RevolutionZ
RevolutionZ
Ep 250 Who Likes Participatory Planning Part 2
Episode 250 of RevolutionZ is the second of what will be three episodes presenting participatory planning as a proposed replacement for markets and central planning for allocation in a new economy. Ep 250 continues describing participatory planning's features as earlier described in the book No Bosses, as well as offering spontaneous critical or hopefully helpful side comments on the material two years after I wrote it. The material is demanding but to say we want a new economy beyond capitalism but not be able to explain why it would be viable and worthy will not sway people who think there is no alternative.
Hello, my name is Michael Albert and I am the host of the podcast that's titled Revolution Z. This episode, our 250th, continues a sequence that is presenting chapters from the books no Bosses. It was written very carefully a couple of years ago and now, presenting it as an episode, I intermittently spontaneously comment on the material two years later. So we are into chapter 7, titled who Allocates what, which presents a proposed alternative to both markets and central planning, which we call participatory planning. The chapter of the book. It's seriously long, so to keep it manageable as podcast episodes, I have divided it into three parts, and this is the second. The chapter as a whole, and thus the three episodes, taken as a set, present and discuss participatory planning by way of a series of takes, I call them each of which reviews what has preceded and then takes it a step further. It's a way of dealing with material that is off the common track of what people think about and a bit difficult at times, and so it lets us get into it a little bit at a time and a little bit more at a time. I had planned to have a two or three week break between part one and this continuation part two, not least to give extra time to consider the earlier content and, for those wanting even more, to consult written works. However, a plan for this week's episode crumpled, so I am slotting in part two on allocation, and the break is just the usual one week. I know it is a lot of allocation and that the allocation subject matter is demanding, but it is also important, so I hope you will stick with it. If not markets, if not central planning, then what instead? Last week episode 249, we had six takes about participatory planning, so we are up to take seven, which goes like this Participatory planning takes seven information and communication.
Speaker 1:Our picture of participatory planning through the first six takes is essentially workers and consumers making and then comparing and then refining proposals in their councils. But what do workers and accounts need to know to sensibly and even optimally propose their production in light of its effects on themselves, on other workers, on consumers, on society at large and on ecology? And what do consumers need to know to formulate their consumption requests in light of their own needs as well as the needs of other consumers and workers and their social and ecological effects? And can participatory planning provide the needed information in ways able to inform decisions without encouraging damaging delays For optimally informed collective self-management.
Speaker 1:The proposals of participatory workers should account for the gains from working less or using less productive though more fulfilling techniques against the consequent loss of consumer well-being due to lower output. The proposals of participatory consumers should account for the benefits of increasing their consumption requests against the sacrifices that would be required to meet those increased requests. Participatory workers should be able to distinguish a responsible production proposal that properly utilizes labor and infrastructure from a production proposal that falls short. Participatory consumers should be able to distinguish responsible consumption requests from ones that are excessive or, for that matter, unnecessarily modest. Everyone should make choices in light of the full social and ecological costs and benefits of what they desire to consume or produce, including the quantified and when, if beneficial, to consult the qualitative causes and consequences of their choices. The procedures of planning should not waste time and should propel actors toward responsible proposals and, when necessary, intervene to prevent defensive, indefensively irresponsible proposals from being enacted. Allocation mechanisms should provide means to decide among options. Should certain productive assets from the societal comments be used to produce peanuts, prison cells, autos or shoes and any conceivable combination of options? Likewise, given that such products are produced, how much of one should exchange for how much of another? If I consume so much of one, how much of my income will I have expended that I cannot then spend on some other? I interject. The above enumerated criteria can be applied to any proposed allocation system. We earlier argued that markets and central planning don't fulfill the criteria, so now we have to ask does participatory planning fulfill these criteria?
Speaker 1:The chapter continues. Economists call a key concept in sensibly making such choices the quote social opportunity costs of doing any particular thing. If we produce peanuts, how much of other things will we forgo because we have used labor, land and facilities in peanut production? Likewise, if we produce autos, what do we forgo from not having used and involved assets to produce public transport, or violins for that matter? Given people's preferences, are we putting productive assets we receive from the commons to their best socially valued use?
Speaker 1:To get decisions that account for actual costs and benefits, prices need to account for full opportunity costs. Prices should tell us, if we do x, how much of y could we have done instead? And therefore, do we really want to do x or would we prefer to do that much y? If an economy functions perfectly, its prices will take into account the full effects of both the production and the consumption of its inputs and its outputs. The full range of actual made choices in the economy, which is the actual final production and consumption that results from allocation, will determine the social opportunity costs of every single item among the totality of possibilities.
