About Michael Albert's new book 'Parecon: life after capitalism'

Can participatory economics tame marketplace relations?

by Joseph Green


Parecon as it would like to be
Equity and solidarity
Ecological balance
The reign of the law of value
Parecon and the alternative institutions of today

. Michael Albert's new book Parecon: Life After Capitalism appeared earlier this year. This is the latest of many books and articles which Albert, often with the collaboration of Robin Hahnel, has written over the last quarter of a century to promote his vision of a future society. Parecon, which is short for "PARticipatory ECONomics", is his model of what capitalism should be replaced by.

. Albert believes that the protest movements around the world are being held back because most activists don't see any alternative to marketplace economics. I certainly agree with the importance of an anti-capitalist vision, although I don't think that this is the main explanation for the present disorganization of the left. But unfortunately Albert writes as if he believed that everyone could be united by simply sketching a picture of a future society run according to the principles of morality. He doesn't deal seriously with the similarities and differences between parecon and other pictures of an anti-capitalist future, and he doesn't test his vision against the experience of the last century of the working class movement.

. Albert is a long-time activist with more-or-less anarchist convictions. He is one of the founders of Z Magazine, and he is the main director of the related website, ZNet (www.zmag.org). This is the trend which is close ideologically to Noam Chomsky. It seeks to unite people with differing ideas around itself. In accord with this, Albert generally plays down the differences between his conceptions and those of the activists he is trying to attract. He emphasizes common aspirations, and passes lightly over different ideas about how to achieve these aspirations. Albert's book Parecon often appeals to general criticisms of the devastation wrought by markets, corporations and governments, criticisms with which we, and most of the left, would wholeheartedly agree. But the real point of parecon is that it is supposedly an alternative to other left visions. To understand Albert's dream, and to see whether it is realistic, it is helpful to see where it fits in the left spectrum.

. Parecon is, according to Albert, "basically an anarchistic economic vision that eliminates fixed hierarchy and delivers self-management". (1) But Albert believes that other anarchist economic visions don't seriously provide for the necessary connection between different economic units, and thus don't provide economic efficiency. Albert believes that parecon solves the ills of anarchism, and molds economic efficiency with adherence to human values. We shall see whether this is in fact so, or whether Albert mainly adds bureaucracy to the anarchist vision without overcoming its reliance on the market.

. Albert differs not only from capitalism and anarchist localism, but from market socialism and Stalinist-style economies (which he calls centralism). However Albert doesn't even bother dealing with the actual Marxist ideal of communism (as opposed to Stalinist state-capitalism in the name of communism). He doesn't consider the possibility that central planning based on social ownership of the means of production can be democratic, allow for self-management and very broad local and regional initiative, and eventually eliminate the need, not just for capitalists and corporations, but for money and markets.

. Indeed, it really is necessary to go beyond not just capitalism, but market socialism, Stalinist state-capitalism, and anarchist localism. None of these alternatives goes beyond capitalism:

. * Market socialism openly preserves the market.

. * Stalinist-type economies claim to do away with capitalism. Albert accepts their claim. Although he recognizes that Stalinism is oppressive, he holds that these went beyond capitalism, and that there was no Soviet bourgeoisie. This is a common view on the left these days. But in reality, Stalinist economies are actually state-capitalism, and they are ruled by a bureaucratic bourgeoisie.

. * Anarchist localism has autonomous units connected to each other through exchanging goods, so it is actually still subject to the rule of the marketplace.

. My objection to Albert is not that he opposes market-socialism, Stalinism, and localism, but that, in the end, it turns out that he hasn't really got beyond them. For all his rhetoric about opposing the idea that "there is no sensible alternative", parecon simply dresses up old solutions with new verbiage. He thinks that humanity will never be able to do away with money, markets, and financial-style calculations. Nor does he understand the distinction between a transitional economy in progress towards that goal, and an oppressive Stalinist system. So he is forced to rely on a patchwork of ideas from the very systems that he wants to oppose.

. * From market-socialism, Albert borrows the idea of pricing things at their true value, their "social cost". He believes that planning consists in large part of pricing things accurately, thus supposedly purging the economy of the distortions introduced by corporate capitalism. He takes over from the market-socialists, as well as from the bourgeois economists and corporate apologists, the belief that money, and buying and selling are eternal. In essence, parecon does not seek to overcome the law of value, but to purify it.

. * From Stalinist economics Albert takes some basic methods of economic calculation. Albert also falls into the pro-Stalinist style of theorizing when he regards "indicative prices" and "participatory prices" as different from prices, "accounting money" as different from money, keeping financial balances in a central computer system as different from banking, and "cost benefit ratios" as different from profit rates. Marxist communism recognizes that money and financial planning can't be eliminated immediately after the capitalists are dispossessed, and that there is an extended transition period during which the working class gains more and more ability to run the economy, thus preparing to eventually dispense altogether with commodity production and marketplace methods. But much of Trotskyist and Stalinist economics denies that the use of money and profit accounting in the state sector, after the revolution, are marketplace methods. They theorize that the categories of commodity production lose their class character, and only superficially resemble the categories used in capitalist economies. This allows them to claim that the state sector has gone beyond capitalism, even when the working class has lost control of the state and the economy as a whole.

. * From anarchist localism, Albert borrows his rhetoric about hierarchy, his belief that centralism is always anti-democratic, and his vision of society as a fusion of local collectives connected through the exchange of goods.

. Thus, Albert doesn't just take some secondary features from market-socialism, Stalinism, and anarchist localism. He embraces some of the key fallacies of these trends.

Parecon as it would like to be

. Albert and Hahnel present parecon as a simple idea -- everyone should determine things to the degree that they are affected by them. But in fact, a parecon economy is a complex one. An accompanying article describes some of the features of a parecon-style society. Here is simply a brief overview.

. A parecon society is run by three separate systems of councils: workers' councils to deal with matters of production, from work teams to workplace councils to councils linking entire industries; also a system of consumption councils organized territorially, from the neighborhood, or even the housing complex, on up; and some type of government councils. The councils also establish bodies of experts, called "facilitation boards". The workplace and neighborhood councils have the right to determine matters that affect only them, and higher-level councils take decisions of broader scope.

. There is an annual economic plan that determines the basic wage rate, the basic amount of work, every enterprise's plan for production and investment, and the prices at which everything will be produced and sold. While a single annual plan guides the entire economic life of a parecon society, Albert and Hahnel insist that this is not a central plan, on the grounds that everyone -- not just individuals, but every workers' council, consumption council or other unit of parecon society -- participates in a complex five-step planning process which determines this plan. For most people, however, this participation consists in bidding on how much they wish to work, and what they wish to consume, and the main result of this bidding process is to determine prices which correctly indicate the "social cost" of things, and which will result in supply and demand being balanced.

. This is the basic structure of a society which Albert believes can achieve all the moral values which a capitalist alternative should have. In particular, he stresses "equity, diversity, solidarity, self-management, and ecological balance". (2) Let's consider whether a parecon economy, assuming it actually can function as he describes, will achieve these and similar goals. I hope to be able to return in a later article to whether an economy with the structure of a parecon could actually exist in the way Albert imagines. For now, I will only comment on that question in passing, mostly when I consider current experience with trying to organize along the lines of parecon.

