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Alternatives to Capitalism: Proposals for a Democratic Economy

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What would a viable free and democratic society look like? Poverty, exploitation, instability, hierarchy, subordination, environmental exhaustion, radical inequalities of wealth and power—it is not difficult to list capitalism’s myriad injustices. But is there a preferable and workable alternative?

Alternatives to Proposals for a Democratic Economy presents a debate between two such Robin Hahnel’s “participatory economics” and Erik Olin Wright’s “real utopian” socialism. It is a detailed and rewarding discussion that illuminates a range of issues and dilemmas of crucial importance to any serious effort to build a better world.

158 pages, Paperback

First published November 26, 2014

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About the author

Robin Hahnel

35 books50 followers
Robin Eric Hahnel (born March 25, 1946) is Professor of Economics at Portland State University. He was a professor at American University for many years and traveled extensively advising on economic matters all over the world. He is best known for his work on participatory economics with Z Magazine editor Michael Albert.

Hahnel is a radical economist and political activist. Politically he considers himself a product of the New Left and is sympathetic to libertarian socialism. He has been active in many social movements and organizations for forty years, notably as a participant in student movements opposed to the American invasion of South Vietnam, more recently with the Southern Maryland Greens, a local chapter of the Maryland Green Party, and the Green Party of the United States. Hahnel's work in economic theory and analysis is informed by the work of Marx, Keynes, Piero Sraffa, Michał Kalecki, and Joan Robinson, among others. He has served as a visiting professor or economist in Cuba, Peru, and England.

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Displaying 1 - 14 of 14 reviews
Profile Image for Valentina Salvatierra.
270 reviews29 followers
June 24, 2018
A brief and useful primer on two key leftist ideas for what happens after capitalism, as well as how to get there. Hahnel offers a summary of his model of participatory economy which is meant to represent a viable alternative for effectively organising a complex economy, while Olin Wright explains his more vague idea of "real utopias". They also respond to each other's thoughts.

Personally I am not convinced by Hahnel's account of participatory account in terms of it being a useful model and not just an interesting thought experiment. Some parts of it were reminiscent of the anarchist society depicted in Ursula K. Le Guin's novel "The Dispossessed, except told in a much less compelling manner. Novels seem a more appropriate form for those kind of inspirational thought experiments than economic modelling, especially in the brief span of this book where none of the economic models are actually detailed, aside from mentions of their supposedly proven efficiency and Pareto equilibrium. The discussion about "market-like" mechanisms not really being markets also felt a bit sterile. Hahnel is extremely specific about some things in his planning procedures but at the same time his writing lacks concreteness. There are very few concrete examples of things like the effort ratings or the organisation of workers. During his first chapter he doesn't even mention the scope of this planned economy, which made me a bit confused: was this planning procedure meant to take place at the level of U.S. states, nation-states, or some other agglomeration? Because this would have vast implications for the type of planning possible and its likely outcomes, when considering for instance the scope of pollution or globalized manufacturing chains.

Olin Wright's section, meanwhile, is more vague but admits it is so, which instantly makes me more sympathetic. It moves away from blueprinting a specific post-capitalist economic model to explain the ways in which we could get there, how societies could move from a mostly-capitalist model to a mostly-socialist one and the value different types of struggle and institutions can have in this process. I enjoyed a lot of his conceptual observations, such as the rejection of social systems as perfectly homeostatic organisms, favoring instead the view that they are like ecosystems where socialist/capitalist/statist institutions coexist at different levels. However, in the end, his writing suffers from a similar lack of concreteness to Hahnel's: by the end I felt like they were just playing with concepts, discussing them, separating and joining them in a world of idea, but that this in no way contributed to actually envisioning a non-capitalist society.

