Capitalism Lite - the paper

[JazzRemington]

Below is what I ahv written thus far for a paper I am writing on two alternatives to Capitalism: Mutualism and Participatory Economics (Parecon). This is all I have written thus far and, since it is a large text, I will split it into several posts. As for the citations, assume there is a Reference listing at the end.

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Introduction
It was perhaps the events in Seattle in 1999 that triggered the renewed interest in alternatives to Capitalism. Such interest has existed in the past, given the nature of such a system as the one we are talking about. The first system was formulated in the middle of the nineteenth-century and was known as Mutualism, whose main and most famous proponent was a one Pierre Joseph-Proudhon, a little known political-economic philosopher best known for being the first person to label himself an Anarchist. Another alternative was developed much later in the 1980s and 1990s by political theorist Michael Albert and "radical economist" Robert Hahnel known as Participatory Economics (parecon).

These two system provide a supposed "alternative" to Capitalism while maintaining a few key features of it: namely, there insistence on property ownership and their use of markets. Mutualism provides that property ownership and markets are the key to individual freedom and Parecon maintains that while property ownership is not necessarily the key, a sort-of controlled market is. Parecon does not advocate a market consciously, but rather unconsciously in the sense that goods are produced according to an agreement between production and consumption councils and is facilitated by what amounts to a market.

This author believes that neither Parecon nor Mutualism are viable alternatives to Capitalism and will collapse eventually due to their inability to break completely from it. The purpose of this work will be to demonstrate exactly how both Parecon and Mutualism are weak alternatives to Capitalism and examine how their political economic structures. While this author is himself an anti-capitalist in the tradition of Libertarian Marxism, there has been great effort undertaken in order to ensure an unbiased and objective look at Parecon and Mutualism.

The works used in this paper were primarily on-line sources and on-line versions of books. For the Mutualism section, Clarence Lee Swartz 1927 book "What is Mutualism?" was used in conjunction with Kevin A. Carson's more recent "Studies in Mutualist Political Economy." W.B. Greene's 1895 "Mutual Banking" was used for more detailed information on the concept of Mutual banking. As for Parecon, Michael Albert's "Parecon: Life After Capitalism" and Michael Albert and Robin Hahnel's "The Political Economy of Participatory Economics" were used. In addition to the above works, several smaller works were used to provide information for a general overview of both systems.

This paper will be organized thusly: each system will receive its own section. Each section will be divided into three others: a brief overview of the system, a survey of its political-economic organization, and a critique of the system. A third and final section will serve to bring the paper together and assess whether or not the author's original assertion was true or not.

[JazzRemington]

Section One: Mutualism
Overview of Mutualism
Mutualism is a political-economic system, which was developed out of the chaotic period of human history known as the nineteenth century. During this time, we same industry encroaching further and further into the economic territory that was once dominated by artisan production and the lone farmer, who were relatively independent and acted autonomous of one another. Year by year, more and more individuals were forced to leave their former mode of production behind and accept the rapidly dominating Capitalist mode of production, which proved to be able to increase production beyond that of the simple artisan producer and farmer.

Mutualism can be seen as an attempt to deal with the problem if an increasing dependence upon the factory for work, which violated an individuals freedom of association, a belief held dear to Mutualists. Their belief in a free market without Capitalism and individual liberty and autonomy echoes the concerns people were having in nineteenth century society. Individualist Anarchists find Mutualism attractive out of their fear of what they perceive as compulsory collectivist nature of the vast majority of socialist economic theories.


The Political-Economy of Mutualism
According to an early twentieth-century anarchist named Clarance Lee Swartz, "Mutualism is a social system based on reciprocal and noninvasive relations among free individuals" (1927). He also established three standards that are to be used to judge whether or not one is "living Mutualism:" equal freedom for each without invasion from others, freedom of exchange and of contract, and complete freedom of association (Swartz, 1927).

Swartz perhaps gives us a good understanding of the way Mutualists look at the State. Most Mutualists view the State as an agent to ensure a privilege or privileges that only a few enjoy. How this is possible is through the use of force and generally is said to have begun around the time private property appeared, thus allowing for the product of one's labor to be taken from him (1927). Another well-known Anarchist-Mutualist named Benjamin Tucker believed that "two elements are common to all the institutions to which the name 'State' has been applied: first, aggression" and "second, the assumption of authority over a given area and all within it" (Eltzbacher, 2004: 190). Tucker also believed that "the State is the embodiment of the principle of invasion" (Eltzbacher, 2004: 190). The State is understood to possess a monopoly in three main areas: money; land; and tariffs, patents, and copyrights. Of these three, the monopoly on money is considered the greatest (Swartz, 1927; Eltzbacher, 2004: 202-204).

For working definition of how Mutualists define a State, we will take the above ideas and combine them into one, fluid definition for the purpose of this paper. We will define the State as "any institution that has the assumption of authority over a given area and those within it, maintaining itself with the use of force, with the purpose of maintaining a monopoly on money, land, and tariffs, patents, and copyrights and also privileges given to certain individuals."

According to Mutualists, the only form of just property ownership is based on use and occupancy as well as labor. Thus, Edward would be able to own a car or a home because he uses them but not a hammer if he is not using them. If Edward grew a few planets, they are his to dispose of. Tucker believed "labor to be the only basis of the right of ownership" (Eltzbacher, 2004: 205). Indeed, "the laborer retains...a natural right of property in the thing which he has produced." The very essence of the Mutualist belief in property ownership can be understood from the phrases "property is theft" and "property is liberty" (Proudhon, 1890). In sum, property ownership is based on labor and use. He or those who labor to produce something claim ownership over it and he or they who use or occupy an item or place claim ownership over it.

In terms of organization, Mutualists contend that the best types are free associations. Individuals will organize into a variety of associations from a lone producer to a collective of hundreds of individuals. According to Swartz, "man is both an egoist as well as a social animal" (1927). There shall be nothing tying or forcing individuals together outside of the need to produce and exchange products freely, the latter being only possible through entry into and competition within a free market (Carson, ND). Free competition is "fully possible only in equitable conditions" without regulations from government. (Swartz, 1927).

As inferred from above, a free market is preferred, without interference from the State and Capitalism. In fact, many Mutualists believe Capitalism to be a State-sponsored monopoly over the free market. The market is to be based on equal exchanges of goods (X amount of commodity A is exchanged for X amount of commodity B). The basis for determining prices can be inferred from nineteenth-century anarchist Josiah Warren's statement, "cost: the limit of price" (Warren, 1852: 73). Warren believed it was unethical to charge a price higher than the cost of bringing a particular good to the market. Kevin A. Carson, a contemporary Mutualist thinker, believes that "every single evil of capitalism...can be traced, in a sense, to a violation of the cost principle." Carson also believes that all costs to a firm will be internalized, so that those who consume and produce goods bare the full cost (ND).

But there appears to be split in exactly how prices are to be determined. Aside from the above notion that prices should reflect the cost to bring a particular good to the market, there is another notion proposed by Swartz himself, namely that prices should be "determined through bargaining on the open market" (1927). He believes that supply and demand can be used to determine the price of a product. In this sense of price determination, we see no difference between Capitalism and Mutualism save for the lack of profits, rent, taxes, etc.

Perhaps the most important part of a Mutualist society would be the Mutual Bank. The Mutual Bank is where the workers receive loans and credit in order to obtain capital and other production tools. The Mutual Bank is considered important because Mutualists generally see it as the first step at putting an end to the money monopoly the State has by issuing currency in the form of loans to workers.

A Mutual Bank is formed by a group of people coming together and by "pledging" that they will receive the bank's paper money for all payments and debts. People organizing themselves into a Mutual Bank will pledge a piece of property, the total value of which will determine the size of the loan they are to receive. Once a borrowers debt as been paid, their property is released and they are free from any obligation (Greene, 1974). The general idea for a mutual bank is to provide a bank that gives loans at one percent interest so that the working class can build a system that would be counter to that of the Capitalists. Since the working class lacks access to money which can be used to secure property, especially productive property, the formation and use of a bank that gives one percent interest loans is seen as a step forward. For many Mutualists, the formation of a Mutual Bank is a communal act. It is a community of individuals coming together for form a bank, which will issue currency that they can use for all payments (Greene, 1974).

[JazzRemington]

Critique of Mutualism
The critique of Mutualism will take into consideration it's political-economic structure as well as the general beliefs held by Mutualists. This is to be by no means considered a critique of each individual Mutualists' beliefs, but rather a critique of a few views that are seen as consistent within the Mutualist community.

Their preference of markets is indeed the first and most troubling of their beliefs. This is especially so when one considers their large emphasis on individual liberty and autonomy and hatred of force. Even within a free market, an individual would be required if not outright forced to do certain things. An individual cannot just produce anything because he must produce something that is useful to someone else, even if said producer has no use for what he or she is producing. If he or she does not do this, then he or she is doomed to failure on the market. Thus, the individual is still forced to do something and to interact with someone he or she would not normally interact with out of the need to exchange with others. Certainly this is not the same type of force used by the State to control its citizens; however, it is important to note that a market does not necessarily mean individual autonomy or freedom.