Speaker 1:This is a difficult but important point to understand In participatory planning. Things don't have built-in objective values or costs. Rather, the values of things result from and simultaneously determine contingent choices and outcomes. It is a circular relationship. The total quantities produced of shoes, autos, peanuts and everything else, and how they are apportioned and how they are apportioned in some determines the relative value of each particular item, which in turn determines the totals produced and how they are apportioned. The economist way to look at this is that the economy will ideally produce peanuts up to the point when producing any more peanuts would entail losing some other item more valuable to society than the extra peanuts, which is to say an economic lingo. It will produce peanuts up until the point when the social opportunity cost equals the benefit from the last peanut. Obviously, in the real world of human interactions there is no such perfect accounting, but approaching this situation is beneficial in precisely the sense of meeting needs without wasting means by taking them from pursuits where they would yield greater benefit.
Speaker 1:As we proceed in light of this observation, however, it is important to realize again that a real economy isn't a mechanical wind-up system that functions, however we might abstractly model or even instruct it to. If allocation ignores important factors like market processes, ignore externalities, not to mention the well-being of employees, then when such allocation arrives at its final determinations of what is produced and what is consumed, those final choices won't in fact have properly accounted for full social benefits and costs, much less balance them. We get way more pollution, for example, than had pollution been accounted for. I interject. I hope you can see that we are going behind claims about outcomes to consider actual mechanisms and their operational implications. Economists very frequently fail to do this. They take context as given, so they take institutions as given, so they take outcomes as not products of the institutions, but sort of neutral things that happen without taking into account that the institutions constrain what those things can be. The chapter, and thus this episode, continues.
Speaker 1:We churn out pencils. When do we stop churning? Pencils are useful, but the more pencils we produce, the less is the value of each new one that we add to the pile, at least after a point, and this is true for most, but not all products. Moreover, we certainly do not want to use up so much of our labor and resources churning out pencils that we start to forego things more desirable to us than the latest items in our growing pile of pencils, say milk. We also shouldn't want to do it beyond the point where we pollute so much as to outweigh the value of more pencils.
Speaker 1:Ideally, again, assuming excellent prices that account for personal, social and environmental effects which is, I should add, a huge assumption the economy will churn out each of its products to a point where the benefit of the last item of that output is equal to its opportunity cost, remembering that both the benefit and the cost depend again on the final allotments. To produce another instance of the item would then occur at the same or a bit higher cost and would have the same or a bit less social value, so that by not producing that item, we could, at least in theory, use our productive capability to produce something else that would benefit us more. That is the professional economist central message about arriving at efficient allocation. On the surface it may seem a bit gray or mechanical, but the message is at least instructive if the allocation's accounting has been inclusive. So the big question becomes what do we count when we count? That is, do we count the workers' circumstances, the problem of pollution or even the impact of the changes in consciousness associated with different choices? The problem in the mainstream profession's insight is that economists typically accept bad prices as if they were good. They ignore or, more accurately, they downplay, the presence of factors inadequately accounted for even in their models, much less in actual settings. Let's return to discussing what is needed for a perfect, which is to say an unreal but in some ways instructive situation.
Speaker 1:Producers and consumers must use numeric prices as a shorthand way of discerning the relative value and cost of various choices. This is so because it would be impossibly time-consuming to make all decisions about what to consume and what to produce absent a mechanism for summarizing massive volumes of information. And this is what numeric prices accomplish, better or worse, depending what they account for and what they leave out. I interject. Think of it this way Imagine each buyer and each seller, each actor, is omniscient. So when they interact, they are able to somehow, magically and creatively and effectively and rapidly account for all the incredible array of implications of choices, if we get a little more of something. Everything that goes into producing it is used a little more for that, not for something else. We calculate that in our heads, we somehow match that up against everything else and we make responsible solutions. Well, impossible. Not just impossible, but ludicrous. So what has to happen? There has to be some mechanism which somehow summarizes those kinds of information so that the calculation becomes much more simple. If we don't have to be omniscient actors, we don't have to be, you know, incredible computers. We just have to compare prices and values and make choices. Okay, all well and good If the values and prices actually convey the kind of information that omniscient actors would utilize to make really good choices.