In summary: This was a relatively quick read and a good introduction to participatory economy and Olin Wright's framework of "real utopianism", but it doesn't really provide any ground-breaking insights if you already have some familiarity with these ideas.
Profile Image for Jim.
3,098 reviews155 followers
March 16, 2023
The only thing I liked about this book is the agreement by the authors that our current system - Capitalism - must be replaced. How it should be done and their respective detailing and commentary was OMFG dry and dull as anything I have ever read. Still, I hate economics with a passion often reserved mostly for White Supremacist-Republicans, so I was unsurprised at how little this book interested me intellectually. As an example of intellectuals/theorists splitting hair ad nauseam it succeeds mightily. As a book that pulls you into its arguments and explanations, not so much. If this is how we are to crush Capitalism and bring in communism, we could be in for a long fucking wait, as these two straddle the academic line between a weird hybrid of State-and-Markets and Participatory Economics (a strange formulation of worker empowerment and governance). I don't necessarily disagree with either, their theories make sense, as it were, but I don't prefer either one. I am all about revolutionary change, which I see as the only way to truly address the multiplicity of social, political, and economic problems facing most people asa result of rampant, State-supported Capitalism. Reforms are just tweaking the system, but keeping it in place. Anyone who understands Capitalism knows all about its ability to absorb reforms and adjustments and come out stronger and more oppressively controlling. We are living in that now. The survival of the human species relies on removing Capitalism, so unless this happens human are doomed. Don't believe me, look at what Capitalism has done to the planet and to humans...
Profile Image for Mark Stevens.
23 reviews5 followers
November 20, 2015
I am not certain from reading this book why Eric Olin Wright is considered a leading radical intellectual. That he enjoys writing ang lecturing for sixty hours a week leaves me perplexed that he doesn't seem to be able to digest the responses Hahnel gives him. Continuing to use the same arguments that have clearly been shown to be erroneous, not giving explanations for choices he makes, instead listing some options and then saying he will be using option A or B...
Hahnel clearly expresses the why behind every idea he puts forward, and does so beautifully and convincingly.
Profile Image for Colin Cox.
547 reviews11 followers
August 8, 2018
Philosophers, critical theorists, sociologists, and radical thinkers alike have conceptualized alternatives to capitalism for some time. Many want to challenge the sorts of cultural and, at times, theoretical assumptions regarding capitalism’s inevitability that Mark Fisher, for example, interrogates in Capitalist Realism. There, Fisher argues that capitalism, “is like a pervasive atmosphere, conditioning not only the production of culture but also the regulation of work and education, and acting as a kind of invisible barrier constraining thought and action” (16).

Disrupting this “invisible barrier” is challenging, especially when influential, progressive figures such as Democratic Minority Leader Nancy Pelosi fail to see alternatives to capitalism. During a CNN town hall in 2017, NYU sophomore Trevor Hill questioned Pelosi about the prospect of moving the Democratic Party further left, citing increasing skepticism among millennial voters toward capitalism. In response, Pelosi said, “We’re capitalists, that’s just the way it is.” In that moment, Pelosi betrayed the trust of her progressive constitutes, but more importantly, she disclosed a lack of imagination. Pelosi is not alone in failing to imagine a world beyond capitalism. In 2016, then President Barack Obama wrote in an essay for The Economist, “The world is more prosperous than ever before and yet our societies are marked by uncertainty and unease. So we have a choice — retreat into old, closed-off economies or press forward, acknowledging the inequality that can come with globalisation while committing ourselves to making the global economy work better for all people, not just those at the top.” Regrettably, pressing forward means discovering ways of making capitalism work better. To Obama’s credit, he acknowledged that, “a capitalism shaped by the few and unaccountable to the many is a threat to all,” yet his solution entailed reinstituting regulations instead of rethinking capitalism. According to Obama, a capitalism we cannot trust “cannot continue to deliver the gains they have delivered in the past centuries.” Unlike Pelosi, Obama did not suggest that capitalism lacks alternatives; at least, he did not do so directly. In response to the “radical reforms,” proffered by the left, he argued, “the economy is not an abstraction. It cannot simply be redesigned wholesale and put back together again without real consequences for real people.” What Obama failed to disclose is something I think he knows: capitalist markets work not when those “real consequences” are eradicated, but when those “real consequences” are hidden. The foundational lie at the core of capitalism is the notion that under the correct, deregulated conditions, everyone will flourish and profits will continue to rise ad infinitum.

