	
  with	
  capitalist	
  
dominance,	
   but	
   rather	
   creating	
   more	
   space	
   for	
   the	
   interplay	
   of	
   interstitial	
   and	
  
symbiotic	
   strategies.”	
   At	
   some	
   point	
   “creating	
   more	
   space	
   for	
   interplay”	
   must	
  
give	
   way	
   to	
   “a	
   systemic	
   rupture	
   with	
   capitalist	
   dominance,”	
   which	
   means	
  
abolishing	
   the	
   institutional	
   basis	
   for	
   their	
   dominance,	
   the	
   private	
   enterprise	
  
market	
  system.	
  When	
  decisive	
  moments	
  come	
  one	
  either	
  defeats	
  an	
  enemy	
  and	
  
disarms	
  him	
  to	
  prevent	
  war	
  from	
  erupting	
  anew,	
  or	
  one	
  fails	
  to	
  do	
  so.	
  In	
  moments	
  
of	
   confrontation	
   unfortunately	
   in	
   my	
   opinion	
   those	
   with	
   a	
   personal	
   inclination	
  
toward	
   symbiotic	
   and	
   interstitial	
   strategies	
   are	
   all	
   too	
   likely	
   to	
   make	
   the	
   same	
  
mistake	
  Swedish	
  social	
  democrats	
  made	
  in	
  1975.	
  At	
  moments	
  when	
  those	
  who	
  
hesitate	
   are	
   lost	
   leadership	
   with	
   more	
   “ruptural	
   inclinations”	
   becomes	
   more	
  
socially	
  useful.	
  Why,	
  when	
  we	
  get	
  the	
  chance,	
  should	
  we	
  hesitate	
  to	
  drive	
  our	
  
stake	
  through	
  the	
  vampire’s	
  heart?	
  
	
  
CONCLUSION	
  
Erik	
  writes	
  in	
  his	
  conclusion:	
  	
  
Instead	
   of	
   a	
   unitary	
   institutional	
   design…the	
   configurations	
   of	
   social	
   empowerment	
  
open	
   up	
   space	
   for	
   a	
   wide	
   diversity	
   of	
   institutional	
   forms….	
   These	
   diverse	
   forms	
   all	
  
increase	
  social	
  power,	
  but	
  they	
  do	
  not	
  point	
  to	
  an	
  integrated,	
  comprehensive	
  system	
  
driven	
   by	
   a	
   single	
   institutional	
   design	
   principle	
   of	
   the	
   sort	
   proposed	
   by	
   Robin	
   in	
   his	
  
analysis	
  of	
  participatory	
  economics.	
  
I	
   hope	
   it	
   is	
   clear	
   by	
   now	
   that	
   I	
   not	
   only	
   regard	
   “institutional	
   pluralism	
  in	
  
transition,”	
   including	
   markets,	
   as	
   a	
   practical	
   necessity,	
   but	
   also	
   appreciate	
   that	
  
pluralism	
  in	
  transition	
  provides	
  a	
  valuable	
  way	
  to	
  test	
  different	
  ideas	
  about	
  how	
  
best	
   to	
   organise	
   economic	
   activities.	
   However,	
   in	
   my	
   opinion	
   “institutional	
  
Breaking	
  With	
  Capitlaism	
  
111
pluralism	
  of	
  the	
  destination”	
  can	
  be	
  an	
  excuse	
  for	
  imprecise	
  reasoning	
  which	
  fails	
  
to	
  follow	
  assumptions	
  through	
  to	
  their	
  logical	
  conclusions.	
  
In	
   today’s	
   world	
   an	
   alternative	
   economic	
   “vision”	
   needs	
   to	
   accomplish	
   three	
  
goals:	
  (1)	
  It	
  must	
  open	
  people’s	
  eyes	
  to	
  the	
  possibility	
  of	
  a	
  much	
  more	
  desirable	
  
way	
  of	
  organising	
  our	
  economic	
  activities.	
  In	
  other	
  words,	
  it	
  must	
  be	
  inspiring.	
  (2)	
  
It	
   must	
   answer	
   reasonable	
   doubts	
   about	
   whether	
   or	
   not	
   the	
   “vision”	
   is	
   a	
   real	
  
possibility	
  rather	
  than	
  merely	
  a	
  fantasy	
  arising	
  from	
  bitter	
  disappointment	
  –	
  much	
  
like	
   the	
   concept	
   of	
   heaven.	
   To	
   do	
   this	
   it	
   must	
   demonstrate	
   concretely	
   how	
  
questions	
  that	
  must	
  be	
  answered	
  in	
  any	
  economy	
  could	
  be	
  answered,	
  and	
  how	
  
problems	
   that	
   will	
   inevitably	
   arise	
   could	
   be	
   addressed.	
   In	
   other	
   words,	
   it	
   must	
  
convince	
   people	
   the	
   vision	
   is	
   feasible	
   for	
   humans	
   who	
   are	
   both	
   self	
   and	
   other	
  
regarding.	
   And	
   (3)	
   it	
   must	
   challenge	
   popular	
   misconceptions	
   about	
   what	
   is	
  
consistent	
  or	
  inconsistent	
  with	
  our	
  goals.	
  In	
  other	
  words,	
  it	
  must	
  help	
  clarify	
  what	
  
the	
   pursuit	
   of	
   economic	
   justice	
   and	
   democracy	
   as	
   well	
   as	
   environmental	
  
sustainability	
  require.	
  
While	
   Erik	
   no	
   longer	
   misinterprets	
   the	
   model	
   of	
   a	
   participatory	
   economy	
   as	
   a	
  
strategic	
   transitional	
   program,	
   I	
   think	
   he	
   still	
   underestimates	
   the	
   usefulness	
   of	
  
elaborating	
   rigorous	
   models	
   of	
   future	
   economic	
   systems.	
  I	
   conclude	
   my	
  
contribution	
   to	
   our	
   dialogue	
   by	
   reminiscing	
   about	
   reactions	
   the	
   model	
   of	
   a	
  
participatory	
  economy	
  has	
  provoked	
  over	
  the	
  past	
  two	
  decades,	
  which	
  indirectly	
  
testifies	
  to	
  the	
  value	
  and	
  limits	
  of	
  this	
  kind	
  of	
  intellectual	
  exercise.	
  
Over	
   the	
   past	
   twenty	
   years	
   I	
   have	
   sometimes	
   had	
   to	
   respond	
   to	
   criticisms	
   I	
  
anticipated.	
  I	
  expected	
  people	
  to	
  challenge	
  our	
  proposal	
  to	
  base	
  any	
  differences	
  
in	
   income	
   on	
   differences	
   in	
   workers’	
   efforts	
   as	
   judged	
   by	
   co-­‐workers.	
   And	
   I	
  
expected	
  people	
  to	
  question	
  the	
  desirability	
  of	
  balancing	
  jobs	
  for	
  empowerment.	
  
And	
   over	
   the	
   past	
   two	
   decades	
   many	
   have	
   questioned	
   the	
   wisdom	
   of	
   asking	
  
worker	
  councils	
  to	
  reward	
  effort	
  and	
  balance	
  jobs	
  for	
  empowerment	
  –	
  although	
  
Erik	
  does	
  not.	
  However,	
  since	
  it	
  was	
  widely	
  believed	
  that	
  in	
  a	
  modern	
  economy	
  
with	
   an	
   elaborate	
   division	
   of	
   labour	
   there	
   simply	
   is	
   no	
   alternative	
   to	
   a	
   market	
  
system	
  or	
  authoritarian	
  comprehensive	
  planning,	
  I	
  expected	
  people	
  to	
  challenge	
  
our	
   claim	
   to	
   have	
   found	
   a	
   highly	
   democratic	
   way	
   to	
   arrive	
   at	
   an	
   efficient	
  
comprehensive	
  economic	
  plan.	
  However,	
  few	
  have	
  challenged	
  our	
  claim	
  that	
  the	
  
participatory	
  planning	
  procedure	
  belies	
  the	
  claim	
  that	
  there	
  is	
  no	
  alternative	
  to	
  
markets	
  and	
  authoritarian	
  planning.	
  And	
  frankly,	
  this	
  has	
  surprised	
  me.	
  
I	
   initially	
   thought	
   the	
   major	
   stumbling	
   block	
   was	
   that	
   many	
   who	
   were	
  
disenchanted	
  with	
  the	
  market	
  system	
  no	
  longer	
  believed	
  there	
  was	
  any	
  feasible	
  
Robin	
  Hahnel	
  
way	
  to	
  engage	
  in	
  comprehensive	
  economic	
  planning	
  that	
  was	
  not	
  authoritarian	
  
and/or	
  inefficient.	
  So	
  I	
  expected	
  critics	
  to	
  challenge	
  our	
  claim	
  to	
  have	
  solved	
  that	
  
problem.	
  However,	
  for	
  the	
  most	
  part	
  critics	
  have	
  not	
  argued	
  that	
  our	
  procedure	
  
will	
  fail	
  to	
  produce	
  a	
  feasible	
  plan.	
  They	
  have	
  not	
  argued	
  that	
  the	
  plan	
  arrived	
  at	
  
would	
  be	
  inefficient,	
  or	
  that	
  it	
  would	
  fail	
  to	
  adequately	
  protect	
  the	
  environment.	
  
Except	
  for	
  a	
  few	
  anarchists	
  who	
  insist	
  that	
  the	
  iteration	
  facilitation	
  board	
  –	
  which	
  
in	
  fact	
  has	
  no	
  discretionary	
  power	
  whatsoever	
  –	
  is	
  nonetheless	
  an	
  authoritarian	
  
central	
  planning	
  bureau	
  in	
  disguise,	
  critics	
  have	
  not	
  disputed	
  that	
  our	
  procedure	
  is	
  
thorough	
   democratic,	
   nor	
   that	
   it	
   affords	
   worker	
   and	
   consumer	
   councils	
   more	
  
autonomy	
  than	
  most	
  dreamed	
  democratic	
  planning	
  ever	
  could.	
  
It	
   is	
   true	
   that	
   some	
   have	
   criticised	
   participatory	
   planning	
   as	
   a	
   nightmare	
   of	
  
endless	
  meetings	
  where	
  a	
  “dictatorship	
  of	
  the	
  sociable”	
  would	
  inevitably	
  end	
  up	
  
settling	
  on	
  an	
  inefficient	
  plan.	
  But	
  those	
  who	
  make	
  these	
  arguments	
  have	
  either	
  
failed	
  to	
  read	
  our	
  actual	
  proposal,	
  or	
  utterly	
  failed	
  to	
  comprehend	
  it.	
  Those	
  who	
  
voice	
   this	
   criticism	
   confuse	
   our	
   procedure	
   with	
   a	
   common	
   conception	
   of	
  
democratic	
   planning	
   that	
   is	
   completely	
   different.	
   We	
   most	
   emphatically	
  
do	
  not	
  propose	
   that	
   worker	
   and	
   consumer	
   councils	
   send	
   delegates	
   lacking	
  
estimates	
  of	
  opportunity	
  and	
  social	
  costs	
  of	
  making	
  things	
  to	
  meetings	
  that	
  would	
  
be	
  endless,	
  to	
  come	
  up	
  with	
  a	
  comprehensive	
  plan	
  which	
  would	
  be	
  inefficient.	
  In	
  
fact,	
  we	
  agree	
  with	
  critics	
  that	
  any	
  attempt	
  to	
  go	
  about	
  comprehensive	
  economic	
  
planning	
  in	
  this	
  way	
  would	
  prove	
  disastrous,	
  and	
  what	
  we	
  have	
  proposed	
  is	
  an	
  
alternative	
  to	
  this	
  naïve	
  and	
  misguided	
  notion	
  of	
  how	
  to	
  organise	
  comprehensive	
  
planning	
  democratically.	
  In	
  sum,	
  these	
  critics	
  do	
  not	
  engage	
  our	
  actual	
  proposal	
  
for	
   how	
   to	
   arrive	
   at	
   a	
   comprehensive	
   plan,	
   but	
   instead	
   criticise	
   a	
   completely	
  
different	
  idea	
  we	
  explicitly	
  reject.	
  
But	
   most	
   criticisms	
   of	
   our	
   planning	
   proposal	
   have	
   nothing	
   to	
   do	
   with	
   how	
   we	
  
propose	
   to	
   arrive	
   at	
   a	
   comprehensive	
   plan.	
   Whether	
   consciously	
   or	
   not,	
   most	
  
critics	
   have	
   challenged	
   the	
   desirability	
   of	
  any	
  comprehensive	
   economic	
   plan,	
  
independent	
  of	
  how	
  it	
  is	
  generated,	
  or	
  whatever	
  desirable	
  properties	
  it	
  may	
  have.	
  
Most	
  criticisms	
  are	
  about	
  problems	
  that	
  arise	
  when	
  we	
  move	
  onto	
  implementing	
  
a	
   plan.	
   Critics	
   ask	
   how	
   broad	
   categories	
   in	
   a	
   comprehensive	
   plan,	
   like	
   shoes,	
  
would	
   be	
   turned	
   into	
   detailed	
   items,	
   like	
   size	
   6½	
   purple	
   women’s	
   high-­‐heeled	
  
leatherless	
  shoes	
  with	
  a	
  yellow	
  toe.	
  Some,	
  like	
  Seth	
  Ackerman	
  writing	
  in	
  Jacobin	
  
Magazine,	
   assume	
   there	
   is	
   no	
   answer	
   to	
   this	
   question	
   and	
   dismiss	
   all	
  
comprehensive	
   planning	
   as	
   impossible.	
   Others,	
   like	
   Erik,	
   recognise	
   that	
   this	
  
problem	
  is	
  not	
  insurmountable,	
  but	
  argue	
  that	
  we	
  will	
  find	
  markets	
  helpful	
  when	
  
solving	
  it.	
  Critics	
  ask	
  what	
  will	
  happen	
  when	
  unforeseen	
  circumstances	
  arise	
  and	
  
Breaking	
  With	
  Capitlaism	
  
113
the	
  plan	
  needs	
  to	
  be	
  adjusted.	
  Again,	
  some	
  argue	
  that	
  market	
  systems	
  adjust	
  far	
  
better	
  than	
  planned	
  economies	
  to	
  unforeseen	
  events,	
  and	
  therefore	
  should	
  be	
  
preferred	
  for	
  this	
  reason	
  alone.	
  Others,	
  like	
  Erik,	
  argue	
  that	
  markets	
  can	
  help	
  us	
  
make	
   necessary	
   adjustments	
   in	
   the	
   plan,	
   and	
   also	
   handle	
   exchanges	
   of	
   second	
  
hand	
   goods.	
   But	
   none	
   of	
   this	
   has	
   anything	
   to	
   do	
   with	
   how	
   to	
   come	
   up	
   with	
   a	
  
comprehensive	
   economic	
   plan	
   in	
   the	
   first	
   place	
   –	
   which	
   was	
   the	
   problem	
   we	
  
tackled	
  initially.	
  
