Wednesday, June 13, 2007

Post-capitalist capitalism

Book Review from the February 2006 Socialist Standard

Michael Albert: Parecon: Life After Capitalism (Verso)

Participatory economics, or parecon for short, is a vision of life after capitalism favoured by many in the anti-capitalist movement. The author of this particular vision helped to establish Z Magazine and its web site Zmag (, including its subsidiary page devoted to parecon (, which debates the issues raised by this book.

Parecon opposes “corporate globalisation” and argues for its replacement by “equity, solidarity, diversity and self-management.” For Albert, capitalism means “private ownership of the means of production, market allocation, and corporate divisions of labour.” Life after capitalism is said to combine “social ownership, participatory planning allocation, council structure, balanced job complexes, remuneration for effort and sacrifice, and participatory self-management with no class differentiation.” The council structure involves workplaces, neighbourhoods, and “facilitation boards” which co-ordinate planning.

So-called “market socialism” is rejected because the market and class differentials would remain, as would buyers and sellers of labour power (capacity to work). In Albert's account, because class differentiation disappears in parecon, “you cannot choose to hire wage slaves nor to sell yourself as a wage slave.” Parecon permits workers to assess their own pay and conditions in their decision-making by inputting their preferences via councils. It apportions income in accord with effort and “does not force or even permit people to try to maximise profits, surplus, or even revenues.”

Notice however that Albert is specifically talking about prohibiting profit maximisation, not profits as such. Profits are acceptable; “excessive” profits are not. In the procedure envisaged, individuals and councils submit proposals for their own activities, receive new information including new indicative prices, and submit revised proposals until they reach a point of agreement. This process is open-ended and in Albert's book a hypothetical example is discussed which reaches a seventh planning cycle, or as Albert calls it “planning iteration.” In reviews of this book much has been made of the potential for bureaucracy in this procedure, but a more telling criticism would be its unquestioning acceptance of the profit system. Wages cannot rise to the point which prevent profits being made; and a fall in profits will put a downward pressure on wages. This is called the class struggle.

“Parecon is basically an anarchistic economic vision”, admits Albert, and it shows. Like many on the left, the difference between capitalism and post-capitalism presented here is essentially political, not economic. As indicated by the title, the crucial factor is participatory planning. The capitalist economy would remain substantially the same in parecon: the accumulation of capital out of profits produced by the unpaid labour of the working class.



earthenfoothold said...

This is not a correct analysis of Parecon. Consider, for a moment, that there is no private ownership of the means of production in the Parecon system. This means that no one owns any factories. No one owns stock. No one derives profit from surplus value. No one hires others for a wage.

There is remuneration for one's contribution to a project, but given all the above structural changes, this remuneration cannot be thought of as anything resembling a wage. "Profit" in this context simply means that you have the ability to save your remuneration-- i.e. you can put your money in a piggy bank and save up for the big toy rather than having to spend it as it comes and buy several small toys. You can work extra hours or contribute more to this or that project so that you can earn that big toy.

But what you cannot do is use your remuneration to earn more remuneration-- you cannot invest.

I'd also like to add that, for me, the attractiveness of Parecon isn't that it is a perfect, fully-formed model for an alternative economic system. What is most appealing to me is that it leaves behind the question, "what is wrong with capitalism?" and instead asks, "What kind of economy do we want, and how can we get there?"

Imposs1904 said...

Hello MG,

Thanks for taking the time to the comment.

As a follow up to this post, I'm intending to also post on the blog the correspondence between the editors of the Socialist Standard and Michael Albert that appeared in the April 2007 Socialist Standard, following the review of Albert's book in the February issue of the Socialist Standard.

I hope that goes some way in answering some of the points you raise in your comment.

Brian Gardner said...

Hi, the main problem that I have with Parecon is that while it is trying to get to somewhere that could (arguably) be thought of as fairly close to what world socialists want, it seems - if I have it right - to be going a long and difficult way round.

