Participatory Economics

This is the second part of a speech delivered to a CNT Sponsored gathering in Barcelona, Spain, October 11, 2011, published on Zcommunications

Participatory Economics, or parecon, which the replacement for capitalism that I advocate, is built on just four institutional commitments.

Parecon is therefore not a blueprint for a whole economy. It is a description of key features of just a few centrally important aspects of an economy.

Parecon is enough, and just enough, for us to know that with parecon future people will self manage their economic lives as they decide.

Workers and Consumers Councils

The first feature of participatory economics is nested workers and consumers councils of the sort we have seen arise most recently in places such as Argentina and Venezuela.

The added feature of parecon’s councils, however, is a very explicit commitment to self managed decision making.

People in a parecon influence decisions in proportion as they are in turn affected by them. If a decision will affect me more, I will have more say in it. If it will affect me less, I will have less say in it.

Sometimes self management entails one person one vote majority rule. Think of deciding the start time for the work day.

Sometimes self management could require a different tally, maybe two thirds or three quarters needed to win, or that only some segment of the whole populace votes. Think of decisions that mostly affect a work team, where only that team votes.

Sometimes for those who are deciding to best approximate perfect self management, consensus is needed. Think of a team deciding its schedule, giving everyone a veto because a bad schedule can so adversely affect each person.

There are even times, many times, when we all believe dictatorial decision making most accords with self management. I decide whose picture I place in my work area, of what color socks I wear, and I do it alone, by myself, like Stalin.

The point is, in a parecon, all such voting approaches and even particular ways of presenting, discussing, and debating before finally voting, are tactics we utilize to attain as closely as makes sense the appropriate self managing say for all involved actors.

So as our first commitment we have self managed workers and consumers councils.

Equitable Remuneration

The second central feature of parecon, is about equitable remuneration.

Other things equal, in a parecon we will earn more if we work longer, if we work harder, or if we work under more harsh or harmful conditions.

Remuneration will be for duration, intensity, and harshness endured. It will not be for property, power, or output.

Parecon rejects the idea that someone should earn more by virtue of having a deed in his or her pocket. There is no moral warrant for profit nor is there any incentive warrant for it.

Parecon also rejects a thuggish economy in which one gets what one can take. This is characteristic of market exchange. It is the kind of remuneration that business school graduates celebrate. You get more if you have the power to take it.

Al Capone, the famous American Gangster, was once asked about his feelings toward the U.S.

He answered, “I love America. America is great. In American, you get what you can take.”

So business school graduates and Al Capone agree, keep what you can take – but parecon rejects thuggish remuneration.

Most controversially, parecon also rejects that we should get back from the economy an amount equal to what we contributed to it by our own labor.

Many socialists favor this norm, but parecon rejects it. The reason for this rejection is that parecon understands that our output depends on many factors and rewarding output rewards each of those factors.

If we have better tools, we produce more. Should we get more income due to the luck of having better tools?

If we work in a more productive environment, or producing more valued items, we produce great value. Should we get more income due to the luck of working one place rather than another?

If we have innate qualities that increase our productivity, we produce more. Should we get more income due to having been born with a great voice, or great reflexes, or large size, or a fantastic talent for calculation?

Parecon says no to all three.

We should not get more for luck in tools, luck in our workplace, or luck in the genetic lottery.

Instead, we should get more only if we work longer, or harder, or at more onerous conditions, doing socially valued labor.

Parecon’s remuneration makes moral sense and also induces productive labor as incentives should.

The usual complaint about pareconish equitable remuneration goes like this.

Doctors won’t go to college and medical school and endure training if they aren’t paid way more than coal miners digging in the ground and folks flipping burgers at MacDonalds.

Thus with parecon’s remuneration scheme we will lose doctors and other creative, necessary workers, and will all suffer. The economists tell us this, students repeat it, virtually everyone takes it for granted.

In fact, however, the claim is utter nonsense. It is repeated so often that most people take it as gospel, but it is far from that.