A	
  part	
  of	
  me	
  feels	
  like	
  I	
  have	
  won	
  the	
  war	
  I	
  volunteered	
  to	
  fight,	
  and	
  would	
  now	
  
like	
  to	
  retire	
  –	
  with	
  full	
  honours	
  of	
  course.	
  Surely	
  there	
  must	
  be	
  other	
  volunteers	
  
willing	
   to	
   answer	
   questions	
   about	
   how	
   best	
   to	
   address	
   practical	
   problems	
   that	
  
arise	
  when	
  we	
  start	
  to	
  implement	
  any	
  comprehensive	
  economic	
  plan.	
  If	
  we	
  have	
  
demonstrated	
  there	
  is	
  a	
  way	
  to	
  arrive	
  at	
  a	
  comprehensive	
  plan	
  for	
  the	
  economy	
  
that	
  is	
  not	
  authoritarian	
  but	
  instead	
  fully	
  democratic;	
  if	
  we	
  have	
  demonstrated	
  
the	
   plan	
   arrived	
   at	
   will	
   use	
   resources	
   efficiently;	
   if	
   we	
   have	
   shown	
   that	
   the	
  
procedure	
   generates	
   credible	
   estimates	
   of	
   the	
   damage	
   from	
   pollution	
   and	
  
charges	
   polluters	
   accordingly;	
   if	
   we	
   have	
   shown	
   that	
   the	
   procedure	
   generates	
  
credible	
   estimates	
   of	
   social	
   benefits	
   and	
   costs,	
   allowing	
   worker	
   and	
   consumer	
  
councils	
   to	
   self-­‐police	
   with	
   little	
   fanfare;	
   if	
   we	
   have	
   shown	
   how	
   all	
   this	
   can	
   be	
  
done	
  without	
  sending	
  delegates	
  to	
  the	
  kind	
  of	
  planning	
  meetings	
  that	
  would	
  be	
  
unproductive	
  nightmares…	
  isn’t	
  this	
  enough?	
  If	
  not,	
  who	
  moved	
  the	
  finish	
  line?	
  
Looking	
  back	
  on	
  questions	
  critics	
  have	
  raised	
  	
  about	
  our	
  planning	
  proposal	
  over	
  
the	
   past	
   twenty	
   years	
   it	
   is	
   now	
   apparent	
   to	
   me	
   that	
   there	
   were	
   always	
   two	
  
questions,	
   not	
   one.	
   (1)	
   Is	
   it	
   possible	
   to	
   arrive	
   at	
   a	
   desirable	
   comprehensive	
  
national	
  plan	
  in	
  a	
  desirable	
  way?	
  (2)	
  Is	
  it	
  desirable	
  to	
  use	
  comprehensive	
  plans	
  to	
  
run	
  our	
  economies?	
  The	
  first	
  is	
  the	
  question	
  we	
  set	
  out	
  to	
  answer	
  many	
  years	
  
ago.	
  But	
  if	
  the	
  answer	
  to	
  the	
  second	
  question	
  is	
  “no”	
  it	
  makes	
  no	
  difference	
  what	
  
the	
  answer	
  to	
  the	
  first	
  question	
  is.	
  There	
  is	
  no	
  reason	
  to	
  search	
  for	
  a	
  desirable	
  
process	
   to	
   generate	
   a	
   desirable	
   comprehensive	
   plan	
   if	
   we	
   don’t	
   want	
   to	
   use	
   a	
  
comprehensive	
   plan	
   in	
   any	
   case.	
   On	
   the	
   other	
   hand,	
   if	
   the	
   answer	
   to	
   the	
   first	
  
question	
   is	
   “no,”	
   there	
   is	
   no	
   need	
   to	
   consider	
   the	
   second	
   question	
   if	
   we	
   have	
  
already	
  rejected	
  authoritarian	
  planning.	
  
I	
  believe	
  the	
  participatory	
  planning	
  procedure	
  has	
  now	
  stood	
  the	
  test	
  of	
  time	
  as	
  a	
  
satisfactory	
   answer	
   to	
   the	
   first	
   question.	
   Yes,	
   we	
   can	
   generate	
   an	
   attractive	
  
comprehensive	
   plan	
   through	
   a	
   process	
   that	
   is	
   quite	
   appealing.	
   Which	
   is	
   why	
   I	
  
think	
  criticisms	
  of	
  participatory	
  planning	
  are	
  now	
  either	
  criticisms	
  of	
  a	
  planning	
  
procedure	
  that	
  is	
  not	
  ours,	
  or	
  criticisms	
  of	
  comprehensive	
  planning	
  in	
  any	
  form.	
  
Robin	
  Hahnel	
  
That	
  is,	
  criticisms	
  that	
  would	
  apply	
  equally	
  to	
  any	
  and	
  all	
  comprehensive	
  plans,	
  
irrespective	
   of	
   how	
   they	
   were	
   generated	
   or	
   how	
   desirable	
   their	
   properties.	
   As	
  
long	
  as	
  people	
  believed	
  the	
  answer	
  to	
  the	
  first	
  question	
  was	
  “no”	
  they	
  did	
  not	
  
have	
  to	
  think	
  about	
  the	
  second	
  question.	
  On	
  the	
  other	
  hand,	
  people	
  would	
  not	
  be	
  
raising	
  questions	
  about	
  implementing	
  comprehensive	
  plans	
  if	
  they	
  did	
  not	
  now	
  
accept	
   the	
   possibility	
   of	
   generating	
   a	
   desirable	
   comprehensive	
   plan	
   through	
   a	
  
process	
  that	
  is	
  also	
  desirable.	
  
So	
  while	
  I	
  anticipated	
  having	
  to	
  defend	
  the	
  virtues	
  of	
  the	
  participatory	
  planning	
  
procedure	
   over	
   alternative	
   ways	
   of	
   arriving	
   at	
   a	
   comprehensive	
   plan,	
   instead	
   I	
  
have	
   more	
   often	
   had	
   to	
   defend	
   comprehensive	
   planning	
   in	
   general	
   as	
   an	
  
alternative	
   to	
   a	
   market	
   system.	
   In	
   this	
   dialogue	
   and	
   elsewhere	
   I	
   have	
   tried	
   to	
  
respond	
   to	
   questions	
   people	
   raise	
   about	
   how	
   comprehensive	
   plans	
   can	
   be	
  
implemented	
  and	
  adjusted.	
  In	
  truth	
  I	
  find	
  this	
  an	
  odd	
  exercise	
  since	
  a	
  number	
  of	
  
large	
   national	
   economies	
   implemented	
   comprehensive	
   economic	
   plans	
  
successfully	
  for	
  many	
  decades	
  during	
  the	
  twentieth	
  century.	
  But	
  memories	
  are	
  
short,	
  confusion	
  over	
  what	
  went	
  wrong	
  and	
  what	
  did	
  not	
  in	
  the	
  centrally	
  planned	
  
economies	
   runs	
   rampant,	
   and	
   most	
   who	
   ask	
   such	
   questions	
   never	
   lived	
   in	
  
anything	
  other	
  than	
  a	
  market	
  economy	
  themselves	
  and	
  therefore	
  understandably	
  
have	
  little	
  sense	
  of	
  how	
  a	
  non-­‐market	
  system	
  works.	
  But	
  I	
  should	
  be	
  clear:	
  I	
  treat	
  
these	
   problems	
   as	
   practical	
   problems	
   for	
   which	
   we	
   must	
   only	
   find	
   adequate	
  
answers.	
   Because	
   provided	
   there	
   are	
   adequate	
   answers	
   we	
   need	
   not	
   abandon	
  
comprehensive	
  planning	
  –	
  which	
  we	
  have	
  good	
  reasons	
  to	
  prefer	
  provided	
  it	
  can	
  
be	
  done	
  democratically	
  and	
  efficiently	
  –	
  in	
  favour	
  of	
  a	
  market	
  system	
  –	
  which	
  we	
  
have	
  good	
  reasons	
  for	
  rejecting.	
  In	
  other	
  words,	
  for	
  me	
  solutions	
  to	
  problems	
  of	
  
implementation	
   and	
   adjustment	
   need	
   not	
   be	
   perfect,	
   but	
   only	
   adequate.	
   And	
  
when	
  there	
  are	
  multiple	
  ways	
  to	
  implement	
  and	
  adjust	
  plans	
  I	
  believe	
  not	
  only	
  
convenience,	
   but	
   the	
   possibility	
   of	
   generating	
   antisocial	
   behaviour	
   should	
   be	
  
carefully	
  considered.	
  
FINAL	
  THOUGHTS	
  
	
  
Erik	
  Olin	
  Wright	
  
	
  
	
  
In	
  my	
  final	
  contribution	
  to	
  this	
  dialogue	
  on	
  alternatives	
  to	
  capitalism	
  I	
  will	
  focus	
  
on	
  a	
  number	
  of	
  specific	
  ways	
  in	
  which	
  Robin’s	
  approach	
  to	
  these	
  matters	
  differs	
  
from	
  my	
  own.	
  It	
  should	
  certainly	
  be	
  clear	
  to	
  everyone	
  that	
  our	
  dialogue	
  is	
  not	
  
antagonistic.	
  	
  There	
  are,	
  to	
  be	
  sure,	
  some	
  real	
  differences	
  in	
  our	
  judgments,	
  but	
  
these	
  are	
  disagreements	
  within	
  a	
  common	
  project	
  of	
  trying	
  to	
  grapple	
  with	
  the	
  
problem	
  of	
  thinking	
  beyond	
  capitalism.	
  	
  The	
  convergence	
  of	
  our	
  views	
  is	
  much	
  
more	
  fundamental	
  than	
  these	
  points	
  of	
  disagreement.	
  In	
  particular	
  we	
  share	
  a	
  
common	
  critique	
  of	
  capitalism,	
  a	
  common	
  understanding	
  of	
  the	
  central	
  values	
  we	
  
would	
  like	
  to	
  see	
  realised	
  in	
  a	
  post-­‐capitalist	
  society,	
  and	
  a	
  common	
  commitment	
  
to	
   progressive	
   reform	
   within	
   capitalism	
   as	
   a	
   necessary	
   part	
   of	
   the	
   (possible)	
  
transformation	
   beyond	
   capitalism.	
   Within	
   this	
   context	
   of	
   such	
   shared	
  
understandings,	
  what	
  I	
  hope	
  to	
  do	
  here	
  is	
  not	
  mainly	
  defend	
  my	
  positions	
  against	
  
Robin’s	
  last	
  piece,	
  but	
  rather	
  revisit	
  a	
  variety	
  of	
  themes	
  we	
  have	
  been	
  discussing	
  
throughout	
  this	
  dialogue	
  to	
  give	
  as	
  much	
  precision	
  as	
  I	
  can	
  to	
  the	
  nature	
  of	
  our	
  
remaining	
  disagreements.	
  	
  
1.	
  What	
  is	
  wrong	
  with	
  markets?	
  
In	
  Robin’s	
  comment	
  on	
  my	
  approach	
  to	
  socialism	
  and	
  real	
  utopias	
  he	
  correctly	
  
identifies	
  our	
  disagreement	
  over	
  the	
  moral	
  implications	
  of	
  markets.	
  Both	
  of	
  us	
  
agree	
  that	
  unfettered	
  markets	
  systematically	
  generate	
  negative	
  consequences	
  –	
  
especially	
   negative	
   externalities,	
   intensifications	
   of	
   inequalities,	
   and	
  
concentrations	
   of	
   power.	
   And	
   we	
   both	
   argue	
   that	
   these	
   consequences	
   can	
   be	
  
mitigated	
   by	
   appropriate	
   countermeasures	
   (although	
   perhaps	
   I	
   am	
   more	
  
optimistic	
  than	
  Robin	
  about	
  the	
  extent	
  to	
  which	
  the	
  pontential	
  harms	
  of	
  markets	
  
can	
   be	
   prevented	
   with	
   appropriate	
   public	
   policies).	
   	
   We	
   also	
   both	
   believe	
   that	
  
whatever	
  problems	
  there	
  are	
  with	
  markets	
  as	
  such	
  are	
  intensified	
  in	
  capitalism.	
  
Where	
  we	
  differ	
  is	
  in	
  our	
  assessment	
  of	
  whether	
  in	
  addition	
  to	
  these	
  side-­‐effects	
  
of	
   markets,	
   markets	
   are	
   intrinsically	
   harmful	
   to	
   central	
   values	
   of	
   a	
   democratic	
  
egalitarian	
  society,	
  especially	
  the	
  value	
  of	
  solidarity.	
  Here	
  is	
  how	
  Robin	
  formulates	
  
this	
  issue:	
  
Erik	
  Olin	
  Wright	
  
In	
  every	
  market	
  transaction	
  the	
  seller	
  is	
  trying	
  to	
  take	
  advantage	
  of	
  the	
  buyer,	
  and	
  the	
  
buyer	
   is	
   trying	
   to	
   take	
   advantage	
   of	
   the	
   seller….	
   In	
   other	
   words,	
   markets	
   “work”	
   by	
  
stimulating	
  greed	
  and	
  fear	
  while	
  undermining	
  trust	
  and	
  solidarity	
  needed	
  to	
  build	
  the	
  
economics	
   of	
   equitable	
   cooperation.	
   In	
   short,	
   markets	
   are	
   cancer	
   to	
   the	
   socialist	
  
project.	
  	
