The Political Economy of Participatory Economics

by Michael Albert, Robin Hahnel

With the near bankruptcy of centrally planned economies now apparent and with capitalism seemingly incapable of generating egalitarian outcomes in the first world and economic development in the third world, alternative approaches to managing economic affairs are an urgent necessity. Until now, however, descriptions of alternatives have been unconvincing. Here Michael Albert and Robin Hahnel support the libertarian socialist tradition by presenting a rigorous, well-defined model of how producers and consumers could democratically plan their interconnected activities.


After explaining why hierarchical production, inegalitarian consumption, central planning, and market allocations are incompatible with "classlessness," the authors present an alternative model of democratic workers' and consumers' councils operating in a decentralized, social planning procedure. They show how egalitarian consumption and job complexes in which all engage in conceptual as well as executionary labor can be efficient. They demonstrate the ability of their planning procedure to yield equitable and efficient outcomes even in the context of externalities and public goods and its power to stimulate rather than subvert participatory impulses. Also included is a discussion of information management and how simulation experiments can substantiate the feasibility of their model.

Genres: Economics, Nonfiction, Theory, Politics

144 pages, Paperback

First published January 1, 1990

About the author

Librarian Note: There is more than one author in the Goodreads' database with this name. See this thread for more information.

American activist, speaker, and writer. He is co-editor of ZNet, and co-editor and co-founder of Z Magazine. He also co-founded South End Press and has written numerous books and articles. He developed along with Robin Hahnel the economic vision called participatory economics.

Albert identifies himself as a market abolitionist and favors democratic participatory planning as an alternative.

During the 1960s, Albert was a member of Students for a Democratic Society, and was active in the anti-Vietnam War movement.

Albert's memoir, Remembering Tomorrow: From SDS to Life After Capitalism (ISBN 1583227423), was published in 2007 by Seven Stories Press.

Reviews

[Andrew · Rating 2 out of 5]

I found Albert's analysis of the problem of traditional economics to be pretty on the money, but his proposed solution to be absolutely impractical (though much of it sounds nice.)

For instance, in one moment he talks about deciding on milk production. However, many people cannot take milk for health or ethical reasons. Fine, so there will be a co-current bottom-up decision upon milks production from a distric-ward-state-nation set of council decisions (consumption and production, both.) Though smaller in number who cannot digest either dairy or soy, so now another D-W-S-N decision if it's optimal to add a third, and then another series of democratic-participatory decisions for a third milk--but rice or goat?

Now there are four types of milk production to consider, plus knowing general preference between rice-goat milk, as well as how many soy-rice preferences. However the decisions of these many council polls come out, it then gets set into the annual production cycle. But, as it happens, a freak frost wipes out half the soy crop. Now a new plan will have to be enacted again via council decisions.

And this is just for milk. While PE might truly resolve the information loss that makes markets and central planning, it instead requires an incredible amount of decision-making (participatory as it is) in order to have the right information.

[Bee · Rating 5 out of 5]

I find the model an insightful alternative to both markets and central planning, with solid explanations for why a real-world model of participatory economics would actually fare better than we expect in an idealized version of it. My understanding is they go into much more detail about the examples in "Moving Forward" but I got a good grasp at how this system would be better in terms of signaling/knowledge and economic democracy. I think the explanations of how workers' and consumers' councils would operate satisfying and open to sufficient flexibility for disruptions in production or consumption.