Political Economy of Participatory Economics

by Albert, Michael; Hahnel, Robin

• ISBN13: 9780691003849
• ISBN10: 069100384X
• Format: Paperback
• Copyright: 1991-03-20
• Publisher: Princeton Univ Pr

Summary

With the near bankruptcy of centrally planned economies now apparent and with capitalism seemingly incapable of generating egalitarian outcomes in the first world and economic development in the third world, alternative approaches to managing economic affairs are an urgent necessity. Until now, however, descriptions of alternatives have been unconvincing. Here Michael Albert and Robin Hahnel support the libertarian socialist tradition by presenting a rigorous, well-defined model of how producers and consumers could democratically plan their interconnected activities. After explaining why hierarchical production, inegalitarian consumption, central planning, and market allocations are incompatible with "classlessness," the authors present an alternative model of democratic workers' and consumers' councils operating in a decentralized, social planning procedure. They show how egalitarian consumption and job complexes in which all engage in conceptual as well as executionary labor can be efficient. They demonstrate the ability of their planning procedure to yield equitable and efficient outcomes even in the context of externalities and public goods and its power to stimulate rather than subvert participatory impulses. Also included is a discussion of information management and how simulation experiments can substantiate the feasibility of their model.

Author Biography

Michael Albert is a founder of South End Press and coeditor of Z Magazine Robin Hahnel is Associate Professor of Economics at-American University in Washington, D.C.

Table of Contents

Introduction	p. 3
Traditional Economies	p. 7
Valuative Criteria	p. 8
Welfare Theorems with Endogenous Preferences	p. 9
Allocation Institutions	p. 11
Markets	p. 12
Central Planning	p. 15
Production and Consumption	p. 17
Private Ownership	p. 17
Hierarchical Production	p. 20
Consumption Institutions	p. 21
The Logic of Power	p. 22
Production	p. 23
Workers' Councils	p. 23
Work Organization	p. 25
Balanced Job Complexes	p. 25
Balancing Across Workplaces	p. 27
Balance in Practice	p. 29
Participation Versus Efficiency	p. 31
Equity Versus Efficiency	p. 34
Information and Incentives	p. 35
Choice of Technology	p. 35
Diversity	p. 37
Consumption	p. 39
Consumption Councils	p. 40
Incentive Compatibility	p. 43
Equity	p. 44
Equity, Incentives, and Efficiency	p. 50
Endogenous Preferences	p. 55
Allocation	p. 57
Participatory Information and Communication	p. 59
First Communicative Tool: Prices	p. 59
Second Communicative Tool: Measures of Work	p. 61
Third Communicative Tool: Qualitative Activity	p. 61
Allocation Organization	p. 62
Participatory Planning	p. 63
A Typical Planning Process	p. 68
Conclusion	p. 71
Welfare	p. 73
Preliminary Insights	p. 74
Differences Between PE and FMPE	p. 74
Summary of Differences	p. 77
Modeling Consumption	p. 77
Differences from Participatory Consumption	p. 81
Modeling Production	p. 82
Constraints	p. 82
Different Productive Endowments	p. 84
Workers' Councils	p. 85
Differences from Participatory Production	p. 87
Formal Summary of Councils' Goals	p. 88
Allocation	p. 89
Summary	p. 96
Formal Models Versus Reality	p. 98
Ideal Markets Versus Reality	p. 99
Ideal Central Planning Versus Reality	p. 101
FMPE Versus PE	p. 102
Conclusion	p. 105
Feasibility	p. 107
Tracking a Participatory Economy	p. 109
Information Variables for a Participatory Economy	p. 109
Manipulating Information	p. 111
Functional Relationships	p. 113
Simulation Methodology	p. 114
Incorporating Prices and Budgets	p. 115
Simulation Actors	p. 117
Incorporating Actual Behavior	p. 120
Experiment 2: Developing a Parallel Economy	p. 129
Conclusion	p. 131
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