  
…..As	
  Erik	
  pointed	
  out,	
  people	
  will	
  spontaneously	
  engage	
  in	
  market	
  behaviour,	
  and	
  using	
  
markets	
  for	
  particular	
  purposes	
  even	
  in	
  an	
  economy	
  where	
  what	
  to	
  produce	
  and	
  how	
  to	
  
produce	
   it	
   is	
   first	
   determined	
   by	
   a	
   comprehensive	
   production	
   plan,	
  will	
  often	
   appear	
  
convenient.	
  So	
  it	
  is	
  easy	
  to	
  understand	
  why	
  people	
  may	
  feel	
  that	
  objecting	
  to	
  even	
  “a	
  
dash”	
  of	
  markets	
  is	
  overly	
  zealous	
  and	
  inflexible.	
  Which	
  would	
  indeed	
  be	
  true	
  if	
  a	
  dash	
  
of	
  markets	
  were	
  like	
  a	
  dash	
  of	
  salt.	
  But	
  if	
  instead	
  a	
  dash	
  of	
  markets	
  is	
  like	
  a	
  dash	
  of	
  
cancer	
  that	
  can	
  spread	
  to	
  undermine	
  the	
  socialist	
  project,	
  that	
  is	
  quite	
  another	
  matter	
  
altogether.	
  
….The	
   dispassionate	
   case	
   against	
   markets	
   refutes	
   every	
   positive	
   claim	
   made	
   for	
  
markets,	
  except	
  that	
  people	
  often	
  find	
  them	
  convenient,	
  which	
  I	
  do	
  not	
  deny….Nobody	
  
would	
  say	
  that	
  an	
  optimal	
  life	
  includes	
  a	
  proper	
  dose	
  of	
  cancer.	
  
The	
  metaphor	
  of	
  cancer,	
  of	
  course,	
  is	
  a	
  powerfully	
  evocative	
  way	
  of	
  characterising	
  
markets	
  as	
  having	
  intrinsic	
  harms,	
  but	
  is	
  this	
  really	
  apt?64
	
  Is	
  it	
  true	
  that	
  fear	
  and	
  
greed	
   are	
   inherently	
   the	
   motivational	
   states	
   of	
   actors	
   engaged	
   in	
   voluntary,	
  
uncoordinated,	
   decentralised	
   agreements	
   to	
   produce	
   and	
   sell	
   things	
   to	
   each	
  
other?	
   Is	
   it	
   true	
   that	
   engaging	
   in	
   market	
   practices	
   between	
   consenting	
   adults	
  
necessarily	
  embodies	
  and	
  fosters	
  antisocial	
  values?	
  
Before	
  directly	
  engaging	
  this	
  question,	
  I	
  would	
  like	
  to	
  make	
  a	
  side	
  point	
  on	
  the	
  
metaphor	
  of	
  markets-­‐as-­‐cancer.	
  An	
  alternative	
  metaphor	
  would	
  be	
  markets-­‐as-­‐
carcinogenic-­‐agents	
  rather	
  than	
  as	
  cancer	
  itself.	
  In	
  this	
  alternative	
  metaphor,	
  the	
  
presence	
  of	
  markets	
  poses	
  some	
  risks,	
  one	
  of	
  which	
  is	
  the	
  fostering	
  of	
  antisocial	
  
norms	
  and	
  behaviour.	
  But	
  it	
  is	
  no	
  longer	
  the	
  case	
  that	
  one	
  can	
  unequivocally	
  say	
  
that	
  no	
  one	
  would	
  choose	
  a	
  “dash	
  of	
  risk”,	
  even	
  in	
  the	
  case	
  of	
  a	
  risk	
  for	
  cancer.	
  	
  
Indeed,	
   in	
   Robin’s	
   own	
   analysis	
   of	
   participatory	
   planning	
   he	
   argues	
   that	
   under	
  
conditions	
   of	
   strong	
   equality	
   and	
   democratic	
   empowerment,	
   people	
   in	
   a	
  
community	
  ought	
  to	
  be	
  able	
  to	
  opt	
  for	
  whatever	
  level	
  of	
  pollution	
  they	
  want	
  so	
  
64
	
  Robin’s	
  co-­‐author	
  in	
  the	
  development	
  of	
  the	
  participatory	
  economics	
  model,	
  Michael	
  Albert,	
  uses	
  an	
  
even	
   more	
   provocative	
   metaphor	
   to	
   describe	
   the	
   presence	
   of	
   markets	
   in	
   an	
   otherwise	
   participatory	
  
economy.	
  He	
  sees	
  markets	
  like	
  slavery:	
  “Having	
  a	
  little	
  markets	
  in	
  a	
  parecon	
  is	
  a	
  bit	
  like	
  having	
  a	
  little	
  
slavery	
   in	
   a	
   democracy,	
   though	
   even	
   less	
   tenable.	
   The	
   logic	
   of	
   markets	
   invalidates	
   the	
   logic	
   of	
  
participatory	
  planning	
  and	
  of	
  the	
  whole	
  parecon,	
  and	
  it	
  is	
  also	
  imperial,	
  once	
  it	
  exists	
  trying	
  to	
  spread	
  as	
  
far	
  as	
  wide	
  as	
  it	
  can.”	
  (Michael	
  Albert,	
  Parecon,	
  Verso,	
  2003,	
  p.79).	
  	
  
	
  Final	
  Thoughts	
  
117
long	
  as	
  they	
  are	
  properly	
  compensated	
  for	
  this	
  by	
  the	
  polluters.	
  This	
  is	
  a	
  critical	
  –	
  
and	
   I	
   would	
   add	
   valuable	
   –	
   aspect	
   of	
   the	
   iterative	
   planning	
   process	
   between	
  
producers	
  and	
  people	
  in	
  the	
  broader	
  society	
  affected	
  by	
  the	
  externalities	
  of	
  the	
  
production	
  process	
  since	
  it	
  forces	
  producers	
  to	
  take	
  into	
  account	
  the	
  full	
  social	
  
costs	
  of	
  their	
  production.65
	
  I	
  endorse	
  that	
  aspect	
  of	
  Robin’s	
  model	
  as	
  part	
  of	
  his	
  
deep	
   effort	
   to	
   realise	
   the	
   democratic	
   value	
   that	
   people	
   ought	
   to	
   participate	
   in	
  
decisions	
   to	
   the	
   extent	
   that	
   they	
   are	
   affected	
   by	
   the	
   consequences	
   of	
   those	
  
decisions.	
  The	
  implication	
  of	
  this	
  commitment	
  to	
  democratic	
  values,	
  however,	
  is	
  
that	
  there	
  is	
  nothing	
  strange	
  about	
  voluntarily	
  choosing	
  a	
  certain	
  level	
  of	
  risk	
  for	
  
cancer	
  (since	
  pollution	
  often	
  brings	
  such	
  risks)	
  given	
  the	
  trade-­‐offs	
  people	
  face	
  
between	
  such	
  risks	
  and	
  other	
  things	
  they	
  care	
  about.	
  If	
  allowing	
  markets	
  is	
  like	
  
this	
  –	
  they	
  pose	
  risks	
  –	
  then	
  it	
  would	
  be	
  reasonable	
  for	
  people	
  to	
  make	
  choices	
  
about	
  this	
  as	
  well.	
  
But	
  is	
  this	
  the	
  right	
  way	
  to	
  think	
  about	
  the	
  impact	
  of	
  markets	
  on	
  motivations	
  and	
  
values?	
  Or	
  are	
  markets,	
  as	
  Robin	
  argues,	
  actually	
  like	
  cancer	
  itself,	
  which	
  suggests	
  
that	
  inevitably	
  the	
  presence	
  of	
  markets	
  will	
  foster	
  corrosive	
  anti-­‐social	
  values?	
  	
  I	
  
disagree	
   with	
   this	
   diagnosis	
   of	
   the	
   intrinsic	
   effects	
   of	
   uncoordinated	
   voluntary	
  
exchange.	
  	
  Rather,	
  I	
  see	
  the	
  extent	
  to	
  which	
  market	
  relations	
  embody	
  motivations	
  
of	
  fear	
  and	
  greed	
  is	
  highly	
  variable	
  and	
  depends	
  on	
  the	
  specific	
  cultural	
  forms	
  and	
  
social	
   relations	
   within	
   which	
   those	
   market	
   processes	
   are	
   embedded.	
   This	
   is	
   a	
  
standard	
  argument	
  in	
  the	
  sociological	
  analysis	
  of	
  markets.	
  Emile	
  Durkheim	
  refers	
  
to	
  this	
  as	
  the	
  “noncontractual	
  elements	
  of	
  contract”	
  and	
  Karl	
  Polanyi	
  as	
  the	
  social	
  
embeddedness	
  of	
  markets.	
  The	
  basic	
  idea	
  is	
  that	
  markets	
  are	
  always	
  existing	
  in	
  an	
  
environment	
  of	
  internalised	
  norms	
  and	
  informal	
  social	
  regulation	
  (as	
  well	
  as,	
  of	
  
course,	
  formal	
  legal	
  regulation),	
  and	
  this	
  deeply	
  shapes	
  the	
  experience	
  of	
  people	
  
within	
   market	
   exchanges	
   and	
   the	
   kinds	
   of	
   dispositions	
   they	
   bring	
   into	
   those	
  
relations.	
   In	
   some	
   market	
   environments	
   there	
   are	
   high	
   levels	
   of	
   trust	
   and	
  
reciprocity,	
   without	
   the	
   pervasive	
   fear	
   and	
   anxiety	
   associated	
   with	
   brutally	
  
65
	
  This	
  aspect	
  of	
  Robin’s	
  model	
  goes	
  against	
  the	
  views	
  of	
  many	
  radical	
  environmentalists	
  who	
  broadly	
  
argue	
  for	
  minimizing	
  pollution	
  rather	
  than	
  leaving	
  this	
  up	
  to	
  the	
  preferences	
  of	
  people	
  who	
  will	
  have	
  to	
  
live	
  with	
  the	
  pollution.	
  Robin	
  correctly	
  recognises	
  that	
  there	
  are	
  real	
  trade-­‐offs	
  people	
  face	
  in	
  opting	
  for	
  
no	
   risk,	
   and	
   while	
   it	
   may	
   be	
   difficult	
   to	
   finely	
   calibrate	
   how	
   to	
   navigate	
   those	
   trade-­‐offs,	
   so	
   long	
   as	
  
people	
  have	
  good	
  information	
  and	
  are	
  on	
  equal	
  footing	
  in	
  balancing	
  their	
  priorities,	
  then	
  people	
  should	
  
be	
  able	
  to	
  choose	
  the	
  balance	
  between	
  income	
  and	
  the	
  level	
  of	
  pollution.	
  This	
  is	
  what	
  is	
  accomplished	
  
through	
  the	
  iterated	
  planning	
  process	
  on	
  negative	
  externalities.	
  	
  
Erik	
  Olin	
  Wright	
  
competitive	
   markets.	
   In	
   other	
   markets	
   the	
   aphorism	
   “buyer	
   beware”	
   properly	
  
describes	
  the	
  exchange	
  relation.	
  
This	
   Durkheimian	
   sociological	
   understanding	
   of	
   the	
   normative	
   dimension	
   of	
  
markets	
  is	
  quite	
  alien	
  to	
  the	
  way	
  markets	
  are	
  typically	
  understood	
  by	
  economists.	
  
For	
  most	
  economists,	
  market	
  agents	
  are	
  purely	
  selfish,	
  rational	
  calculative	
  actors.	
  
This	
  is	
  what	
  sociologists	
  traditionally	
  characterise	
  as	
  an	
  “under-­‐socialised”	
  view	
  of	
  
people.66
	
  In	
  a	
  world	
  of	
  people	
  who	
  are	
  disconnected	
  from	
  reciprocity-­‐based	
  social	
  
relations	
   and	
   normative	
   commitments,	
   then	
   it	
   is	
   reasonable	
   to	
   see	
   markets	
   as	
  
intrinsically	
  reinforcing	
  and	
  spreading	
  antisocial	
  motivations	
  and	
  practices.	
  But	
  I	
  
see	
   no	
   reason	
   to	
   imagine	
   that	
   in	
   an	
   economy	
   dominated	
   by	
   participatory,	
  
democratic,	
  egalitarian	
  relations	
  and	
  values,	
  the	
  co-­‐presence	
  of	
  market	
  relations	
  
within	
  certain	
  aspects	
  of	
  economic	
  practices	
  would	
  have	
  these	
  properties.	
  These	
  
motivational	
  states	
  are	
  not	
  intrinsic	
  to	
  market	
  processes	
  as	
  such;	
  they	
  are	
  only	
  
intrinsic	
   to	
   the	
   atomistic,	
   normatively	
   unconstrained	
   markets	
   of	
   economics	
  
models.	
  In	
  a	
  capitalist	
  economy	
  –	
  especially	
  a	
  neo-­‐liberal	
  capitalist	
  economy	
  in	
  
which	
  markets	
  are	
  indeed	
  relatively	
  disconnected	
  from	
  community	
  reciprocities,	
  
competition	
   is	
   destructive,	
   and	
   the	
   cultural	
   formation	
   of	
   people	
   encourages	
  
manipulative	
  selfish	
  strategies	
  –	
  market	
  do	
  indeed	
  embody	
  and	
  foster	
  greed	
  and	
  
fear,	
  but	
  this	
  is	
  not	
  because	
  of	
  something	
  intrinsic	
  to	
  the	
  sheer	
  fact	
  of	
  market	
  
processes	
  but	
  to	
  the	
  social	
  form	
  of	
  those	
  markets	
  in	
  capitalism.67
	
  
66
	
  Mark	
  Granovetter,	
  in	
  “Economic	
  Action	
  and	
  Social	
  Structure:	
  The	
  Problem	
  of	
  Embeddedness,”	
  	
  (The	
  
American	
  Journal	
  of	
  Sociology	
  (	
  91,	
  3),	
  November,	
  1985:	
  481-­‐510)	
  famously	
  contrasts	
  the	
  characteristic	
  
“undersocialized	
  view	
  of	
  man”	
  in	
  economics	
  with	
  an	
  “oversocialized	
  view	
  of	
  man”	
  in	
  much	
  sociology.	
  