Speaker 1:The chapter continues. Numeric prices are ideally a social measure of what society wants and what it doesn't want, and how much in each case, where society is hopefully taking into account the full implications of contending possibilities. Numeric prices have worth, therefore, to the extent that in allocation systems, processes, market competitions, buying and selling, central planning, dictated and accepted instructions or participatory planning's iteratively updated proposals and I should add, it's accompanying other institutions, like its division of labor, like its ownership relations, like its class relations and so on, generate sufficiently accurate estimates of the full personal, social and ecological costs and benefits of inputs and outputs, and I interject. I should add impose motives or provide incentives that cause people to use the information to undertake responsible actions. Chapter continues. In a participatory economy, prices or relative valuations arise in the process of participatory planning. Along the way, indicative prices serve as shorthand guides for making preliminary proposals and evaluations.
Speaker 1:The social character of the final emergent actual prices, their emergence from the preferences, circumstances and social interactions of economic actors, not only in participatory economics but in all economic systems, is important to understand. Too often, however, theoretical economists using the disciplines tools say little about the social origin of prices and make it sound like they are objective, quantitative measures that represent an intrinsic, objective, non-contingent reality which can be found technically by an analyst solving equations. It's as if prices were like weight and it was intrinsic to the item, and solving equations told us what the weight was, instead of putting things on a balance scale. In the literature on central planning, for example, prices are too often seen as emerging from a cut-and-dried mathematical calculation. In neoclassical literature, market prices are too often said to arise from plugging fixed preferences and given technologies into some complex equations, while assuming producers maximize profits and consumers, maximizing something called utility. Used carefully, this set of thinking can shed some modest light on some limited questions, but used indiscriminately it can be very misleading.
Speaker 1:Real people's preferences arise in social interactions. They are not innate and fixed, but social and malleable. What we want and how much we want, it is contextually and historically dependent. Not only do the outcomes of the clash and jangle of different people's preferences depend on what those interactions are like, but the very preferences that people bring to their decisions and that lie at the basis of economic results depend on people's interactions in that self-same economy. Our preferences influence and our influence by are institutional circumstances and situations. Our institutional circumstances and situations influence and are influenced by the nature of the economic activities we undertake. Cause as effect is cause as effect. With different allocation systems, our activities differ and different preferences and prices emerge. Emergent preferences and prices often deviate greatly from what we could reasonably call freely expressed desires and full measures of social and environmental costs and benefits.
Speaker 1:Let's take an example. Do we have a preference for surgical masks? Yes, if our circumstances makes not using one dangerous. What if producing the masks creates the conditions that make using them wise? Consider having a preference for public means of transportation or private cars. If the auto companies destroy and prevent the building of more public means of transport, see the problem. We'll want cars, but we'll have wanted them if there was plenty of public transport. Our very preferences are not simply manifestations from within, but influence by our context, which is an outcome and considerable part of prior choices and conditions.
Speaker 1:For that matter, consider the person who owns a firm. The person seeks profits. But is the person seeking profits because that is somehow wired into their biology, that is wired into their personality at birth or even early on? Or is it because they are part of an institutional setting in which to not seek profits causes them to effectively lose everything? Or, at the other end, take the worker. The worker once has a preference for income, but is that preference for income distorted by the class conditions under which the person lives, under which the person works, under which the person's life is organized? Is there more of a preference for work than leisure, which would exist in different contexts?
Speaker 1:The chapter continues Thinking about allocation. Therefore, we should remember that for estimates of social costs and benefits to be optimal, they must arise from realistic social communicative processes that, as closely as possible, account for all the involved factors To propose positive approaches for allocation. We have to propose processes that give people no incentives to dissimulate regarding their true desires. We also have to propose processes that give people equal opportunity to manifest their feelings in determining outcomes. We also have to propose processes that help people arrive at choices that are not perverted by impositions contrary to their freely expressed desires. I interject. We also have to propose circumstances during which allocation occurs, in other words, other institutions like, for instance, a division of labor or ownership relations or mechanisms for apportioning income that are consistent with people having their true desires emerge, being able to express their desires, and so on. The episode chapter continues.
Speaker 1:It is precisely because our participatory planning process differs in many respects from the flawed communicative processes of market and centrally planned allocation that its prices differ as well. Even the same population, with the same infrastructure, with the same everything, except for having participatory planning and other participatory economic structures, or having, say, markets and other capitalists or market coordinator structures, will arrive at different prices and outcomes. In fact, even for the same population and same productive commons and the same participatory planning apparatus and the same accompanying institutions, matters of happenstance at the time of planning could cause a different plan to emerge. So if it's all that contingent, how can we say that one set of prices is better than another? They are what they are. Prices are what the totality of choices make them.