Another troubling aspect of their system is their faith on Mutual Banks. This is not to say that Mutualist Banks are not entirely useful. If the goal is to provide workers with the means of self-employment, then a banking system that operates with one percent loans is preferable to any other type of bank. But our concern here is the collateral put up for the bank. As noted above, an individual joining a Mutual Bank association is required to pledge a piece of property, the value of which will be used to determine the size of the loan available to him or her. This is key here because what if the individual cannot pay back his debt to have his or her property released? Simply put, the bank is considered owner of the property.

This is especially troublesome for the Mutualists who believe that Mutual Banks should be operated individually and not collectively. An individualist Mutual Bank would come into possession of a number of properties beyond its use.

[JazzRemington]

That is all I have written as of now.

[Son of a Strummer]

Status: feeble

I'm going to confine myself to your views on Parecon because I have considerable experience in that area, although I also find your interpretation of mutualism suspect, based on what little I know about that system. So here goes...


1. The juvenile use of scare quotes is "regrettable".

2.
These two system provide a supposed "alternative" to Capitalism while maintaining a few key features of it: namely, there insistence on property ownership and their use of markets. Mutualism provides that property ownership and markets are the key to individual freedom and Parecon maintains that while property ownership is not necessarily the key, a sort-of controlled market is. Parecon does not advocate a market consciously, but rather unconsciously in the sense that goods are produced according to an agreement between production and consumption councils and is facilitated by what amounts to a market.

It is worth noting that the idea that Parecon's allocation institutions are effectively reduced to or inevitably must devolve into market institutions is an extreme minority viewpoint. In my own experience the only folks who have proferred this line of argument have been a relatively few internet activists. Most left economists who have written about it describe it as a non-market alternative, these include Marxist economists. Do you have any evidence of a noted left economist who holds this view?

To be convincing you will have to go much further by providing a plausible definition of a market system and then show why Parecon can be reduced to such a description. Personally, I don't think you can do it. The following excerpt may be be a step in that direction, but amounts to no more than assertion devoid of substantive argument...

Parecon does not advocate a market consciously, but rather unconsciously in the sense that goods are produced according to an agreement between production and consumption councils and is facilitated by what amounts to a market.

According to this, it seems like the task before you is to show that the mechanism(s) that facillitate agreements between production and consumption councils amounts to a market. But early in the process, and evolving throughout, consumers and producers are formulating and revising personal and collective consumption proposals and production proposals and this information is being used to coordinate allocation collectively and consciously- do people really do that in a market system?


3. [/QUOTE]The purpose of this work will be to demonstrate exactly how both Parecon and Mutualism are weak alternatives to Capitalism and examine how their political economic structures. While this author is himself an anti-capitalist in the tradition of Libertarian Marxism, there has been great effort undertaken in order to ensure an unbiased and objective look at Parecon and Mutualism.[QUOTE]

Your introduction is not promising in terms of your professed objectivity. First are the inexplicable scare quotes, then come the oddball assertions about Parecon being in reality a market system, despite the volumes and volumes of detailed critiques rejecting markets outright made by their authors. Once again it is worth distinguishing between assertion and argument; you have thus far only offered the former.

[JazzRemington]

What do you mean by "scare quotes"? How am I attempting to scare people with my quotes? Also, what do you suspect of the critique of Mutualism? The sources are information written by the people professing Mutualism. Would you care for the reference listings?

[ComradeRed]

It is worth noting that the idea that Parecon's allocation institutions are effectively reduced to or inevitably must devolve into market institutions is an extreme minority viewpoint. In my own experience the only folks who have proferred this line of argument have been a relatively few internet activists. Most left economists who have written about it describe it as a non-market alternative, these include Marxist economists. Do you have any evidence of a noted left economist who holds this view? What a great argument! "There are guys with PhDs who think Parecon is right, do you have a PhD or anyone with one agreeing with you?"

Appeal to authority, terrific! Bourgeois apologists love it too; which is why an apologist of Parecon using it is hardly a surprise.


According to this, it seems like the task before you is to show that the mechanism(s) that facillitate agreements between production and consumption councils amounts to a market. But early in the process, and evolving throughout, consumers and producers are formulating and revising personal and collective consumption proposals and production proposals and this information is being used to coordinate allocation collectively and consciously- do people really do that in a market system? Or all he has to do is demonstrate the existence of surplus value in the economy, whichever.

Your statement makes me think though that Parecon is trying to make the world act as the bourgeois Neoclassical economists describe it: a "force" allocates resources and "evolves" according to the every whim of the market. There's a third way to go about it too I guess ;)


Your introduction is not promising in terms of your professed objectivity. First are the inexplicable scare quotes, then come the oddball assertions about Parecon being in reality a market system, despite the volumes and volumes of detailed critiques rejecting markets outright made by their authors. Once again it is worth distinguishing between assertion and argument; you have thus far only offered the former. Yeah, you can't get published if you use quotes :rolleyes:

Parecon really is a market socialism, SOAS; it's actually somewhat reactionary in my opinion since it advocates change, but change for what was once a status quo, all the while using a pseudo-leftist vocabulary.

The current market system is heavily criticized by Parecon, only to be replaced by a more "workers friendly" market system! On second though, Parecon is the epitome of reactionary ideology hiding in a pseudo-leftist aura.

But hey, some like that sort of thing.

[Son of a Strummer]

What do you mean by "scare quotes"? How am I attempting to scare people with my quotes?

For example you introduce Robin Hahnel not as a radical economist but a “radical economist.” What is the purpose of the inverted commas?

Contrary to your professed intention of objectivitiy it suggests cynicism towards a description of Hahnel as a radical economist. Is such cynicism credible? Is he an economist? Of course he is; he teaches it at a major American university. Is he a radical economist? In left discourse the term is not strictly synonymous with Marxism but rather has customarily been applied to folks who tend to criticize the roots of the system and who advocate for a fundamentally different system. Hahnel’s work certainly fits that description, whether or not one believes that Parecon is a desirable alternative. Incidentally, he has been a leading democratically elected organizer for the Union of Radical Poltical Economists (URPE) for years.

In a similar vein you used scare quotes around “alternative” ostensibly to engender in the reader cynicism about the notion that Parecon and mutualism are authentic alternatives. What is the point of those scare quotes? Can’t there exist alternatives without inverted commas, that you recognize as alternatives to the status quo but simply disagree with?

Humour me for a moment by allowing me to go off on a tangent about a possible interpretation that is suggested by your approach but which nevertheless may not be your real approach since it is interpretation based on a small sample of your writing.

What you wrote suggests that you are arguing from a perspective analogous to the old school vulgar Marxists who dogmatically butchered language and elementary standards of rationality so as to denounce any deviations from their orthodox views. According to the vulgar Marxist, there was no possibility of any alternatives or any genuine radical tradition than Marxism. I was a little surprised by the extent to which vulgar Marxism still exists and exemplified by the views of many activists in these forums. On the other hand, I know a few Marxist political economists personally, and have engaged in constructive conversations with many more; although they obviously may disagree with alternative approaches they at least recognize the possibility that essential contributions can be made by folks using independently derived frameworks. The vulgar Marxists of the internet perhaps also do not realize that it is Eurocentric prejudice of the worst kind to suggest, even implicitly, that Marx described the essentials of everything, everywhere, that would follow in the long foreseeable future. I also feel that it is a tendency towards uncritical deification that Marx, at least in his better moments, would have found deplorable.

This is not to suggest that the employment of inverted commas around words or phrases cannot be done judiciously and with meaningful purpose. For example, as specific references or to distinguish between propagandic, technical and popular uses. However in your case the inverted commas appear to be employed to engender a bias in the reader’s mind, even though the description sans inverted commas would be no less accurate.

“Also, what do you suspect of the critique of Mutualism? The sources are information written by the people professing Mutualism. Would you care for the reference listings?”

Unfortunately I do have the time at this moment to go into detail about my wary impressions concerning your explanation of mutualism. I think your choice of Kevin Carson as an authority is a credible choice, but not the only one. I also must say that your critique of mutualism seems to be on significantly firmer ground than your critique of Parecon.

Although I expect to be screamed at for this- let me say that I think it is important to distinguish between a selected market institution, specifically a market for consumer goods, and that of a market system of allocation, which is a generalized method of allocation through an autonomous mechanism of competitive supply and demand. Historically consumer markets were embedded in and guided by overarching social institutions; these markets predate the rise of capitalism, do not represent some inevitable incipient form of it, and thus should not be confounded with the social system known as capitalism. Time and experimentation will tell…but it might we wise for an authentic socialist society to utilize the horizontal market relations and spontaneity exemplified by the market for consumer goods while rejecting market forces exemplified by private investment and its associated financial architecture in favour of democratic planning (including of investment, production, resource utilization, and general direction in a dynamic context). I would call such a system a planned economy because overwhelming primacy for the allocation of resources, is given to institutions of democratic planning, even though a small corner of the economy is the domain of an embedded market institution (perhaps because it may be more convenient and intuitive for people to participate in without sacrificing socialist values). It is also consistent with egalitarian norms of remuneration. What I have described above is not mutualism nor parecon which has qualitatively different consumption institutions, but the model of democratic planning proposed by Pat Devine and his colleagues. Although it uses a limited market, it is qualitatively different than the tradition of market socialist proposals ranging from Oskar Lange through to John Roemer and David Schweikhart. It’s not even clear that Marx would have rejected this kind of limited use of a market. It’s something more for you to think about.


