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Synthesis/Regeneration 40   (Summer 2006)

Participatory Socialism

Robin Hahnel, Economic Justice and Democracy:
From Competition to Cooperation

A review by Richard Burke

Robin Hahnel, Economic Justice and Democracy: From Competition to Cooperation, with an afterword by Noam Chomsky, 2005. New York: Routeledge Books, ISBN 0-415-93345-5.

One of the most encouraging trends in recent left-wing thought has been the Participatory Economics model proposed by Michael Albert and Robin Hahnel as an alternative to both market-based capitalism and centrally planned command economies. In recent years a number of books by Albert have presented the idea, but in an often unfortunately dogmatic and simplistic fashion. Now, in Economic Justice and Democracy: from Competition to Cooperation, Robin Hahnel presents his version, both visionary and realistic, with a sophistication that does credit to the concept.

For those unfamiliar with Participatory Economics a summary is necessary. It combines public, or common, ownership of the means of production with a highly decentralized management structure based on workers’ and consumers’ councils organized by principles of federation into larger units. Through these councils democratic decisions regarding production and consumption are made. Payment is made solely according to the effort and sacrifice of workers in their jobs. Balanced work complexes, in which all are required to perform menial and rote tasks as well as participate in decision-making, prevent the monopolization of knowledge and skills by a “coordinator” class. Economic plans are devised by workers and consumers submitting proposals in a series of iterations aided and guided by “facilitation boards” whose function is to track economic data and sum up proposals in plans to be voted upon collectively. The system would function autonomously from any governmental institutions. Production is for use, not profit. Albert and Hahnel have made a convincing argument that their model would achieve its aims efficiently and democratically while being able to handle the externalities, or social costs, which capitalist markets are unable to account for.

In his books on Participatory Economics (for which he has coined the inelegant term “parecon”) Albert presents the model as a kind of fixed system, to be attained as the result of inevitable linear social progress.

Hahnel’s version is more subtle. He recognizes that building an alternative to capitalism is a process that will take many generations, and which may never be fully completed. For him Participatory Economics is more of a guiding vision, and he is aware that a very long period of mixed economy is likely to result regardless of whether or not his model is completely realized. In comparing his model to other alternatives to capitalism he takes a more balanced approach, aware of both the strengths and weaknesses of competing visions rather than simply trashing them. Unlike Albert he does not present his proposal as a kind of unsurpassable ideal, but recognizes that it might prove to be a stage in the development of a society based on the principle of “from each according to his (or her) ability, to each according to his (or her) needs.” His open-ended approach presents Participatory Economics as a tendency rather than as an endpoint.

His open-ended approach presents Participatory Economics as a tendency rather than an end point.

Hahnel also deftly responds to critics who have raised what he sees as reasonable criticisms to Participatory Economics. He deflates the often repeated objections that such a system would take too much time or involve too many meetings, demonstrating that instead it would involve arguably less time to manage than capitalism. He also reminds us that it is a long recognized fact that productivity goes up when workers are actively participating in job decisions.

…it is a long recognized fact that productivity goes up when workers are actively participating in job decisions.

In addition Hahnel shows how the functioning of his model promotes the protection of the environment. Unlike markets, which are unable to handle social costs, Participatory Economics can incorporate social concerns into its pricing so as to encourage the use of inputs and processes that are more environmentally friendly. This is a welcome exploration of an aspect of Participatory Economics which has been overlooked in previous books.

Particularly welcome is his attempt to situate his model in a historical context, as opposed to Michael Albert who tries to present it as an exercise in pure reason. Hahnel examines the triumphs and failures of previous anti-systemic movements. He shows how social democrats introduced many important reforms but lost sight of a vision of economic justice. As a result they contented themselves with reforming some excesses of capitalism, but eventually surrendered to the current neo-liberal attack. Libertarian socialists (and Hahnel identifies himself as one) had their greatest successes early in the 20th century when they were involved in de-facto reform efforts which laid the basis for later insurrections, such as in Spain in the 1930s. In the latter half of the 20th century however they eschewed such activities in favor of the belief in spontaneous revolt, and as a result became increasingly isolated politically. (It is on this point that Chomsky contributes his afterword, agreeing with the basis of Hahnel’s analysis but adding that he has not confronted the difficulties imposed by outright suppression by either pro-capitalist or Marxist-Leninist governments).