Speaker 1:The answer is that we can give a poor grade, or even a failing grade, or even abysmal grade, I add, to a system's emergent prices, when we can show that they don't take into account factors we think ought to have been accounted for, such as external effects like pollution. Or we can give a poor grade when we can show that prices were imposed, such as with central planning. Or we can give a poor grade when we can show that participants had inappropriate levels of influences, such as due to having different bargaining power. Or we can give a poor grade when we can show participants' preferences were warped, such as due to manipulative advertising or due to a bias against collective goods built into procedures that misassess collective goods and I interject. Or we can give a poor grade if accompanying institutions that surround allocation pervert allocation by restricting, restraining, cajoling and molding actors to be other than they would like to be they ought to be. The chapter continues Participatory planning's accounting procedures and the other defining elements of participatory economics consciously reduce all these distortions of final valuations or prices.
Speaker 1:More indicative prices in a participatory economy derive from cooperative social proposals and refinements of proposals which can, if desired, be qualitatively checked when actors are confronted by unexpected reports. This addition can enhance the likelihood that quantitative indications remain as accurate as possible. It can also help develop worker sensitivity to fellow worker situations and thereby sensitize everyone's understanding of the intricate tapestry or human relations that determines what we can and can not consume or produce. Yes, as critics will emphasize, the burden of distributing information in a participatory allocation procedure can be somewhat greater than in a non-participatory economy, because the latter simply disregards such matters. This is particularly true for adding qualitative information to databases able to be accessed when folks feel the need, so that then the bare numbers that are prices can be considered in light of their real world human context.
Speaker 1:While not being negligible, this would not entail everyone writing long essays about their work and living conditions. In fact, the whole approach could be optional. If pursued, it would presumably mean having a few people in each industry whose jobs included the task to generate concise accounts of unusual situations, to correct for the fact that not everyone can personally experience every circumstance. It might be particularly helpful to consult such information when consumption or production proposals deviate greatly from expectations. In such cases, instead of seeing only a proposal that makes unexpected requests, we would be able to access reasons for the unexpected requests. This would increase our understanding of why producers of something we want more of are reluctant to meet that demand or why consumers of something we want to produce less of are reluctant to reduce their requests. It might speed our ability to respond with refinements of our own proposals.
Speaker 1:I interject Uh-oh, I can sense that I'm going to address what I did in an earlier interjection, except no doubt here, more fully. On the plus side, I guess it shows for what it is worth that my thinking is still producing basically the same patterns as two years ago. On the minus side, I suspect it will be a bit redundant. The chapter continues. Part of a full critique of markets is that they cause buyers and sellers to become steadily more concerned solely about self and steadily less concerned about others. In a market system there is every incentive to behave that way and there is often no way to do otherwise, even with no attempt to make qualitative information available.
Speaker 1:Participatory planning would do vastly better than markets, because even if workers and consumers in participatory planning only explicitly concern themselves with their own condition. The prices they act on nevertheless take account of impacts beyond buyer and seller. But at least in one sense there wouldn't be improvement. Because even though participatory planning's prices take into account other people's conditions, and even though arriving at a participatory plan solely using its prices would respect other people's conditions still, if people actively consider only their own situation, the process would not explicitly involve each actor ever self-consciously taking into account the situation of others. Account would have been taken automatically by virtue of being built into vastly improved pricing and decision-making, but not due to being built into the personal roles in the planning process. As such, I suspect planning with only numeric information would have significantly less positive impact on who we are and how we see others than would planning with occasional access to qualitative information. So I lean toward opting for the latter, even at the expense of some additional time spent.
Speaker 1:I interject. This is actually a real difference among at least some advocates of participatory planning. Even beyond the insights relating this material may give into issues of information, it also says something about the model's development. The difference, note, is not over what the scaffold is but over amendments to it. I suppose in time having qualitative information could become part of the essential scaffold, though certainly not all precise ways of doing so, or that it could be deemed too time-consuming and therefore not only not in the scaffold but only in a few or maybe even no one's hopes and expectations for full structures that might emerge to fill out the scaffold, I should add. This kind of situation is not at all unique to participatory economics. For example, advocates of capitalism can differ about countless details, some very important, but not about private ownership of the means of production. In any case, the chapter continues Participatory planning. Take eight allocation organization In a participatory economy, as we have now seen in the number of successively deeper and also more complex and difficult takes.