Equity and solidarity

. Parecon focuses a good deal of attention on trying to ensure equity in how much people are paid. It focuses attention on different moral ideas about what a just pay scale would be, and what deductions or additions to pay should be made to deal with how much effort a worker makes on the job, or how much a worker sacrifices to make that effort. It ends up with a basic hourly wage rate that is equal for all workers in a parecon economy. This means that the wild inequalities of today's market capitalism would be abolished. Pay would, however, vary according to the hours worked, and the hourly rate itself is supposed to be adjusted according to an assessment of the workers effort or sacrifice (which aren't necessarily the same thing). But these differences would presumably still be relatively small compared to present inequalities. Indeed, since income is also to be provided for children(3), even the difference in conditions between large and small families would be mild.

. Solidarity, by way of contrast, is pretty much an afterthought. In Chapter 2 of Parecon, which is entitled "Economic Values", there are over 10 pages on argumentation over what is needed to ensure equity. There is a quarter of a page on solidarity, and it concludes that a parecon economy automatically ensures solidarity without conscious effort being directed to that end. Albert returns to this theme in Chapter 10, where he writes a page on solidarity, but the emphasis is on the claim that "In a parecon, even antisocial people, if they want to get ahead, must do socially positive things". (4) Although Albert identifies with anarchism, there is no discussion of "mutual aid", which is the usual anarchist answer to how solidarity will be manifested between autonomous collectives. (5)

. It turns out that, without solidarity, equity too pretty much goes down the drain. For one thing, it is likely that there will be separate parecon economies in different regions or countries. Each parecon economy will have a certain equity in pay for all its members, but there may be vast differences in the wealth and living conditions of different parecon societies. Certainly any future society will inherent such differences from present-day capitalism. How would a parecon society overcome these differences? This is not directly discussed in Albert's Parecon, which is astonishing in itself. But it was dealt with in an internet forum on parecon where Albert and Hahnel answered questions. The answer was simply that "a parecon attitude in this realm is to have exchange rates, which, over time, facilitate equalization". (6) Nothing else was mentioned. Internationalism and fraternal assistance just aren't a serious part of parecon theorizing. It is reduced simply to better exchange rates.

. This is also hinted at in Albert's book Parecon. After all, while he doesn't discuss how the inequalities between parecon societies would be overcome, he does discuss what activists should demand in today's capitalist world. He suggests "why not replace the IMF, the World Bank, and the WTO, with an International Asset Agency, a Global Investment Assistance Agency, and a World Trade Agency?" Thus Albert envisions great things from adjustments in world trade terms. In line with this, he envisions turning the IMF, the World Bank and the WTO into "bottom-up institutions", and thus transforming the international marketplace so that it "prioritizes equity, solidarity, diversity, self-management, and ecological sustainability and balance". The movement is to look, not towards class struggle and the building up of powerful workers' movements, but to improved terms of trade. (7)

. This marketplace dream is parecon's "economic vision" for rectifying the vast economic inequalities of the present. Thus parecon is weak in dealing with the vast differences between regions. Until these regions agree to join together, "solidarity" and mutual assistance will be expressed only in trade relations. Under these conditions, one wonders how fast different regions will actually join into a common parecon economy.

. Aside from this, the lack of direct solidarity can also affect relations between neighborhoods in the same parecon economy. Even if income doesn't vary too much from one individual to another, one neighborhood might be much better than another. Some neighborhoods might have a legacy of better housing and public buildings, and less need for social services. Other neighborhoods might require extra help. But under parecon, each neighborhood basically is on its own in dealing with its problems. In theory, a higher-level council could recommend, during the formulation of the parecon annual plan, that an exception be made in the normal method by which each neighborhood finances its own public services, and some resources diverted from richer neighborhoods to poorer ones. In practice, Albert doesn't discuss this in his book Parecon. Perhaps one reason for his silence is that it goes against the parecon idea of equity. Normally, each individual and each neighborhood is supposed to receive from the economy an equivalent of what they themselves have contributed to the economy.


. Albert and Hahnel repeat over and over that a parecon society will promote diversity. But at times they admit that, under parecon, preserving diversity poses some real problems.

. For one thing, one is supposed to list everything that one intends to buy in one's annual consumption proposal, which is considered by the neighborhood consumption council. So your neighbors will know everything that you want to buy, and this will put pressure on you to conform.

. This is a real problem; and it took Hahnel some time to deal with it. He describes the problem as follows:

. "Justin Schwartz is worried about privacy when specifying consumption needs. He claims that 'even if there is no individual identification, there will be an understandable reluctance to enter your preferences for things of which your community disapproves. ' "

. Hahnel's solution is "Submit your request to a geographically dispersed anonymous consumption council. By the way, my students when discussing this issue have taken to calling it 'the kinky underwear problem. ' We have discussed it ad nausea(m) and now feel that we have the problem licked. ". (8)

. It is bad enough that the local consumption councils might want to intrude into one's bedroom (the "kinky underwear" problem). But naturally this also concerns dissident books and printing supplies as well as a whole host of personal preferences.

. So to deal with diversity, Hahnel had to propose a revision in the basic structure of parecon. That is how serious the problem is. He had to supplement the neighborhood consumption councils by geographically-dispersed anonymous councils. But it's not clear that this would be consistent with preparing the parecon annual plan. The neighborhood consumption councils are supposed to in touch with all consumption in the local area. They are supposed to plan the balance between local work effort and local consumption, and, with respect to local consumption, the balance between private consumption and social services. They are one of the links in the planning that leads to the formulation of the annual economic plan. If any significant part of consumption doesn't go through the neighborhood council, this harms its ability to carry out its work.

. Probably for this reason, Albert proposed a different solution to the problem in his book Parecon. His idea was that an individual could make an anonymous consumption request, but apparently it was still going to be considered by the individual's local neighborhood council. According to Albert, anyone in the neighborhood would "be privy to the general character of her community mates' anonymous private consumption choices because she is allowed to question those that seem dangerous or otherwise antisocial at planning sessions .  . . "(9) It certainly would be an interesting discussion, in which anyone who spoke up in favor of their own consumption choice would thereby risk losing the anonymity of that choice.

. Thus neither Hahnel's plan for an anonymous council, nor Albert's plan for anonymous requests to one's local council, would fully solve the problem. Maybe not the dirty linen, but certainly the "kinky underwear", will be aired in public after all. For one thing, the neighborhood consumption council would know who had submitted anonymous requests to them, or that anyone who didn't submit all or part of their consumption request to it must have submitted it to an anonymous council. They would thus know which people had something to hide, so to speak. And they might even know the "general character" of these requests, even if they didn't necessarily know who had made them, and in enough detail so that the requests could be judged.

. This problem is one aspect of the fact that parecon has no provision for the distinction between public and private matters. This distinction is discarded because one's interests are supposedly sufficiently safeguarded by the principle that people should participate in decisions to the extent that they concern one. But since few things have no affect at all on others, this principle can justify interference by others in almost anything. What you buy, what books you read, your religious or anti-religious beliefs, what you do for recreation, and even your choices in health care -- all these things might affect your relations to others.