99.9999% of what redstar wrote is nonsense and distortion devoid of any arguments. At the moment I have to split-so I will be getting back to it later. I hope he will be respectful enough to patiently wait for my reply to that post before posting again.

[Son of a Strummer]

replying, without much hope of a constructive dialogue, to redstar,


What a great argument! "There are guys with PhDs who think Parecon is right, do you have a PhD or anyone with one agreeing with you?"

Appeal to authority, terrific! Bourgeois apologists love it too; which is why an apologist of Parecon using it is hardly a surprise.

Right off the bat you distort my words. I wrote that left economists including Marxists tend (practically unaminously) to regard Participatory Economics as a non-market system that affords primacy to planning. I certainly did not suggest they "think Parecon is right"- in fact, a significant number reject it for various reasons. FWIW, appeals to authority can be legitimate, particularly those presenting claims of plausibility rather proof. In this case I presented a prima facie case that left economists (who study economics systematically and have some basic claims to competence) do not tend to reduce participatory economics to a market system. You might have chosen to refute or weaken this prima facie case by citing left economists who think otherwise, or you could have chosen to offer some informed arguments of your own based on an honest interpretation, instead you blurted reactionary nonsense. :rolleyes: If you choose to ignore this case, fine, I followed the prima facie case with a more substantive line of argument in the paragraph that followed...


According to this, it seems like the task before you is to show that the mechanism(s) that facillitate agreements between production and consumption councils amounts to a market. But early in the process, and evolving throughout, consumers and producers are formulating and revising personal and collective consumption proposals and production proposals and this information is being used to coordinate allocation collectively and consciously- do people really do that in a market system?


Or all he has to do is demonstrate the existence of surplus value in the economy, whichever.

While you are not quite following the logic of my point I would welcome a line of argument from the perspective of a theory of surplus value. You would have to do more than merely "demonstrate the existence" of surplus value, it is a theory that has agents with relations between them, and describes a process. (It is commonplace for any economy above a primitive level of development, to generate surpluses, the distribution of this surplus depends on specific institutional forms). It seems that you would have to demonstrate not only that a surplus value was created but then how it's creation was exploitative, it's distribution was unfair and/or was appropriated by particular agents. Although a few vulgar internet Marxists have tried this line of critique, none, in my experience, have been the least bit successful. They have typically demonstrated a double confusion. They misunderstand both Marx (and credible variants of a theory of surplus value) and particpatory economics. Surplus value in capitalism is bound up with the circuitous process of the valorization of capital (M-C-M). The extra value that is created is a result of the legal right of the capitalist class to control the process of production enabling them to compel wage-labourers to perform surplus labour, their legal claims on the output, and the realization of the extra value created via the conversion of the product back into money. How can this, or even something analogous, be done in a Parecon? In parecon the incomes of folks are not directly linked to revenues derived from the sale of their outputs.


Your statement makes me think though that Parecon is trying to make the world act as the bourgeois Neoclassical economists describe it: a "force" allocates resources and "evolves" according to the every whim of the market. There's a third way to go about it too I guess

This is another distortion. I did not describe any "force"- I wrote "this information is being used to coordinate allocation collectively and consciously." There is no impersonal "force" as there is in market economics, people need to interact and undergo a dynamic, yes "evolving" process of deliberative negotiation, give and take, etc, using information that itself undergoes revision.


Parecon really is a market socialism, SOAS; it's actually somewhat reactionary in my opinion since it advocates change, but change for what was once a status quo, all the while using a pseudo-leftist vocabulary.

And this is bloated, bleating, hysterical rhetoric with zero substance. Please do clearly identify the old status quo which you imagine participatory economists to be foisting on people with their "pseudo-leftist vocabulary"...


The current market system is heavily criticized by Parecon, only to be replaced by a more "workers friendly" market system! On second though, Parecon is the epitome of reactionary ideology hiding in a pseudo-leftist aura.

Anyone who had read a fair sample of the material with any care would know that Albert and Hahnel reject and thoroughly critique markets of all types at all times,in theory and practice; in other words they reject markets categorically, and provide ample reasons for this rejection. Personally, my judgement is suspended on the categorical rejection of markets, since Pat Devine's notion of a role for embedded consumer's markets in democratic planning may be more desirable, at least in practice, at least for the crucial first stage of communism. I see no reason to rush to judgement because these are speculative proposals that require experimentation.

[Dimentio]

I read Michael Albert's Parecon and I think it is completely crazy. I mean, a squirrel wheel work or a task which requires more work and is more inefficient than a similar task which is simpler and requires less work and time would be more efficient to make in that system.

[Son of a Strummer]

I read Michael Albert's Parecon and I think it is completely crazy. I mean, a squirrel wheel work or a task which requires more work and is more inefficient than a similar task which is simpler and requires less work and time would be more efficient to make in that system.

I'm afraid you misunderstood the system. The system of Parecon welcomes the introduction of technologies that will lower the social cost of producing a particular good all other factors being given. Of course technologies that brutely increase output while at the same time causing negative externalities will tend to be relatively socially costly! The system tends to incentivize the introduction of green, labour-saving technologies. Moreover, since there are no patent/intellectual property rights, innovations can be generalized relatively quickly.

[Dimentio]

People are paid their allocation points by how hard physically they work, no matter if they fail or not. Even running in a squirrel wheel the whole day may be the equivalent. It is better to give everyone a share of the total production capacity and alienate income from work whatsoever.

[Son of a Strummer]

People are paid their allocation points by how hard physically they work, no matter if they fail or not.

no, remuneration FOR effort and sacrifice explain differences in income of workers, the nominal level of income is based on an equal share of the total social product (with allowances made for those with special needs).

as for the reasoning behind the (minor) differences, it's getting late so I will just quote Mike Albert:

"The parecon norm is that you get more income for more duration, more intensity, or more onerousness of your work, or you get less income for the opposite, but that this holds only if the work you do, for the duration you do it, is socially useful. If it isn't socially useful, which means if it isn't sufficiently effective, then the work isn't remunerated. This means I can't furiously dig holes in my backyard and furiously fill them, and get good pay for doing so. It produces nothing of value. It also means that I can't be remunerated as an artist, baseball player, surgeon, airplane pilot, translator, or countless other things that I simply couldn't do well enough for my labors to be deemed socially useful. The hours expended don't generate sufficient value to be deemed well spent, or socially useful."


Even running in a squirrel wheel the whole day may be the equivalent. It is better to give everyone a share of the total production capacity and alienate income from work whatsoever.

The squirrel wheel analogy is irrelevant. As Albert noted above, the production must have demonstrable social value. The starting point for the incomes of workers in participatory economics is equal consumption bundles. The divergences in these bundles reflect considerations of equity, because not all tasks in society are equally desirable, it makes ethical sense to compensate people more for undertaking tasks that others don't want to do but which nevertheless have demonstrable social value.

[ComradeRed]

Originally posted by Son of a Strummer
replying, without much hope of a constructive dialogue, to redstar, Are you drunk? :huh:


FWIW, appeals to authority can be legitimate, particularly those presenting claims of plausibility rather [than?] proof. "Fallacies aren't that bad, really!" :rolleyes:


In this case I presented a prima facie case that left economists (who study economics systematically and have some basic claims to competence) do not tend to reduce participatory economics to a market system. This makes no logical sense. "Real" leftist economists don't do it, so therefore it can't be done. No true scotsman fallacy, anyone? Or are you "too good" for logic now?


You might have chosen to refute or weaken this prima facie case by citing left economists who think otherwise, or you could have chosen to offer some informed arguments of your own based on an honest interpretation, instead you blurted reactionary nonsense. :rolleyes: I did not realize this was like a theological debate where we "had" to cite canonical works; apparently, we (you anyways) cannot use reason and logic.

Your Prima Facie case is an irrelevant one. Well, "only" according to modern logic, which we know you zealots hate.


You would have to do more than merely "demonstrate the existence" of surplus value, it is a theory that has agents with relations between them, and describes a process. (It is commonplace for any economy above a primitive level of development, to generate surpluses, the distribution of this surplus depends on specific institutional forms). It seems that you would have to demonstrate not only that a surplus value was created but then how it's creation was exploitative, it's distribution was unfair and/or was appropriated by particular agents. Can you, just for one post, stop pretending to know what you are talking about?

