“Parecon: life after capitalism” by Michael Albert

This is not the most interesting book I have read lately, but it is one of the most important. It deals with the topics so often left vague in left-wing literature: the nitty-gritty of how a non-capitalist economy would actually allocate goods and services, balance supply and demand, avoid gluts or shortages, invest in infrastructure, reward work, manage workplaces, etc. Essentially trying to create a non-capitalist economic theory.

I have to admit that it was a struggle to keep reading sometimes. The talk of iterative planning, facilitation boards, nested councils, balanced job complexes, etc., is very nitty and very gritty. But it’s necessary. There are lots of slogans, lots of vague and inspiring essays about how things should be. I even wrote one myself a while back, and won a prize for it. That stuff is important, but we also need to take the next step. Capitalism is a horrifically unjust system: that much is obvious, even to many of its supporters. What makes it so hard to replace is that people don’t believe another system is possible. The fact that “Another world is possible” became a radical slogan is an indication of quite how much we have swallowed the lie that capitalism is the only possible way that human beings could ever hope to organise themselves.

Part of the reason for that is that so few people have set out a detailed description of how an alternative society would work. Contrary to popular belief, Marx never did. His analysis was of capitalism, and his references to a post-capitalist society were as vague as anyone else’s. What became associated with Marxism, socialism and anything else left-wing was the central planning installed by the Bolsheviks when they found themselves in power in Russia after 1917 and perpetuated thereafter in Soviet-influenced countries around the world and, to a lesser extent, by “democratic” socialist parties in capitalist countries. So Labour came to stand for more nationalisation and government control, and the Conservatives for the free market, and similar dichotomies arose in many other countries.

Unfortunately, both models have now failed.

Markets, by their nature, perpetuate injustice: those with accumulated wealth are at a huge advantage in any market interaction, and so achieve a favourable outcome, and so accumulate more wealth. In theory, when a sweatshop worker in Thailand decides to stitch shirts for a huge multinational corporation, they are entering into a free and fair contract. But the huge differential in power ensures that the deal heavily favours the multinational corporation. The company makes a huge profit on the shirts and accumulates yet more wealth; the worker goes nowhere if they’re lucky, downward if they’re not. Unions help to mitigate this effect by organising workers into bigger groups with more collective power, but they can only slow down the inevitable. The recent credit crunch shows more than ever the stupidity of relying on a system of individual greed to provide the best results for society as a whole.

Central planning, on the other hand, leads to the development of a coordinator class (“Party members”) who monopolise the decision-making and gain unjust advantages. Plans are developed centrally, with little input from workers or consumers, and enforced using state power. Party members, just like capitalist elites, need to protect their power and wealth from the rest of society, and because they are the state, they have direct control over the police, army, secret police, etc. It’s not hard to see how a police state would evolve in this scenario. Relying on the experts to do the right thing might sound good in theory, but in practice it’s no different from the medieval reliance on having a good king. It might happen, but if it doesn’t, society goes to hell. You need something else, to safeguard against abuse of power.

This book proposes a new way: participatory planning. I can’t go into the whole thing here – it needs a  book. But these are some of the main principles:

Remuneration according to effort and sacrifice. The premise is that it’s only fair to reward people for what they can control. Nobody can control how much wealth they were born with, how much physical or mental ability they were born with, how much each person can produce, etc. What everyone can control is how much effort they make, and how much sacrifice (in terms of time spent at work, in training, etc.) they make. So this is rewarded.

Balanced job complexes. In a “parecon” society, everyone will be expected to take part in political and economic decision-making. Not just once every four years, but all the time, from a local level up to the regional and national level. But this will never work if some people, by working in empowering jobs all the time, become experts in decision-making, while others, by working in mundane jobs, become incapable of participating effectively. So everyone should have a “balanced job complex”. This means that in any workplace, tasks are shared around. You might be the manager on one project, and the note-taker on another. And if you work in a comparatively empowering place, that has to be balanced out by doing some mundane tasks somewhere else (e.g. collecting garbage once a month). Similarly, people who work in a steel mill will be able to balance out their comparatively unpleasant workplace by doing a few hours a week of empowering work.

Individual planning. Instead of relying on markets to set prices, each person makes a plan of how much they want to work and what they want to spend. This is all tallied up, indicative prices are set, and several rounds of planning are done to even up supply and demand.

Nested councils. Decision-making is bottom-up, not top-down. Decisions that affect only local people are made only at a local level. Neighbourhood councils then feed into local councils, regional councils, national councils, etc.

This is only a very brief sketch, and does not do justice to it. Because we are so used to how things are, the initial reaction to many of these ideas, especially when presented so briefly, may be to laugh at them. They may sound naive or unrealistic or impossible. But Michael Albert sets out a compelling vision and goes into a LOT of detail to explain it all. He doesn’t talk at all about how to get from A to B, and that for me is the biggest problem. But I guess that is addressed in other books – his main concern here is to provide an example of how we could organise society differently. There is no rhetoric, no calls to arms. It is very sober, very boring in places, but very necessary. If we don’t actively engage in the dull science of economics, it will be left in the hands of people like Milton Friedman, and the world will end in a fireball of lunacy.

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3 thoughts on ““Parecon: life after capitalism” by Michael Albert

  1. I was in the USSR in the 80’s. Better hope your grand plan doesn’t go to that. Whenever you go this route you’ll find no matter what the intent there can only be one head to the snake in this enviroment. Better hope you’re it.

  2. Hi sandysays1

    You raise a valid concern – of course nobody wants to go the way of the USSR. In fact, the book devotes quite a lot of space to explaining this issue and showing how its proposed system differs from the Soviet model and has checks and balances in place to prevent it from becoming the USSR.

    My personal view is that while it’s important to be concerned about avoiding the mistakes of communism, it’s also important not to paralyse ourselves and cut off any possibility of social development. In the Cold War we got used to thinking in a binary fashion – two competing superpowers, two competing economic models. Now that it’s over, we are still thinking in the same way: anything that’s not capitalism must be communism/Marxism/Stalinism/socialism/totalitarianism. I think it’s time to start thinking differently. In politics and economics, just as in any other field of human endeavour, the possibilities are limited only by the power of our imaginations. It’s arbitrary to say there are just two. Capitalism is one way to organise the world; communism is another. There are many other alternatives out there, and they don’t all necessarily lead back to one of those two. Parecon is certainly not “my grand plan”, but I think it is an interesting alternative that merits open-minded consideration.

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