. Indeed, aside from the "kinky underwear" problem (which is also a "bad books" problem), there is the issue of "public goods". These are public services, such as public buildings, parks, libraries, recreation centers, health facilities, etc. ; they are financed by the local councils. Albert and Hahnel point to the possibility that a parecon society will penalize "deviant preferences", and even that this might sometimes be desirable. "Deviant preferences" has an ominous ring to it, but all it refers to are minority choices, whether they are better or worse or simply different than the prevailing opinions. Presumably the issue includes whether there are unusual or diverse tastes in books, music, forms of recreation, types of medical care, etc. The parecon principle that one should get back from society exactly what one puts in might lead to the conclusion that people with uncommon tastes should be charged more for them through higher user fees or taxes, either because it is more expensive to provide a broader range of services, or to discourage choices which are regarded as harmful and therefore as bearing a higher "social cost".

. Thus Albert and Hahnel wrote about

"what is at stake in implementing a 'compensating' or 'penalizing' system of assessing deviant preferences for public goods. A plausible case can be made for both compensating and penalizing on equity grounds. But if deviant preferences are penalized, people will develop more conformist tastes for public goods, whereas if deviant preferences are compensated, preference variety will be encouraged. While in our view more variety is generally better, in the case of public goods the more alike people's preferences are the easier it is to give everyone what they want. So it is not obvious what kind of deviations might be warranted from proportionate charges. . . . there is no clear-cut theoretical answer . . .  What should be more feasible in our system of consumers' councils, where people meet and discuss options and where people's preferences for public goods are explicitly recorded, is for consumers to debate the pros and cons of differential charges . . . "(10)

. Thus, as far as public goods are concerned, the issue of diversity would be debated on a case-by-case basis by the various councils. This doesn't rule out that diversity might win out at times, but it hardly justifies the claim that a parecon society "elevates diversity to a central value". (11)

Ecological balance

. A parecon society is supposed to protect the ecology because the cost of things is the true "social cost", as opposed to present-day prices. The "social cost", which is established by the parecon planning method, is supposed to include the cost of the ecological damage done by a product. Parecon assumes price adjustments will usually suffice to protect the environment.

. This is a marketplace solution to ecological problems. It replaces direct planning to protect the environment with the hope that higher prices will cause enterprises to shift away from harmful chemicals or lead individuals to stop buying bad products. In present-day capitalism, many regulations from the past have been torn down in the name of such marketplace solutions. For example, there are schemes to allow companies to buy and sell permits for pollution, rather than being subject to direct regulation.

. But marketplace solutions are at best half-measures. And as we shall see, even the pareconists recognize that this wouldn't fully work in their society as well.

. For example, someone asked in ZNet forum about how natural resources would be protected:

. "Take trees, for example. I assume that legislation would need to be passed, saying that the economy as a whole can cut down so many trees a year (a sustainable number), as long as they are replanted, etc. "

. The answer was that a parecon economy "actually prices the trees to take into account true social costs and benefits associated with using them . . . as best it can". As this is the method prescribed by the parecon planning process, it was hoped that this would solve the problem. There wouldn't be direct regulation of the forests. Instead the forests would supposedly be protected by pricing lumber and other wood products at their true social cost.

. But, the ZNet answer admitted, this wouldn't work for all ecological problems. For example, take the problem of protecting a species which lived in the forest but didn't have much economic value. It wouldn't, therefore, have much of a price, even a true "social cost". So it wouldn't add to the "social cost" of wood. If the only thing protecting this species was parecon pricing, its environment might simply be wiped out, and it might perish. In the words of the answer:

. "If society wants to preserve the species it would need to pass a law, as you say, imposing restraints on the economy which might otherwise just wipe it out. The point is, economic calculation of true and complete human and social costs and benefits wouldn't even include reference to this particular species so unless there was a law protecting it, there would be no gainsay(ing) it wouldn't be wiped out. "(12)

. Indeed, the answer went on, if it should happen that a high price for wood didn't suffice to protect forests, then there would have to be a law about trees too. So for a number of ecological concerns, the parecon planning method of establishing the "social cost" of things would be irrelevant.

. Doesn't this mean that basic parecon economics, such as the five-step iterative process to prepare the annual plan (see the accompanying article on the structure of parecon), isn't particularly environmentally friendly? Not to Albert and Hahnel, who think that if one also has to tack on a law, "no problem". But it is a problem. It shows that a parecon economy has to resort to being rescued from the outside, by a law that overrides its basic economic impulse.

. This casts doubt on the overall rationale for the parecon pricing system. Albert and Hahnel have boasted that they have proved mathematically that their system is better than others because of its wonderful pricing mechanism. (13) In an argument reminiscent of market fundamentalism, they have written about the "snowballing" inefficiency in other systems that takes place when prices aren't set just right. (14) But when it comes to protecting ecology, it is supposedly "no problem" when it is necessary to override the parecon price system. All the talk about snowballing inefficiencies is forgotten.


. Parecon prides itself on providing self-management to everyone. It allows lower-level councils to decide local matters, while other matters are decided by higher-level councils. No doubt this would provide some self-management. Workers would deal with their own workplaces, rather than being oppressed by capitalist owners. And those who dwell in a neighborhood would deal with their local affairs.

. But many alternate socialist and communist systems would provide similar self-management. The Marxist idea of central planning combines extensive local initiative with overall societal plans. And if local initiative, in the Marxist concept, has to be consistent with the common plans decided on by everyone, such is also the case in parecon. Parecon is opposed to the idea of autonomous collectives or councils, that can do what they like. According to parecon, the collectives and lower-level councils are subject to higher-level councils and general decisions, whenever they are dealing with matters that affect others.

. But Albert and Hahnel believe that they have found a principle that provides much more self-management than any previous attempt to combine local initiative and the common action of large masses. This is that people and councils should have "a say in decisions in proportion as outcomes affect them". (15) This is constantly repeated in slightly different words.

. But this principle is simply one attempt at explaining self-management or local initiative. Taken as complete in itself, it is not a perfect formulation, as we shall see in a moment, but it does give a general idea of what is being aimed at. Albert and Hahnel to the contrary, however, it does not answer the question of how to provide self-management, or tell us precisely which issues should be decided by which people, but simply indicates that one is interested in doing so. Indeed, it turns out that many of the arrangements suggested by Albert and Hahnel might plausibly be taken to either contradict this principle, or show its inadequacy.

. For example, in parecon, the workplace council determines who they want to hire. (16) The rationale is that who is hired mainly affects only the existing staff of the workplace. Yet what happens if the workers at an enterprise decide, say, to keep out members of some minority group, or perhaps to prevent women from working at the plant. Is this really a decision that concerns only them? In fact, there are different ideas about who is affected by what. There are individualist ideas that hold one should only be concerned about one's own narrow circumstances, and there are other ideas based on the common interests of the working class. From point of view of Marxism, the issue of bias in hiring strongly affects the interests of all members of the excluded group, even though they don't work at the plant, and indeed, affects the interests of all working people.