While	
   the	
   former	
   sees	
   people	
   as	
   atomistic	
   self-­‐directed	
   rational	
   actors,	
   the	
   latter	
   sees	
   people	
   as	
  
following	
   scripts	
   imposed	
   on	
   them	
   by	
   culture.	
   Granovetter	
   offers	
   an	
   intermediary	
   view	
   of	
   socially-­‐
embedded	
  economic	
  action.	
  
67
	
  To	
  fully	
  sort	
  out	
  the	
  contrast	
  between	
  my	
  views	
  and	
  Robin’s	
  on	
  this	
  issue	
  would	
  require	
  a	
  discussion	
  
of	
  some	
  quite	
  difficult	
  methodological	
  issues	
  about	
  the	
  relation	
  between	
  abstract	
  concepts	
  and	
  their	
  
concrete	
   realization.	
   When	
   Robin	
   claims	
   that	
   fear	
   and	
   greed	
   are	
   intrinsic	
   to	
   markets	
   rather	
   than	
   a	
  
variable	
  effect	
  of	
  markets	
  in	
  specific	
  contexts	
  (as	
  is	
  the	
  case	
  for	
  negative	
  externalities),	
  he	
  is	
  relying	
  on	
  a	
  
particular	
  way	
  of	
  thinking	
  about	
  the	
  abstract	
  “pure”	
  concept	
  of	
  “markets”	
  in	
  which	
  the	
  fundamental	
  
nature	
   of	
   markets	
   can	
   be	
   analyzed	
   independently	
   of	
   the	
   concrete	
   institutional	
   and	
   cultural	
   forms	
   in	
  
which	
  they	
  may	
  occur,	
  and	
  at	
  that	
  level	
  of	
  abstraction	
  fear	
  and	
  greed	
  are	
  inherent	
  features.	
  He	
  then	
  
assumes	
  that	
  because	
  these	
  are	
  inherent	
  features	
  at	
  the	
  most	
  abstract	
  level	
  of	
  analysis	
  they	
  remain	
  
inherent	
   features	
   at	
   the	
   concrete	
   institutional,	
   cultural	
   and	
   social	
   forms	
   which	
   markets	
   take	
   in	
   the	
  
world.	
  	
  My	
  position,	
  in	
  contrast,	
  is	
  that	
  these	
  concrete	
  cultural	
  and	
  social	
  forms	
  are	
  internalised	
  within	
  
markets	
  and	
  can	
  alter	
  the	
  consequences	
  of	
  what	
  might	
  otherwise	
  be	
  seen	
  as	
  their	
  inherent	
  properties.	
  
	
  Final	
  Thoughts	
  
119
Let	
  me	
  give	
  an	
  imperfect	
  parallel	
  example	
  to	
  illustrate	
  my	
  point	
  here:	
  competition	
  
within	
   sports.	
   Some	
   radical	
   egalitarians	
   have	
   argued	
   that	
   competition	
   within	
  
sports	
  and	
  games	
  intrinsically	
  fosters	
  status	
  hierarchies	
  and	
  various	
  types	
  of	
  anti-­‐
solidaristic	
  sentiments.	
  Players	
  in	
  a	
  sport	
  want	
  to	
  win	
  and	
  this	
  means	
  “defeating”	
  
an	
  “opponent”.	
  Winners	
  are	
  better	
  than	
  losers.	
  Aggressiveness	
  is	
  valued.	
  And	
  so	
  
forth.	
  Other	
  people	
  contend	
  that	
  competition	
  in	
  sports	
  can	
  be	
  governed	
  by	
  norms	
  
of	
  good	
  sportsmanship,	
  of	
  fair	
  play	
  and	
  camaraderie,	
  and	
  that	
  whatever	
  status	
  
inequalities	
  are	
  generated	
  by	
  sports	
  could	
  be	
  contained	
  in	
  ways	
  that	
  would	
  make	
  
them	
   relatively	
   benign.	
   In	
   particular,	
   if	
   other	
   kinds	
   of	
   rewards	
   –	
   in	
   particular	
  
wealth	
   and	
   power	
   –	
   are	
   not	
   connected	
   to	
   being	
   successful	
   in	
   sports,	
   then	
  
normatively	
   regulated	
   competitive	
   sports	
   need	
   not	
   be	
   corrosive	
   of	
   egalitarian	
  
social	
  solidarity.	
  	
  
I	
  do	
  not	
  think	
  the	
  question	
  of	
  the	
  moral	
  status	
  and	
  cultural	
  effects	
  of	
  competition	
  
in	
  sports	
  is	
  a	
  settled	
  issue.	
  It	
  is	
  possible	
  that,	
  in	
  the	
  end,	
  competitive	
  sports	
  are	
  
always	
   pernicious,	
   that	
   they	
   intrinsically	
   foster	
   socially	
   harmful	
   forms	
   of	
   status	
  
inequality	
  regardless	
  of	
  the	
  broader	
  social	
  context.	
  Anti-­‐competition	
  activists	
  in	
  
the	
  1970s	
  created	
  a	
  range	
  of	
  “new	
  games”	
  rooted	
  in	
  cooperative	
  values	
  and	
  some	
  
of	
  these	
  in	
  fact	
  were	
  reasonably	
  enjoyable,	
  at	
  least	
  to	
  some	
  people.68
	
  Perhaps	
  in	
  a	
  
post-­‐capitalist	
   world	
   with	
   a	
   participatory	
   economy,	
   people	
   will	
   abandon	
  
competitive	
   sports	
   just	
   as	
   Robin	
   hopes	
   that	
   they	
   will	
   completely	
   abandon	
  
markets.	
  But	
  it	
  is	
  also	
  possible	
  that	
  in	
  the	
  context	
  of	
  the	
  cultural	
  forms	
  that	
  are	
  
consolidated	
   within	
   such	
   a	
   world,	
   whatever	
   negative	
   effects	
   of	
   competition	
   in	
  
sports	
  will	
  be	
  minimal,	
  and	
  competitive	
  sports	
  will	
  flourish	
  as	
  a	
  human	
  activity	
  
because	
  many	
  people	
  will	
  find	
  them	
  interesting	
  and	
  fun	
  to	
  play.	
  	
  
2.	
  But	
  is	
  there	
  anything	
  actually	
  desirable	
  about	
  markets?	
  
Even	
   if	
   one	
   accepts	
   my	
   argument	
   that	
   markets,	
   understood	
   as	
   uncoordinated	
  
decentralised	
   voluntary	
   exchanges,	
   do	
   not	
   intrinsically	
   generate	
   anti-­‐social	
  
behaviour,	
  nevertheless	
  I	
  acknowledge	
  that	
  they	
  may	
  have	
  a	
  tendency	
  to	
  do	
  so.	
  
Why	
  not	
  try	
  to	
  completely	
  eliminate	
  all	
  social	
  practices	
  that	
  have	
  the	
  potential	
  of	
  
generating	
  such	
  harms?	
  	
  The	
  only	
  reason	
  to	
  allow	
  a	
  space	
  for	
  market	
  processes	
  is	
  
that	
  they	
  promote	
  some	
  other	
  positive	
  value	
  that	
  we	
  care	
  about	
  and	
  a	
  complete	
  
elimination	
   of	
   all	
   market	
   processes	
   would	
   harm	
   those	
   values.	
   There	
   are	
   two	
  
positive	
  values	
  a	
  constrained	
  use	
  of	
  markets	
  might	
  advance:	
  “convenience”	
  and	
  
risk-­‐taking	
  initiatives.	
  	
  
68
	
  For	
  a	
  description	
  of	
  new	
  games,	
  see	
  http://inewgames.com/	
  
Erik	
  Olin	
  Wright	
  
Convenience	
  
Robin	
   acknowledges	
   that	
   even	
   in	
   a	
   broadly	
   democratic-­‐participatory	
   economy	
  
people	
   might	
   opt	
   to	
   use	
   markets	
   in	
   some	
   contexts,	
   but	
   if	
   they	
   do	
   so	
   it	
   will	
  
because	
  of	
  “convenience”,	
  with	
  the	
  implication	
  that	
  this	
  is	
  to	
  be	
  contrasted	
  with	
  a	
  
deeper	
   dedication	
   to	
   democratic-­‐participatory	
   principles.	
   	
   As	
   quoted	
   above:	
  
“people	
  will	
  spontaneously	
   engage	
   in	
   market	
   behaviour,	
   and	
   using	
   markets	
   for	
  
particular	
   purposes	
   even	
   in	
   an	
   economy	
   where	
   what	
   to	
   produce	
   and	
   how	
   to	
  
produce	
   it	
   is	
   first	
   determined	
   by	
   a	
   comprehensive	
   production	
   plan,	
  will	
  often	
  
appear	
   convenient.”	
   The	
   use	
   of	
   the	
   word	
   “convenient”	
   here	
   suggests	
   that	
   this	
  
reflects	
  a	
  kind	
  of	
  weakness	
  of	
  will	
  or	
  moral	
  laziness.	
  Certainly	
  if	
  markets	
  really	
  are	
  
like	
   cancer,	
   people	
   would	
   be	
   making	
   a	
   mistake	
   in	
   deciding	
   that	
   a	
   “dash	
   of	
  
markets”	
   is	
   convenient.	
   But	
   if	
   the	
   greed-­‐and-­‐fear-­‐inducing	
   property	
   of	
   markets	
  
depends	
  upon	
  how	
  they	
  are	
  embedded	
  in	
  other	
  social	
  institutions	
  and	
  the	
  ways	
  in	
  
which	
   they	
   embody	
   specific	
   pro-­‐social	
   norms,	
   then	
   in	
   a	
   broadly	
   democratic-­‐
egalitarian	
  economic	
  system	
  “convenience”	
  could	
  actually	
  reflect	
  positive	
  values	
  
for	
  which	
  it	
  is	
  reasonable	
  that	
  people	
  would	
  think	
  about	
  balance	
  and	
  trade-­‐offs.	
  
“Convenience”	
  is	
  a	
  way	
  of	
  talking	
  about	
  the	
  time	
  and	
  effort	
  for	
  doing	
  one	
  thing	
  
rather	
  than	
  another.	
  Time	
  and	
  effort	
  are	
  valuable,	
  and	
  thus	
  it	
  may	
  be	
  reasonable	
  
to	
  trade	
  convenience	
  off	
  against	
  other	
  values,	
  depending	
  on	
  the	
  situation.	
  It	
  is	
  
even	
  reasonable	
  to	
  give	
  up	
  some	
  degree	
  of	
  taking	
  into	
  account	
  total	
  social	
  costs	
  
of	
  production	
  (the	
  negative	
  externality	
  problem)	
  or	
  other	
  aspects	
  of	
  resource-­‐use	
  
efficiency	
  for	
  a	
  significant	
  increase	
  in	
  convenience.	
  Robin	
  is	
  quite	
  confident	
  that	
  a	
  
pure	
   participatory	
   economy	
   in	
   which	
   all	
   aspects	
   of	
   economic	
   activity	
   were	
  
processed	
  through	
  the	
  participatory	
  planning	
  mechanisms	
  would	
  not	
  take	
  up	
  a	
  lot	
  
of	
   time	
   and	
   effort.	
   He	
   therefore	
   believes	
   that	
   there	
   would	
   not	
   be	
   much	
  
convenience	
   gained	
   from	
   allowing	
   any	
   market-­‐like	
   processes	
   into	
   the	
   system.	
  
(And,	
  as	
  already	
  noted,	
  he	
  also	
  believes	
  there	
  would	
  always	
  be	
  significant	
  costs,	
  
since	
   markets	
   are	
   like	
   cancer	
   and	
   this	
   would	
   be	
   corrosive	
   of	
   the	
   participatory	
  
process	
  itself).	
  	
  I	
  lack	
  Robin’s	
  confidence	
  that	
  participatory	
  mechanisms	
  will	
  work	
  
as	
  smoothly	
  as	
  he	
  believes	
  and	
  that	
  the	
  time	
  and	
  effort	
  involved	
  will	
  be	
  minimal.	
  
My	
  expectation,	
  therefore,	
  is	
  that	
  “convenience”	
  will	
  matter	
  to	
  people	
  for	
  good	
  
reasons	
  and	
  this	
  will	
  provide	
  legitimate	
  grounds	
  for	
  people	
  to	
  choose	
  a	
  dose	
  of	
  
markets	
  (probably	
  more	
  than	
  just	
  a	
  dash).	
  	
  
The	
   trade-­‐off	
   between	
   convenience	
   and	
   fully	
   banishing	
   market	
   processes	
   is,	
   I	
  
believe,	
  a	
  significant	
  issue	
  in	
  the	
  iterative	
  planning	
  process	
  for	
  consumers.	
  Robin	
  
admits	
  that	
  many	
  –	
  perhaps	
  most	
  people	
  –	
  will	
  not	
  spend	
  much	
  time	
  on	
  planning	
  
	
  Final	
  Thoughts	
  
121
their	
  consumption	
  for	
  the	
  next	
  year.	
  They	
  will	
  only	
  provide	
  very	
  rough	
  indicators	
  
of	
  what	
  they	
  plan	
  to	
  consume,	
  largely	
  based	
  on	
  what	
  they	
  did	
  the	
  previous	
  year,	
  
and	
   certainly	
   nothing	
   like	
   a	
   fine-­‐grained	
   account	
   of	
   specific,	
   detailed	
   products.	
  