Consider that if you think about it for just a couple of minutes, this is what it says.

Sam and Sara are just getting out of High School. Sara is heading to a coal mine, or MacDonalds. Sam is headed to college, then medical school, then to be an intern.

Sara, let’s be generous, is going to earn $60,000 a year for the next 45 years, and retire. Sam is going to earn, once a doctor, $600,000 a year, until he retires.

So here is what the economists are telling us.

Sam needs to get that salary because if we pay him less he will not go to college, not go to medical school, not be an intern, and not be a rich doctor.

Apparently, the suffering of college compared to being in a coal mine for the same period, and of medical school compared to being in a coal mine for those years, and of interning compared to being in a coal mine, is so horrible, that the payment for the next few decades is needed as a kind of bribe.

I hope you can already see this is absurd.

In fact, if we asked Sam to choose between his doctoring path and the coal mine or MacDonalds path – and to do it in light of a lower salary offered for a doctor…and we then started dropping the proposed salary, and said, tell us, Sam, when you are ready to give up doctoring to switch because you are not being paid enough – the results are absolutely predictable.

I have done this experiment dozens of times, with pre med students, with doctors, with other students, all of whom not five minutes earlier told me pareconish remuneration was idiotic and would lead to no doctors, and I have always gotten the same result.

They say no to switching from medicine to coal or burgers at $500,000, $400,000…all the way down to $60,000 and then $50,000 and then they typically stop me. And they say, well, I don’t know. How low can I go and still survive? And they are always laughing, addled at how obvious it is that their economist teachers were either lying or idiots.

The reality is, of course, that doctors make as much as they do because in capitalism they have the power to take that much. It has nothing to do with justice or incentives. It has everything to do with market competition and power based on a monopoly on skills and knowledge, which is very carefully maintained.

And in a parecon, even though paid instead only for duration, intensity, and onerousness of socially valued labor, of course we will all want to do things we are good at and can make a contribution at. This is not only moral, it generates economically correct incentives.

Balanced Job Complexes

For its third feature, participatory economics needs a new division of labor.

If a new economy were to remove private profit and install equitable remuneration and also incorporate self managing councils, but were to simultaneously retain the current corporate division of labor, its commitments would be inconsistent.

If you look at workplaces here, around the world, or for that matter in 20th century socialist economies, you will find a startling commonality. The way work is parceled out into jobs is very consistent.

One job has only empowering tasks. The next four jobs have only disempowering tasks. Another job has only empowering tasks. The next four have only disempowering tasks.

Having 20% of the workforce monopolize empowering work and 80% do only more obedient, rote, stultifying work is the corporate division of labor.

It ensures that the former group – who I want to call the coordinator class – including, by the way, doctors – rules over the latter group, the working class.

The coordinators have all the knowledge, social skills, confidence, and even energy needed for discussing and making decisions. The workers are robbed of knowledge, not allowed to advance their social skills, and exhausted.

Even with a formal commitment to self management, the coordinators enter each decision discussion in a workers council having set the agenda for the discussion, owning all the information relevant to the ensuing debate, alone possessing the habits of communication that will inform the debate, and alone possessing and exuding the confidence and energy to fully participate.

The workers, in contrast, having been bored and exhausted by the repetitive and disempowering work they do, will come to decision discussions only ill prepared and eager to get home.

The coordinators will therefore determine outcomes. In time they will begin to see themselves as superior. Disempowered workers will begin to avoid the meetings. The coordinators will then choose to remunerate themselves more, to streamline meetings and decision-making by excluding those below, and to orient economic decisions in their own ruling class interests.

I sat in a room in Argentina some years back with about fifty workers, each from a different occupied factory. I was to give a talk, but suggested we go around the room with people telling of their experiences, first.

These folks were just meeting each other, and initially very upbeat. They were, after all, all occupying and making successes out of factories taken over from the prior owner.