. The parecon principle that each workplace can hire who they please can't deal with this problem, and it would prevent the society from having some equivalent of civil rights laws. Albert is aware that there is some problem here, but he is unable to deal with it. At one point, he mentions in passing that, maybe, there will be a need for affirmative action. But he doesn't explain how one can expect a workplace council that is, say, excluding black people, to undertake on its own initiative an affirmative action plan to hire black people. He simply blandly assures us that "parecon is not inconsistent" with affirmative action, without trying to explain how and why the parecon structures he envisions would actually implement it. (17)

. He does later devote a couple of sentences to workplace caucuses of an oppressed group having the right "to challenge arrangements they believe are sexually or racially oppressive". But naturally such caucuses are composed of people who already work at an enterprise, whereas this issue also affects people who don't work there, and enterprises which don't yet have anyone from the sexually or racially oppressed groups. Moreover, he can't even explain how workplace caucuses fit into the logic of parecon, and writes that "since the rationale for these requirements stems from theories of kinship and community relations and not from a theory of economic relations, we do not address the justification for employing such caucuses in further detail here. " I am not aware of any writing about the parecon system which goes into this in detail; if some reader of this article is aware of such writing, I would appreciate it if they would notify me about it. (18)

. So Albert can't explain the relationship between self-management and protecting the right of minority groups. But this is only the start of the problem.

. Albert briefly praises the "Green Bans" which were carried out by some workers in Australian building trades. Workers "would ban certain proposed projects on the grounds they were socially or environmentally unworthy. " Albert regards this as in line with parecon, and writes that "Parecon extends the logic of Australia's Green Bans into a full economic vision for all facets of economic life. "(19)

. While I am not familiar with the Green Bans, it seems likely they would have been important actions by Australian workers. But what is notable, is that they violate the parecon principle. According to parecon, workers should have a say on things in proportion to how much they concern them. But the banning of projects strongly affects much larger numbers of people than the construction workers, and so does the question of environmental protection. Under parecon, the building trades workers would not have the right to unilaterally carry out such actions.

. I wouldn't be surprised if many working people supported the Green Bans, because they regarded that the politicians and other institutions of modern bourgeois society were stacked against them. They want to have their own say on these matters, but they realize that the bourgeois parties and institutions don't represent them. Thus they would hail action by individual groups of workers, such as Green Bans, as being the only way, at present, that the working class can express itself on these important matters. Meanwhile the workers carrying out the Green Bans have to be careful to pay attention to the views of the working class as a whole, and their ultimate success depends on obtaining broad support.

. Large strikes also go beyond the parecon principle, for they almost always affect the interests of many people well beyond the strikers themselves. The entire working class may be affected by whether the workers in a certain industry go on strike or cave in to capitalist demands. And the conduct of a large, bitter strike may split the whole society into warring camps. Yet workers generally accept that the decision to strike should be made by the future strikers themselves, who, however, must carefully gauge the level of sympathy and support from other workers as an important factor in their own decision.

. Now, no doubt Albert, in practice, supports strikes as well as Green Bans. This is not what I am casting in doubt. The point is that the parecon principle doesn't provide any justification for workers taking their own initiative to engage in major strikes or Green Bans or other actions that affect large numbers of other people. These examples show that parecon doesn't provide a better basis for local initiative than other left theories. The parecon framework is sometimes too restrictive of the rights of individual groups of workers to act for themselves, and sometimes sets self-management against the overall interests of the working masses (as when it can't explain how the protection of minorities would be carried out).


. Albert gives the impression that parecon eliminates hierarchy, but this is not so. Workers and neighborhood councils in parecon are part of a hierarchical system. There are lower councils, embracing the interests of smaller numbers of people, and higher councils, embracing the interests of larger numbers of people. This is a common model of hierarchy. Albert of course prefers to talk of, say, a "nested federation of democratic councils". (20) The word "nested" sounds so nice and pleasing and neutral, not at all like the dreadful word "hierarchy". But the concept is the same.

. There are, of course, different types of hierarchy. There is the hierarchy of a tyrannical system, and there is the hierarchy of a democratic system. But the fact that various offices are filled democratically, even if they were subject to term limits or other means of automatic rotation of personnel, doesn't negate the existence of a certain sort of hierarchy. And indeed, Albert, when he is being careful, only claims that parecon eliminates "fixed hierarchy", not hierarchy itself.

. As anarchists, Albert and Hahnel see hierarchy, centralism, and authority as all synonymous. They try to avoid all of these things. But parecon not only has hierarchy, but parecon is astonishingly centralized, as the accompanying article on the structure of parecon shows.

. In and of itself, it doesn't discredit parecon that it has a certain amount of hierarchy, representative councils, and so forth. Any society too large to conduct all its business with direct democracy will need such things. Nor is parecon discredited simply by the existence of the annual economic plan. The problem is that parecon tries to hide or obscure the existence of its hierarchy, centralism, and authority. It may appear simply humorous that Albert refers to parecon hierarchy as "nested" organization, and harmless that he obscures the actual organization in parecon by saying that everyone "participates" in councils even when he is talking of higher-level representative councils. But because the actual centralism and hierarchy of parecon is hidden, so is the need for guarantees against the abuse of centralism and hierarchy. Indeed, why bother with guarantees? If Albert is right that there isn't any hierarchy or centralism, then ipso facto there is no possibility of abuse.

. This is perhaps one of the reasons that there is no distinction between private and public in parecon. Such a distinction would put a limit on what the annual plan could dictate, and what use could be made of the economic information about everyone that will be recorded on parecon computers (parecon uses "accounting money" in which all transactions will be recorded -- see the accompany article). But since Albert can't imagine that anyone would have the slightest reason to abuse the huge mass of information accumulated in the parecon files, he sees no need to deal with the issues of privacy, non-discrimination, and so forth.

. Take the question of the procedures to be followed by the complex system of parecon councils. Albert repeats over and over that the voting might be by majority vote on some issues, by consensus on other issues, and so forth. Which council deals with an issue, what its procedures are, and who gets consulted, all vary. The only constant is that the council is convinced that its procedure, whatever it is, implements the general moral values of parecon. But unless there are certain fixed procedures that people can rely on, that aren't changed from case to case, it is difficult for people to oppose any mistakes that a council might make. Opponents can generally be outmaneuvered procedurally, if the council leadership can arbitrarily change the methods used to decide matters. But Albert, rather than pondering the guarantees necessary to ensure that the councils stay democratic, prefers to argue that no one could do anything wrong, or have any motive to do anything wrong.

. Moreover, since there isn't supposed to be any central planning under parecon, it would be hard for people to influence the broader decisions that are made. True, everyone participates in the five-step iterative process that leads to the yearly economic plan. But they mainly make proposals about their own future purchases and work activity, and there are few occasions for them to express their opinions about general issues. In Albert's examples of parecon planning and self-management, he never shows how the people are able to decide on the questions of the general structure of a parecon society or major projects of general societal concern.

. From the other side, the obscuring of the existence of centralism can lead to the failure to make effective use of centralism to deal with various issues. The problem of workplace discrimination, for example, needs to be attacked both form above and below. There is a role for the society as a whole to intervene in individual workplaces to end such discrimination. Albert is reluctant to discuss this, probably because it raises the issues of centralism and authority.


. These issues also lead to the question of government. Albert may be an anarchist, but a parecon society will have a government, courts, and police. This is not just for a transitional period, but forever.

. Marxism holds that there will still be a state during the transitional period between the socialist revolution and the achievement of a fully classless society, but that the state will eventually wither away. As Engels puts it, "The government of persons is replaced by the administration of things and the direction of the processes of production. "(21) Marxism thus see the state as a temporary institution in human society, examines the changes the state goes through, and looks towards its eventual disappearance. In particular, it distinguishes between the state, and the necessary economic centralism for a classless society based on large-scale production.

