The Political Economy of Participatory Economics / Edition 1

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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.

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Product Details

  • ISBN-13: 9780691003849
  • Publisher: Princeton University Press
  • Publication date: 3/20/1991
  • Edition number: 1
  • Pages: 144
  • Product dimensions: 6.09 (w) x 9.22 (h) x 0.36 (d)

Table of Contents

Introduction 3
1. Traditional Economies 7
Valuative Criteria 8
Welfare Theorems with Endogenous Preferences 9
Allocation Institutions 11
Markets 12
Central Planning 15
Production and Consumption 17
Private Ownership 17
Hierarchical Production 20
Consumption Institutions 21
The Logic of Power 22
2. Production 23
Workers' Councils 23
Work Organization 25
Balanced Job Complexes 25
Balancing Across Workplaces 27
Balance in Practice 29
Participation Versus Efficiency 31
Equity Versus Efficiency 34
Information and Incentives 35
Choice of Technology 35
Diversity 37
3. Consumption 39
Consumption Councils 40
Incentive Compatibility 43
Equity 44
Equity, Incentives, and Efficiency 50
Endogenous Preferences 55
4. Allocation 57
Participatory Information and Communication 59
First Communicative Tool: Prices 59
Second Communicative Tool: Measures of Work 61
Third Communicative Tool: Qualitative Activity 61
Allocation Organization 62
Participatory Planning 63
A Typical Planning Process 68
Conclusion 71
5. Welfare 73
Preliminary Insights 74
Differences Between PE and FMPE 74
Summary of Differences 77
Modeling Consumption 77
Differences from Participatory Consumption 81
Modeling Production 82
Constraints 82
Different Productive Endowments 84
Workers' Councils 85
Differences from Participatory Production 87
Formal Summary of Councils' Goals 88
Allocation 89
Summary 96
Formal Models Versus Reality 98
Ideal Markets Versus Reality 99
Ideal Central Planning Versus Reality 101
FMPE Versus PE 102
Conclusion 105
6. Feasibility 107
Tracking a Participatory Economy 109
Information Variables for a Participatory Economy 109
Manipulating Information 111
Functional Relationships 113
Simulation Methodology 114
Incorporating Prices and Budgets 115
Simulation Actors 117
Incorporating Actual Behavior 120
Experiment 2: Developing a Parallel Economy 129
Conclusion 131
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