Why?	
  Because	
  they	
  don’t	
  want	
  to	
  spend	
  the	
  time	
  and	
  energy	
  to	
  do	
  so.	
  They	
  opt	
  
for	
  convenience.	
  I	
  agree	
  with	
  Robin	
  that	
  this	
  is	
  perfectly	
  fine.	
  But	
  the	
  result	
  is	
  that	
  
the	
  post-­‐planning	
  adjustments	
  to	
  initial	
  allocations	
  are	
  likely	
  to	
  be	
  quite	
  large	
  and	
  
–	
  more	
  importantly	
  –	
  may	
  function	
  very	
  much	
  like	
  market	
  adjustments	
  that	
  shape	
  
both	
   prices	
   and	
   quantities	
   of	
   things	
   produced.	
   To	
   avoid	
   such	
   market-­‐like	
  
adjustments	
  would	
  require	
  people	
  to	
  spend	
  a	
  great	
  deal	
  more	
  time	
  in	
  carefully	
  
planning	
  their	
  future	
  consumption,	
  which	
  would	
  be	
  	
  an	
  unacceptable	
  sacrifice	
  of	
  
“convenience”.	
  I	
  will	
  discuss	
  this	
  trade-­‐off	
  in	
  more	
  detail	
  in	
  the	
  section	
  on	
  hybrids	
  
below.	
  	
  
Risk-­‐taking	
  initiative	
  	
  
As	
   I	
   explained	
   in	
   my	
   initial	
   comment	
   on	
   Robin’s	
   model,	
   another	
   aspect	
   of	
  
economic	
  life	
  in	
  which	
  I	
  can	
  imagine	
  people	
  democratically	
  embracing	
  a	
  space	
  for	
  
market	
  processes	
  would	
  be	
  to	
  allow	
  certain	
  forms	
  of	
  entrepreneurial	
  risk	
  taking.	
  
In	
   any	
   participatory	
   process	
   of	
   investment	
   planning	
   there	
   will	
   inevitably	
   be	
   a	
  
range	
   of	
   investment	
   projects	
   that	
   get	
   rejected,	
   which	
   is	
   fine.	
   But	
   it	
   is	
   easy	
   to	
  
imagine	
  that	
  under	
  these	
  conditions	
  there	
  will	
  be	
  people	
  with	
  rejected	
  proposals	
  
who	
  are	
  nevertheless	
  able	
  to	
  mobilise	
  capital	
  from	
  personal	
  networks	
  or	
  personal	
  
savings	
  –	
  after	
  all,	
  an	
  effort-­‐based	
  income	
  system	
  can	
  allow	
  very	
  hard-­‐working	
  
people,	
   especially	
   if	
   they	
   are	
   part	
   of	
   a	
   group,	
   to	
   amass	
   over	
   a	
   period	
   of	
   time	
  
considerable	
   savings.	
   The	
   question	
   then	
   is	
   whether	
   there	
   will	
   be	
   a	
   strict	
  
prohibition	
  on	
  people	
  launching	
  a	
  project	
  using	
  these	
  “private”	
  resources	
  without	
  
getting	
  prior	
  permission	
  from	
  the	
  relevant	
  planning	
  council.	
  My	
  prediction	
  is	
  that	
  
in	
  a	
  broadly	
  participatory	
  economy	
  some	
  space	
  will	
  be	
  allowed	
  for	
  more	
  chaotic	
  
investment	
  processes	
  because	
  this	
  will	
  be	
  seen	
  as	
  an	
  all-­‐things-­‐considered	
  better	
  
mix	
   of	
   planning	
   and	
   un-­‐coordinated	
   spontaneity	
   than	
   a	
   system	
   requiring	
   that	
  
every	
  economic	
  project	
  get	
  permission	
  go	
  through	
  the	
  standard	
  planning	
  process.	
  	
  	
  
The	
  importance	
  of	
  trade-­‐offs	
  
The	
   presence	
   of	
   some	
   space	
   for	
   democratically	
   constrained	
   markets	
   within	
   a	
  
participatory	
  economy	
  may	
  thus	
  be	
  the	
  optimal	
  mix	
  given	
  trade-­‐offs	
  of	
  various	
  
values.	
   Acknowledging	
   such	
   trade-­‐offs	
   in	
   the	
   ideal	
   social	
   “destination”	
   of	
   a	
  
process	
   of	
   social	
   transformation,	
   however,	
   does	
   not	
   imply	
   watering	
   down	
   the	
  
ideal;	
  it	
  just	
  says	
  that	
  the	
  ideal	
  economic	
  system	
  must	
  try	
  to	
  realise	
  a	
  plurality	
  of	
  
values	
  and	
  that	
  the	
  different	
  values	
  themselves	
  are	
  sometimes	
  in	
  tension.	
  This	
  is	
  
Erik	
  Olin	
  Wright	
  
not	
   about	
   the	
   practical	
   necessity	
   tolerating	
   imperfections	
   in	
   the	
   ideal	
   during	
   a	
  
transition;	
  it	
  is	
  about	
  the	
  optimal	
  institutional	
  configuration	
  in	
  the	
  destination	
  to	
  
realise	
  a	
  complex	
  set	
  of	
  partially	
  conflicting	
  values.	
  
To	
  help	
  clarify	
  my	
  fundamental	
  point	
  here,	
  let	
  me	
  discuss	
  another	
  case	
  that	
  also	
  
bears	
  on	
  core	
  values	
  involved	
  in	
  a	
  participatory	
  economy:	
  the	
  difficult	
  problem	
  of	
  
implementing	
  in	
  an	
  optimal	
  way	
  the	
  democratic	
  value.	
  Both	
  Robin	
  and	
  I	
  endorse	
  
the	
   radical	
   democratic	
   value	
   that	
   people	
   should	
   participate	
   in	
   decisions	
   to	
   the	
  
extent	
  that	
  they	
  are	
  affected	
  by	
  them.	
  If	
  a	
  decision	
  only	
  affects	
  oneself,	
  then	
  that	
  
decision	
  can	
  be	
  autonomously	
  made	
  without	
  anyone	
  else’s	
  involvement;	
  but	
  if	
  a	
  
decision	
  affects	
  other	
  people,	
  then	
  they	
  should	
  be	
  co-­‐participants	
  in	
  the	
  decision	
  
to	
   the	
   extent	
   that	
   they	
   are	
   affected.	
   Now,	
   this	
   is	
   the	
   correct	
   principle.	
   The	
  
question	
  then	
  is	
  how	
  precisely	
  we	
  should	
  understand	
  the	
  practical	
  trade-­‐offs	
  in	
  its	
  
implementation.	
  In	
  reality,	
  nearly	
  everything	
  we	
  do	
  has	
  effects	
  on	
  other	
  people,	
  
so	
   it	
   is	
   impossible	
   to	
   actually	
   involve	
   everyone	
   affected	
   by	
   a	
   decision	
   in	
   a	
  
proportionate	
   role	
   in	
   the	
   decision.	
   The	
   result	
   is	
   that	
   some	
   kind	
   of	
   line	
   of	
  
demarcation	
   has	
   to	
   be	
   drawn	
   between	
   the	
   public	
   and	
   the	
   private	
   domains	
   of	
  
decision-­‐making:	
   inside	
   the	
   private	
   domain,	
   however	
   that	
   is	
   defined,	
   one	
   need	
  
not	
  get	
  permission	
  from	
  anyone	
  else	
  to	
  make	
  choices.	
  This	
  boundary	
  is,	
  of	
  course,	
  
not	
  pre-­‐social,	
  not	
  some	
  “natural”	
  line	
  of	
  demarcation.	
  It	
  is	
  socially	
  constructed,	
  
and	
   in	
   a	
   democratic	
   society,	
   constructed	
   through	
   democratic	
   deliberation.	
   But	
  
once	
  created	
  it	
  defines	
  the	
  limits	
  of	
  collaborative,	
  democratic	
  decision-­‐making.	
  
One	
  way	
  of	
  looking	
  at	
  this	
  is	
  demarcation	
  of	
  the	
  public/private	
  boundary	
  is	
  that	
  it	
  
is	
  simply	
  a	
  practical	
  concession	
  to	
  the	
  complexity	
  of	
  life.	
  	
  Another	
  way	
  of	
  looking	
  
at	
  the	
  issue	
  is	
  that	
  even	
  if	
  magically	
  one	
  could	
  involve	
  everyone	
  in	
  every	
  decision	
  
that	
  had	
  any	
  effect	
  on	
  them	
  we	
  would	
  not	
  want	
  to	
  do	
  this.	
  Individual	
  self-­‐directed	
  
autonomy	
   is	
   also	
   a	
   value,	
   and	
   a	
   full	
   implementation	
   of	
   the	
   democratic	
  
proportionality	
  principle	
  would	
  involve	
  too	
  severe	
  a	
  restriction	
  on	
  autonomy.	
  This	
  
is	
  a	
  tricky	
  issue,	
  of	
  course,	
  and	
  it	
  opens	
  a	
  space	
  for	
  a	
  lot	
  of	
  contestation	
  about	
  
how	
   much	
   autonomous	
   self-­‐direction	
   is	
   desirable.	
   Billboards	
   impinge	
   on	
   other	
  
people.	
   Some	
   messages	
   may	
   be	
   offensive.	
   Some	
   may	
   be	
   offensive	
   to	
   a	
   small	
  
group	
  of	
  people	
  and	
  not	
  others.	
  Should	
  everyone	
  who	
  is	
  negatively	
  affected	
  by	
  a	
  
billboard	
  have	
  a	
  proportionate	
  say	
  in	
  allowing	
  it?	
  Or	
  do	
  we	
  value	
  autonomy	
  of	
  
individual	
  expression	
  and	
  want	
  to	
  allow	
  a	
  fairly	
  broad	
  scope	
  for	
  people	
  erecting	
  
billboards	
   to	
   express	
   their	
   views?	
   These	
   are	
   difficult	
   issues	
   that	
   cannot	
   be	
  
resolved	
  by	
  simply	
  invoking	
  a	
  no-­‐trade-­‐off	
  rule	
  for	
  democratic	
  values.	
  	
  
	
  Final	
  Thoughts	
  
123
As	
  long	
  as	
  we	
  are	
  trying	
  to	
  realise	
  multiple	
  values	
  and	
  ideals,	
  then	
  worrying	
  about	
  
these	
  kinds	
  of	
  trade-­‐offs	
  is	
  inherent	
  in	
  the	
  design	
  of	
  any	
  social	
  institution.	
  In	
  the	
  
case	
   of	
   economic	
   institutions,	
   democracy,	
   solidarity	
   and	
   equality	
   are	
   critical	
  
values,	
  but	
  so	
  are	
  convenience	
  and	
  autonomous	
  individual	
  initiative.	
  The	
  optimal	
  
trade-­‐off	
   across	
   these	
   values	
   is	
   likely	
   to	
   require	
   a	
   space	
   for	
   some	
   market-­‐
processes	
  within	
  a	
  participatory	
  economy.	
  
3.	
  The	
  hidden	
  infusion	
  of	
  marketish	
  processes	
  within	
  a	
  participatory	
  economy:	
  
the	
  problem	
  of	
  hybrids	
  
I	
  make	
  the	
  argument	
  that	
  even	
  if	
  we	
  had	
  a	
  participatory	
  economy	
  fully	
  in	
  place,	
  
we	
  cannot	
  know	
  now	
  what	
  the	
  real	
  weight	
  of	
  the	
  adjustment	
  processes	
  within	
  
the	
  implementation	
  of	
  plans	
  will	
  look	
  like.	
  Robin	
  acknowledges	
  that	
  there	
  will	
  be	
  
lots	
  of	
  adjustments	
  to	
  plans.	
  But	
  he	
  also	
  assumes	
  that	
  these	
  adjustments	
  will	
  be	
  
relatively	
   small	
   relative	
   to	
   planned	
   allocations,	
   and	
   thus	
   that	
   the	
   system	
   as	
   a	
  
whole	
   is	
   really	
   a	
   planned	
   system	
   of	
   allocations	
   with	
   minor	
   adjustments,	
   rather	
  
than	
  a	
  planned	
  system	
  which	
  imposes	
  constraints	
  on	
  lively	
  market-­‐like	
  processes.	
  
I	
  do	
  not	
  think	
  we	
  can	
  confidently	
  know	
  now	
  whether,	
  in	
  such	
  a	
  possible	
  world,	
  
post-­‐planning	
  adjustments	
  will	
  be	
  small	
  relative	
  to	
  initial	
  expectations	
  or	
  large,	
  
and	
   whether	
   or	
   not	
   the	
   adjustment	
   process	
   will	
   look	
   a	
   lot	
   like	
   markets	
   or	
  
something	
  else.	
  Robin	
  writes:	
  	
  
I	
   also	
   explained	
   three	
   reasons	
   why	
   I	
   do	
   not	
   believe	
   in	
   this	
   case	
   [i.e.	
   post-­‐planning	
  
adjustments]	
  just	
  because	
  it	
  may	
  “look	
  like	
  a	
  market	
  and	
  smell	
  like	
  a	
  market,”	
  it	
  truly	
  is	
  a	
  
market	
  in	
  any	
  meaningful	
  sense…	
  
This	
  is	
  a	
  key	
  issue	
  –	
  looking	
  and	
  smelling	
  like	
  a	
  market	
  but	
  not	
  “truly”	
  being	
  a	
  
market.	
  This	
  is	
  part	
  of	
  what	
  I	
  mean	
  by	
  saying	
  that	
  all	
  real	
  economic	
  systems	
  are	
  
hybrids	
   of	
   different	
   principles.	
   Of	
   course,	
   market-­‐like	
   adjustments	
   within	
   a	
  
participatory	
  planning	
  world	
  it	
  is	
  not	
  the	
  same	
  as	
  a	
  “market	
  system”	
  or	
  a	
  “free	
  
market”,	
  but	
  these	
  market	
  processes	
  could	
  still	
  play	
  a	
  critical	
  role	
  in	
  coordinating	
  
actual	
   production	
   through	
   feedback	
   processes	
   based	
   on	
   supply	
   and	
   demand,	
  
lowering	
   prices,	
   and	
   increasing	
   and	
   shifting	
   production	
   in	
   response	
   to	
   what	
  
people	
  actually	
  do	
  rather	
  than	
  what	
  they	
  anticipate	
  doing.	
  	