. But for Albert, government is an eternal institution. To prove this, he writes:

. ". . . what about murder, theft, and other crimes--or what about the black market if you decide to prosecute actors for that? Do these require police, and if so won't that lead right back to old-fashioned coercion and hierarchy? The answer is yes, a society with a parecon is like any other society in that it has to deal with abuses of individuals and of society, and yes that entails--in fact it defines--a 'police function'. But no, this does not imply old-fashioned political coercion and hierarchy. "

. How does the parecon version of government and police differ from the old-fashioned kind? Albert evades this question, and says only that "discussing how to accomplish police, judicial, legislative, or other political functions is a matter for a presentation about political vision outside the scope of this book. " His excuse is that politics and economics would be separate under parecon. Yet one of his own examples of government action is the possible suppression of the black market, that is, of economic transactions outside the annual economic plan. (22)

. This is all he says on the issue in a book of 300 pages about parecon, a book designed to show people that "there is a reasonable alternative" to the present system. As far as I am aware, this issue isn't elaborated in his other works on parecon either. He prefers to leave it aside.

. The reason is that he doesn't want to give offense to anarchists, who are among the chief people he is appealing to. Thus the pareconist Brian Dominick, in one of the articles posted on the parecon web site, states "In addressing anarchists on the question of parecon and the state, it's important to note that advocates of parecon are not necessarily in total agreement on these questions. " Brian goes on to discuss whether the state is needed "for introducing solely 'ethical' or 'moral' ecological factors into a desired economy". But he adds that "It probably behooves us greatly to leave these questions wide open for now. "(23) Apparently the idea is that people with radically contradictory ideas are to be convinced to support parecon on the grounds that it hasn't yet been decided exactly what parecon will be.

. This is why although Albert remarks that a judicial function and police are necessary, he says little about it. Yet while evading these questions himself, he chides other trends of anarchists for putting such issues aside. In his reply to the libertarian municipalists, he questioned "why the authors don't discuss mechanisms for adjudicating disputes (the kind of thing that now leads to law suits) and handling difficult problems of enforcement . . . "(24)

. Parecon too would need a mechanism for adjudicating disputes. A parecon society is likely to have a myriad of them because of its complex structure. For example, there is the question of which council is to decide what, since there are so many overlapping councils and such vague indications as to their roles. Moreover so much of parecon revolves around the idea that people are supposed to get precisely what they deserve, and this is likely to lead to different opinions. But what would this mechanism deciding disputes be, and does he see it as involving the courts? Albert doesn't say. He prefers to sugarcoat parecon in his writings, and not discuss the "difficult problems".

The reign of the law of value

. As we have seen, even if parecon works the way it is supposed to work, it can't fully achieve the values and goals that Albert and Hahnel have set for it. Albert evades this in his new book Parecon. Sometimes he puts aside admissions that he or Hahnel have made elsewhere (such as those on diversity or on ecological problems), and sometimes he claims to be able to fix everything by tacking on additional ad hoc laws or arrangements to parecon.

. Much of this failure is due to parecon's maintenance of marketplace relations, such as buying and selling, and planning according to price. True, the annual parecon plan governs what is produced, but this plan is worked out in terms of prices, and it is carried out through buying and selling. Albert talks of the iterative procedure to establish the annual parecon plan as a negotiation between everyone, as a place where people and productive units consider qualitative information as well as quantitative, and so forth. But the plan centers on settings prices as a way to bring the economy into balance. Individuals and units submit their bids of what they will produce, and what they will consume, and this is summed up over the whole economy. Naturally, it won't at first be in a balance, and there will be too much of some things and too little of others. To deal with this, "facilitation boards provide new estimates of indicative prices projected to equilibrate supply and demand. "(25)

. Naturally any system of planning would have to provide a balance between the labor needed and the labor that is going to be supplied, and similarly for other resources and raw materials, manufactured items and so forth. But the parecon planning process, when it sees that something is out of balance, doesn't directly seek to change that balance. Instead it uses prices as its main tool. As prices are adjusted, "consumers [will] reassess their requests in light of the new prices and most often 'shift' their requests for goods in excess demand toward goods whose indicative prices have fallen . . . "(26) The facilitation board guesses what change in prices is needed to induce people and units to shift their proposals, and then people and units react to the new prices. This is a marketplace method of proceeding. Albert and Hahnel claim that they have gone beyond the market because, among other things, they talk about, not prices, but "indicative prices". But call the prices what you will, parecon's planning method centers on them.

. The process of preparing the annual plan goes through a number of different "rounds" or iterations, in which people and units put forth a proposal, and then change them in the next round. Until the final round, individuals and units are putting forward proposals simply for their own activity. They may be surprised by the result when they see all the proposals summed up. For example, if there was a shortage of some product during one round of planning, and the price is subsequently increased to induce consumers to propose to use less of this product, many individuals may shift to other products, and then find that so many people and units have shifted that the product is now in oversupply. They will have to make the same guesses and estimates as if they were confronting an ordinary market, and the changes in prices that result from their bids will have something of the character of the "invisible hand" of the market. It is not until the final round of planning that individuals and units will be able to examine plans for the economy as a whole, rather than submit bids for their individual activity and hope that these bids don't have unanticipated results.

. Moreover, the parecon planning not only revolves around adjusting and readjusting prices, renamed as "indicative prices", but also gives an important role to the " 'benefit cost ratio' per firm". This is a renamed variant of the rate of profit. Albert says "Each round of planning, or iteration, yields a new set of proposed activities. Taken together, these proposals yield new data regarding the status of each good, the average consumption per person, and the average production 'benefit cost ratio' per firm. All this allows for calculation of new price projections and new predictions .  .  . "(27)

. Albert claims that the "benefit cost ratio" has nothing to do with profits, because a high benefit cost ratio will only benefit parecon society as a whole, and not exclusively any one individual. Everyone benefits, he say, when there is a high "benefit cost ratio" because this means the firm is efficient. But in fact, the "benefit cost ratio" has a special significance for the firm concerned. If it falls below average, the firm might be disbanded. Thus, presuming the workers want to stay at this firm, they must keep up the "benefit cost ratio". Moreover, since a parecon society measures efficiency through the "benefit cost ratio", it will want to encourage firms to act vigorously to maintain this ratio, and to show its displeasure with those who don't.

. But there are a number of anti-social ways in which firms can maximize their "benefit cost ratio", ways that hurt the overall economy. They can cut corners, modify their product to be most profitable rather than most useful, tamper with the figures they report, etc. Anyone who examines the Soviet economic experience will come across many ways in which firms can maximize their own performance, whether on a profit scale or with respect to some other numerical scale, while penalizing other firms. For example, a firm may hoard scarce materials in order to ensure that its production is never disrupted. This ensures that the firm operates well, but harms the interests of the rest of the economy. (28) The Stalinist economy had its own overall plan, its enterprises with their own financial balances, and its own version of "cost benefit ratios". Stalinist economists theorized that if individual firms maximized their "cost benefit ratios", they would have to benefit the whole economy. But in fact, the result was that the firms acted anarchically in their own interest, not that of the overall economy. Moreover, for this to happen, it is not necessary that there be capitalist CEOs or state-capitalist bureaucrats getting rewarded financially for the firm's pursuit of its individual "cost benefit ratio". All that is necessary is that the firm is motivated in some way to do so.

