and some of what I have to say would be relevant to those arenas of planning as well, but I also think that the weight of the participatory planning elements for those kinds of decisions would, in an optimal social design, be much greater than for household consumption planning.
One final provisional comment: I am not sure that in all details I fully understand the operation of the participatory planning mechanisms that are at the core of Robin’s model. I have read Robin’s opening contribution and the relevant chapters in the book numerous times, as well as Michael Albert’s book Parecon: Life After Capitalism and a few other discussions of these issues, but nevertheless there are parts of the exposition that, for me anyway, remain unclear. I have not been able to develop an intuitive understanding of how all of this actually works, how all of the pieces fit together, and especially why the proposed institutional design eliminates all perverse incentives so that everyone provides perfect information to everyone else, thus making the system invulnerable to opportunism by individuals or groups.6
Let me begin by reviewing the basic elements, as I understand them, of the way consumption planning for individual households takes place in Robin’s model. This process is covered to some extent in Robin’s opening contribution but there it is interwoven with an account of production planning as well. For my purposes it is useful to distil the consumption planning process, which I take to be as follows:
1.At the beginning of the process the IFB, announces current estimates of indicative prices for everything (consumption items, inputs to production, labor, etc.) based on estimates of opportunity costs and positive and negative externalities in the production of all goods and services.
2.Each household begins the process with a budget constraint determined by: (a) an effort rating based on the contributions of labor effort by all household members during the previous year, (b) a level of consumption allowances for people excused from participation in production (children, elderly, severely disabled, etc.), and (c) a consumption allowance for people who simply don’t want to work (this is, in effect, an unconditional basic income, presumably set at a level to fully meet basic needs).
3.Every year individual households submit to their neighborhood consumer councils their requests for all the things they anticipate consuming in the following year, given the household budget constraints. In effect, they pre-order their annual household consumption.
4.The powers of neighborhood consumption councils with respect to household consumption include: authorizing borrowing and saving of households; approving their consumption requests; discussing and proposing neighborhood public goods. The household proposals are reviewed by neighborhood consumption councils. If they fall within the budget constraint of the household, then they would normally be approved automatically. If there is a request for consumption above this level—in effect a request for a loan—this would normally be reviewed more closely. If the proposals are rejected, households revise them.
5.Neighborhood consumption councils aggregate the approved individual consumption requests of all households in the neighborhood, append requests for whatever neighborhood public goods they want, and submit the total list as the neighborhood consumption council’s request in the planning process.
6.Higher-level federations of consumption councils make requests for whatever public goods are consumed by their membership.
7.On the basis of all of the consumption proposals along with the production proposals from worker councils, the IFB recalculates the indicative prices and, where necessary, sends proposals back to the relevant councils for revision.
8.This iterative process continues until no revisions are needed.
There are two issues that I would like to raise with this account about how household consumption planning would actually work in practice: (1) How useful is household consumption planning? (2) How marketish are “adjustments”?
How Useful Is Household Consumption Planning?
Robin argues that this planning process would not be especially demanding on people. In his words:
We are well aware that consumers will misestimate what they ask for and need to make changes during the year, and that some consumers will prove more reliable and others more fickle. As a matter of fact, being quite lazy about such matters, I would not bother to update my consumption proposal at all! And being very irresponsible about communication I would also, in all likelihood, fail to respond to the prompt from my neighborhood consumption council reminding me to send in a new proposal for the coming year. I would simply allow my neighborhood council to re-enter what their records show I actually ended up consuming last year as my pre-order again for this year. Sound difficult?
The easiest way to think about this is to imagine each consumer with a swipe card that records what they consume during the year as they pick it up, and compares their rate of consumption for items against the amount they had asked for. If one’s rate of consumption for an item deviates by say 20 percent from the rate implied by the annual request, consumers could be “prompted” and asked if they want to make a change. If at the end of the year the total social cost of someone’s actual consumption differs from the social cost of what they had asked, and been approved for, they would simply be credited or debited appropriately in their savings account. (pp. 86–7)
Here is one of the things I don’t understand about this process as described: A key issue for any meaningful planning process is the classification of the items in the consumption bundle. When a consumer submits a plan, how fine-grained are these categories? For example, is “clothing” a category, or is the relevant category “shirts,” or “dress shirts,” or “highly tailored dress shirts” or “highly tailored silk dress shirts”? Among food items, is “jam” a category, or is “imported French blueberry jam” a category? For something like “books”, is it enough to estimate how much I plan to spend on books in a year, or do I have to know which titles I am likely to buy? Also: if I travel, then my consumption of certain things will extend far beyond the boundaries of my immediate location. If I estimate how much of the value of my consumption will be in restaurants, does it matter that some of these might be in Paris or New York rather than in the city where my neighborhood consumption council is located? I can certainly imagine making gross estimates of very large categories of consumption—like clothing or travel or food—but not of fine-grained items.
The problem is that the gross categories provide virtually no useful information for the actual producers of the things I will consume. It does not help shirt-makers very much to know, based on the aggregation of individual household consumption proposals, that consumers plan to spend a certain percent of their budget on clothing; they need to have some idea of how many shirts and of what style and quality to produce since these have very different indicative prices (and thus reflect different opportunity costs and positive and negative externalities). But consumers can hardly be expected to have a reasonable idea of their consumption for the future at that level of detail—how many cheap versus expensive meals I will consume in what cities, etc. Robin does not explain how detailed the consumption list is expected to be, whether it is built on categories like “food” or the list needs to be broken down into “wild-caught smoked salmon” and “gourmet organic chunky peanut butter.” In some places he seems to suggest that the categories will be quite coarse-grained, as in the above quotation when he writes: “If one’s rate of consumption for an item deviates by say 20 percent from the rate implied by the annual request, consumers could be ‘prompted’ and asked if they want to make a change.” That prompting would make sense for a broad category like clothing, but not a detailed specification like “silk neckties”.
Since the coarse categories would not be useful for planning by federations of worker councils, and this is the fundamental purpose for pre-ordering consumption, I will assume that the finest level of detail is required. This would involve for any