  
The	
  key	
  to	
  my	
  diagnosis	
  of	
  the	
  actual	
  infusion	
  of	
  market	
  processes	
  within	
  even	
  
Robin’s	
   model	
   of	
   a	
   participatory	
   economy	
   is	
   the	
   claim	
   that	
   the	
   adjustments,	
  
especially	
  if	
  large,	
  are	
  really	
  a	
  variety	
  of	
  a	
  hybrid	
  market	
  process.	
  Robin	
  clearly	
  
does	
  not	
  think	
  this	
  is	
  the	
  right	
  way	
  to	
  think	
  about	
  this.	
  In	
  the	
  conclusion	
  of	
  his	
  
commentary	
   on	
   my	
   essay	
   he	
   discusses	
   the	
   mistakes	
   people	
   have	
   made	
   in	
  
criticising	
  the	
  processes	
  of	
  comprehensive	
  participatory	
  planning:	
  
Erik	
  Olin	
  Wright	
  
Critics	
  ask	
  how	
  broad	
  categories	
  in	
  a	
  comprehensive	
  plan,	
  like	
  shoes,	
  would	
  be	
  turned	
  
into	
  detailed	
  items,	
  like	
  size	
  6½	
  purple	
  women’s	
  high-­‐heeled	
  leatherless	
  shoes	
  with	
  a	
  
yellow	
  toe.	
  Some,	
  like	
  Seth	
  Ackerman	
  writing	
  in	
  Jacobin	
  Magazine,	
  assume	
  there	
  is	
  no	
  
answer	
  to	
  this	
  question	
  and	
  dismiss	
  all	
  comprehensive	
  planning	
  as	
  impossible.	
  Others,	
  
like	
  Erik,	
  recognise	
  that	
  this	
  problem	
  is	
  not	
  insurmountable,	
  but	
  argue	
  that	
  we	
  will	
  find	
  
markets	
  helpful	
  when	
  solving	
  it.	
  
He	
   rejects	
   my	
   argument	
   and	
   instead	
   describes	
   the	
   process	
   by	
   which	
   actual	
  
production	
  hones	
  in	
  on	
  the	
  right	
  number	
  of	
  “size	
  6½	
  purple	
  women’s	
  high-­‐heeled	
  
leatherless	
  shoes	
  with	
  a	
  yellow	
  toe”	
  as	
  nonmarket	
  adjustments.	
  	
  My	
  position	
  is	
  
certainly	
   not	
   that	
   the	
   solution	
   requires	
   introducing	
   a	
   full-­‐blown,	
   autonomous	
  
“market	
  system”	
  into	
  the	
  economy,	
  but	
  rather	
  that	
  the	
  introduction	
  of	
  effective	
  
adjustment	
  processes	
  is	
  likely	
  to	
  have	
  strong	
  market-­‐like	
  features	
  –	
  they	
  would	
  
look	
  like	
  a	
  market	
  and	
  smell	
  like	
  a	
  market	
  –	
  in	
  that	
  they	
  would	
  involve	
  “buyers	
  
and	
  sellers	
  of	
  goods	
  and	
  services	
  agreeing	
  to	
  exchange	
  things	
  at	
  mutually	
  agreed	
  
upon	
  prices.”	
  The	
  actual	
  exchanges	
  that	
  result	
  from	
  this	
  process	
  (in	
  contrast	
  to	
  
the	
  anticipated	
  plans),	
  in	
  turn,	
  would	
  be	
  data	
  that	
  would	
  feedback	
  into	
  on-­‐going	
  
decisions	
  about	
  how	
  much	
  of	
  different	
  things	
  to	
  produce.	
  	
  This	
  is	
  a	
  real	
  feedback	
  
process,	
  which	
  is	
  embedded	
  in	
  the	
  post-­‐planning	
  uncoordinated	
  interactions	
  of	
  
buyers	
   and	
   sellers	
   and	
   the	
   adjustments	
   that	
   emerge	
   out	
   of	
   those	
   interactions.	
  
These	
  significant	
  market-­‐like	
  adjustments	
  would	
  in	
  turn	
  systematically	
  inform	
  the	
  
next	
  year’s	
  cycle	
  of	
  the	
  iterated	
  planning	
  process.	
  	
  
Robin	
   concludes	
   the	
   discussion	
   of	
   incorrect	
   criticisms	
   of	
   his	
   planning	
   model	
   by	
  
saying	
   that	
   this	
   really	
   has	
   nothing	
   to	
   do	
   with	
   an	
   articulation	
   of	
   planning	
   and	
  
market	
  processes:	
  “But	
  none	
  of	
  this	
  has	
  anything	
  to	
  do	
  with	
  how	
  to	
  come	
  up	
  with	
  
a	
  comprehensive	
  economic	
  plan	
  in	
  the	
  first	
  place	
  –	
  which	
  was	
  the	
  problem	
  we	
  
tackled	
  initially.”	
  He	
  could	
  be	
  right	
  about	
  this	
  if	
  the	
  adjustments	
  are	
  small	
  to	
  the	
  
comprehensive	
   plan	
   that	
   comes	
   out	
   of	
   the	
   iterated	
   participatory	
   planning	
  
process.	
   The	
   initial	
   plan,	
   after	
   all,	
   will	
   include	
   some	
   number	
   of	
   size	
   6½	
   purple	
  
women’s	
   high-­‐heeled	
   leatherless	
   shoes	
   with	
   a	
   yellow	
   toe,	
   and	
   perhaps	
   this	
   is	
  
pretty	
  close	
  to	
  what	
  people	
  will	
  actually	
  want	
  when	
  they	
  actually	
  buy	
  shoes.	
  But	
  if	
  
the	
  adjustments	
  are	
  large,	
  and	
  if	
  they	
  require	
  significant	
  shifting	
  around	
  of	
  actual	
  
allocations	
  of	
  resources,	
  then	
  these	
  supply	
  and	
  demand	
  feedback	
  processes	
  and	
  
adjustments	
  which	
  “look	
  like	
  a	
  market	
  and	
  smell	
  like	
  a	
  market”	
  will	
  have	
  much	
  
more	
   the	
   character	
   of	
   actual	
   market	
   processes.	
   In	
   effect	
   this	
   means	
   that	
   the	
  
planning	
   process	
   itself	
   is	
   not	
   in	
   fact	
   comprehensive,	
   but	
   rather	
   loosely	
  
constructed.	
  It	
  is	
  a	
  hybrid	
  of	
  planning	
  and	
  market	
  processes,	
  not	
  a	
  pure	
  form	
  of	
  
either.	
   I	
   see	
   no	
   problem	
   with	
   this	
   because	
   I	
   do	
   not	
   see	
   this	
   as	
   inherently	
  
generating	
  pernicious	
  antisocial	
  effects.	
  	
  	
  
	
  Final	
  Thoughts	
  
125
4.	
  Mathematical	
  models	
  of	
  complex	
  systems	
  
One	
  of	
  the	
  interesting	
  issues	
  that	
  has	
  run	
  through	
  our	
  dialogue	
  is	
  the	
  contrast	
  
between	
   the	
   methods	
   by	
   which	
   Robin	
   and	
   I	
   envision	
   alternatives.	
   Robin	
   has	
  
developed	
  an	
  elaborate	
  model	
  of	
  a	
  future	
  possible	
  economic	
  system.	
  At	
  its	
  core	
  
this	
   involves	
   formal	
   mathematical	
   models	
   in	
   which	
   various	
   kinds	
   of	
   consistent	
  
outcomes	
  can	
  be	
  demonstrated,	
  given	
  the	
  assumptions	
  of	
  the	
  model,	
  including	
  
behavioural	
   assumptions	
   about	
   agents.	
   	
   While	
   these	
   formal	
   models	
   have	
   not	
  
directly	
   figured	
   in	
   our	
   exchanges	
   in	
   this	
   dialogue,	
   they	
   have	
   been	
   periodically	
  
referred	
   to	
   in	
   footnotes,	
   and	
   in	
   any	
   case	
   constitute	
   the	
   foundation	
   for	
   Robin’s	
  
belief	
   that	
   his	
   proposed	
   procedures	
   of	
   iterated	
   participatory	
   planning	
   will	
  
produce	
  consistent	
  prices	
  that	
  fully	
  embody	
  the	
  social	
  costs	
  of	
  production	
  and	
  an	
  
allocation	
  of	
  resources	
  needed	
  to	
  produce	
  the	
  planned	
  output.	
  My	
  approach	
  has	
  
been	
  to	
  elaborate	
  the	
  normative	
  principles	
  we	
  would	
  want	
  to	
  see	
  embodied	
  in	
  
ideal	
   economic	
   institutions	
   and	
   then	
   explore	
   a	
   wide	
   variety	
   of	
   quite	
   different	
  
institutional	
  forms	
  that	
  could	
  help	
  realise	
  those	
  values	
  without	
  positing	
  a	
  model	
  
of	
   an	
   overarching	
   unified	
   system	
   within	
   which	
   these	
   diverse	
   institutional	
  
arrangements	
  would	
  fit	
  together	
  and	
  function	
  seamlessly.	
  	
  
While	
  Robin	
  supports	
  many	
  of	
  the	
  specific	
  proposals	
  I	
  endorse	
  in	
  my	
  account	
  of	
  
socialism	
  and	
  real	
  utopias,	
  nevertheless	
  he	
  argues	
  that	
  my	
  pluralist	
  approach	
  has	
  
significant	
  limitations:	
  	
  
I	
   hope	
   it	
   is	
   clear	
   by	
   now	
   that	
   I	
   not	
   only	
   regard	
   ‘institutional	
   pluralism	
  in	
   transition,’	
  
including	
   markets,	
   as	
   a	
   practical	
   necessity,	
   but	
   also	
   appreciate	
   that	
   pluralism	
   in	
  
transition	
  provides	
  a	
  valuable	
  way	
  to	
  test	
  different	
  ideas	
  about	
  how	
  best	
  to	
  organise	
  
economic	
  activities.	
  However,	
  in	
  my	
  opinion	
  “institutional	
  pluralism	
  of	
  the	
  destination”	
  
can	
  be	
  an	
  excuse	
  for	
  imprecise	
  reasoning	
  which	
  fails	
  to	
  follow	
  assumptions	
  through	
  to	
  
their	
   logical	
   conclusions…..While	
   Erik	
   no	
   longer	
   misinterprets	
   the	
   model	
   of	
   a	
  
participatory	
   economy	
   as	
   a	
   strategic	
   transitional	
   program,	
   I	
   think	
   he	
   still	
   under	
  
estimates	
  the	
  usefulness	
  of	
  elaborating	
  rigorous	
  models	
  of	
  future	
  economic	
  systems.	
  
Let	
  me	
  try	
  to	
  clarify	
  my	
  view	
  of	
  “rigorous	
  models	
  of	
  future	
  economic	
  systems,”	
  
especially	
  the	
  kind	
  of	
  comprehensive	
  models	
  elaborated	
  by	
  Robin.	
  	
  
I	
  absolutely	
  agree	
  that	
  it	
  is	
  useful	
  to	
  develop	
  formal	
  mathematical	
  models	
  and	
  
deploy	
  them	
  within	
  discussions	
  of	
  social	
  transformation.	
  They	
  clarify	
  the	
  logic	
  of	
  
ideas	
  and	
  the	
  implications	
  of	
  different	
  design	
  features.	
  They	
  alert	
  us	
  to	
  potential	
  
problems.	
   They	
   are	
   a	
   critical	
   part	
   of	
   the	
   intellectual	
   map	
   of	
   envisioning	
  
alternatives.	
   Just	
   as	
   I	
   advocate	
   viewing	
   economic	
   systems	
   as	
   ecosystems	
  
combining	
  qualitatively	
  different	
  forms	
  of	
  economic	
  organisation,	
  so	
  I	
  think	
  the	
  
Erik	
  Olin	
  Wright	
  
optimal	
   intellectual	
   ecosystem	
   for	
   emancipatory	
   theory	
   should	
   contain	
   a	
   wide	
  
variety	
  of	
  different	
  forms	
  of	
  theoretical	
  and	
  empirical	
  work.	
  
But	
   I	
   also	
   believe	
   that	
   too	
   much	
   reliance	
   on	
   formal	
   models	
   can	
   create	
  
overconfidence	
   that	
   the	
   complexities	
   and	
   dynamics	
   of	
   the	
   actual	
   world	
   do	
   not	
  
seriously	
  undermine	
  the	
  predicted	
  smoothness	
  of	
  the	
  model.	
  There	
  is	
  a	
  tendency	
  
for	
  people	
  who	
  are	
  really	
  good	
  at	
  constructing	
  formal	
  mathematical	
  models	
  of	
  
social	
  processes	
  to	
  treat	
  real	
  world	
  complexity	
  as	
  disturbances	
  and	
  noise,	
  rather	
  
than	
   as	
   problems	
   that	
   could	
   potentially	
   severely	
   undermine	
   the	
   expected	
  
outcomes.	
   If	
   it	
   should	
   come	
   to	
   pass	
   that	
   someday	
   people	
   are	
   in	
   a	
   position	
   to	
  
institute	
   an	
   emancipatory	
   economic	
   system	
   along	
   the	
   lines	
   of	
   participatory	
  
planning,	
  I	
  don’t	
  know	
  what	
  the	
  problems	
  will	
  be	
  and	
  whether	
  they	
  will	
  be	
  just	
  
minor	
   wrinkles	
   that	
   require	
   practical	
   implementation	
   adjustments,	
   or	
   whether	
  
they	
  will	
  involve	
  more	
  fundamental	
  issues.	
  I	
  suspect	
  that	
  it	
  is	
  not	
  even	
  possible	
  to	
  
know	
  how	
  system	
  complexity	
  will	
  shape	
  the	
  optimal	
  way	
  of	
  navigating	
  whatever	
  
problems	
  occur.	
  	