. The result is an ironic situation. The parecon economy is run according to a plan. But this plan is based on prices and financial calculation, and drives enterprises to maintain their profit rate. The result is that the economy will be subject to the law of value and marketplace forces. The plan itself reproduces a modified version of the phenomena produced by markets in capitalist economies.

. Similarly, the Stalinist economies were subject to marketplace forces, despite their five-year plans. They were in fact state-capitalist economies, not socialist ones, not post-capitalist ones, and not workers' states. Yet if one believes that parecon is free from the market simply because it won't resemble a Western free-market economy, then logically one would also have to believe that the Soviet Union was a post-capitalist and post-market society. Indeed, this is what Albert and Hahnel do believe. They even argue that this is why it is absurd to regard parecon is subject to marketplace forces; after all, they say "no one would mistake the old Soviet economy for a market economy". (29)

. But world economic history shows that marketplace forces have existed in a wide variety of economies, from free-market economies to regulated economies. The law of value isn't choosy. It reigns not just in perfectly free markets (if any such exist), but in markets where the goods are heavily taxed, and in markets which are subject to monopoly distortions as well. These differences change the way in which the law of value manifests itself, but not the fact of the law of value. The old Soviet economy would not be mistaken for a Western free-market economy, but nevertheless it didn't escape from law of value.

. Long ago Frederick Engels analyzed a "socialitarian" utopia put forward by a German socialist, Eugen Duhring. Duhring envisioned collectives linked together by trade conducted according to the "true value" of things, rather than normal capitalist prices. This trade would be conducted through vast trading communes. It was like marketplace trade in that the collectives would exchange one thing for another. But this trade would always be the exchange of equals, whether expressed in terms of price or value (which, in Duhring's plan, would be identical). So this certainly wouldn't have been like any capitalist marketplace ever seen; there would be no one trying to make a profit in this trade; and the trade was organized communally rather than being ordinary buying and selling. But Engels showed that the mere fact that the collectives exchanged goods according to their "true value" was sufficient to subject them to the law of value, and hence they would inevitably develop a variety of capitalist ills. (30) Parecon also organizes itself for the regulation of production, and exchange of goods, according to their proper value (which, however, it calls their "social cost" rather than their "true value"). It may have many radical differences from an ordinary capitalist economy, but just as Duhring's socialitarian economy, it would be subject to the consequences of the law of value.

. In fact, the five-round method of iterative bidding developed by Albert and Hahnel for the preparation of the annual parecon plan is based on methods used to simulate marketplace results. The neo-classical bourgeois economist Leon Walras was the first to analyze optimal pricing in the marketplace by imagining it as obtained by an auction with bidding. Market-socialists eventually noticed that the mathematics of his scheme could be used to develop planning methods that would graft marketplace results onto a central economic plan. Meanwhile, Soviet-bloc planners began to use an iterative method as a way of simplifying the calculations for five-year plans. They also looked increasingly towards schemes of pricing in order to induce enterprises to produce what the planners want, and to balance supply and demand. Albert and Hahnel have taken over these ideas from such economists as the eminent market-socialist Oscar Lange, who worked extensively on the Polish Stalinist economy, and from bourgeois micro-economic theorists. In this regard, Albert and Hahnel write that:

. "About half a century ago, Oscar Lange, Abba Lerner, and Frederick Taylor, responded to an erroneous consensus that public enterprise economies could not operate efficiently by elaborating a model of what they called a 'socialist' economy that they argue was capable of yielding Pareto optimal outcomes. . . . Interestingly, their formal model was derived directly from propositions well known to microeconomists of their day.
. "Our formal model of a participatory economy also relies heavily on work well known to microeconomic theorists. The planning procedure is a variation of a 'price guided' procedure known to those familiar with the literature on iterative planning mechanisms that flourished briefly in the late 1960s and early 1970s. . . . as in the case of Lange, Lerner, and Taylor, the techniques we use have been familiar to microeconomic theorists for decades. "(31)

. What attracted Albert and Hahnel is the idea that they might be able to develop a price-guided mechanism that provides overall planning without the intervention of any central planning body. A free-market is ruled by Adam Smith's "invisible hand" instead of any government or committee. Albert and Hahnel didn't want the free-market, but they though they could achieve the same thing with a price-guided planning system. While Lange and others who worked with the Soviet-style economies sought to aid the central planning bodies, Albert and Hahnel thought they had found the secret to how societal planning could be accomplished without a directing body. Thus they wrote:

. "It is true that this literature focused on solving what was considered at that time the principal problem of central planning -- how the central planning bureau could gather information about the technical capabilities of different units -- while our focus is to adapt iterative procedures so that the different units in the economy can participate directly in forging an equitable, efficient plan without the intervention of any central planning bureau. "(32)

. The claim that markets allow everyone to democratically determine the economy is, of course, a well-known theme of free-market advocates in their struggle against state interference and regulation. This idea has had an appeal for pareconists, who believe that they can have their cake and eat it too. They could have the supposed democratic virtues of the marketplace bidding process, and yet supposedly avoid all the failings of the marketplace, if they simulated the marketplace in creating the annual plan. This would allow them to use bourgeois economics, and yet supposedly transcend capitalism and the corporate economy. It would allow them to have an overall plan, and yet supposedly avoid the dread centralism.

. But Albert and Hahnel were deluding themselves. They didn't avoid centralism, but just created an ugly form of it. They didn't provide decentralized planning, but just the illusion of participation. And by taking over methods of economic calculation from bourgeois economics and market socialism, they subjected parecon to the same law of value that operates, albeit in somewhat different forms, in free-market, mixed, and state-capitalist economies.

Parecon and the alternative institutions of today

. Albert believes that establishing a parecon society is a matter of people deciding on the proper moral values. He doesn't see any particular material conditions needed for parecon, nor does he theorize about early stages of a parecon society versus a later, more mature, developed society. He doesn't see that workers' ideas about economic values and how things should be organized might change in accordance to their material conditions. Instead he sees designing an ideal society as dealing with timeless values concerning equity and justice.

. Thus, although Albert claims that just about any example of workers forming councils is a sign of incipient parecon, he doesn't analyze the experience people have had with these councils. Albert and Hahnel's books and articles are full of hypothetical examples of how they believe that councils would work, but they never analyze concrete experience with councils. For example, Albert likes to talk about how parecon would work in a publishing company, and claims to have some experience with this. He writes that "my own experience of helping found and define South End Press was impacted by and in turn enriched my understanding of participatory economic workplace relations. "(33) But he never discusses what happened at the South End Press, but instead gives an account of the imaginary firm "Northstart Press".

. Well, the parecon web site does have a section devoted to "doing parecon". It claims that there are number of institutions which actually carry it out, and it refers to the South End Press, Z Magazine and ZNet. But it just gives a few sentences describing how they work.

. For example, all it says about South End Press is that it is a collective of six people, and they all do various tasks, balance everyone's workload, and are democratic and non-hierarchical. There's no discussion of their experience in this. But for that matter, it is just a group of six people with similar views. It would hardly be out of the ordinary that, in a small group, everyone shares tasks.

. Moreover, it turns out that South End Press also uses unpaid "interns and volunteers". It doesn't say that they will carry out all the various tasks, but instead says that they may work in this or that field "depending on our organizational needs and the previous work experience of interns/volunteers". So in practice, South End Press is stratified between permanent staff, and the interns.