Surplus value by definition is exploitive, or did you forget that from elementary Marxist economics? Surplus value by definition is given to the owners of the means of production (the capitalists).

All that really needs to be done is demonstrate the existence of surplus value in the Parecon model, and he's set. It then (trivially) implies by its very existence the existence of classes and there being unique relations between them.


This is another distortion. I did not describe any "force"- I wrote "this information is being used to coordinate allocation collectively and consciously." There is no impersonal "force" as there is in market economics, people need to interact and undergo a dynamic, yes "evolving" process of deliberative negotiation, give and take, etc, using information that itself undergoes revision. Unless you are using binary digits to describe such an allocation, in which case it would be a flow of information, it would be a force (actually here's another point someone could run a train through: formulate the Parecon model as a Lagrangian/Hamiltonian system and from that you could demonstrate it treats time as bad as vulgar bourgeois economists do).

You can pretend all you want that it is information, though unless you are using information theory it isn't information! You are redefining terms as you like to so you'll avoid the same absurdity in vulgar bourgeois economics.

As I stated earlier, one could speculate a remarkable similarity between vulgar economics and Parecon economics.


Anyone who had read a fair sample of the material with any care would know that Albert and Hahnel reject and thoroughly critique markets of all types at all times,in theory and practice; in other words they reject markets categorically, and provide ample reasons for this rejection. You can't blindly believe everything you read. "Well they say they're against markets, so their solution must thusly not be a market."

Well, if you logically follow the model to its conclusions, you'd be wrong.

What, you seriously propose is that Parecon's model has no central coordinator guiding its operation, yet theoretically self-organization emerges amidst the complex interplay of supply and demand and price regarding a multitude of goods and services? Gee whiz, that doesn't sound like a market economy in the least! :rolleyes:

[blueeyedboy]

If there is a vanguard party, then ComradeRed and Son of a Strummer would defenitley be in it lol. What's with all the long replies and stuff. Surely Parecon can be described in detail without resorting to huge essays. Anyway, I don't like the idea of Parecon. From what little I've read, and thats mostly other people's opinions of it, it doesnt seem right.

To Son of a Strummer, there was no need to write a massive and exhaustive essay on the use of inverted commas. Jesus, I can imagine you scribbling out everyones 'inverted commas' vigorously, almost to the point of obssesive compulsive disorder. There was just no need to have a go like that at someone just for using 'inverted commas'.

[JazzRemington]

I finished the paper a few days ago. I've submitted it to AK Press to see if they wish to publish it. No word back yet. I've also given a hard copy to my sociology teacher, who expressed interest in it.

[Son of a Strummer]

Originally posted by [email protected] 11, 2006 05:50 am
I finished the paper a few days ago. I've submitted it to AK Press to see if they wish to publish it. No word back yet. I've also given a hard copy to my sociology teacher, who expressed interest in it.
AK Press? The very same folks who publish most of the works of Mike Albert? All I can say is- good luck with that.!!!...perhaps you are better off finding a reactionary Marxist publsher.

As presented it was a shoddy thesis- has it since been improved by at least 1000%?

And have you cleared up the misrepresentation? For example, the authors of Parecon do not actually "maintain" that
"while property ownership is not necessarily the key, a sort-of controlled market is" - this sort of misrepresentation of what they "maintain" is a lie. You should instead make clear that YOU THINK that an argument for a "sort-of controlled market" is implicit in their conception. This is what you maintain as a matter of interpretation, not them.

ComradeRed is a demagogue. To argue with demagogues is a waste of time. He is wrong to suggest that if surplus "exists" it is "given by definition" to the owners of the means of production. He seems to forget that Marx recognized that surplus value represents no achievement for the purposes of capitalist reproduction until it is transformed into monetary form. Thus Marx was well aware that though surplus value might "exist", it may not be realized; it could be destroyed, especially in times of crises. This is to suggest that Marx like anyone else that is sane or not naive recognizes elementary distinctions between the institutions of production, distribution and consumption.

I see no credible arguments that a separate class could form out of the institutions of Parecon - keeping in mind that it is a staunchly anti-elitist system, it does not reward intellectual work more than manual work and its division of labour advocates balanced job tasks. Its production units are not "autonomous" in the sense that they can use the revenues from their ouput to develop inequitable advantages of wealth or control of production.

By the way. the name of the "radical" economist whose system you are writing about is Robin Hahnel, not "Robert".

[JazzRemington]

Here's teh section on Parecon.

Participatory Economics (Parecon) is a system devised by political theorist Michael Albert and radical economist Robin Hahnel in 1991. The system is designed to maximize worker participation and equality in the production process by creating a balanced series of jobs in which shared by workers in a rotating basis. They believe in creating "an equitable economy" in which "people's work experiences [are] equally desirable" and is also "fully efficient" (Albert & Hahnel, 1991).

In regards to the State, Parecon offers no critique of it or any sort of information what so ever. Therefore, we can not conclude whether or not Parecon demands a society with no State, with a State, with a strong State, or with a weak State. It should be noted, however, that a lot of Parecon supporters are anarchists, who are both anti-State and anti-capitalist, and who are constantly seeking non-authoritarian economic systems. Thus, Parecon offers no "default" political system to go along with its economic system, according to what are considered the principle texts of the system.

The heart of Parecon lies in that the economy is essentially organized into two councils: workers and consumption. Each council will have its say in its respective field: workers councils will work in production and consumption councils will deal with consumption. We will now explore these two councils as separate entities, isolated from one another. Later we will see how they cooperate in order to produce goods and services for the economy.

Each workplace would be composed of a worker's councils. The size would be dependent on the size of the firm: smaller councils for teams, small firms and larger ones for entire industries, etc. (Albert, 2003). In these councils, "each worker has one vote" (Albert & Hahnel, 1991). This is the opposite of, say, a stock holder's meeting in which one person has a number of votes equal to the number of stock he or she owns. The amount of say an individual worker has is determined how much he or she is effected by what is being voted on (Albert & Hahnel, 1991; Albert, 2003). Thus, if a council were deciding on whether or not to implement a new device that dampens the noise created by a machinery, those workers who are not affected by the noise probably would not vote as it would not effect them too much. It is through these councils that workers would be able to fully express their opinions and ideas on things (Albert & Hahnel, 1991), and share in the decision making process (Albert & Hahnel, 1991; Albert, 2003).

In regards to production, Parecon offers a way in which it is possible to allow for full participation in the process: balancing of job complexities. This is what makes Parecon unique from probably all other alternatives to Capitalism. It is believed by both Albert and Hahnel that the key to creating an atmosphere of equality within the workplace is that all jobs are rotated amongst members of the workplace. This is done by organizing each job into different categories depending on their complexity. The jobs would be rotated between individuals so that no one individual is to work a certain job his or her whole life. The process of assigning difficulty to jobs would be admittedly difficult at first but "once the first approximation of balanced complexities within the workplace [has] been established, yearly adjustments would be relatively simple" (Albert & Hahnel, 1991).

The use of experts would provide information to the workers councils as to the consequences of the choices they might face. They would be used only when necessary and for the purpose of creating a more informed workplace. "For informed self-management, there is no conflict between participation and efficiency." This, along with the training one would receive with each new job, is proposed to lead to an enhanced knowledge of the production process and allow for better informed decisions (Albert & Hahnel, 1991).

The consumption councils would be organized the same way. Councils would be set up in neighborhoods, cities, counties, wards, etc. on a upward moving scale and would also be federated. For example, from the lowest to the highest level of councils we might have neighborhood councils, ward councils, city councils, then county councils, then state councils, and the possibly a national council. The higher councils are understood to be comprised of delegates from the lower councils. The purpose of these councils would be to obtain consumption requirements of the members of the councils, often through the use of a Research & Development (R&D) task force at the lower levels and a full-time R&D unit at the higher levels (Albert & Hahnel, 1991; Albert, 2003).

But on what basis should the goods be distributed? Albert gives us a few examples on how they should not be distributed: "no one should have claims on output on the basis of bargaining power. No one should have claims on output on the basis that they put a larger sum into the social product than others by using some special genetic endowment or talent or size, or due to having some highly productive learned skill, better tools, or more productive work- mates, or because they happen to produce things that are more highly valued" (2003). Rather, goods are to be distributed according to the "proportion to the relative magnitude of the effort or sacrifice that they expend in their socially useful work" (Albert, 2003). The more effort one puts into his or her job, the more he or she would receive of the total goods and services society produces. The idea is that one should not receive goods or services based on something that he or she has no control over. The only thing he or she has control over in regards to economic production is the level of effort he or she puts into production.

How would the level of effort be determined then? By a democratic vote taken by the workers council of the workplace. Albert gives us several ways in which one can determine this. The first is to simply assume that each worker works at an average level of intensity "so that for the most part income will vary only with hours worked." Another way is to use a grading system utilizing such levels as "superior," "average," and "below average." A third way is to simply use a numerical system (2003). This may seem to be an odd way to judge something subjective, but it is believed that the different workers councils will devise different methods of dealing with renumeration. Sometimes, an individual or collective might request renumeration above the respective effort level. Such cases would handled in a case by case basis (Albert, 2003).