Speaker 1:Our proposal for economic vision is that every workplace and neighborhood consumer council participates in the social allocation method that we call participatory planning. But besides workplace councils, participatory planning will also undoubtedly involve industry federations of workers' councils and a national producer council. And besides neighborhood consumer councils, it will also involve Ward City, county and State Federation of Consumer Councils, as well as National Consumer Council. Moreover, in addition to all these councils and federations of councils, participatory planning would likely have various agencies that would facilitate information processing for collective consumption proposals, determining the pricing of externalities, proposing and evaluating innovations and investment projects, handling workers' requests for changing their place of employment and aiding individuals and families looking to find membership in new living units and neighborhoods, among other functions, most of which will be discovered by future experience. Finally, during each year and at every level of the economy, appropriate agencies designed and operating based on future insights and experiences might also help units revise proposals and search out the least disruptive ways of modifying plans in response to unforeseen circumstances. And we should remember that all workers, including those with such roles in industries and neighborhoods, as well as those in the Intermediation Facilitation Board, would get income for duration, intensity and ownerlessness of socially valued labor, and thus would have no way to accrue excessive wealth. All this taken together is profoundly important, but also too detailed to elaborate further for a visionary scaffold. However, we can at least ask for clarity what more specifically might be included among participatory planning's possible steps and possible personal roles. I answered, so now we can ask a bit more specifically about what are the quote steps of participatory planning, and the chapter continues.
Speaker 1:In participatory planning regarding day-to-day affairs over the course of a year, we propose that every individual or council, at every level, propose its own activities and, after receiving information regarding other actors' proposals and receiving the responses of other actors to its proposal all in the form of indicative prices and perhaps some qualitative information that each individual and council then make a newly, suitably altered proposal and that this recurs until a plan is adopted. Thus, each consumption actor, from individual consumers up to large consumer federations, proposes a consumption plan. Individuals make proposals for private goods such as clothing, food, travel, toys, etc. Neighborhood councils make proposals that include approved requests for their individual members' private goods as well as previously approved requests for the neighborhood's collective consumption that might, for example, include a new pool or a local park. Higher-level councils and federations of councils make proposals that include approved requests for member councils as well as the Federation's larger collective consumption requests. Indeed, collective proposals precede personal ones as they impact each actor's personal budget by indicating how much each actor is charged for their share of collective consumption. And, similarly, each workplace council proposes a production plan. Workplaces enumerate the inputs they want and the output they propose to make available. Regional and industry-wide federations aggregate proposals and track excess supply and demand for the industry's products.
Speaker 1:As every individual worker and consumer council navigates through successive iterations of participatory planning. They alter their proposals in response to the information they receive. There is no center or top. There is no competition. There are no excessively self-aggrandizing paths to pursue. Each actor fulfills responsibilities that bring them into more cooperative rather than into more antagonistic relations with other producers and consumers. Over the course of the planned year. Everyone is remunerated for effort and sacrifice. Everyone has a proportion of influence on their personal choices as well as on those of larger collectives they are part of and on the whole economy. Updates flexibly occur as each year unfolds.
Speaker 1:It sounds viable, but can people actually make the called-for planning proposals and will the proposals be responsible and will the process converge on a worthy plan in an acceptable timeframe? Suppose we kept records of the production and consumption that took place in the just completed year, then with each new year we would have information about the prior year's enacted plan. Suppose the prices that wound up, embodying the relative social costs and benefits last year, were also recorded, then each year we would have a set of final prices from the prior year to use to begin the year's estimates. If we also stored last year's full plan, access to additional relevant information could be made available to all actors in the planning process who choose to consult it. By accessing such information, each unit could easily see what its own proposals were in the prior year's planning process. With all this information available, how might workers and consumers councils make their first proposals for the coming year? Actual, finely detailed and contextually efficient procedures will emerge and undoubtedly be steadily refined in practice in ways that real-world lessons illuminate.
Speaker 1:Many here suggest one possible but not required method. We offer it to aid in understanding possibilities without drifting into thinking. We can or must discern much less the side all aspects. Now I interject. You can, I suspect, see my inclination to prevent overreaching into domains we can't know or into now making decisions that are for future determination by others, as well as to provide a feel for possibilities.