. Z Magazine also claims to be organized on the parecon principle. But it only has a staff of three people, so it would hardly be surprising that everyone carries out various tasks. Of course, Z Magazine also has a lot of writers. They are not part of the balanced workload. So Z Magazine too is stratified.

. Albert also works in ZNet, and this too is supposed to be an example of parecon. But it appears to be run in a very commonplace way. It has a staff of three, with Albert being the leader. Then there are five volunteers. The staff and volunteers do all the work to keep the website up. But there are also a number of favored writers, such as Noam Chomsky, whose articles are featured on ZNet. They don't balance their work for ZNet with the staff or volunteers. And of course there are a mass of sympathizers who contribute money and general support. So ZNet turns out to be a stratified operation. Task-sharing occurs at most among the staff and volunteers, and even this handful of people are divided into two separate categories.

. Znet, Z Magazine, and the South End Press are organizations with a core staff consisting of a few people strongly united in their views. What happens in somewhat larger organization? The problems mount.

. For example, Paul Burrows is a convinced advocate that the left should, among other things, build alternative institutions along the lines of parecon. Yet, at the World Social Forum at Porto Alegre, when he discussed the experience of a parecon-style bookstore and coffee in Winnipeg, Canada, well over half his talk was devoted to discussing "parecon theory vs. practice". He wrote that ". . . I'd like to discuss the relationship (if any) between parecon theory and practice by focusing on a few key areas: 1) balanced work complexes; 2) skills, training, and empowerment; 3) remuneration on the basis of effort; 4) decision-making, non-hierarchy, and self-management, and 5) conflict resolution. " He pointed to problems in all these areas. (34)

. Most of the problems he attributed to the difference between having an entire society run on parecon principles, and having a single parecon workplace in the midst of a hostile environment. Indeed, he gave some dramatic illustrations about the effect of outside conditions on an isolated alternative institution. But his description also suggested that most workers prefer to organize themselves differently from how Albert and Hahnel think they should, and he himself believes that this raises some issues about parecon.

. While Burrows' article is posted on the parecon web site, it hasn't seem to have much affect on parecon theorizing. The other pareconists regard it as a feather in their cap that here is an activist who seriously works to apply parecon to the organization of a left bookstore. But they don't deal with the contradictions that keep coming up between parecon theory and practice.

. Now let's pass from small organizations to larger ones. In Argentina, the issue of workers' councils has come up on a mass scale. The economy has collapsed, and millions of people are without a source of livelihood. The masses have risen up in protest demonstrations, and in some cases workers have taken over factories and reopened them under their own control. So the question arises -- what does parecon have to offer to these workers?

. A discussion took place about this between Albert and an Argentine parecon sympathizer, Ezequiel Adamovsky. This allows us to see what Albert takes as the key content of parecon. And one of these things is that the workers must not only have a relatively fair pay scale, but they shouldn't be paid only according to time, but must be paid "according to effort and sacrifice". Albert insists on his particular idea of absolute fairness in pay. But even Adamovsky has to suggest that this really doesn't make sense at the moment. He states:

". . . Salaries tend to be egalitarian, and paying by time only (I do not think that any of the occupied factories uses paying by output). I believe that workers would agree that moving toward paying according to effort and sacrifice would be more fair. I imagine, however (although this is highly hypothetical) that, at the moment, they would not feel they are strong enough as to spend much energy in implementing such a change, which involves finding accurate ways to measure effort, adding extra meeting to those they already have for other issues (production, judicial strategy, defence against repression, political strategy, etc. ). "(35)

. In fact, Burrows too had worried about this, and he noted that workers at the alternative bookstore in Winnipeg had resisted being paid according to "work and effort" (insofar as this differed from simply paying a time wage). They saw the point of dealing with "major work deficiencies, and consistent patterns or unacceptable behavior or job shirking. " But "in 'normal' situations", they didn't like the detailed judging of the precise level of their co-workers efforts. According to Burrows, these and other problems

"make the evaluation and rating of co-workers' effort much more problematic in practice. Even if they think the theory makes sense, most people don't want to do it in practice -- at least, not in any systematic, rigid, or precise manner. At best, people consider it a 'rote' task to hold others accountable or to monitor their co-workers. At worst, they find that attempting precision in the realm of peer review is socially or politically offensive (some mistakenly call it 'authoritarian'), but in any case, they feel it's not at all conducive to a harmonious work environment. I have serious doubts that many workers' collectives would choose to implement an effort rating system with the degree of formality and precision suggested (albeit as one extreme) by the model. "(36)

. Thus Albert's central principles don't necessarily fare very well in practice. It's not just that parecon has problems describing the building of a non-capitalist society. When it comes to workers' councils and alternative institutions under capitalism, parecon is also flawed. Although Albert likes to claim all attempts at mass initiative as incipient parecon, in fact other trends have also inspired and supported such actions. Indeed, few if any of these attempts, other than efforts to build several very small alternative institutions, have been inspired by parecon. Moreover, and more important, parecon in practice tells the workers and activists to implement a set of rigid rules concerning pay and organizational structure, and to boycott political parties as hierarchical. These prescriptions are not based on the experience of workers' councils, but on an idea of eternal moral justice. So it's not surprising that, insofar as parecon differs from other left theories that promote workers' initiative, it isn't very successful. <>


(1) Michael Albert, h. 19: "Individuals/Society", Parecon, p. 263. (Return to text)

(2) "Introduction", Parecon, p. 4. (Text)

(3) Ch. 22: "Elevating Need?", Parecon, p. 282. (Text)

(4) "Ch. 10: "Evaluating Parecon", Parecon, p. 159. (Text)

(5) However, although most other anarchists lay stress in theory on "mutual aid" between collectives, in practice this is a weak point of the anarchist economic system. This was seen in the Spanish Civil War. The Spanish anarchists talked as much about "mutual aid" as anarchists anywhere. Yet the anarchist-influenced collectives, whether agrarian collectives in the countryside or workers' collectives in Barcelona, weren't particularly interested in equalizing conditions among themselves. The collectives might provide aid for the anti-fascist struggle, but not for equalizing conditions. Vast differences persisted in wage levels, living conditions, etc. Agrarian collectives were more likely to send aid to the civil war or the city, then to provide mutual aid to each other, while collectivized workplaces in the cities were concerned with their own problems and allowed other collectivized workplaces to flounder. See the section on "Equality" in my Reply to the Open Letter of the Black Autonomy Collective: The experience of the Spanish anarchists shows that autonomous collectives cannot overcome the marketplace in Communist Voice, #10, October 1, 1996. It is also available at www.communistvoice.org/10cSpanishCivilWar. (Text)

(6) "5. Trade and ParEcon" in Questions & Answers About Participatory Economies, Prepared by John Krumm from forum posts by Michael Albert and Robin Hahnel, and available at www.parecon.org/writings/faq.htm. (Text)

(7) "Introduction", Parecon, pp. 5-7. He suggests that the International Monetary Fund and the World Bank were more-or-less positive institutions until they took up neo-liberalism. He doesn't talk of their earlier role as part of the new form of world imperialism after World War II, but says simply that the IMF sought to "stabilize currencies", and the World Bank aimed to "facilitate long-term investment in underdeveloped countries as a means of expanding and strengthening their economies. . . . Within then existing market relations, these limited goals were positive. In time, however, and most dramatically in the 1980s, these institutions changed. Instead of working to facilitate stable exchange rates and to help countries protect themselves against financial fluctuations, the IMF's priority became bashing down all obstacles to capital flow and unfettered profit-seeking--virtually the opposite of its mandate. And in parallel, instead of facilitating investment on behalf of local poor economies, the World Bank became a tool of the IMF . . . " His fixation on the benefits of stable exchange rates and commercial relations seem to have led him to a remarkably sanguine view of the main world financial institutions of world imperialism, and of the more regulated capitalism that preceded neo-liberalism. (Text)

(8) Robin Hahnel, "Response to Criticisms of ParEcon (Relayed from the LBO Listserv)", available at www.zmag.org/ParEcon/writings/hahnelanswers.htm.