As I write this, the American left is becoming more progressive. Upstart crows like Alexandria Ocasio-Cortez call themselves Democratic Socialists and advocate for progressive policies such as a $15 minimum wage and a jobs guarantee program. Yet, these policies fail in their visionary fervor because they fail to conceptualize a world beyond capitalism.

This is why Alternatives to Capitalism: Proposals for a Democratic Economy is so important: it articulates what a progressive, post-capitalist world can look like. Hahnel and Olin Wright adopt a readable, dialogic format to develop their theories and elucidate key points of disagreement. Hahnel’s Participatory Economy theory is comprised of “self-governing democratic councils of workers and consumers where each member has one vote.” Jobs are “balanced for empowerment and desirability by the members of workers councils themselves” and workers receive “compensation according to effort as judged by one’s workmates.” Finally, councils and federations of workers “propose and revise their own interrelated activities without central planners or markets, under rules designed to generate outcomes that are efficient, equitable, and environmentally sustainable.” Hahnel’s skepticism toward capitalists markets underpins the principal features of a Participatory Economy. Means of production and resource allocation become smaller and localized thus more democratic and egalitarian.

Olin Wright’s alternative functions as a synthesis or “mix of diverse forms of participatory planning, state regulatory mechanisms, and markets.” Wright is skeptical that Participatory Planning could ever “completely displace markets,” yet, like Hahnel, he is committed to championing a system that rejects “inequalities in material conditions of life that are the result of talents or contributions or brute luck and certainly of power.”

Olin Wright’s theory feels far more practical than Hahnel’s, but Hahnel’s approach illustrates the depth of creative thinking on the left. It’s easy to dismiss Hahnel’s Participatory Planning as utopian idealism, but perhaps utopian thinking isn’t so bad when attempting to combat the perception that capitalism is just “the way it is.” Olin Wright, for example, makes a compelling case for utopian thinking in Chapter 4 when he writes, “Real utopias…envision the contours of an alternative social world that embodies emancipatory ideals and then look for social innovations we can create in the world as it is that move us towards that destination.”

With both approaches, Hahnel and Olin Wright offer their readers visions of progressive thinking that work beyond the boundaries of capitalist ideology. Neither theory is perfect (nor that new), but collectively they constitute a critical intervention that shifts the terms of discourse for those on the left.
Profile Image for MrSickFló.
10 reviews1 follower
February 28, 2025
Probably doesn’t contain the answer but I’m not convinced the Tesco clubcard does either. 3.5 for fucks sake Goodreads just allow it
Profile Image for Jonna Higgins-Freese.
811 reviews79 followers
December 8, 2016
I found this interesting as I know little about economics and less about alternatives to capitalism. Hahnel's proposal for participatory economics requires planning in the economy, although not by a central state, and with flexible options for iteration as the plan is implemented.

Consumer cooperatives would be allocated consumption according to effort expended; worker cooperatives would indicate what they intended to produce. Communities of affected parties would be composed of all those impacted by toxic pollution, etc., and would state what their tolerance for such pollutants was in exchange for various kinds of additional allocations of consumption.

Wright seems to take a more incrementalist proposal, seeing ways to expand the non-market spaces for real utopias and socialism, whose details will be worked out in the living of them as time goes on. He sees some of Hahnel's proposals, particularly the iterative nature of the planning process, as similar to markets and they argue back and forth about that a bit.

Wright does succinctly articulate what he sees as the difficulty with markets: "What is undesirable are two things that are generally strongly linked to markets: first, the ways in which markets can enable people and organizations with specific kinds of power to gain advantages over others, and second, the way markets, if inadequately regulated, generate all sorts of destructive externalities and harms on people." (95).

