has destructive effects on all of these values. Finally, we both argue that capitalism systematically contradicts the realization of all of these values, and while it is sometimes possible to mitigate some of the deficits with various kinds of public policies within capitalism, transcending capitalism is a necessary condition for the fullest possible realization of democratic-egalitarian values.
That is a lot of agreement. Where we differ is in our views of certain important aspects of the institutional design of an alternative that is best suited to realize these common values.
Robin feels very confident that a complex, large-scale, well-functioning economic system—in principle even a global economy—could exist in which markets have been completely replaced by participatory planning. While he acknowledges that the actual design of economic institutions in a post-capitalist participatory economy will evolve through experimentation and democratic deliberation, he nevertheless argues that the goal should be the complete elimination of markets, and his hypothesis is that such an economy would function in ways that would be robustly sustainable. Sustainability, in the context of a democratic-egalitarian economy, means that the institutional configuration in question would be continually endorsed by the broad majority of participants in the economy since they have the power to change the rules of the game if they don’t like the way things are working. There will inevitably be trade-offs across the different values that a participatory economy hopes to realize. A particular set of institutional rules of the game is a way of navigating those trade-offs. A stable system is one in which the continual over-time results of the operation of the system reinforce the actors’ commitment to those rules. Robin’s hypothesis, then, is that a participatory economy in which markets play no role would be sustainable in this sense.
My position is that the optimal institutional configuration of a democratic-egalitarian economy is much more likely to be a mix of diverse forms of participatory planning, state regulatory mechanisms, and markets. I, like Robin, am disposed to give great weight to the participatory mechanisms because of the ways these embody values of equality and democracy, but I am very skeptical that these could ever completely displace markets, or even, really, that this should be some bottom-line goal to which we aspire. I want a robustly and sustainably democratic-egalitarian economy, but my expectation is that the institutional designs that people in such an economy would actually choose (through experimentation and learning) will include a significant role for markets. This is a prediction rather than a prescription. I do not know what institutional configuration of different forms of economic organization would work best, nor what, in practice, the trade-offs will be between different configurations. What I predict, then, is that a configuration in which markets play no role would not be sustainable in the sense I am describing.3
I also believe—as I will argue in more detail later—that this expectation may not be so different from what Robin’s model would, in practice, generate iteratively over time. Robin acknowledges that the actual functioning of his model for a participatory economy combines initial rounds of planning (through his nested participatory councils of various sorts) and after-the-fact, continual “adjustments” that occur for a variety of reasons. Depending on the scale of processes through which these adjustments occur and exactly how they are executed, they could function a lot like markets. And since this is an ongoing process in which the adjustments in one period constitute inputs for subsequent planning, it is not so clear that the marketish processes would play only a peripheral role.
This way of thinking about the issues implies that the concept of “markets” is not a binary. In a binary conception of markets you either have markets or you don’t; any given transaction is either a market transaction or it is not. A non-binary conception recognizes that exchanges can be heavily regulated and affected by collective priorities, but still involve things being bought and sold in which the prices are affected by supply and demand as well as regulatory constraints. Such exchanges involve significant market and non-market mechanisms. Or to take a different kind of example, in my usage of the term “markets,” garage sales (and their internet equivalents like Craigslist) are a form of market relations: items are put up for sale; the prices tend to be higher in the morning than at the end of the day in response to the demand by consumers for the things on offer; more garage sales are likely to occur (i.e. the supply of goods for sale through this mechanism will be greater) in an economic environment where there are lots of people who like to buy used things. A participatory economy, I would predict, is likely to allow, perhaps even encourage, things like garage sales. Of course capitalism is not like a garage sale writ large because the power relations implicated in capitalist markets are vastly different from those in a neighborhood garage sale. Garage sales are a very minor aspect of the market system in contemporary capitalism. But nevertheless, they constitute a particular form of market processes.
In what follows I focus on five elements of Robin’s model:4 household consumption planning; the mechanisms for dealing with externalities; public goods planning; risk-taking innovation; the organization of work and pay. My skepticism is greatest about the first of these, so I will spend the most time exploring its mechanisms and ramifications. For the others I have specific issues to discuss, but I broadly endorse what I see as the core principles they each attempt to achieve.
Participatory Planning of Household Consumption
In his book (p. 115), Robin describes four basic principles that his model of participatory planning is meant to embody, all of which are touched on in his opening contribution to this dialogue as well:
1.We want people to have input in decisions to the degree they are affected.
2.We want outcomes to be fair and efficient.
3.We want procedures to promote rather than undermine solidarity.
4.We want all our plans to be environmentally sustainable.
These are all desirable principles. What I wish to interrogate is the second element in the second criterion: efficiency.5 Specifically, I am skeptical that an institutional design in which markets have been completely eliminated—where they play no role whatsoever in economic coordination—is likely to be as efficient as an institutional configuration that combines a variety of forms of economic coordination: participatory planning, centralized regulations, and market interactions. I will not argue for the superiority of markets over participatory planning; I am arguing for the desirability of an institutional ecosystem of the economy that combines a variety of institutional forms and mechanisms.
I will focus first on the aspect of the planning process which I feel is the most problematic, the planning of household consumption. The planning of consumption is in many ways the pivotal process within the participatory economy model for this is what most fundamentally dictates what is produced in the economy. As Robin writes:
There is complete freedom of choice in a participatory economy regarding what one wishes to consume. Moreover, consumer preferences determine what will be produced in a participatory economy whereas they only do so very imperfectly in market economies. Since markets bias consumer choice by overcharging for goods whose production or consumption entail positive external effects, undercharging for goods with negative external effects, and over supplying private goods relative to public goods, markets influence what will be produced in systematic ways that deviate from consumers’ true preferences. Participatory planning is carefully designed to eliminate these biases which both infringe on ‘consumer sovereignty’ and generate inefficiencies. (p. 80)
Robin’s model of the participatory planning of public goods—collective consumption in its various forms—does not pose the same problems. By their very nature, public goods are always planned in one way or another, and Robin’s proposed model of participatory planning of public goods in which councils at the appropriate scale for a given public good are the primary site for deliberation over public goods seems absolutely right. I also have much less to say about the various forms of production
