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Parecon: Life After Capitalism

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To find out about participatory economics, I read two books, The ABCs of Political Economy by Robin Hahnel and Parecon by Michael Albert. I would recommend the former over the latter. Admittedly, they cover somewhat different ground. The former critiques basic concepts in neoclassical economics in light of political economy and is not meant as a detailed exposition of participatory economics (parecon). But in defending political economy, Hahnel explains the moral foundations behind parecon's system of remuneration and parecon's critique of markets much more clearly and concisely than Albert does. And Albert's book is so turgid and repetitive that you arguably get a clearer picture of the parecon system (and of the various criticisms of the model) from Hahnel's one chapter on the subject than you do from Albert's whole book. Hahnel's book is a model of how to popularize complex ideas without condescension or oversimplification. You finish the book feeling he has equipped you to think for yourself. In his care to craft comprehensible prose, Hahnel is consistent with his own belief in popular democracy and open debate. Hahnel also practices what he preaches by debating with alternative points of view, quoting from other authors, referring to other traditions, and providing ample footnotes.

By contrast, Albert's style contradicts his avowed commitment to democracy and non hierarchical discourse. He writes like a member of the "coordinator" class he condemns. His writing exemplifies what Richard Lanham, in the tradition of Orwell, has called the "official style," a style laden with abstract nouns linked by prepositional phrases and passive verbs, a style designed not to communicate ideas clearly, but to overawe the reader with pseudo-scientific abstractions connoting bureaucratic mastery over reality. Moreover, unlike Hahnel, Albert largely ignores the long tradition of other authors who have speculated on the subject of life after capitalism and provides no footnotes or endnotes and only a very skimpy bibliography. He does not review other proposed systems of non-market, democratic planning and dismisses market socialism in only 1 1/2 pages as another version of class society. He thereby does little to discourage readers from fallaciously inferring that if they oppose capitalism they must favor the particular system he is proposing (notice how even the book's title, "Parecon: Life After Capitalism," encourages this fallacy). Although he does rehearse various criticisms of parecon, his summary of critics is cursory and brusque, his defense of himself long-winded and blustering. Hahnel, by contrast, carefully and respectfully articulates other perspectives before stating his own position.

In case you think I'm being too harsh, here are two examples of Albert's style (you could find similar sentences on almost every page):

"Different abilities to benefit from competitive exchange can also result from more accurate predictions about uncertain consequences or from differential knowledge of the terms of exchange (which in turn could stem from genetic differences in this particular 'talent' or differences in training or, more often, from different access to relevant information)."

As Lanham notes, in bureaucratic prose like this, you never know who is doing what to whom; agents and actions are obscured beneath heaps of abstract nouns. But that sentence was easier to digest than many. Try this one:

"Suppose in place of top-down central planning and competitive market exchange, we opt for cooperative, informed decision-making via structures that ensure actors a say in decisions in proportion as outcomes affect them and that provide access to accurate valuations as well as appropriate training and confidence to develop and communicate preferences--that is, we opt for allocation that fosters council-centered participatory self-management, remuneration for effort and sacrifice, balanced job complexes, proper valuations of collective and ecological impacts, and classlessness."

This is a defense of participatory economics written as if by a government policy wonk. For a clearer, more concise and effective defense, I'd turn to Hahnel.

This is the clearest exposition yet of participatory economics,
an alternative to captitalism, market socialism, and
Soviet-style central planning. The participatory economics
model was developed by Michael Albert in collaboration
with Robin Hahnel. I would recommend reading this book
with Hahnel's recent book, The ABCs of Political Economy,
which provides a more in-depth critique of mainstream
pro-market economics.

Instead of allocation by how much
power or bargaining clout you have -- which is how markets
really work (forget about mainstream propaganda
about markets as "efficiency machines"!) --
participatory economics is based on the idea of
self-management -- each is to have a say over economic
decisions in proportion to how much they are impacted.

Governance by corporations and the state is replaced
by democratic worker and neighborhood organizations.
The market is replaced by participatory planning -- the
creation of a comprehensive agenda for production by
the direct input of requests
for work and consumption outcomes by individuals and
groups, and a back and forth process of negotiation.
Intead of elite planners, as in Soviet-style central
planning, we all would craft the economic plan.

In the process of individuals and groups evaluating
possible outcomes, the planning system takes account
of consumer and worker preferences, thus giving measures
of social benefits and costs. As each production group
approximates to the average social cost/benefit, waste
is avoided. The overall structure is designed to support
the tendencies in human nature towards solidarity and
cooperation, as opposed to the market, which imposes
a regime where "nice guys finish last."