Speaker 1:All simultaneously, the chapter continues For each upcoming year's plan. One workers' councils, individual consumers and consumer councils first access relevant data from last year. Two the same planning participants simultaneously receive information from the iteration facilitation board estimating this year's probable changes in prices and income in light of existing knowledge of past investment decisions and changes in the labor force. Three planning participants also receive information from production and consumption councils regarding long-term investment projects and collective consumption proposals already agreed to in previous plans indicating the continuing commitments for the coming year. Four planning participants optionally review changes in their own proposals made during last year's planning to see how much they had to scale down their consumption desires or their desires to improve their quality of work life and to remember their past aspirations in these regards. They also look to see what increases in average income and improvements in the quality of average work complexes are projected for the coming year and consider how they might best enjoy those gains. Five, finally using estimated prices as starting indicators of social costs and benefits, planning participants develop a proposal for the coming year enumerating what they want to consume or produce and also, if society weren't doing so, providing qualitative information about any major deviations from expectations. Each proposal then enters the mix with all others, feedback arrives and revisions are made. This occurs iteration after iteration until a final plan is reached.
Speaker 1:Six please note the above does not mean that individuals or collective consumption councils must specify how many units of every single product they need, all the way down to size, style and color. Goods and services would instead undoubtedly be grouped into categories according to the interchangeability of the resources, intermediate goods and labor required to make them, as well as the easily predicted variation of preferences for optional features like size and color. For planning purposes, consumers would only need to request types of goods shirts, vegetables, fruit books, vehicles from which workplaces could deduce, based on past experiences, how many of different instances of each type of good would be needed to let everyone later pick a preferred size, style and color, etc. To actually consume. At any rate, individuals would present consumption requests for main categories of goods to neighborhood councils which would, by some agreed procedures, collectively check for any significant problems in their requests and organize them into a total council request for the total of individual goods of all their members, along with the neighborhood's previously agreed collective consumption requests to become the total neighborhood consumption proposal. Neighborhood proposals would be added to consumption requests from other neighborhoods and then to forward proposal, city proposals and so on. Having the next higher level council able to improve or contest lower level requests until they are ready to be passed on could likely save considerable planning time and in any event might be advantageous for assessing collective implications. So might well be introduced into the process, a possibility, among others, for future consideration.
Speaker 1:In the same way, on the productive side, similar procedures would unfold. The workers' council of a firm would assess summaries of its last year's production, including what was initially proposed, changes made during planning iterations and what was finally enacted. To make separate proposals, it would access the iteration facilitation board prediction of this year's request based on extrapolations from new demographic data and last year's negotiations. Workers would presumably consider this information, perhaps guided by suggestions from some workers specially assigned to the task, discuss ideas for improving work life and debate proposals that would finally settle on the firm's first proposed inputs and outputs. I interject. What's next? How do we proceed from one proposal to another? And then how do we decide? We have arrived at a plan.
Speaker 1:The chapter continues Supposing some participatory economy. The first proposals are in. Workers' councils have entered how much they want to work and consumers' councils how much they and their members want to consume, all in light of their own, very possibly overly optimistic, assessments of possibilities. Do the first proposals constitute a plan or must we have another round To decide? It is necessary to collect all the proposals and compare total demand and total supply for every class of final good and service, for every intermediate good and for every primary input In a first iteration, where consumers propose in part a wish list and workers likely propose output in hopes of some substantial improvements in their work lives. While some goods may be in excess supply, we can reasonably predict that for most goods initial proposals will reveal excess demand. In other words, initial proposals taken together will not equal a feasible plan.
Speaker 1:As the next step, every council would receive new information indicating the goods in excess supply or demand and by how much and how the council's own proposal compares to proposals of other comparable units in the same industry, as well as new estimates of indicative prices. At this point, consumers would reassess their requests in light of the new prices and would likely, in most cases, shift their requests for goods in excess demand somewhat toward those whose indicative prices have fallen because they were in excess supply or at least less in excess demand than others. Consumers' councils and individuals whose overall requests were higher than average, and especially higher than anticipated budgets would warrant, would feel obliged to whittle down their requests in hopes of making their proposals responsible and viable. Why do consumers make changes toward operating within budget? Because, when the final plan is settled, their budget sets a limit on their consumption choices. Equity and efficiency would emerge simultaneously from each round of consumers' refinements. That is the need to win approval from other similar councils in the form of a mesh plan that all could then commence to implement, plus the need for one's own plan to be within budget, would together provide reason for councils whose per capita consumption request is significantly above the social average to reduce their overall requests into accord with their budgets. But the need to reduce could be met by substituting goods whose indicative prices have fallen for those whose prices have risen.