Actual production is handled by a cooperative effort between the workers councils. There are three ways in which production is regulated in a Parecon. The first way is using prices. Albert explains that "a key concept in making [production choices] sensibly is the 'social opportunity cost' of doing any particular thing" (2003). He means that we must we weigh producing something at the cost of producing something else that may be of use. It is through this process that we have prices that give us a true value of these relationships. Prices would be determined through qualitative information exchanges between workers councils (Albert, 2003) and "social consultation and compromise" (Albert & Hahnel, 1991).

The second method is using work effort. With the idea that jobs would be more or less equally balanced, we can measure the amount one should receive through renumeration by how many hours he or she works (Albert & Hahnel, 1991; Albert, 2003).

The third and final way in which production is regulated is through qualitative information exchanges. This simply means that workers will exchange qualitative information about one another's job, which would be used in the production process. This does not, as Albert and Hahnel claim, require a novel length of information but rather a short summary (Albert & Hahnel, 1991).

We now get to how exactly goods and services are allocated through out the economy. This is done by a the consumer and workers councils meeting and deciding amongst themselves what is rational to produce. Every council participates in what is called the "participatory planning" procedure (Albert & Hahnel, 1991). The process happens as follows: first an individual devises a consumption plan for himself and/or his or her family. This plan is approved as being rational and acceptable by the local consumption councils, which is the final phase of a long series of bargaining. The workers councils do the same in regard to production. The information is checked against the previous years' production records, which are to be stored in a central computer and can be accessed by anyone. The information is worked by a facilitation board which works to make sure there is neither excess demand or excess supply by adjusting the price. The consumer and workers' councils would adjust their proposals in response to the adjusted price until a "balance" is found. (Albert & Hahnel, 1991; Albert, 2003).

Parecon appears to us as another alternative to Capitalism in a world where alternatives appear to both abound numerously and yet be no where insight; however, there are several issues we must demonstrate that make Parecon a weak alternative to Capitalism, just as we did above with Mutualism.

The first issue is that of the renumeration process. It is a step beyond Capitalism to assert that an individual should be paid according to the effort he or she puts into his or her job. But we must take issue with this because there is no objective way of determining the exact level of effort. Certainly, we can just assume that everyone puts in an average level of effort so that we can remunerate based on hours worked. This appears to be the only way we can quantify such a thing. This can be likened to the neo-classical economical concept of "utility:" there is no objective way of quantifying something that is ultimately subjective in nature. Effort is subjective and cannot be objectively quantified.

The second issue is the price function. Under Parecon, prices are affected by a combination of both the previous years production records and by what the consumption councils propose they need and what the workers' councils propose they can produce. In other words, prices are affected in part by what amounts to supply and demand in a Capitalist economy. It could be argued that supply and demand is in effect in any economic system. But we must understand that the supply and demand we are talking about affects prices and not what gets produced. We must also criticize the foundation of the prices being based on the previous year's production records as being dangerous because one could base the prices too high or too low, since production tends to fluctuate every year.

The final point is the apparent tendency toward bureaucracy in regards to how the councils are organized. While it is understandable that consumption and production proposals should be agreed upon by all of those councils that are involved, we see in Parecon that one council cannot act independently of the others and thus lack a degree of autonomy that would be necessary for the preservation of the general freedom of the individual councils to pursue their ends. While it is required that these councils be federated and cooperate in order to function, the councils must also have the freedom to act independently of each other from time to time.

[ComradeRed]

ComradeRed is a demagogue. Thank goodness you realized who you are talking to; it took you long enough.


He is wrong to suggest that if surplus "exists" it is "given by definition" to the owners of the means of production. He seems to forget that Marx recognized that surplus value represents no achievement for the purposes of capitalist reproduction until it is transformed into monetary form. Thus Marx was well aware that though surplus value might "exist", it may not be realized; it could be destroyed, especially in times of crises. This is to suggest that Marx like anyone else that is sane or not naive recognizes elementary distinctions between the institutions of production, distribution and consumption. And by all means, please don't cite sources or quote Marx. It's a brilliant strategy in debates.

"Plato once said 'Read a fucking book'...no really, trust me, I don't need to cite it." :rolleyes:

How ironic you are criticizing JazzRemmington over his lack of academic formalism when you can't even cite a single source to back your points.


I see no credible arguments that a separate class could form out of the institutions of Parecon... Of course not, when you have your head up your ass all you see is bull shit.

But I'm a "dogmatic demagogue", what would I ever know without my precious PhD in baloney economics :rolleyes:

[JazzRemington]

I thought he originally said Redstar2000 was a demogogue?

[ComradeRed]

Originally posted by [email protected] 11, 2006 08:24 pm
I thought he originally said Redstar2000 was a demogogue?
He forgot my name.

[Son of a Strummer]

Just to take this thread down a more interesting course I have offered this critique to both Kevin Carson and Mike Albert.

What follows is a conversation between myself and Mike Albert. Keep in mind that though my own responses follow Mike Albert's in this post, I actually intially presented him the critique with my responses...

Hi Mike,

I wanted to pass along a rough draft of my response to a critique of Parecon by a self-proclaimed libertarian Marxist. The excerpt below appears in a paper titled “Capitalism-Lite” which contains the thesis that "neither Parecon nor Mutualism are viable alternatives to Capitalism and will collapse eventually due to their inability to break completely from it.” I do not regard it as a particularly strong critique; nevertheless the author thinks highly enough of it to have submitted it to AK Press. He presents three main criticisms of Parecon. Since each criticism is fairly self-contained I will present the first critique below and follow up with the others at a later time. My comments on the critique are interspersed. I would appreciate it if you could add your own comments.

Mike: Okay will comment on the criticisms, below…

> Critic: The first issue is that of the remuneration process. It is a step beyond Capitalism to assert that an individual should be paid according to the effort he or she puts into his or her job. But we must take issue with this because there is no objective way of determining the exact level of effort.

Mike: In reality, there is no way to determine the exact level of anything, but one can do well enough, with many things and this is one. Duration is easy. Use a clock. Intensity isn’t actually much harder – given that it is gauged by workmates according to shared standards and we aren’t talking about deciding it to the nearest hundredth, for example, but just settling on whether it is average, way above, just above, below, or way below, as possible categories, for example. . Whether your work is socially useful or not is also easy – is it generating output people want via the plan?

> Me: It is immediately notable that by raising only the issue of measurement that the critic is not rejecting the claim that the reward for effort and sacrifice is just, but rather raising an objection confining itself to the practicability of effort ratings. Regarding practicability, objectivity in measurement is not the stated goal of those who advocate Parecon, nor is it believed the appropriate criteria for measurement. The appropriate criteria for the measurement of effort and sacrifice is fairness. Fairness can be achieved in three principal ways: 1) by attempting to make relevant measurement as accurate as possible and 2) by building in access and opportunity for appeal and revision of procedure if worker(s) feel the effort rating system is unfair and 3) by facilitating change of work councils if a worker does not agree with the procedures for measuring effort by a particular council.

Mike: All true, but you make it sound like the determination of effort occurs someplace distant – it is done by workers councils, however they choose.

> Critic: Certainly, we can just assume that everyone puts in an average level of effort so that we can remunerate based on hours worked. This appears to be the only way we can quantify such a thing.

Mike: If you assume average intensity and equal onerousness – not bad assumptions but not always true, then, yes, it is just a matter of duration. But if I want to work harder, say, and it can be arranged acceptably in my workplace, or am willing to work at worse conditions if the difference exists, and that is arranged, then I should get more remuneration for it. And if I I want to work less hard, and that can be arranged, then reverse.

> Me: We can just assume that rewarding for effort and sacrifice = quantity of hours worked – only if we have first balanced jobs for desirability and empowerment. If it was the case that jobs were not balanced and workers were rewarded only for hours worked then someone doing a job consisting of what is construed to be desirable tasks say, project manager in a production unit that designs games would get the same amount of pay as a rote worker in the same industry, say someone relegated to doing rote secretary tasks all day long or someone doing only automated packaging. Parecon maintains that it is unfair if some people do unfulfilling jobs all day long while others do cushy and/or creatively stimulating jobs while those doing the undesirable jobs are not compensated for shouldering more of the burdens of socially valued work. The monopolization of empowering tasks can also lead to the establishment of coordinator class structures. Additionally another instance of injustice is that two workers could be performing the same task even in a workplace with balanced jobs yet one sloughs off while his counterpart applies considerably more mindfulness and intensity to her work operations. If they work the same number of hours should they get rewarded the same? What would it do to incentives if it the intensity of worker’s efforts did not matter, and consequently what would the apparent lack of incentive to apply oneself at work do for solidarity and the prospects of meeting the objectives of production proposals? It is for all the above reasons of fairness that it is proposed that remuneration for effort and sacrifice should be measured according to the following three parameters: 1) DURATION (the number of hours worked), 2) ONEROUSNESS of work (more burdensome tasks get a greater weight in terms of reward than less burdensome tasks) and 3) INTENSITY (based upon the judgements of one’s peers, with the procedures for judgement and its redress left to the discretion of each worker council).