Parecon has a particularly elegant solution to the
problem of under-production of collective goods,
and over-production of negative external effects,
like pollution, which are widespread and destructive
effects of markets.

Little is said about how such an economic framework
would come about. Albert thinks that having a good
vision of where we want to go is important to motivating
the kinds of mass movements that would be needed to
bring about such a change.

When was the last time you had a voice regarding what's being produced in the economy? And how much of an influence did you have over the cost of your last doctor visit? Finally, does the market care about the homeless or the environment, or does it only care about profits, leaving the former two concerns for you, the taxpayer, to deal with (i.e., market discipline)? People should ask themselves questions such as these before reading Michael Albert's Parecon: Life After Capitalism.

In a nutshell, this book offers an alternative economic vision that could fulfill human potentials and needs in participatory ways. Parecon's guiding values are equity, diversity, solidarity, and participatory self-management.

Clearly then, this book requires critical thinking on the part of the reader. Prepare to be challenged at first, as Albert analyzes the inherent weaknesses of both capitalist and the so-called "socialist" economies (e.g., former USSR), and how they both subvert human values to a considerable extent. In fact, he demonstrates conclusively how capitalism destroys equity, limits choices, wrecks solidarity, and smashes worker self-management. And because capitalism remunerates for bargaining power and has corporate divisions of labor, these ill-effects will be inevitable under capitalism, according to Albert. Therefore, Albert dismisses capitalism when thinking about a desirable economic vision.

Albert picks apart the so-called "socialist" economies in the same way. He shows the reader that such economies are clearly totalitarian, as they typically have state ownership and central planning; despite some marginal democratic forms on the periphery. Further, he argues that such systems create a new class of people who monopolize skills and decision-making -- what he calls the "coordinator class". Ironically, the philosopher Bakunin warned of this over a century ago about such a systems; a system under the control of an elite minority "overflowing with brains". Ultimately, Albert proclaims, we should reject such "socialist" systems on the same grounds that we reject capitalism; they're flawed, and violate basic human rights and "the values we hold dear".

But again, the focus of this book is to actually develop a new economy -- its relations, institutions, and so on. At the same time, it's remarkably consistent with a long tradition of libertarian thought from the Left. Albert merely expands upon those ideas in order to arrive at a realistic, desirable economic vision for the future.

Economies affect people. Understanding this and working to make that relationship compatible should be our concern. This book is an important step in that direction.

Credit to Albert for exploring new ideas. A few good insights. But I haven't been able to finish.

I found the writing style tedious.

The vision described feels stifling and bureaucratic. It does not appear to put a lot of value on individual freedom. For one thing, in a Parecon I need to get approval before I do anything. I even have to submit a plan for personal consumption. It seems I can't take any entrepreneurial initiative without approval, which aside from negative impacts on the economy and on innovation, strikes me as an unjustified restriction. (Sure, many people in a capitalist economy don't have these opportunities, but Parecon is taking us further backward in terms of some liberties).

The idea of being evaluated by workers' councils feels intimidating, but if done properly it could work well.

Okay, some things are worth trying. I'm convinced that a more cooperative approach to organising society is possible and desirable, but as for the more radical Parecon ideas, I'm highly sceptical.

It's not only this book and it's not only on the Left side of politics. Bias and a lack of rigour are too common: The Lexus and the Olive Tree by Tom Friedman was unsatisfying in its lack of rigourous, balanced analysis; and "The Road to Serfdom" was infuriating in its mixture of 1. half-truths (the efficiency of the market, and the inefficiency of government price-setting. Post-WW2 Britain even had inspector ensuring haircuts were the right price, so Hayek did have valid concerns), 2. blatant untruths (compromising the market leads inevitably to totalitarianism) and 3. enormous blind spots (Hayek completely ignores externalities, the free rider problem, and inequalities in opportunity due to differences in health care and education).

So Friedman and Hayek are no more satisfactory than Albert. Actually, Albert has been far more willing to push the boundaries and explore new ideas. So Parecon does have value.

It's worth reading someone who is genuinely insightful and rigourous and isn't stuck in one viewpoint. I'm very impressed with Amartya Sen's "Development and Freedom". Intelligent, rigourous and balanced. Importantly, it balances a philosophical analysis of freedom with a very empirical examination of outcomes. I'm having to read it very slowly, but it's got far more substance than Parecon, or the other books mentioned. I can see why Sen won a Nobel Prize.