For me Parecon appears to address the political sphere while leaving relatively intact the economic sphere.

To have a system that allows wages to be dispensed on the basis of work carried out, allows money to circulate, and presumably restricts access to wealth (eg food or housing) unless you have sufficient money to purchase something, doesnt seem to be too far from capitalism for me in terms of its outward appearance. More importantly, despite its relatively limited ambitions, I fail to see how it could actually work.

For example, if a factory unit obtained a more efficient item of plant and become more productive for a given amount of labour, would that not increase the remuneration of those working there ? If so (and I cant think how an incentive scheme could work that didn't depend on productivity), there would be an obvious incentive for the workers to obtain more efficient plant & machinery - even if this wasnt permitted by regulations. But Parecon would apparently stop this by prohibiting unauthorised investment. But in reality I think that someone who had saved up their money, rather than bought lots of "little toys" would offer (albeit under the table)their dosh to the factory on the understanding that they would get a cut of the increased remuneration won by the factory workers. It would be a private investment - just as happens in capitalism. And before long, those who had invested well would be able to stop working because their investments were providing them with enough income to buy all the big teddies they could want. Resut ? - a new owning class in all but name (like M Albert's co-ordinator class ?)

The fact that Parecon apparently wouldnt permit this to happen is irrelevant - most countries in the world have very strict laws regarding the production and selling of drugs. Thousands of laws, massive police resources and the threat of draconian punishments appears to do little to deter those who see a quick way to get/keep themselves out of poverty.

Why and how does Parecon think that it will be able to police every sphere or sector of production to ensure no illicit investment/profiteering occurs ?
Capitalism finds it hard to cope with the few black markets that exist on the untaxed margins of the legitimate market system, (eg drugs, sex industry, gambling/ organised crime). Parecon would appear to provide an immediate incentive to break the law in a number of ways in every sector of production.

It seems to me that it would be far better and easier to actually just go one step further. Dont just remove ownership of the means of production (as Parecon wants) but remove ownership of money - by opening up access to wealth, thereby making money redundant.

Parecon appears to me to be about building a fairly massive (and socially unproductive) state administration for policing all the wage levels, labour outputs etc. In contrast the practical aspects of a (world-)socialist revolution is not about creating ever greater bureaucratic structures, but probably quite the opposite - it will be about removing the barriers capitalism has developed which prohibit access to wealth, and at a stroke create an economic environment without individual (ie monetary) incentives ("from each according to ability, to each according to need")

The reason that Parecon has to go to such lengths to construct such a complex and wasteful system of checks and balances is ultimately that its proponents are unwilling/unable to challenge one of the central arguments propping up capitalism, that humans can - if given the right economic framework (or arguably no economic framework) in fact consciously co-operate, work and consume.

I am certainly sympathetic to Miss Guided's view that anti-capitalists should be moving beyond just being "anti" and need to start discussing how an alternative system could operate. But in my view, Parecon doesn't just "not go far enough": it offers a model that retains major elements of the market system, but more importantly is simply highly unlikely to be workable in the real world.

Parecon is attractive to those who dislike capitalism, but who, in the final analysis, lack confidence that either there are sufficient resources on the planet, or that human beings can:

- work voluntarily, and/or
- co-operate to organise production & distribution of wealth without chaos, and/or
- consume wealth responsibly without some form of rationing

Brian Gardner
Glasgow Branch, SPGB

ajohnstone said...

hwopruoBrian ,

You raised some very interesting points which had not crossed my mind particularly the co-ercive side of their alternative which has never been raised much , surprising considering the anarchist roots of Parecon.

I think many Pareconistas (...what is the collective name for them ? ) don't realise that with the continued existence of private property within Parecon (and i think we can't accept their definition that because their is no individual capitalists , there is no private ownership and therefore it isn't capitalism ),there will be a continuance of the haves and haves-nots that theft and associated property crime will continue , and consequenently , a Parecon police will exist , and Parecon prisons will exist and no doubt Parecon priests for absolution and forgiveness will exist .