Mike: Nice.

> critic: This can be likened to the neo-classical economical concept of "utility:" there is no objective way of quantifying something that is ultimately subjective in nature. Effort is subjective and cannot be objectively quantified.

Mike: Ignoring philosophical niceties, the point is that it is precisely people’s shared and collective and overall opinions that matter, and that should govern the distribution of income. That it is subjective is not a bad thing, at all, but the whole point.Suppose people don’t value – subjective – clean air, or being able to watch movies, say. Then the value of those goes down, perhaps to zero. Same item, new value. All of economics has to do with subjective desires and inclinations and how they are addressed.

> Me: These are social affairs involving choices and value judgements, this is not physics. One should probably set aside expectations of objectivity for an understanding that values that a citizenry holds as important can be discovered and revised by processes that are intersubjective. It is unrealistic to expect objectivity to be an outcome of social interactive processes. Probably the most one can hope for is that the participants in the process feel that is fair. Those who are in the best position to make fair judgements about a particular worker’s application of effort are those working beside her who can empathize with her situation and who are the most qualified to engage in intersubjective comparison.

Mike: The words are confusing the issue, it seems. Suppose I say I want a glass of milk. It is an objective fact I want the glass of milk, my taste is subjective. Suppose the totality of the population has certain desires for milk and likewise all other things the ingredients could be used for, including the labor. What emerges from all those preferences is an objective statement of the relative valuation of all items by this population in context of particular institutions.

The price of oil, now, is what it is, a fact. It emerges from preferences as they emerge and are manifested in context of markets, etc., which gives some preferences much more weight than others, and skews things itself, as well.In a parecon the price emerges from preferences at they emerge and are manifested in context of participatory planning, etc., which convey self managing influence to all and introduces no biases that I am aware of, at least.

[JazzRemington]

"Mike: In reality, there is no way to determine the exact level of anything, but one can do well enough, with many things and this is one. Duration is easy. Use a clock. Intensity isn’t actually much harder – given that it is gauged by workmates according to shared standards and we aren’t talking about deciding it to the nearest hundredth, for example, but just settling on whether it is average, way above, just above, below, or way below, as possible categories, for example. . Whether your work is socially useful or not is also easy – is it generating output people want via the plan?"

This explains nothing. It's just reiterating what was written in the Parecon literature. I
still assert you cannot quantify effort. Besides, baseing prices on something subjective seems a bit too familiar if you ask me.


"The appropriate criteria for the measurement of effort and sacrifice is fairness. Fairness can be achieved in three principal ways: 1) by attempting to make relevant measurement as accurate as possible and 2) by building in access and opportunity for appeal and revision of procedure if worker(s) feel the effort rating system is unfair and 3) by facilitating change of work councils if a worker does not agree with the procedures for measuring effort by a particular council."

So, basically you're attempting to measure something subjective as accurately as possible, allow individuals to have a direct say in the price, and allow them to change workplaces. How is this supposed to be an alternative to capitalism? That is not to say this theory is incorrect, but just sounds suspiciously familiar.


"Ignoring philosophical niceties, the point is that it is precisely people’s shared and collective and overall opinions that matter, and that should govern the distribution of income."

'Philosophical niceties'? The fact that something that is subjective cannot be objectively measured has nothing to do with philosophy. Perhaps one could provide a formula that may tell me the exact intensity (in a numerical figure) of my enjoyment from playing a video game, that will generate a reliable result? I am not arguing against people having a say in distribution. What I am arguing against is that one cannot objectively and effectively determine something that is inherently subjective.


"That it is subjective is not a bad thing, at all, but the whole point.Suppose people don’t value – subjective – clean air, or being able to watch movies, say. Then the value of those goes down, perhaps to zero."

Exactly. It's either VALUED or NOT VALUED. You can objectively determine this. Not, "I value this thing 50 utils" or "I value this thing -2 utils." Does that mean when one picks between two valued things that he or she values the one more than the other? There's no real way of effectively determining this.


"What emerges from all those preferences is an objective statement of the relative valuation of all items by this population in context of particular institutions."

Ah, but what of the next day? Or the next few minutes after these readings were taken? Ask someone how much they want something one minute and you're likely to get a different response the next. Besides, how would one quantify such a thing anyway? Would I measure it in feet, pounds, meters, quarts? It IS objective in that one can objectively state that this is the measurement, but the measurement itself relies on subjectivity and you would probably not be able to obtain the same measurement any other time you were to try.

-------------------------
I am intersted in hearing from Carson. I don't think I've ever talked to a Mutualist before.

[Son of a Strummer]

I have received a reply from Kevin Carson...below...

>I write you because I am interested in what your response might be to an
>essay critiquing > Mutualism posted in another lefty forum by a
>self-proclaimed libertarina Marxist named JazzRemington. Your work is cited
>as one the major references by the author. The critique appears in an essay
>that is a joint critique of both mutualism and particpatory economics under
>the catchy title "Capitalism-Lite." According to the introduction "This
>author believes that neither Parecon nor Mutualism are viable alternatives
>to Capitalism and will collapse eventually due to their inability to break
>completely from it." I don't think much of the paper, either in terms of
>style or its rather slim substance; nevertheless its author regards it
>highly enough to have submitted it to AK Press. I am not currently in a
>disposition to offer an informed response but maybe you or your cohorts
>will feel so inclined.

Thanks for passing this along.

I have a few minor quibbles, like with this:

>According to Mutualists, the only form of just property ownership is based
>on use and occupancy as well as labor. Thus, Edward would be able to own a
>car or a home because he uses them but not > a hammer if he is not using
>them.

Actually, individualists and mutualists treat land and natural resources as
fundamentally different from property which is made my human labor. The
latter can be owned without regard to occupancy and use. Land and natural
resources are treated differently because they are free gifts of nature, and
are in essentially fixed supply.

But the real howler is here:

>But there appears to be split in exactly how prices are to be determined.
>Aside from the above notion that prices should reflect the cost to bring a
>particular good to the market, there is another notion proposed by Swartz
>himself, namely that prices should be "determined through bargaining on the
>open market" (1927). He believes that supply and demand can be used to
>determine the price of a product. In this sense of price determination, we
>see no difference between Capitalism and Mutualism save for the lack of
>profits, rent, taxes, etc.
>

This is a bit like saying we see no difference between the uncle and the
aunt save for the lack of testicles, etc. The whole point of the various
schools of free market anti-capitalism is that the natural tendency of the
market price mechanism is toward production cost, unless state-enforced
unequal exchange inflates the returns on land and capital. If the mechanism
of supply and demand result in a wage that reflects the full product of
labor, and in prices of goods that reflect production cost, doesn't that
take care of the problem of exploitation?

Remington goes on to explain his (?) objection to markets, as such, even in
the absence of anything that us Tuckerites would regard as exploitative:

>Their preference of markets is indeed the first and most troubling of their
>beliefs. This is especially > so when one considers their large emphasis on
>individual liberty and autonomy and hatred of force. Even within a free
>market, an individual would be required if not outright forced to do
>certain things. An individual cannot just produce anything because he must
>produce something that is useful to someone else, even if said producer has
>no use for what he or she is producing. If he or she does not do this, then
>he or she is doomed to failure on the market. Thus, the individual is still
>forced to do something and to interact with someone he or she would not
>normally interact with out of the need to exchange with others. Certainly
>this is not the same type of force used by the State to control its
>citizens; however, it is important to note that a market does not
>necessarily mean individual autonomy or freedom.
>

This renders the concept of force meaningless, unless the general
limitations of existence in a material world with material laws, and the
absence of free chickens growing on bushes as in the land of Cockaigne,
constitutes "force." The individual would not be "forced" to do labor of any
kind or produce anything. On the other hand, he would not be able to force
anyone else to work to supply him with food and other material goods
without persuading them to do so voluntarily, either as a gift or in return
for his producing something that they wanted. Remington objects, in other
words, to the fact that nobody is born with a blank check on everyone else's
labor. How cruel! Boo hoo! If this is force, it results from the simple
fact that food and clothing don't grow on trees, but must be produced by
human labor. And since labor is entitled to its product, forcing one person
to labor to support another is involuntary servitude--slavery.

Finally, I don't know what this is supposed to mean....

>This is especially troublesome for the Mutualists who believe that Mutual
>Banks should be operated individually and not collectively. An
>individualist Mutual Bank would come into possession of a number >of
>properties beyond its use.

...especially in light of this earlier statement:

>For many Mutualists, the formation of a Mutual Bank is a communal act. It
>is a community of individuals coming together for form a bank, which will
>issue currency that they can use for all payments (Greene, 1974).
>

The mutual bank's properties would be the properties of its members, the
same ones they had before. I'm not sure what Remington means by the
distinction between "communal" and "collective," but I consider mutual banks
a voluntary communal association between individuals: it's a way for
ordinary working people to pool their small properties as a source of
capital in order to create a producer-owned economy.