Parecon has its place, but I'd recommend getting a firmer grip on economics and issues of freedom before you do - and Sen's book is a good place to start.

even though this doesn not present totally new ideas (centuries of socialist thought and practice have presented and enacted this ideas which run counter to the bureacratic soviet system as well as to the monopolistic technocratic capitalism of today), it nevertheless presents us a contemporarized guide as to how a different society from this one plagged by extreme concentrations of wealth and power and its corresponding abuses, environmental destruction, war, crime, etc, can work. capitalism is a system that inevitably concentrates wealth in a few hands, requires inmense bureaucratic aparatuses in order to stand on its feet (tax collection agencies, military and police, environmental regulation agencies, courts, etc.) which would end up always centralizing political power in a few hands and with the implication of corruption and abuse of power. it will always end up in condemning millions to poverty and crime and specifically it created the current ecological crisis. from the point of view of a wish for a decent dignified life for humans, it stands as basically againts this wish.
if indeed one takes this wish seriously, this book shows how the problems mentioned above can be eliminated by organizing society in a descentralized truly democratic way which could provide for everyone while at the same time posibilitating and respecting everyones individuality/difference.
charges of it being unpractical can come up, nevertheless if one ends up investigating this ideas, it is because one has already found the current system as uncapable of solving this problems and perhaps even seeing in it the most crucial source of all this problems. the becoming reality of this alternative view depends of course on collective vill well aware of the cirscunstances which has in opposition to it.

If you're a Hobbesian type who feels that life is brutish, short, and that people are basically animals that need to be continually monitored, goaded into working, etc., then you'll probably find Albert's views offensive. TINA doctrine, (There Is No Alternative), is a powerful ideological force which Albert seeks to counteract. At the heart of this book is the concept of human nature and how this affects the ability to construct a more just economic system.
The first argument in support of TINA is typically along the lines of "without work and punishment, what would motivate people, because they are basically selfish?" Albert's latter chapters address this philosophical yet reality-based question head-on. He uses a compelling example. If you saw a large adult grab an ice cream cone out of a child's hand, pushing the child to the ground, what would you do? Albert says that of course, most of us would be outraged and may even come to the defense of the child. If humans are so animalistic and depraved, then why aren't more people pushing and shoving? Could it be that the forces around us, versus only our "inner selves," push and shove on us to make it more difficult to be good samaratins. Despite 24 hour, "me first," "screw you, hooray for me" individualism married to ultra-social-Darwinistic capitalism, people care about others and the values of commnity. Of course the state wants to convince us that we are under constant threat and that it is the police that keeps order. Oh really? Then why do they lose control of a crowd during a riot? I guess we need one policeman per person to keep us in check. Maybe we have such a thing as inner humanity and morality, which actually lessens the need for a police state.
I've often found another TINA defense funny. People often act that if capitalism weren't around to monitor people, the motive to work would mysteriously vanish. My response is, how do (did) tribes survive? Did Native American groups just sit around and starve without the "benevolent" foreman to "motivate" them along? Do local villages in all parts of the world today lounge around, waiting to be given direction? Heavens to Betsey, how DID any of us achieve human progress and purpose before capitalism? I mean, it's all of 300 years old. Compare that to, say, Ancient Egypt, and there's no contest, right? Albert aruges that work, producing value, is an essential part of being human. It is the alienating kinds of labor that the majority of the world is involved in that's the problem. Note that the top 20% who get to experience more autonomous and creative work ususally scratch their head trying to figure out why everyone is "whining." Albert points out that this same group also gets a) paid more even though they experience less harsh labor conditions, and b) gets more of a say in important political decisions! Under our current system, the message is "one-dollar-one-vote." If you aren't college eduated, you don't deserve a living wage, etc.
Albert rightly points to examples of unemployed communities taking back factories and turning them into productive entities. The only difference is that THEY, the WORKERS are the ones doing it, not state-owned socialism or market capitalism. The activism of the unemployed (who most automatically picture as lounging around and being stubborn at the same time) is tremendous in South and Central America.
It would take some time to implement Albert's ideas, mostly because the ideology of capitalism is more entrenched than we realize. Our entire system of hierarchy, where education supposedly equals merit (typically measured and reinforced via standardized tests), comes to bear in even the most liberal of the upper 20%. "I wouldn't want to do MENIAL work. That's what I went to college for" as if menial work isn't valuable and that we simply expect certain groups to do it (after all, they deserve to do it because they aren't smart or special like us).
I recommend this book for those interested in learning something new about something old...human nature.

It is amazing to see critics trivialize the incredible amount of evolution in economic theory that it has taken to get us to the point of a workable and equitable product that both enhances work output and quality of life. Demonizing Participatory Economics is very easy.. unless you've actually read the book.