Particularly welcome is his attempt to situate his model in a historical context, as opposed to Michael Albert who tries to present it as an exercise in pure reason.

An interesting aspect of Economic Justice and Democracy is Hahnel’s attempt to envision a pathway in the direction of the participatory socialism he advocates. Here he draws from the best of both the social democratic and libertarian socialist traditions. He outlines a number of reforms including but not limited to: single-payer health care, living wage campaigns, community development and anti-sprawl initiatives, pollution taxes, full employment policies, as well as measures to strengthen the public sector and move towards a mixed economy. Recognizing that there is no such thing as a “non-reformist reform” Hahnel proposes that cooptation by the system can be avoided if activists are also involved with attempts to create alternative institutions. Thus he advocates not only the creation of workers’ and consumers’ cooperatives, but conscious efforts to link these into a larger network so that cooperative enterprises increasingly do their business with each other instead of with capitalist corporations whenever possible. He thus creates a convincing picture of how we might begin to build a new society “within the shell of the old,” to use a phrase from the Industrial Workers of the World.

One weakness in Hahnel’s book concerns his attempts to criticize orthodox Marxist theories about the inevitable collapse of capitalism.

Classically these concern crises of overproduction and the fall in the rate of profit due to the substitution of automation for living labor. Hahnel shows that these orthodox interpretations are incorrect and claims that the idea of a collapse of capitalism is a “debilitating myth” which postpones necessary efforts to fashion an alternative economic system to some indeterminate future. While his point is well taken one may ask if there is also danger in an image of capitalism as being able to overcome all crises and perpetuate itself indefinitely. Does this not itself play into the hands of those ideologues who claim that “there is no alternative?” Is there an interpretation of the Marxist final crisis of capitalism which could pass Hahnel’s scrutiny and avoid postponing the necessary activist work?

In a book written with Michael Albert in the 70s, Unorthodox Marxism, Hahnel admitted that a fall in the rate of profit could be provoked by two factors: (a) an increase in the bargaining power of workers, and (b) a depletion of natural resources. Now this is precisely what is predicted by the neo-Marxist World Systems Analysis of Immanuel Wallerstein. Describing long-term trends in the capitalist world-system, Wallerstein points to the deruralization of the world and the consequent loss of areas which have served as sources of cheap, easily exploitable labor. In coming decades labor costs will rise and will take a big bite out of profits. Similarly the growing environmental crisis will force capitalists to internalize costs which they have previously externalized (by dumping the wastes into the environment or avoiding paying for the replenishing of natural resources) thus leading to an increase in the costs of processing raw materials and diminishing profits. These factors, along with a continuing demand for public services which will lead to an increase in taxes, are long-term trends which threaten the continued profitability of the capitalist system.

The neo-liberal assault of the last 25–30 years has been a desperate and ultimately doomed attempt to hold back these costs which in coming decades cannot help but rise. Thus, Wallerstein concludes that we are already in the final crisis of capitalism and that by 2050 we will have a new world-system.

Rejecting notions of inevitable progress, he claims we cannot know what kind of system this will be, but the choice is between one which attempts to maintain the privileges and hierarchies of capitalism and another which is more democratic and egalitarian than at present.

Hahnel shows … the idea of a collapse of capitalism is a “debilitating myth” which postpones necessary efforts to fashion an alternative economic system to some indeterminate future.

Wallerstein shows that what is truly debilitating is not the doctrine of the final crisis of capitalism, but rather the belief in inevitable progress. After all, if the future will automatically see improvement then what need is there to take action today? His World Systems Analysis provides a much better understanding of the historical dynamics of capitalism than Hahnel offers. Conversely Hahnel’s version of Participatory Economics fills a crying need for models of an alternative to capitalism, an area in which Wallerstein is somewhat weaker. The two approaches complement each other.

Combining them would help the world overcome its present demoralized state and successfully replace capitalism with a libertarian socialist world-system. At any rate, Economic Justice and Democracy is highly recommended to all progressive activists.

Richard Burke is an artist and teacher. He is a member of the Industrial Workers of the World and the Surrealist Movement.

[24 apr 06]

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