  
Robin	
  acknowledges	
  that	
  there	
  will	
  be	
  lots	
  of	
  experimentation	
  and	
  modification	
  
of	
  the	
  ideas	
  he	
  proposes	
  in	
  his	
  model.	
  He	
  does	
  not	
  claim	
  that	
  the	
  specific	
  details	
  
of	
   his	
   iterated	
   planning	
   process	
   with	
   a	
   facilitation	
   board	
   and	
   various	
   kinds	
   of	
  
councils	
  constitute	
  a	
  full-­‐blown	
  blueprint	
  for	
  an	
  alternative	
  economy.	
  The	
  specific	
  
design	
  of	
  these	
  institutions	
  will	
  emerge	
  out	
  of	
  an	
  extended	
  process	
  of	
  democratic	
  
experimentalism.	
  But	
  he	
  is	
  quite	
  confident	
  –	
  and	
  I	
  feel	
  over-­‐confident	
  –	
  that	
  there	
  
will	
  be	
  no	
  necessity	
  for	
  markets	
  in	
  the	
  institutional	
  configuration	
  of	
  a	
  democratic,	
  
egalitarian,	
  cooperative	
  economy.	
  I	
  think	
  he	
  believes	
  this	
  because	
  his	
  equations	
  
show	
   that	
   markets	
   are	
   not	
   needed.	
   It	
   is	
   on	
   this	
   strong	
   confidence	
   in	
   the	
  
conclusions	
  derived	
  from	
  formal	
  models	
  that	
  we	
  disagree.	
  
The	
   upshot	
   of	
   these	
   arguments	
   is	
   that	
   in	
   the	
   intellectual	
   ecosystem	
   of	
  
emancipatory	
  thinking	
  it	
  is	
  certainly	
  desirable	
  to	
  have	
  some	
  people	
  pushing	
  ideas	
  
anchored	
   in	
   models	
   of	
   a	
   unitary	
   system-­‐building	
   totality.	
   But	
   we	
   also	
   need	
  
institutional	
   pluralists	
   who	
   attempt	
   to	
   give	
   precision	
   to	
   the	
   idea	
   of	
   a	
  
heterogeneous	
  loosely	
  coupled	
  system	
  embodying	
  emancipatory	
  values.	
  	
  
5.	
  The	
  ultimate	
  need	
  for	
  system-­‐rupture	
  
As	
  in	
  many	
  of	
  the	
  themes	
  in	
  our	
  dialogue,	
  Robin	
  and	
  I	
  have	
  similar	
  views	
  about	
  
many	
  aspects	
  of	
  the	
  process	
  of	
  transformation.	
  In	
  particular,	
  we	
  share	
  a	
  strong	
  
commitment	
  to	
  struggles	
  for	
  progressive	
  reforms,	
  both	
  because	
  these	
  can	
  make	
  
life	
  better	
  for	
  people	
  and	
  because	
  they	
  can	
  help	
  pave	
  the	
  road	
  for	
  more	
  radical	
  
transformation	
   in	
   the	
   future.	
   	
   He	
   also	
   endorses	
   the	
   importance	
   of	
   what	
   I	
   call	
  
	
  Final	
  Thoughts	
  
127
interstitial	
   and	
   symbiotic	
   strategies	
   and	
   transformations	
   as	
   a	
   way	
   of	
   thinking	
  
about	
  such	
  reform	
  processes.	
  
Where	
  we	
  may	
  differ	
  is	
  in	
  the	
  question	
  of	
  whether	
  or	
  not	
  at	
  some	
  point	
  in	
  the	
  
future	
  a	
  system-­‐level	
  rupture	
  might	
  be	
  needed,	
  and	
  if	
  needed,	
  would	
  be	
  actually	
  
possible.	
  Commenting	
  on	
  my	
  account	
  of	
  situations	
  in	
  which	
  sharp	
  confrontations	
  
with	
  capitalist	
  elites	
  may	
  be	
  necessary,	
  Robin	
  poses	
  the	
  problem	
  this	
  way:	
  
I	
   am	
   disappointed	
   with	
   Erik’s	
   formulation	
   of	
   how	
   we	
   should	
   behave	
   when	
   such	
  
situations	
   arise:	
   “The	
   purpose	
   of	
   such	
   confrontations,	
   however,	
   is	
   not	
   a	
   systemic	
  
rupture	
  with	
  capitalist	
  dominance,	
  but	
  rather	
  creating	
  more	
  space	
  for	
  the	
  interplay	
  of	
  
interstitial	
  and	
  symbiotic	
  strategies.”	
  At	
  some	
  point	
  “creating	
  more	
  space	
  for	
  interplay”	
  
must	
   give	
   way	
   to	
   “a	
   systemic	
   rupture	
   with	
   capitalist	
   dominance,”	
   which	
   means	
  
abolishing	
   the	
   institutional	
   basis	
   for	
   their	
   dominance,	
   the	
   private	
   enterprise	
   market	
  
system.	
  When	
  decisive	
  moments	
  come	
  one	
  either	
  defeats	
  an	
  enemy	
  and	
  disarms	
  him	
  to	
  
prevent	
  war	
  from	
  erupting	
  anew,	
  or	
  one	
  fails	
  to	
  do	
  so.	
  In	
  moments	
  of	
  confrontation	
  
unfortunately	
   in	
   my	
   opinion	
   those	
   with	
   a	
   personal	
   inclination	
   toward	
   symbiotic	
   and	
  
interstitial	
   strategies	
   are	
   all	
   too	
   likely	
   to	
   make	
   the	
   same	
   mistake	
   Swedish	
   social	
  
democrats	
  made	
  in	
  1975.	
  At	
  moments	
  when	
  those	
  who	
  hesitate	
  are	
  lost	
  leadership	
  with	
  
more	
   “ruptural	
   inclinations”	
   becomes	
   more	
   socially	
   useful.	
   Why,	
   when	
   we	
   get	
   the	
  
chance,	
  should	
  we	
  hesitate	
  to	
  drive	
  our	
  stake	
  through	
  the	
  vampire’s	
  heart?	
  
This	
   is	
   a	
   potent	
   argument,	
   for	
   unquestionably	
   there	
   are	
   situations	
   in	
   which	
  
progressive	
   reform	
   is	
   completely	
   blocked.	
   Robin	
   is	
   correct	
   when	
   he	
   writes,	
  
“Incrementalism	
  also	
  has	
  no	
  answers	
  for	
  situations	
  where	
  one	
  must	
  either	
  make	
  a	
  
qualitative	
  change	
  or	
  accept	
  eventual	
  re-­‐stabilisation	
  back	
  to	
  the	
  old	
  status	
  quo.”	
  
But,	
   of	
   course,	
   it	
   does	
   not	
   follow	
   that	
   simply	
   because	
   incrementalism	
   has	
   no	
  
answer	
  for	
  this	
  problem,	
  system-­‐ruptures	
  are	
  actually	
  possible,	
  that	
  they	
  could	
  
succeed	
   in	
   their	
   stated	
   objective	
   of	
   “abolishing	
   the	
   institutional	
   basis	
   for	
  
[capitalist]	
   dominance”.	
   	
   System-­‐ruptural	
   strategies	
   may	
   be	
   wishful	
   thinking	
  
rather	
   than	
   genuine	
   answers	
   to	
   the	
   question	
   “what	
   is	
   to	
   be	
   done?”	
   in	
   these	
  
situations.	
   It	
   is	
   one	
   thing	
   to	
   argue	
   that	
   in	
   the	
   case	
   of	
   political	
   dictatorships	
   a	
  
seizure	
  of	
  power	
  could	
  be	
  capable	
  of	
  transforming	
  the	
  institutions	
  of	
  the	
  state	
  in	
  a	
  
democratic	
  way,	
  and	
  quite	
  another	
  to	
  say	
  that	
  a	
  seizure	
  of	
  power	
  can	
  successfully	
  
both	
   abolish	
   something	
   as	
   complex	
   as	
   capitalism	
   and	
   replace	
   it	
   with	
   a	
  
participatory	
  democratic	
  alternative.	
  I	
  do	
  not	
  have	
  an	
  answer	
  to	
  the	
  problem	
  of	
  
what	
   should	
   be	
   done	
   in	
   the	
   face	
   of	
   the	
   impossibility	
   of	
   further	
   incremental	
  
advance,	
   but	
   I	
   remain	
   sceptical	
   that	
   a	
   systemic	
   rupture	
   in	
   which	
   capitalism	
   is	
  
effectively	
  abolished	
  could	
  result	
  in	
  an	
  emancipatory	
  alternative.	
  
When	
   thinking	
   about	
   the	
   foundational	
   transformation	
   of	
   core	
   power	
   relations	
  
within	
   an	
   economic	
   system,	
   the	
   metaphor	
   of	
   “driving	
   the	
   stake	
   through	
   the	
  
Erik	
  Olin	
  Wright	
  
vampire’s	
   heart”	
   is	
   gravely	
   misleading.	
   The	
   metaphor	
   suggests	
   that	
   there	
   is	
   a	
  
single	
  centre	
  of	
  agency	
  and	
  power	
  that	
  can	
  be	
  decisively	
  destroyed	
  and	
  whose	
  
destruction	
  effectively	
  removes	
  the	
  main	
  obstacle	
  to	
  transformation.	
  	
  This	
  is,	
  of	
  
course,	
  the	
  way	
  revolutionaries	
  have	
  often	
  thought	
  about	
  social	
  revolution:	
  seize	
  
state	
  power,	
  destroy	
  the	
  enemy	
  and	
  clear	
  the	
  way	
  for	
  building	
  a	
  new	
  society	
  “on	
  
the	
  ashes	
  of	
  the	
  old.”	
  Robin	
  and	
  I	
  both	
  regard	
  this	
  as	
  an	
  unrealistic	
  strategy	
  for	
  
the	
   United	
   States	
   today,	
   but	
   is	
   it	
   likely	
   ever	
   to	
   be	
   a	
   plausible	
   strategy	
   for	
   the	
  
purposes	
   creating	
   a	
   radically	
   egalitarian	
   democratic	
   economy	
   and	
   society?	
   The	
  
historical	
   evidence	
   weighs	
   against	
   this	
   possibility:	
   revolutionary	
   ruptures	
   have	
  
been	
  capable	
  of	
  transforming	
  state	
  power,	
  and	
  they	
  have	
  also,	
  in	
  a	
  few	
  notable	
  
instances,	
  been	
  capable	
  of	
  abolishing	
  the	
  core	
  class	
  relations	
  of	
  existing	
  economic	
  
systems,	
  but	
  so	
  far	
  they	
  have	
  not	
  shown	
  any	
  capacity	
  to	
  build	
  even	
  the	
  rudiments	
  
of	
  democratic	
  egalitarian	
  emancipatory	
  alternatives.	
  
Robin	
   invokes	
   the	
   case	
   of	
   Sweden	
   in	
   1975	
   when	
   the	
   Social	
   Democrats	
   initially	
  
proposed,	
  and	
  then	
  in	
  the	
  face	
  of	
  strong	
  opposition	
  from	
  Swedish	
  capital,	
  backed	
  
away	
   from	
   a	
   proposal	
   to	
   gradually	
   democratise	
   ownership	
   of	
   large	
   Swedish	
  
corporations	
  through	
  the	
  use	
  of	
  a	
  novel	
  kind	
  of	
  wage-­‐earners	
  fund.	
  Robin	
  uses	
  a	
  
military	
  image	
  to	
  set	
  up	
  his	
  reference	
  to	
  the	
  Swedish	
  situation:	
  “When	
  decisive	
  
moments	
   come	
   one	
   either	
   defeats	
   an	
   enemy	
   and	
   disarms	
   him	
   to	
   prevent	
   war	
  
from	
  erupting	
  anew,	
  or	
  one	
  fails	
  to	
  do	
  so.”	
  	
  This	
  just	
  does	
  not	
  seem	
  an	
  apt	
  way	
  of	
  
thinking	
  about	
  the	
  foundational	
  transformation	
  of	
  capitalism	
  in	
  Sweden.	
  While	
  I	
  
agree	
  with	
  him	
  that	
  it	
  is	
  conceivable	
  that	
  Swedish	
  Social	
  Democracy	
  might	
  have	
  
been	
   able	
   to	
   enact	
   their	
   wage-­‐earner	
   funds	
   plan	
   if	
   they	
   had	
   been	
   willing	
   to	
  
confront	
  capital	
  head	
  on,	
  it	
  seems	
  implausible	
  that	
  they	
  would	
  have	
  been	
  able	
  to	
  
abolish	
  “the	
  institutional	
  basis	
  for	
  [capitalist]	
  dominance,	
  the	
  private	
  enterprise	
  
market	
  system.”	
  The	
  most	
  that	
  could	
  have	
  been	
  hoped	
  for	
  would	
  have	
  been	
  a	
  
shift	
  in	
  the	
  power	
  relations	
  within	
  the	
  “economic	
  ecosystem”	
  in	
  which	
  capitalism	
  
would	
  have	
  been	
  rendered	
  less	
  dominant	
  and	
  perhaps	
  even	
  subordinate	
  to	
  more	
  
democratically	
  organised	
  economic	
  relations.	
  	
  
There	
  are,	
  then,	
  two	
  fundamental	
  issues	
  a	
  ruptural	
  argument	
  must	
  confront:	
  first,	
  
under	
   what	
   condition	
   would	
   it	
   be	
   possible	
   to	
   really	
   “abolish”	
   something	
   as	
  
complex	
   as	
   “the	
   institutional	
   basis	
   of	
   capitalism”,	
   and	
   second,	
   under	
   what	
  
conditions	
   would	
   that	
   abolition	
   actually	
   result	
   in	
   a	
   democratic	
   egalitarian	
  
alternative.	
  	
  We	
  know	
  from	
  historical	
  experience	
  that	
  it	
  is	
  possible	
  to	
  destroy	
  the	
  
private	
   enterprise	
   market	
   system	
   without	
   creating	
   a	
   democratic	
   egalitarian	
  
alternative.	
  What	
  is	
  unclear	
  is	
  whether	
  under	
  other	
  conditions	
  not	
  yet	
  historically	
  
	
  Final	
  Thoughts	
  
129
encountered	
   a	
   ruptural,	
   abolitionist	
   attack	
   on	
   capitalism	
   could	
   have	
   genuinely	
  
emancipatory	
  results.	
  