Wright also addresses the question of how we get from here to there, and critiques Marxist claim that capitalism will, in the long run, destroy its own conditions of existence: "Capitalism may be crisis ridden and cause great suffering in the world, but it also has enormous resilience and capacity to effectively block alternatives." (100)

"Any economic system relies on people to think and behave in particular ways. Different economic systems require people to think and behave in different ways. The kind of humans capitalism requires, and the kind of humans we tend to become when we play our appointed roles under capitalist institutions, are different from the kind of humans socialism requires, and participation in socialist institutions tends to create. In other words, when we choose to use particular institutions to organize and govern our economic activities we are also choosing to some extent what kind of people we want to become." (111).

One example of cooperative/worker-focused organization: Logik & Co. "pays everyone exactly the same hourly wage -- from the most senior to the most junior member, regardless of skills -- but does not allow anyone to be paid for more than 40 hours a week. People often work more than that, but this is treated as reflection how much they enjoy the process. Real slackers -- which are rare -- are dealt with through social sanctions and, potentially, expulsion" (46).
Profile Image for Pablo.
70 reviews3 followers
April 13, 2020
3.5 stars.

An interesting dialogue between Erik Olin Wright and Robin Hahnel on alternatives to capitalism that are not (solely) based on central planning. The book is divided in two parts; the first one discusses Hahnel's participatory economy model, while the latter is a bit more vague and discusses Erik Olin Wright's "real utopian socialism" ideas. I had read "Envisioning Real Utopias" by Wright before (see my review here) but I hadn't read any book by Hahnel. I think it would be a good idea to read a book or at least an extended summary of the authors' viewpoints before starting this book.

The biggest point of disagreement between the authors is on the role of markets on a socialist economy: while Hahnel avows for getting rid of them almost completely, being replaced by his decentralized planning system of Parecon, Wright argues that they might be a necessary evil, after necessary adjustments to account for things like externalities are made.

Overall, I like Wright's style more, perhaps because I had read a book by him before. I think Hahnel is sometimes quite vague on his argumentation and relies a tad too much on arguing by analogy. In particular I don't think he makes a convincing case as to why adjustments to the annual plan in parecon are qualitatively different to market-like behavior.

Profile Image for Billie Pritchett.
1,202 reviews122 followers
February 28, 2020
The only essay in this set that I could understand was Erik Olin Wright's. Wright is a sociologist and has a skill at explaining what is at stake. This set of essays is a friendly debate between Robin Hahnel, who proposes one alternative to capitalist economies, and Wright, who proposes many possible alternatives. Wright says he sees nothing wrong with market transactions, but Hahnel believes there should be no markets at all. The book is quite boring, and I imagine if anyone has a real interest in these subjects, it would be best to read the other author's books first. Looks like the major books are Robin Hahnel's Of the People, By the People: The Case for a Participatory Democracy and Erik Olin Wright's Envisioning Real Utopias .
27 reviews4 followers
July 24, 2022
An informative read overall, but could have done with editing. Wanted more detail on the practicalities of each author's system, and less diving into minutiae of theory.

The first section from each author could have been massively reduced if they'd had a round of correspondence to answer questions. Instead there was too much time spent arguing unnecessary points based on incomplete information.

Hahnel's arguments were ultimately unconvincing, but his discussions of theory were useful. He writes and argues like someone who's spent altogether too long in academia; he struggles to present ideas in a linear way and goes off on tangents (he should be banned from using footnotes), and he argues like someone who's never had to compromise when ideas and ideals meet the cold light of reality. Olin Wright thankfully called out many of what felt like obvious holes in Hahnel's system.

Far more convinced by Olin Wright than Hahnel, but still much work to be done in this space.
Profile Image for william ellison.
87 reviews4 followers
April 11, 2017
How ya gonna keep them down on the farm...?

An interesting format and equally interesting content. Hahnel comes at it from the collective old proletarian correct point of view and is relatively uncompromising, while Olin speaks for the market-savvy technologically literate er...workers' perspective. It's a question of how you define the working class and what you think they're capable of. The format whereby they critique each others vision of a working socialist economy and have the opportunity each to come back, is novel and appealing though cracks begin to appear in the models. I tend to come down on Hahnels side allowing for changed social conditions changing mindsets. But Olin is persuasive. We need more books like this in these times.
Just one question, when did anyone ever see a size 61/2 purple woman?
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