. Note that one's voice on what happens in one neighborhood--on the organizations of schools, the provision of local services, etc. --is based on one's participation in a neighborhood consumption council. To abandon such a council in favor of an anonymous, geographically-dispersed consumption council would mean to give up one's right to the participatory planning of local affairs. So Hahnel's idea was presumably that one submits most of one's consumption request to the neighbor-hood consumption council, and continues one's work on it, and only submits part of one's request to the anonymous council. This would preserve one's say on local affairs, but it would divide the council into those who fully trusted it, and those who submitted some requests to the anonymous council. This might well deter many people from making anonymous requests. (Text)

(9) Ch. 12: "Consuming", Parecon, p. 215. (Text)

(10) Ch. 3: "Consumption", The Political Economy of Participatory Economics, in the subsection "Incentive Compatibility", p. 44. This work is also available on-line at www.zmag.org/books/polper.htm. (Text)

(11) "Ch. 10: "Evaluating Parecon", Parecon, p. 162. (Text)

(12) 10. "Ecology and ParEcon", Questions & Answers About Participatory Economics: Prepared by John Krumm from forum posts by Michael Albert and Robin Hahnel". (Text)

(13) See for example "Ch. 5: Welfare" of Albert and Hahnel's The Political Economy of Participatory Economics. (Text)

(14) Albert and Hahnel, Quiet Revolution in Welfare Economics. (Text)

(15) Albert, "Introduction", Parecon, p. 12. (Text)

(16) See the section "Hiring and Firing" in "Chapter 11: Working", Parecon, pp. 205-7. (Text)

(17) Chapter 10: "Evaluating parecon", Parecon, p. 162. (Text)

(18) Chapter 11: "Working", Parecon, p. 178. Note that the issue isn't whether Albert supports minority groups fighting for their rights. No doubt he does, and I am familiar with some of his writing about this. The issue is, how does this fit into the structure of a parecon economy? (Text)

(19) "Introduction", Parecon, p. 15. (Text)

(20) Chapter 5: "Councils", Parecon, p. 93. (Text)

(21) Frederick Engels, Herr Eugen Duhring's Revolution in Science (Anti-Duhring), Part III. Section 2. "Theoretical", International Publishers, p. 307. (Text)

(22) Chapter 20: "Participatory?", Parecon, pp. 270-1. Incidentally, note that, in putting forward the suppression of the black market as a possible police matter, it doesn't occur to Albert to first ask who is concerned by any particular black market transaction. Yet in parecon, only those affected by a matter are supposed to have the right to decide on it. And on other issues, Albert applies this principle more strictly. Thus Albert's difficulty in dealing with workplace discrimination. He only raises that minority members who work at a particular place may object to oppressive arrangements, presumably because supposedly only the staff at the enterprise is affected by who is employed there. But when it comes to two people bartering something outside the annual parecon plan, Albert doesn't stop to asked who this concerns. No, if you want to, just stamp it out with the police. (Text)

(23) Brian Dominick, "ParEcon, Anarchy and Politics", available at www. parecon. org/writings/brian_state. htm, paragraphs 3, 10, 13. (Text)

(24) Michael Albert, "Assessing Libertarian Municipalism", available at www.zmag.org/lm.htm. (Text)

(25) "Ch. 8: "Allocation", Parecon, p. 131. See the section "Proceeding from One Proposal to Another. " (Text)

(26) Ibid. (Text)

(27) Ch. 8: "Allocation", Parecon, p. 132. (Text)

(28) Most serious descriptions of the Soviet economy agree in describing how individual enterprises maximize their performance while harming the interests of the rest of the economy. The firms may fulfill various numerical quotas set by the ministries and the Soviet plan, and yet undermine the plan. The main issue dividing serious economic studies of the Stalinist economy is why this takes place, and what it proves about attempts to transcend capitalism. See The anarchy of production under the veneer of Soviet revisionist planning in Communist Voice #12, March, 1, 1977 for an analysis of this question from the point of view of anti-revisionist communism. (Text)

(29) "Planning, Facilitation Boards and Class Relations: Questions and Answers", Questions & Answers About Participatory Economics: Prepared by John Krumm from forum posts by Michael Albert and Robin Hahnel. (Text)

(30) Engels sets this forward in Anti-Duhring, especially Part II. Ch. IV "Distribution". For an analysis of Engels' views on Duhring's plan, see the section "The emergence of Marxism" in "Labor-money and socialist planning (part one)" in Communist Voice #25, Nov. 27, 2000. This article can also be read at www.communistvoice.org/25cLaborHour.html. (Text)

(31) See the subsection "Summary" of "Chapter 5: Welfare" in The Political Economy of Parecon, pp. 97-8. Incidentally, the Frederick Taylor being referred to is the market-socialist Frederick M. Taylor, who took part in the so-called "socialist calculation" debate along with Oscar Lange, not the famous time-study and "scientific management" expert Frederick Winslow Taylor, who died in 1911. (Text)

(32) Ibid. (Text)

(33) Ch. 11: "Working", Parecon, p. 173. (Text)

(34) Paul Burrows, "ParEcon in Theory and Practice: 'Work After Capitalism' Panel Discussion", at the World Social Forum III, Porto Alegre, Brazil (January 23-28, 2003). The parenthetical remark "if any" is from Burrows. This article is available at www. parecon. org/writings/burrows_lac. htm. The workplace was the Mondragon Bookstore & Coffee House, but it has no relation to the much larger and more famous Mondragon cooperatives of Spain, and is organized differently. (Text)

(35) "Argentina and Parecon: Michael Albert interviews Ezequiel Adamovsky, August 04, 2003", available at www. zmag. org. Payment according to "effort and sacrifice" might be taken to be simply a flowery way of describing, say, a time wage with adjustments for such things as night work. In that case, it actually is used at various workplaces. But that's not what parecon means by it. Albert counterposes payment by "effort and sacrifice" to a time wage. No one seems to be really sure of what payment according to "effort and sacrifice" would be in practice, but both Adamovsky and Burrows take parecon as requiring a very precise rating of each individual. (Text)

(36) Burrows, Ibid, emphasis as in the original. Actually, the parecon pay principle is not according to "work and effort" but "effort and sacrifice" or, as Albert also puts it, "effort or sacrifice". It is, of course, even harder to measure "sacrifice" than effort, or even to know what one is supposed to measure. Presumably no one at Mondragon in Winnipeg could make heads or tails of what it meant to measure "sacrifice", so they tried to pay only according to "effort" instead. (Text)

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