By the third person to report, the room was quiet and the upbeat mood had dissipated. By the fifth person, things were maudlin. There were tears in people’s eyes by the seventh person, and I intervened and said I had heard enough to begin my talk, which I did.

Each worker had told a similar story. The last one put it roughly like this. “I never thought I would ever say anything like this, but maybe Margaret Thatcher was right.”

“We took over our factory,” she continued. “We equalized wages, save for differences in time worked. We instituted democracy and even elements of self management. Time passed. We made a success of the workplace, but now, I hate to say it, all the old crap is coming back. Our democracy is becoming sham. Incomes are diverging. Alienation is setting in. Maybe it is just impossible.”

So I spoke about the effects of the corporate divisions of labor they had retained, and why that was the explanation for the coordinators accruing more power and eventually also more income.

Due to about four fifths doing working class jobs, and about one fifth doing coordinator class jobs, the latter dominated, and developed warped self perceptions and perceptions of others, too, and in time the old crap returned.

Having this knowledge was the difference between folks succumbing to cynicism and despair, and folks realizing that there was a way forward.

The large scale upshot of all this is that one kind of class that exists above workers is owners. Having a deed to property, capitalists own means of production. They hire and fire wage slaves. They seek profits.

But the startling point about the oberservations is that even with this owning class eliminated, classlessness is not necessarily attained.

Another group that is also defined by its position in the economy, not by ownership but by its position in the division of labor, can still wield virtually complete power, including aggrandizing itself above workers.

It follows, that to avoid coordinator class rule, which is exactly what exists in what is called market and centrally planned socialism, we must replace the corporate division of labor with a new approach to defining work roles that doesn’t overwhelmingly empower some while overwhelmingly disempowering the rest.

Parecon calls this third institutional commitment balanced job complexes. Each of us in any society, will by definition be doing some collection of tasks. That is what a job is.

If the economy employs a corporate division of labor, our tasks will combine into a job that is either largely empowering due to including mainly empowering tasks, or is largely disempowering due to including mainly disempowering tasks.

In a participatory economy, instead, we combine tasks into jobs so that for each worker the overall empowerment effect of his or her job is like the overall empowerment effect of every other worker’s job. Everyone has what we call an average balanced job complex.

In parecon, that is, we don’t have managers and assemblers, editors and secretaries, surgeons and nurses as we now do. The functions these actors now fulfill persist, but the labor of accomplishing the functions is divided up differently.

Of course some people still do surgery while most don’t. However, those who do take scalpel to brains also clean bed pans, or sweep floors, or assist with other hospital functions.

The total empowerment the current surgeon’s job affords is altered by remixing tasks in a parecon. She still does some surgery but she winds up with a balanced job complex including other tasks, like cleaning bed pans, in sum conveying the same total empowerment as the new job of the person who previously only cleaned up.

The domination of the coordinator class over all other workers is removed not by eliminating empowering tasks, nor by everyone doing the same things, both of which options are impossible.

Instead, we distribute empowering and rote tasks so that all economic actors participate in self managed decision making without advantage or disadvantage due to their economic roles. There are only people who work. There is no division of that large group into two classes.

Some say this approach will waste talents and as a result, fall short in delivering the goods. Their feeling is that we will lose some of the highly productive labors of doctors and lawyers and engineers, and so on, who will have to do a mix of work, including a fair share that is disempowering.

In truth, this viewpoint is either sloppy thinking, or is classist.

Yes, if Sam does surgery in capitalism 40 hours a week, and then in parecon does it only 20 hours a week, or 15, then we have indeed lost 20 or 25 hours of Sam’s highly productive labors since Sam is spending that much time cleaning up.

And if this happens for all doctors, the total doctoring done by the old doctors has dropped by half, or more.

The critic smiles and proclaims that this approach will not deliver the goods.

This is sloppy thinking if the critic simply failed to notice that we altered society so that the 80% who previously were schooled to endure boredom and take orders, thereby crushing the creativity out of them, are in parecon instead schooled to fulfill all their talents and capacities – so that that huge new pool of people is available to provide additional folks doing surgery.