The	
  only	
  condition	
  in	
  which	
  I	
  think	
  a	
  successful	
  systemic	
  rupture	
  might	
  actually	
  
lead	
  to	
  an	
  emancipatory	
  alternative	
  is	
  one	
  in	
  which	
  it	
  was	
  the	
  case	
  that	
  the	
  hybrid	
  
economic	
   ecosystem	
   had	
   already	
   shifted	
   to	
   one	
   in	
   which	
   participatory,	
  
democratic	
   egalitarian	
   economic	
   relations	
   had	
   become	
   the	
   core	
   of	
   the	
  
economy.69
	
  If	
  over	
  an	
  extended	
  period	
  of	
  time	
  interstitial	
  and	
  symbiotic	
  strategies	
  
had	
   transformed	
   the	
   economy	
   in	
   this	
   way,	
   then	
   the	
   institution-­‐building	
   tasks	
  
following	
  a	
  rupture	
  would	
  be	
  fairly	
  modest	
  and	
  the	
  chaotic	
  processes	
  unleashed	
  
by	
  rupture	
  perhaps	
  manageable.	
  	
  This	
  scenario,	
  however,	
  seems	
  to	
  be	
  ruled	
  out	
  
by	
   Robin’s	
   scepticism	
   that	
   anti-­‐capitalist,	
   egalitarian	
   and	
   cooperative	
   economic	
  
processes	
   could	
   ever	
   reach	
   such	
   a	
   threshold	
   so	
   long	
   as	
   capitalism	
   remains	
   a	
  
powerful	
   component	
   of	
   the	
   economic	
   system.	
   We	
   are	
   therefore	
   left	
   with	
   the	
  
conclusion	
   that	
   (a)	
   a	
   successful	
   rupture	
   with	
   capitalism	
   in	
   which	
   the	
   private	
  
enterprise	
  market	
  system	
  is	
  abolished	
  and	
  a	
  participatory	
  economy	
  is	
  established	
  
is	
  only	
  possible	
  if	
  a	
  participatory	
  economy	
  has	
  already	
  reached	
  near	
  dominance	
  
within	
   the	
   economic	
   ecosystem,	
   but	
   (b)	
   a	
   participatory	
   economy	
   cannot	
   reach	
  
that	
  level	
  of	
  development	
  so	
  long	
  as	
  capitalism	
  is	
  dominant.	
  	
  It	
  therefore	
  may	
  well	
  
be	
   true	
   that	
   incrementalism	
   does	
   not	
   have	
   an	
   answer	
   to	
   the	
   problem	
   of	
  
overcoming	
  absolute	
  barriers	
  to	
  transformation.	
  	
  Unfortunately,	
  the	
  same	
  is	
  true	
  
for	
  ruptural	
  strategies:	
  they	
  have	
  no	
  answer	
  to	
  the	
  problem	
  of	
  actually	
  advancing	
  
a	
  democratic	
  egalitarian	
  economy	
  and	
  society	
  in	
  the	
  aftermath	
  of	
  a	
  rupture.	
  
	
  
CONCLUSION	
  
Where,	
  then,	
  does	
  this	
  leave	
  us?	
  	
  	
  
A	
  critical	
  issue	
  for	
  a	
  political	
  project	
  of	
  emancipatory	
  transformation	
  is	
  having	
  an	
  
array	
   of	
   practical,	
   achievable	
   objectives	
   that	
   make	
   life	
   better	
   for	
   people	
   in	
   the	
  
world	
  as	
  it	
  is	
  that	
  are	
  connected	
  to	
  the	
  vision	
  for	
  a	
  fundamentally	
  different	
  kind	
  of	
  
economy	
   and	
   society.	
   Having	
   a	
   strategic	
   scenario	
   that	
   can	
   take	
   us	
   all	
   the	
   way	
  
from	
  here	
  to	
  there	
  matters	
  much	
  less.	
  On	
  the	
  core	
  strategic	
  issues,	
  Robin	
  and	
  I	
  
are	
  largely	
  in	
  agreement.	
  	
  Both	
  of	
  us	
  argue	
  that	
  another	
  world	
  is	
  possible	
  in	
  which	
  
69
	
  This	
  is	
  –	
  roughly	
  –	
  the	
  way	
  capitalism	
  replaced	
  feudalism:	
  proto-­‐capitalist	
  economic	
  processes	
  had	
  
already	
   become	
   the	
   dynamic	
   core	
   of	
   the	
   economy	
   at	
   the	
   time	
   that	
   feudal	
   centres	
   of	
   power	
   were	
  
effectively	
  abolished.	
  	
  	
  
Erik	
  Olin	
  Wright	
  
people	
  have	
  vastly	
  more	
  equal	
  access	
  to	
  the	
  conditions	
  to	
  live	
  flourishing	
  lives	
  
than	
   they	
   do	
   in	
   capitalism	
   and	
   vastly	
   greater	
   capacity	
   to	
   directly	
   shape	
   the	
  
conditions	
   of	
   their	
   own	
   lives	
   through	
   an	
   array	
   of	
   empowered	
   participatory	
  
processes.	
   We	
   also	
   both	
   believe	
   that	
   much	
   can	
   be	
   done	
   now	
   to	
   mitigate	
   the	
  
damage	
  to	
  people’s	
  lives	
  created	
  by	
  the	
  dominance	
  of	
  capitalism,	
  and	
  that	
  some	
  
of	
  the	
  things	
  we	
  can	
  do	
  also	
  prefigure	
  this	
  alternative	
  world.	
  
Still,	
   there	
   are	
   some	
   real	
   differences	
   in	
   our	
   views	
   –	
   on	
   the	
   potential	
   role	
   for	
  
markets	
   within	
   the	
   structural	
   configurations	
   of	
   the	
   desired	
   destination,	
   on	
   the	
  
level	
  of	
  our	
  confidence	
  that	
  we	
  can	
  actually	
  anticipate	
  the	
  kinds	
  of	
  dilemmas	
  and	
  
trade-­‐offs	
  that	
  will	
  exist	
  even	
  in	
  the	
  ideal	
  world	
  we	
  want,	
  and,	
  perhaps,	
  on	
  the	
  
necessity	
  at	
  some	
  point	
  for	
  a	
  systemic	
  rupture.	
  These	
  differences,	
  however,	
  may	
  
in	
  the	
  end	
  have	
  almost	
  no	
  practical	
  implications.	
  	
  I	
  suspect	
  that	
  the	
  time	
  horizon	
  
before	
  the	
  issue	
  of	
  attempting	
  a	
  systemic	
  rupture	
  with	
  capitalism	
  in	
  developed	
  
capitalist	
  countries	
  is	
  very	
  far	
  in	
  the	
  future,	
  and	
  that	
  it	
  is	
  even	
  further	
  in	
  the	
  future	
  
before	
  the	
  issue	
  of	
  whether	
  or	
  not	
  markets	
  should	
  be	
  abolished	
  will	
  be	
  on	
  the	
  
political	
  agenda	
  of	
  any	
  democratic	
  society.	
  But	
  I	
  also	
  doubt	
  that	
  one’s	
  beliefs	
  now	
  
about	
  what	
  should	
  be	
  decided	
  under	
  those	
  future	
  conditions	
  would	
  greatly	
  affect	
  
any	
  choices	
  about	
  strategies	
  and	
  initiatives	
  today.	
  It	
  is	
  in	
  this	
  sense	
  that	
  I	
  think	
  the	
  
main	
   thing	
   is	
   to	
   be	
   very	
   clear	
   about	
   fundamental	
   values	
   and	
   the	
   critique	
   of	
  
capitalism,	
  about	
  the	
  possibility	
  of	
  realizing	
  those	
  values	
  to	
  a	
  much	
  greater	
  extent	
  
in	
   alternative	
   economic	
   institutions,	
   and	
   about	
   the	
   practical	
   initiatives	
   we	
   can	
  
undertake	
   today	
   that	
   move	
   us	
   in	
   that	
   direction.	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   	
   .
	
  Final	
  Thoughts	
  
131
ABOUT	
  THE	
  AUTHORS	
  
	
  
Robin	
  Hahnel	
  is	
  Professor	
  Emeritus	
  from	
  American	
  University	
  in	
  Washington	
  DC	
  
where	
  he	
  taught	
  in	
  the	
  department	
  of	
  economics	
  for	
  thirty-­‐three	
  years.	
  He	
  has	
  
also	
   taught	
   as	
   a	
   visiting	
   professor	
   at	
   the	
   Catholic	
   University	
   in	
   Lima,	
   Peru,	
   the	
  
University	
  of	
  Manchester	
  in	
  Manchester	
  England,	
  and	
  most	
  recently	
  at	
  Lewis	
  and	
  
Clark	
   College	
   and	
   Portland	
   State	
   University	
   in	
   Portland	
   Oregon.	
   He	
   has	
   been	
  
active	
   in	
   left	
   politics	
   for	
   over	
   forty-­‐five	
   years,	
   beginning	
   with	
   New	
   Left	
   SDS	
  
chapters	
   at	
   Harvard	
   and	
   MIT	
   in	
   the	
   1960s,	
   and	
   most	
   recently	
   with	
   Jobs	
   with	
  
Justice	
  and	
  Rising	
  Tide	
  in	
  Portland	
  Oregon.	
  	
  
	
  
He	
  is	
  best	
  known	
  as	
  co-­‐creator,	
  together	
  with	
  Michael	
  Albert,	
  of	
  the	
  alternative	
  to	
  
capitalism	
   known	
   as	
   “participatory	
   economics,”	
   (The	
   Political	
   Economy	
   of	
  
Participatory	
  Economics,	
  Princeton	
  University	
  Press,	
  1991.)	
  His	
  most	
  recent	
  books	
  
are	
   Economic	
   Justice	
   and	
   Democracy:	
   From	
   Competition	
   to	
   Cooperation	
  
(Routledge,	
   2005),	
   Green	
   Economics:	
   Confronting	
   the	
   Ecological	
   Crisis	
   (M.E.	
  
Sharpe,	
  2011),	
  Of	
  the	
  People,	
  By	
  the	
  People:	
  The	
  Case	
  for	
  a	
  Participatory	
  Economy	
  
(AK	
   Press,	
   2012),	
   and	
   The	
   ABCs	
   of	
   Political	
   Economy:	
   A	
   Modern	
   Approach,	
   2nd
	
  
edition	
  (Pluto	
  Books,	
  2014).	
  	
  
	
  
Erik	
  Olin	
  Wright	
  has	
  taught	
  sociology	
  at	
  the	
  University	
  of	
  Wisconsin	
  since	
  1976	
  
where	
   he	
   is	
   currently	
   Vilas	
   Distinguished	
   Professor	
   of	
   Sociology.	
   His	
   academic	
  
work	
  has	
  been	
  centrally	
  concerned	
  with	
  reconstructing	
  the	
  Marxist	
  tradition	
  of	
  
social	
   theory	
   and	
   research	
   in	
   ways	
   that	
   attempt	
   to	
   make	
   it	
   more	
   relevant	
   to	
  
contemporary	
  concerns	
  and	
  more	
  cogent	
  as	
  a	
  scientific	
  framework	
  of	
  analysis.	
  His	
  
empirical	
   research	
   has	
   focused	
   especially	
   on	
   the	
   changing	
   character	
   of	
   class	
  
relations	
   in	
   developed	
   capitalist	
   societies.	
   Since	
   1992	
   he	
   has	
   directed	
   The	
   Real	
  
Utopias	
   Project	
   which	
   explores	
   a	
   wide	
   range	
   of	
   proposals	
   for	
   new	
   institutional	
  
designs	
   that	
   embody	
   emancipatory	
   ideals	
   and	
   yet	
   are	
   attentive	
   to	
   issues	
   of	
  
pragmatic	
  feasibility.	
  He	
  was	
  president	
  of	
  the	
  American	
  Sociological	
  Association	
  in	
  
2011-­‐12.	
  
	
  
His	
   principal	
   publications	
   include:	
   The	
   Politics	
   of	
   Punishment	
   (Harper	
   Collins,	
  
1973);	
   Classes	
   (London:	
   Verso,	
   1985);	
   The	
   Debate	
   on	
   Classes	
   (London:	
   Verso,	
  
1990);	
  Interrogating	
  Inequality	
  (London:	
  Verso,	
  1994);	
  Class	
  Counts:	
  Comparative	
  
Erik	
  Olin	
  Wright	
  
Studies	
   in	
   Class	
   Analysis	
   (Cambridge	
   University	
   Press,	
   1997);	
   Deepening	
  
Democracy:	
   institutional	
   innovations	
   in	
   empowered	
   participatory	
   governance	
  
(with	
  Archon	
  Fung.	
  London,	
  Verso,	
  2003);	
  Envisioning	
  Real	
  Utopias	
  (Verso,	
  2010);	
  
and	
  jointly	
  with	
  Joel	
  Rogers,	
  American	
  Society:	
  how	
  it	
  really	
  works	
  (W.W.	
  Norton,	
  
2011).	
  He	
  is	
  also	
  the	
  editor	
  of	
  the	
  Real	
  Utopias	
  Project	
  series,	
  published	
  by	
  Verso	
  
Books.	
   His	
   forthcoming	
   book,	
   Understanding	
   Class	
   (Verso,	
   2015),	
   proposes	
   a	
  
framework	
  for	
  integrating	
  the	
  insights	
  of	
  different	
  traditions	
  of	
  class	
  analysis.	
  He	
  
is	
   currently	
   working	
   on	
   a	
   new	
   manuscript,	
   Sociological	
   Marxism	
   (Verso:	
  
tentatively,	
  2017).	
  
	
  
Website:	
  www.ssc.wisc.edu/~wright	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  Final	
  Thoughts	
  
133