Democratic Economic Planning

Description

Democratic Economic Planning presents a concrete proposal for how to organize, carry out, and integrate comprehensive annual economic planning, investment planning, and long-run development planning so as to maximize popular participation, distribute the burdens and benefits of economic activity fairly, achieve environmental sustainability, and use scarce productive resources efficiently. The participatory planning procedures proposed provide workers in self-managed councils and consumers in neighbourhood councils with autonomy over their own activities while ensuring that they use scarce productive resources in socially responsible ways without subjecting them to competitive market forces. Certain mathematical and economic skills are required to fully understand and evaluate the planning procedures discussed and evaluated in technical sections in a number of chapters. These sections are necessary to advance the theory of democratic planning, and should be of primary interest to readers who have those skills. However, the book is written so that the main argument can be followed without fully digesting the more technical sections. Democratic Economic Planning is written for dreamers who are disenamored with the economics of competition and greed want to know how a system of equitable cooperation can be organized; and also for sceptics who demand "hard proof" that an economy without markets and private enterprise is possible. Cover Half Title Series Title Copyright Dedication Contents Preface The authors About the main author Intellectual challenges Intended audiences and readers’ guide About the contributors Introduction Semantics Political context Socialist planning in the history of economic thought First socialist calculation debate Post–World War II debate Post-Soviet debate Part I Preliminaries Introduction to Part I 1 Defining goals Efficiency Economic self-management Economic justice Environmental sustainability Solidarity Variety 2 Social democratic capitalism Better than neoliberal capitalism, but not good enough Why not private enterprise? Private enterprise is incompatible with economic justice Why not markets? Markets are inefficient Externalities are pervasive Markets are often not competitive Markets often fail to equilibrate Practical problems with policy correctives Labor markets are unfair Markets subvert democracy Markets undermine the ties that bind us Conclusion Part I: conclusion Part II Central planning Introduction to Part II 3 Central planning: how to do it A multi-good, one-year model A multi-good, multi-year model Information issues in central planning Finding the social welfare function Responding to the tacit knowledge critique Material balances Trial prices Trial quantities Gradient procedures 4 Central planning: why not to do it Central planning: an information game of cat and mouse Central planning obstructs worker self-management Conclusion Part II: conclusion Part III A participatory economy Introduction: answer to Auntie Tina 5 A participatory economy in brief Social ownership Major institutions Worker councils Balanced jobs Neighborhood consumer councils Federations Income based on effort and need Participatory planning The challenge The annual planning procedure in brief A participatory economy and self-management 6 Digging deeper into a participatory economy Social ownership Indigenous cultures and the natural commons Socialism and the productive commons A productive commons for modern times Worker councils Outside stakeholders Birth and death of worker councils Objections to balanced jobs Incentives Fairness, trust, and solidarity Measuring effort and sacrifice Capping average effort ratings Motivational efficiency Allocative efficiency Dynamic efficiency Consumption Allowances Saving and borrowing Councils and federations Councils Governance of federations Assessments for public goods 7 The participatory annual planning procedure Who says no? Treatment of capital goods during annual planning Public goods Pollution The pollution demand revealing mechanism Overcoming perverse incentives Multiple victims Misrepresentation Conclusion An important caveat Welfare theoretic analysis A heuristic model Consumer councils Worker councils A formal model Comparing assumptions What participatory planning is not Participatory planning is not central planning Participatory planning is not one big meeting Participatory planning is not a Walrasian auctioneer Appendix on efficient levels of emissions 8 Dispelling common confusions The size 6 purple women’s high-heeled shoe with a yellow toe problem Post-plan adjustments If it looks like a market, and smells like a market . . . 9 Computer simulations of participatory planning Purpose Platforms The algorithm Practicality: how many iterations will it take? Threshold Price adjustment rule Initial prices Changing exponents in production and well-being functions Tracking when different thresholds are achieved Robustness: sensitivity to relaxing assumptions Intervention by IFB personnel Benefits of human intervention Dangers of human intervention Future simulation research Conclusion: a practical possibility? 10 Reproductive labor Conceptualizing reproductive activity Different kinds of reproductive labor Assumptions about education and healthcare The public vs. private choice Reproductive labor in the participatory economy Women’s caucuses Balance jobs for caring labor Anti-discrimination legislation Affirmative action Reproductive activity in households In-home domestic labor In-home caring labor In-home socialization labor Conclusion Part III: conclusion Dangers to be avoided Unique features of participatory planning Part IV Investment planning Introduction to Part IV 11 Aggregate investment planning A one-good, three-year model An omniscient investment planner Reality vs. theory Missing information Missing people Inherently undemocratic Participatory aggregate investment planning Challenges The investment planning procedure Sequencing investment and annual planning Welfare gains from updating investment plans Conclusion 12 Comprehensive investment planning Producing the efficient amounts of different capital goods Allocating user rights for different capital goods efficiently Part IV: conclusion Participants in aggregate investment planning Participants in detailed investment planning Part V Long-run development planning Introduction to Part V 13 Participatory educational planning What does education planning decide? “Producing” education Benefits of education Investing the efficient amount in education A note on time frames Participants Education planning proposal 14 Participatory environmental planning Unique features of environmental planning What does environmental planning decide? Investing the efficient amount to protect the environment Participants Environmental planning proposal 15 Participatory international economic planning International context Goals Issues to keep in mind Three rules to guide trade policy Evaluating comparative advantages Achieving efficient trade during annual planning International financial investment What does participatory international economic planning decide? An efficient transformation of comparative advantages Participants in participatory strategic international economic planning Does size matter? Conclusion Appendix on investment in infrastructure Investing the efficient amount in infrastructure Part V: conclusion Education planning Environmental planning International economic planning Conclusion The socialist calculation debate a century later Reconciling democratic planning and autonomy Opportunity costs, social costs, and social rates of return A level playing field for public and private consumption Externalities extinguished! Income distribution and incentives Addressing concerns about impracticality Integrating long-run and short-run plans Reproductive labor Looking forward A bridge too far? Appendix: other democratic planning proposals Introduction 1 Community-based economics 2 The “Scottish” model 3 Multi-level democratic iterative coordination 4 Negotiated coordination 5 Amazon socialism Epilogue on prices in socialism Index