Speaker 1:The attention would likely focus on the degree to which a council's proposals diverge from projected averages and on whether there are reasons for doing so are compelling, in which case exceptions might be warranted. I interject Look, I get that hearing. All this is no picnic. Neither is thinking about it. But the simple fact is you can't replace a capitalist economy with a post-capitalist economy and get the results you desire unless you rid it of markets and central planning. But if you're gonna get rid of those, you better have a viable and worthy way to allocate that you are gonna implement. Thus, tedious, dry, boring, demanding or not, getting a grip on the basic features, the essential features and the logic of a new approach to allocation is necessary if we're gonna decide whether or not it's worthy and participatory planning is our proposal for a post-market, post-central planning allocation system.
Speaker 1:Let me put this a bit differently Folks who say they want anarchism or socialism or eco-socialism or degrowth or solidarity economy or whatever else, in place of capitalism, and then they describe all the nice outcomes that they are expecting and they desire, or perhaps they describe even partial changes in the present that they support and are even enacting, but they are not really offering an alternative system at that point. They're at best indicating they want one and indicating qualities they hope and expect a new system will have, and maybe indicating some steps toward a new system, but without saying what new institutions will make the qualities they desire appear. They aren't offering a viable and worthy alternative to what we have for allocation. Participatory economics tries to deliver, intends to deliver. Hell, I hope it delivers on that missing task. It hopes to describe worthy and viable post-capitalist institutions and thus allocation, participatory planning, the chapter and thus this episode continues.
Speaker 1:Similarly, workers' councils whose ratios of social benefits of their outputs to social costs of their inputs were lower than average, which is to say after consideration of mitigating explanations, workers' councils whose proposals weren't adequately utilizing their assets and inputs would come under pressure to increase either their efficiency or their effort in using assets from the commons or to explain why the indicators were misleading in their particular case. Before increasing their work commitment, workers might substitute inputs whose indicative prices had fallen for inputs whose indicative prices had risen, or substitute outputs whose indicative prices had risen for inputs whose indicative prices had fallen. Why do they do this? Because they want their activity to be socially valued so it can be remunerated, and because they need to wind up with a responsible, implementable workplace plan so they do not instead wind up having their agendas thwarted by a need to reconceive the use of their workplace assets, as well as their total payroll reduced due to some of their effort not being socially valuable. Each iteration of planning would yield a new set of proposals. Taken together, these proposals would yield new data regarding the status of each good, the average consumption per person and the benefit to cost ratio for each firm. All this would allow calculation of new price projections and new predictions for average income and work, which would in turn lead to modifications in proposals. All of which dynamics would recur in additional planning iterations until a feasible plan is reached.
Speaker 1:And then what? When is that? When does the planning process conclude with the collectively agreed plan? It happens when the gap between supply and demand of each item falls within some socially agreed range, including provision for some slack production to ease accommodating subsequent modifications of preferences and actions. Notice participatory planning is an entwined process of all producers and consumers, assisted by information agencies, but entirely self-managed. No top, no bottom, no center, no periphery. I interject. Suppose we have arrived at a plan, it is say January 15th, won't things change in February, much less by June, say. The question arises how do we account for such changes from what we anticipated? The episode continues Converging on a plan during a planning period and then updating the proposed initial plan during the year in light of changes in preferences or circumstances could each take advantage of the large scale of the whole planning process.
Speaker 1:For example, assume we have settled on a plan for the year. Why might we need to update it during the year and how might this be done with the least disruption? Consumers would begin each year with a working plan including how much of different kinds of food, clothing, meals at restaurants, trips, books, records, tickets to performances and so on they have proposed to consume. What if, after some week, someone wants to substitute one item with a different one? Or what if she wants to delete or add items to what she had expected to prefer for the year? Or what if she changes her mind and wants to save or borrow more than she planned to and to thus reduce or increase overall consumption? She belongs to a neighborhood consumers council that in turn belongs to a ward council, a city federation, and so on. Some changes that Tony and Thalia in one neighborhood opt for will cancel each other out when taken together with changed requests from all the consumers within their neighborhood Some people increasing requests for a particular product, other people decreasing requests for it, other variations will cancel out at the ward level, and so on.
Speaker 1:As long as consumer adjustments cancel each other out at some consumption federation level, production plans need not change. The same overall array of goods is headed to the councils, or rather made available for purchase by the council members online or while browsing at local store outlets. Indeed, facilitating adjustments without disrupting production plans could be one function of consumer adjustment boards. But what happens if aggregate demand for a particular item significantly rises or drops, as it undoubtedly would in some cases Suppose? One possibility individuals record their consumption on credit card computers that automatically compare the percentage of annual requests drawn down with the fraction of the year that has passed, taking account of predictable irregularities such as birth dates and holidays, seasonal variation and the like. This data could be processed by planning terminals that communicate projected changes to relevant industry councils that in turn communicate changes to particular firms. The technology could be similar to that used in contemporary computerized store inventories, where store sales are automatically subtracted from inventory stocks.