It is classist thinking, however, if the critic remembered this fact, but felt it was irrelevant because people in the 80% would be incapable of doing good surgery – or good lawyering, doctoring, managing, etc.

Why is that classist? Because it says that working people are intrinsically incapable, and not merely beaten down.

Now none of you need to be convinced this is nonsense, I hope, but you will find yourselves having to convince others of the point, often. So here are two techniques I find very effective.

First, I ask them to imagine that it is 1955 and we have taken all the surgeons in the U.S. and put them in a gigantic stadium. I say, look around and tell me if there is anything noteworthy.

They say, yes, of course, they are all men. And I point out that at the time, all of those men, and even a very large percentage of women, would have said that this was due to women being inherently incapable of doing good surgery.

I then add that now 51% of medical students in the U.S. are women, so that this virtually universal belief was not wisdom, but was sexism, and I point out that it is exactly the same thing to look around at working people now and see that they aren’t surgeons and don’t have other empowering work, and attribute this to their lack of capacity rather than to injustice.

The second way I try to overcome such prejudice is by telling a story about Argentina.

I was there, in a glass factory that had been occupied by its workforce when the capitalist gave up and wanted to sell it.

The coordinator class folks also left, figuring they were better off elsewhere. But the workers stayed. And months later, when I visited, the workers had the plant working, and indeed thriving.

I spoke with a woman who was doing the chief financial officer job, basically accounting, financial policy making, etc. She has been, before, working at an open furnace.

All day she would repeat a few movements, tedious, unskilled, deadly. Day after day she did it. Then, after the take over, she was assigned to do finances.

So I asked, what was the hardest thing to learn. She didn’t want to answer – she was shy.

So I said, was it using computers? No. Using spread sheets on the computer? No. Learning accounting concepts? No.

I was running out of guesses, so I said, okay, please, tell me.

And she said, well the hardest thing was that first I had to learn to read.

Just think about that. From working class boredom, through learning to read, to running the finances, in a matter of months. So much for a lack of capacity.

Participatory Planning

Finally, we come to parecon’s fourth institutional commitment.

Suppose we have lots of workplaces and communities all committed to having workers and consumers councils, to using self managed decision making procedures, to having balanced job complexes, and to remunerating for effort and sacrifice.

Suppose, in addition, we opt for central planning or for markets for allocation. Would this constitute, all together, a new and worthy vision?

No, it would not. Both central planning and markets, by their impositions on behavior and options, would destroy self management, balanced job complexes, and equitable remuneration.

With central planning the authoritarian logic of order giving and order taking would impose coordinator class rule.

With markets, the competitive dictates would not only violate equitable remuneration and self management, they too would impose coordinator rule.

These results are not only predictable, following out the logic of these modes of allocation – and if we had time for that we could show it – but they are and have been visible in real world situations, notably what have been labelled centrally planned and market socialist economies, which would have been better labelled, however, coordinatorist.

But then what replaces markets and central planning to round out the defining features of participatory economics?

Participatory planning is the fourth institutional commitment of parecon. It is essentially cooperative negotiation of inputs and outputs by the workers and consumers self managing councils.

There is no time to walk through what this looks like in any detail beyond saying that it has no center, no top, and no bottom.

The dynamics of participatory planning reveal true social costs and benefits.

They provide appropriate incentives enabling equitable remuneration.

They convey motivations for actors to mutually aid and benefit one another via solidarity.

And they arrive at self managed decisions in an efficient manner.

Okay, so suppose we combine workers and consumers councils, self managed decision making, remuneration for effort and sacrifice, balanced job complexes, and participatory planning.

That is participatory economics, or parecon.

Our claim is that parecon is not only classless, and not only fosters solidarity, diversity, and equity – but to the extent possible and with no recurring biases, it apportions to each worker and consumer about each economic decision, an appropriate level of self managing influence.

Parecon doesn’t reduce productivity per worker hour but provides adequate and proper incentives for everyone to work well.