Best,
Kevin

[Son of a Strummer]

Here is part 2 of a 3 part interchange between myself and Mike Albert about Jazz Remington's comments on Parecon....Mike Albert's replies are in the block quotes

Jazz:
> The second issue is the price function. Under Parecon, prices are affected by a combination of both the previous years production records and by what the consumption councils propose they need and what the workers' councils propose they can produce. In other words, prices are affected in part by what amounts to supply and demand in a Capitalist economy. It could be argued that supply and demand is in effect in any economic system. But we must understand that the supply and demand we are talking about affects prices and not what gets produced. We must also criticize the foundation of the prices being based on the previous year's production records as being dangerous because one could base the prices too high or too low, since production tends to fluctuate every year.




Mike: The comment is, well, confused.



Either an economy matches supply to demand, or it has gluts or shortages. There is nothing capitalist about the idea of supply or demand. There is something capitalist about a particular way of discerning or tallying supply and demand – if the way is, well, capitalist, as in occurring by way of markets plus private ownership, etc. then it is capitalist. But if it uses, say, polls and indications from shelves plus central planners, then it is not capitalist but centrally planning coordinatorist, and if it uses markets but not private ownership then it is market coordinatorist, just as if it uses participatory planning it is not capitalist, but, well, pareconist. Whether any of these is an approach we like or not is another issue. It should depend on whether the procedures are consistent with and further our values, while also arriving at true and full social costs and benefits and desirable allocation.



Saying something affects prices – meaning relative values – but that it does not affect what is produced in what quantities, is incoherent. Perhaps it wasn’t meant. Prices are all about what gets produced in what quantities. In fact, you could very reasonably say that in most allocation systems, parecon’s included, what get’s produced and consumed in what quantities is what in fact determines final valuations, or prices.



Parecon doesn’t determine or set prices based on last year – it starts from last years relative values as a basis for efficiently arriving at current relative values which are determined by the self managing choices of producers and consumerrs. The procedure could start with random valuations and get to the same final place as well, but it would take longer for no gain.




SOS:
> It is true that supply and demand is in effect in any (credible) economic system. It is equally true that supply and demand should be a factor in determining relative valuations (ie: prices).




Mike: True.


SOS:> Perhaps it is worth underlining this point by considering the consequences of not making supply and demand adjustments for significant divergences. To not attempt to equilibrate supply and demand is equivalent to systematizing allocative inefficiency. One would have, as a regular feature of the system, significant shortages of some goods that are wanted and significant waste of goods produced in excess of demand. More importantly it means that significant resources, including labour, would be employed wastefully when they could have been used to produce things that people need and want. Moreover, the reallocation and/or reorganization of resources and methods so as to bring supply in line with demand certainly does change the cost of producing goods that are socially valued; in other words supply and demand are two factors that affect social opportunity cost. So why shouldn’t supply and demand be factors (but not the only ones) that have an influence on prices? To suggest that attuning production and consumption to supply and demand does not require adjustments in prices, amounts to suggesting that the benefits of accurate allocation should not be passed on to citizens in their roles as workers and consumers.




This is true, but could be a bit confusing. Think of it this way. We are going to produce and distribute some stuff. The we, for the sake of discussion, is everyone – each being both a consumer and a producer. How much of each thing are we producing, and how much are we each getting? The determination of this is what is called a general equilibrium problem. Suppose we settle on a conclusion – perhaps someone dictates it, or we get to it by way of competitive markets, central planning, participatory planning, random determination, or whatever. The list of all inputs and all outputs reveals a set of consistent relative valuations or prices. A good system will be one that has relative values moving in accord with people’s tastes and preferences, productive capacities, etc, and decisions about inputs and outputs moving, also, and really being the driving aim and element, until there is a final plan.


SOS:> The levels of supply and demand represent responses to relative valuations (prices) which are themselves articulated as a result of the preferences of human beings living in specific institutional contexts. It is social institutions that shape preference fulfillment and their development over time, and thus the levels of supply and demand.




Mike: This is what it means to be general equilibrium, everything affects everything else, correct. Preferences, however, while dramatically affected by economic and also other institutions, are also affected by our personal traits, genetic endowment, etc.

SOS:> Capitalism is a complex of institutions. The system of ownership and production is based on private property. The allocation system is that of a competitive market determining supply and demand. The rewards system is according to the value of physical and human capital, with the property rights system ensuring that rewards due to ownership of physical capital will dominate.




Good summary so far…


SOS:> Primary roles in the sphere of exchange are those of buyers and sellers. The dominant incentive of the sellers is to reap profit, which for the individual capitalist is typically maximized according to a number of strategies; such as by minimizing costs and maximizing outputs and exploitation and superior bargaining power in the sphere of production, strategic maneuvering for greater market share, by manufacturing demand through advertising and by selling products at their optimum marginal price.




Right – except it isn’t sellers who profit – you sell your labor power but you don’t get profits, rather income. It is owners of capital who profit…


SOS:> A critical observation is the individualistic bias of a private enterprise market economy. There is a systemic bias against the consumption of public goods, market demand grossly under-represents the social benefits of such goods. Thus we have their exploitation, and the prevalence of free riders, as market actors are incentivized to reap the benefits of public goods without revealing their true willingness to pay for them on the marketplace. A second critical fact common to both buyer and seller in a capitalist institutional context is that neither has sufficient incentive to take into consideration the external effects of their transactions. In fact, the problem goes further than just a lack of incentive to consider external effects. Capitalist actors are incentivized to actively externalize costs onto third parties (public at at large, future generations) so as to appropriate benefits without payment.




One might nitpick, but basically very good, I would say. I think in fact you are probably way too succinct, though, not too verbose, for most people to understand what you saying and why you think it.


SOS:> As you can see, before the mechanism of supply and demand even makes its appearance on the stage,




No one could see this, based on your comments, only accept it or not as your assertion – you would need to explain why, a little more, to have presented argument rather than assertion, to most folks perceptions of your words.



SOS:* the complex of capitalist institutions involving private property, wage-labour, and production for profit with market allocation and the incentives they instill have erected a severe degree of allocative inefficiency.


True, and well said, though again not an argument, but a correct assertion, I would say.



SOS* This is the kind of dead end to which contemporary mainstream economics has led. According to Hahnel, “in other words, mainstream economics concedes that the laws of the marketplace will lead to inefficient allocations of scarce productive resources when public goods and externalities come into play because important benefits or costs go unaccounted for in the market decision making process. If anyone cares to listen standard economic theory predicts that market forces will lead us to produce too much of goods whose production and/or consumption entail negative externalities and too little of goods whose production and/or consumption entail positive externalities and much too little, if any, public goods.� (Hahnel, ABC’s of Political Economy, 85) Honest mainstream economics comes to a dead end, and then proceeds to pretend that its problems do not exist (ie: externalities are marginal phenomena).




I think it would be more accurate to say they argue that the debits aren’t that great and can be amelioriated considerably, and no other system can do better.

SOS> Now what about Parecon? Citizens as workers and consumers express their preferences in self-managing institutional contexts. Prices are based on comprehensive cost accounting. For example the pollution costs resulting from the production of a good is internalized in the selling price.




Dead on though again very succinct and without explaining, even in a cursory way, how..


SOS:> Workers councils are not in a competitive contest to outsell other production units, but they do optimize their income to the extent that they utilize the productive capacity they happen to have efficiently, thus optimizing social benefits. This can be done in several ways, for example by superior work organization and teamwork, or by proposing technologies or techniques that reduce social costs while maximizing social benefits.




This could be unclear to people, or perhaps even you. You don’t get more due to having produced a higher value of output per se. Your income doesn’t go up proportionately to the value of your output. What you get, instead, is proportionate to your effort and sacrifice in generating socially valued output. Being efficient matters because if you aren’t, and there is no real explanation – for example, you aren’t and it is because you are lax, incompetent, etc., and ignoring advisories to correct the problems, then some of your labor is not socially valuable and not deserving of being remunerated.


SOS:> Advertising is transformed into qualitative information about the production and health effects of the products. Thus consumer preferences are based on quantitative signals based on comprehensive cost accounting as well as qualitative information, since everything relevant about a product may not be capable of being quantified.




Very good.


SOS:> There is no systemic bias against either public or private goods. Preferences for public goods are articulated in processes of collective negotiation. The valuation of public goods relative to private goods is a result of democratic process at each different nested level. Because the division between public and private allotments is a matter of social decision at each nested level one can expect a considerable amount of diversity as different neighborhoods choose different distributions between public and private allotments, and different targets for their public spending. If an individual dislikes the distribution between public spending and private consumption rights in her neighborhood she is free to choose to move to a neighborhood that more closely reflects her tastes.




Again, very good.