What Albert presents in PARECON is a solid, workable plan worthy of thought, discussion and debate in every level of society. Albert has solidified the original economic theories that he developed with Robin Hahnel in their previous works together (Looking Forward; Political Economy of Participatory Economics), and has presented thoughtful reflections on the workability of such a system in our world.

It is often that critics who have not actually read through the proposals that ParEcon presents argue against it with such erroneous statements as, "the jobs that produce the most value, i.e., the most important jobs, will go unfilled!" I challenge you, the reader, to find out just how untrue this is for yourself. Participatory Economics is a long-awaited step in the evolution of economic theory, and I encourage everyone to take a look into it.

In this comprehensive, well-organised argument for a meaningful post-capitalist political economy, Michael Albert critiques both free-market capitalism as well as its existing (or failed) alternatives of central-planning (the Soviet model) and market socialism (the Yugoslav model) offering a well-thought out vision of democratic planning, self management and balanced job-complexes as an antidote.
Many of Albert's core ideas are not, in themselves, new but can be traced to currents in libertarian socialist thought from as early as the late nineteenth century and systems close to parecons have managed to emerge throughout history in various contexts (though seldom have they been very long-lived for a number of reasons).
Overall, Parecon is an impressive and inspiring vision of what we could achieve if we chose to live according to a fundamentally different set of guiding values and modes of operation to those that prevail in a market system. Naturally, implementation in real life would be beset with many challenges and difficulties but having a vision of what "the good society" is brings us that much closer to achieving it.
I applaud Michael Albert's work in producing Parecon and heartily recommend it to anyone interested in questions of post-capitalist political-economy.

Parecon attempts to defend "participatory" economics. However, only a bureaucrat could love "parecon". I did not see any mention of America's Shakers who tried a religious form of participatory economics and failed. Nor did I see anything on the many socialistic communes that formed in America in the 1970's (Most failed). Nor did I see anything to explain why some of Israel's kibbutzim seem to lack the enthusiasm they had 40 and 50 years ago.

Parecon is at least one (or more) step(s) toward socialism than is the concept of Co-ops. The author suggests that no one should have any "ownwership" of any means of production. To me, this means that there is no individual ownership of anything including of my self. Everything should belong to all members of the parecon society. Unfortunately, this totally disregards very fundamental human psychology. If I have access to anything that can be used as a means of production for stuff that is "scarce", I am going to try to produce the scarcity so I can get a higher reward for my efforts than society is willing to give me for my regular, assigned, job.

There are a number of these blind spots to the realities of human psychology in the author's presentation. For example, the author does not discuss "competition".

On the other hand, the presentation is worthwhile for students of economics who wish to intellectually explore various possibilities for economics.

My overall impression is that parecon has too much potential for some alpha-dog participants to take advantage of more passive participants and much too much bureaucracy necessary to achieve parecon in an entire nation. I think there is a serious lack of individual freedom or liberty in the author's notion of a parecon. I think it would be more worthwhile and more realistic to study how tribal economies work in the various American Indian nations.

This is a book about economics, by which the author means work, production, consumption, what we get, what we do, etc. It is about finding institutions for accomplishing all this that meet people's needs and that further positive values including equity, diversity, solidarity, and people controlling their own lives -- an advanced kind of democracy.

I've been watching the anti globalization movements, and the antiwar movements, and wondering what people are for. I heard about this book, and I got my answer. This isn't just fluffy adjectives. This is a careful and complete discussion of key institutions for the economy to replace those of capitalism - it is anti capitalism with a positive goal. And the amazing thing is, not only does the goal as described by Albert have wonderful attributes -- after all, what idiot would produce a book about goal for society and not claim great achievements for it? -- but the book is very convincing that parecon would work. Parecon, the name of the economy as well as of the book, is described in day to day detail. Objections of all kinds are carefully considered. Yet, with all the detail, and with all the provocative content that is so different than what we are all familiar with, it is a pretty easy read due to being very clearly written. This book assumes only that you have consumed and worked, not economics background.

What can I say? I came away thinking that this participatory economics would be a vast, almost unimaginably vast improvement on what we now have to put up with in our economic lives. Does that make me anti-capitalist? I guess so. Does it make me an advocate of revoluionatizing the economy? I guess so. It sure as hell makes me want to urge others to get this book and read it.

By the way, this is not your parents socialism...it rejects what goes under that label, and what goes under green labels, and what involves markets, and what involves central planning -- it is new, better, more liberatory and more viable.

I reccommend anyone who cares about the future read this book. Hell, I think this is the future of economics -- only the question is, how long in the future -- I hope not too long.