Parecon doesn’t bias toward longer hours but allows free choice of work versus leisure.

Parecon doesn’t pursue what is most profitable for a few regardless of impact on workers, the ecology, and often even consumers, but instead orients output toward what is truly beneficial in light of full social and environmental costs and benefits for all.

Parecon doesn’t waste the human talents of people now doing surgery, or composing music, or otherwise engaging in difficult and skilled labor by requiring that they do offsetting less empowering labor as well, but instead by that means surfaces a gargantuan reservoir of previously untapped talents throughout the populace.

Parecon apportions empowering and rote labor not only justly, but in accord with self management and classlessness.

Parecon doesn’t assume divine citizens. Instead, it creates a context in which to get ahead in their economic engagements even people who grow up entirely self seeking and anti-social must be concerned for the general social good and the well being of others.

In capitalism buyers seek to fleece sellers and vice versa. People are trained by the economy to be anti-social and to get ahead they must learn those lessons well. In capitalism, nice guys finish last – or in my own more pithy rendition, garbage rises.

In parecon, in contrast, solidarity among citizens is produced by economic life just as vehicles, homes, clothes, and musical instruments are. We all gain if the whole society benefits by larger overall output, or by increased productivity per hour, or by less onerous work conditions – or if we work harder or longer to gain the extra income.

We all have an interest in changes in the economy that improve society’s overall average job complex – because we all share in its attributes.

Strategic Implications

Finally, what difference does advocating parecon make for our present behavior?

When Margaret Thatcher, the British reactionary Prime Minister, said “There is no alternative,” she accurately identified a central obstacle to masses of people actively seeking a better world.

If one sincerely believes there is no better future, then it follows that to reject a call to fight against poverty, alienation, and even war, is understandable.

If I were delivering the most powerful speech any of you had ever heard, a tear-jerking description of a scourge of humanity that undeniably diminishes all our lives and in the end kills almost of us, and at the end I said please, in the name of justice and your own well being, come join me in a movement against this horrible devastator of humans – aging – you would all laugh at me. You might even say, thinking I was a bit nuts, go get a life. Grow up. Face reality. You can’t fight aging, that’s a fool’s errand. And you might say it, dismissively, and with good reason.

And haven’t we all encountered people talking to us like that?

Well, the truth is most people sincerely think capitalism is forever. Capitalism is like a law of nature.

And in their view, to fight against capitalism, or even against its symptoms, can indeed seem like a fool’s errand.

When we say come join us in a movement against capitalism, they hear us saying, come be an idiot – come fight for the impossible. And they tell us to grow up and get a life.

As an advocate of parecon I hope to provide an economic vision able to turn that feeling upside down, a vision able to replace cynicism with hope and reason.

I am not suggesting that you should have heard this talk and become a pareconist.

This talk doesn’t provide enough detail, enough evidence, and nor have you had sufficient time to mull it over.

What I do hope is that you will be feeling, hey, what if parecon really does answer the claim that there is no alternative? What if it is a viable and worthy alternative to capitalism?

In that case, you might think to yourself – I would need to know about it, I would even need to advocate it. So, to find out – I need to explore it further.

When we all go to movies and see courageous souls of the past represented on the screen, fighting against slavery, or against the subordination of women, or against colonialism, or for peace and justice and against dictatorships, we rightly feel sympathy and admiration for their acts.

Abolitionists, suffragettes, labor organizers, anti apartheid activists, all seekers of freedom and dignity are heroes to us.

But if we admire standing up against injustice, shouldn’t we ourselves stand up against injustice. If we admire seeking a better world, shouldn’t we ourselves seek a better world.

If we admire rejecting exploitation, alienation, domination, and its violent maintenance, shouldn’t we ourselves advocate and fight for an economic model and societal structure that will eliminate these horrors.

I believe participatory economics is such an economy and should be part of such a new society.

Author: Michael Albert

Zie ook Occupy to Self Manage van dezelfde auteur

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