SOS:> In summary the institutions of participatory economics are radically different than capitalist, which means they instill different incentives. Preferences for goods are responses to signals and information that are inclusive of social costs and which represent true social costs and benefits. To equate participatory economics to capitalism based on the observation that they both have some kind of supply and demand mechanism which affects prices is, to borrow a clever line from Kevin Carson, tantamount to “saying we see no difference between the uncle and the aunt save for the lack of testicles, etc.�


Indeed.

[JazzRemington]

Originally posted by Carson
This is a bit like saying we see no difference between the uncle and the
aunt save for the lack of testicles, etc. The whole point of the various
schools of free market anti-capitalism is that the natural tendency of the
market price mechanism is toward production cost, unless state-enforced
unequal exchange inflates the returns on land and capital. If the mechanism
of supply and demand result in a wage that reflects the full product of
labor, and in prices of goods that reflect production cost, doesn't that
take care of the problem of exploitation?

The point is that non-supply and demand supporters (for lack of a better term) say that the price of a good should, by default, be the price of production. Supply and demand supporters claim that a good should be priced according to the supply available and the demand for it. Schwartz did say that even with supply and demand that the price of a good could eventually fall to the price of production.


This renders the concept of force meaningless, unless the general
limitations of existence in a material world with material laws, and the
absence of free chickens growing on bushes as in the land of Cockaigne,
constitutes "force." The individual would not be "forced" to do labor of any
kind or produce anything. On the other hand, he would not be able to force
anyone else to work to supply him with food and other material goods
without persuading them to do so voluntarily, either as a gift or in return
for his producing something that they wanted. Remington objects, in other
words, to the fact that nobody is born with a blank check on everyone else's
labor. How cruel! Boo hoo! If this is force, it results from the simple
fact that food and clothing don't grow on trees, but must be produced by
human labor. And since labor is entitled to its product, forcing one person
to labor to support another is involuntary servitude--slavery.

This completely side-steps my objection. What I was getting at was that even in a market, if you don't produce something someone else needs, regardless of whether or not you would produce the thing on your own, you will fail in your business. I didn't mean people would come along and use force to make you produce something that is of use to other people. Rather, it's just that the mutualist's love of individual liberty falls flat when confronted with the realities of market based production and distribution. If you do not produce something that is socially useful (that is, of use to someone else), no one will buy from you and you will fail. This is about equal to a non-formal use of force, even though it isn't clearly the same thing as pointing a gun to someone's head.


The mutual bank's properties would be the properties of its members, the
same ones they had before. I'm not sure what Remington means by the
distinction between "communal" and "collective," but I consider mutual banks
a voluntary communal association between individuals: it's a way for
ordinary working people to pool their small properties as a source of
capital in order to create a producer-owned economy.

Perhaps its from my misunderstanding of how mutual banks form and who operates them. I was in teh understanding that mutual banks could be formed and operated by individuals (as if it were just another business) or by communities.

[JazzRemington]

Originally posted by Mike

Either an economy matches supply to demand, or it has gluts or shortages. There is nothing capitalist about the idea of supply or demand. There is something capitalist about a particular way of discerning or tallying supply and demand – if the way is, well, capitalist, as in occurring by way of markets plus private ownership, etc. then it is capitalist. But if it uses, say, polls and indications from shelves plus central planners, then it is not capitalist but centrally planning coordinatorist, and if it uses markets but not private ownership then it is market coordinatorist, just as if it uses participatory planning it is not capitalist, but, well, pareconist. Whether any of these is an approach we like or not is another issue. It should depend on whether the procedures are consistent with and further our values, while also arriving at true and full social costs and benefits and desirable allocation.

Once again, the people who blessed us with Parecon prove incapable of escaping from capitalist economic thinking. The system uses supply and demand and maintains that people's
subjective preferences can be accurately, reliably, and consistently measured, ala a system
developed by capitalists. But it isn't anywhere capitalist because they SAY it isn't doesn't resemble capitalist thinking. Certainly, because a system uses a capitalist method
to determine prices and distribution, it isn't anything like capitalim!

The rest of this pitiful attempt to demonstrate that Parecon isn't anything like capitalism completely diverts from my paper, so I choose not to comment.

[Son of a Strummer]

The system uses supply and demand and maintains that people's
subjective preferences can be accurately, reliably, and consistently measured, ala a system
developed by capitalists.

Which only shows that you are once again incoherent, ostensibly not even attempting to understand what is being said. In fact, in participatory economics subjective preferences are articulated, weighed and considered in a social decisional framework consisting of self-managing consumer and workers councils. Actors in a parecon formulate their preferences within this inclusive and cooperative framework. Actors in capitalism are atomized and antagonistic. The supply and demand that arise from each are different. You are also conflating subjective preferences for consumption goods with the role that subjectivity plays in intensity of work effort. BTW, have you heard back from AKPress yet? Has your masterpiece been published?


Certainly, because a system uses a capitalist method
to determine prices and distribution, it isn't anything like capitalim!

Yes well you better ignore the long explanation of why parecon prices differ fundamentally from capitalist prices because the institutions which factor in a primary way into preference formation and development are radically different. Better for you to dismiss rather than engage in rational argument.


DO YOU HAVE ANY IDEA WHAT THE CONCEPT OF OPPORTUNITY COST REFERS TO? DO YOU UNDERSTAND HOW DEMAND FOR A GOOD AND THE CAPACITY TO SUPPLY IT CAN AFFECT ITS OPPORTUNITY COST?

[JazzRemington]

Which only shows that you are once again incoherent, ostensibly not even attempting to understand what is being said. In fact, in participatory economics subjective preferences are articulated, weighed and considered in a social decisional framework consisting of self-managing consumer and workers councils. Actors in a parecon formulate their preferences within this inclusive and cooperative framework. Actors in capitalism are atomized and antagonistic. The supply and demand that arise from each are different. You are also conflating subjective preferences for consumption goods with the role that subjectivity plays in intensity of work effort.

I am confusing nothing. Any system that relies on subjectivity to determine 1) prices and 2) allocation falls flat before the fact taht you cannot reliably measure anything subjective and receive a consistent, objective measurement.


BTW, have you heard back from AKPress yet? Has your masterpiece been published?

No, I have not yet heard back from AK Press. But the level of tenacity you are showing in attempting to debunk by paper only further supports my belief that I hit something interesting, and pushes me more to revise my paper more and work harder to get it published. It seems you're doing the opposite of what you appear to be attempting to do.


Yes well you better ignore the long explanation of why parecon prices differ fundamentally from capitalist prices because the institutions which factor in a primary way into preference formation and development are radically different. Better for you to dismiss rather than engage in rational argument.

They're argument is essentially that their system doesn't resemble capitalism because it uses capitalist concepts in a different way. My whole argument is that Parecon is one step below capitalism because it's concepts and theories closely resemble capitalism. I'm not dismissing them, I'm supporting my argument.


DO YOU HAVE ANY IDEA WHAT THE CONCEPT OF OPPORTUNITY COST REFERS TO? DO YOU UNDERSTAND HOW DEMAND FOR A GOOD AND THE CAPACITY TO SUPPLY IT CAN AFFECT ITS OPPORTUNITY COST?

I understand what opportunity costs are. It's the good or service that's forgone when one purchases something. But once again, see above.

[Dimentio]

Originally posted by JazzRemington+December 31, 2006 11:41 pm--> (JazzRemington @ December 31, 2006 11:41 pm)
Mike

Either an economy matches supply to demand, or it has gluts or shortages. There is nothing capitalist about the idea of supply or demand. There is something capitalist about a particular way of discerning or tallying supply and demand – if the way is, well, capitalist, as in occurring by way of markets plus private ownership, etc. then it is capitalist. But if it uses, say, polls and indications from shelves plus central planners, then it is not capitalist but centrally planning coordinatorist, and if it uses markets but not private ownership then it is market coordinatorist, just as if it uses participatory planning it is not capitalist, but, well, pareconist. Whether any of these is an approach we like or not is another issue. It should depend on whether the procedures are consistent with and further our values, while also arriving at true and full social costs and benefits and desirable allocation.

Once again, the people who blessed us with Parecon prove incapable of escaping from capitalist economic thinking. The system uses supply and demand and maintains that people's
subjective preferences can be accurately, reliably, and consistently measured, ala a system
developed by capitalists. But it isn't anywhere capitalist because they SAY it isn't doesn't resemble capitalist thinking. Certainly, because a system uses a capitalist method
to determine prices and distribution, it isn't anything like capitalim!

The rest of this pitiful attempt to demonstrate that Parecon isn't anything like capitalism completely diverts from my paper, so I choose not to comment. [/b]
The system of supply and demand cannot actually be determined efficiently under capitalism due to the differentised consumption capacity and the dead usage of ownership items [for example cars which are used 1/48 of a day]. It is actually possible to go beyond a planned economy, through Interactice economics (http://spazz.mine.nu/cms/index.php?option=com_content&task=view&id=104&Itemid=75).