Speaker 1:In any case, what would presumably follow is that consumer federations, industry councils and individual work units would negotiate adjustments in consumption and associated production, which might in turn entail adjustments in work assignments to account for change demand. Such changes during the unfolding year could lead to work diminishing in some industries and increasing in others relative to the plan for the year, including possible transfers of employees, but there need be no more moving about than in other types of economies. In any case, the need for workers to change jobs or to increase or diminish workloads, and the ensuing impact of that on their lives, would be a factor proportionately considered in the negotiation over whether and how to meet change demands, though neither unemployment nor inequitable income would ever arise. Notice also, since each firm's activities would have implications for other firms, we can confidently predict that if plan matches between supply and demand are calculated too closely and each change in demand for goods with many inputs would disrupt the whole economy. For this reason, a taught plan would prove unnecessarily inconvenient, since it would require excessive debating and moving. To avoid this and to simplify updating, we can pretty confidently predict that a plan agreed to should be loose enough to include some unutilized capacity for many goods. A practical knowledge of those industries most likely to be affected by non-canceling alterations would facilitate this type of preparatory slack planning and is logically no different than planning in advance for medical disaster or other needs that individuals alone can't predict, but that we can socially predict and plan for.
Speaker 1:There is a related additional issue, however. During the planning period there emerges a final array of anticipated exchange rates or prices based on planned inputs and outputs for the economy. At the end of the year we will have had actual inputs and outputs for the whole economy. Due to changes in output of various goods from the initial plan to the final reality, final real prices will differ somewhat from initially planned prices. The same is true for incomes or for work. A person could have benefited or lost having paid the initial planned price but gotten items whose true social value wound out somewhat higher or lower than expected. A participatory economy could simply reassess people's overall expenditure, charging them accurately at year's end, leading to some debt or remittance compared to their initial expectations. For that matter, facilitation boards could release new price estimates every few months for those who wish to avoid any large variations by adapting their choices based on the new valuations. Or a participatory economy might instead allow such errors to pass unaddressed, on the experience validated assumption assuming it exists that over many years they would average out to no one's undue advantage.
Speaker 1:The point here is that these are details that will no doubt be resolved in practice perhaps in different ways and different implementations of participatory planning and due to different practical lessons. The same observations hold, in only slightly different forms, for detailed procedures by which industries would credit equitable total incomes to their various workplaces for their overall duration, intensity and onerousness of actually undertaken socially valuable labor, total income that each workers council would in turn internally equitably allocate among its members. We'll talk about that more in a bit. The same logic, again with some modest differences, would presumably apply to detailed federation procedures for requiring updated operations by member workplaces to ensure that they responsibly utilize commons inputs To assess a vision the main thing to keep our eye on, instead of such contingent details, is how the broad institutional structures and properties of the preferred vision, the visionary scaffold, fulfill desired values for economic life.
Speaker 1:So that is it for this episode, and now there is one more episode coming on participatory planning, to further elaborate what we have said and to add and discuss various additional features regarding allocation and income, investment externalities and some other matters.
Speaker 1:I should say and it is, of course, only my opinion, but what you've been listening to in the first and now the second part on allocation plus, what is coming is not only a proposal for participatory planning to be part of a participatory economy, to in turn be part of a participatory society.
Speaker 1:It is also a kind of mini course in economics, addressing not how to rationalize and justify capitalism and markets by sleight of hand, but how to actually think about and evaluate features of economic life by paying close attention to their actual social dynamics, not the unnatural dynamics of a bunch of abstract equations.
Speaker 1:You may want to consult no bosses for print text, minus the online interjections, of course, or, for that matter, to consult Z-Network, which is now the host of Revolution Z, where you can find additional materials, including a section on vision and strategy and many articles on participatory economics, even including the whole book Paricon Life After Capitalism, among others. That book's a little more detailed than no bosses, but it's earlier, and I think there have been updates since Z-Network also has a discord system and if you wish to enter that and to discuss concerns about, or extensions of, or criticisms of, or whatever else regarding participatory economics and these Revolution Z episodes, enter your thoughts and before long I will reply to join you in that pursuit. And so, that said, this is Michael Albert signing off until next time for Revolution Z.