Re: Albert’s “Participatory Economics” and the problem of allocation

[Matías Scaglione <mdscaglione@xxxxxxxxxxxx>]

Michael Albert has already commented my brief
critique. Thank you anyway.

Best,

Matias


 --- troy cochrane <troyc001@xxxxxxxx> escribió: >
Matias,
> Thank you for your response and I apologize for
> being unable to get the accent on the i in your
> name.
>
> Do you mind if I forward your critique onto Michael?
>
> Thanks,
> Troy
>
> Matías Scaglione <mdscaglione@xxxxxxxxxxxx> wrote:
> I wrote a little comment on Michael Albert's Parecon
> as a reading interrogation for a class. We, the
> students, had a teleconference with Albert, in which
> the problem of allocation appeared as the critical
> issue of his propposal. Here are my brief comments:
>
> --------------------------------------
> Michael Albert?s ?Participatory Economics? and the
> problem of allocation
>
> Michael Albert?s whole proposal of Parecon
> (Participatory Economics) suffers from what I
> believe
> are serious and insurmountable defects, among which
> the solution to the problem of allocation appears as
> the decisive one. Albert?s Economics ?a very
> misfortunate word, as long as Economics is the name
> of
> the official discipline that is supposed to study
> ?the
> economy?? is conducted by workers and consumers; the
> workers create the ?social product? and the
> consumers
> ?enjoy? it. The evanescent exchange of a commodity
> for
> money in the capitalist market is supplanted for a
> ?decentralized participatory planning? through
> councils of workers and consumers, in which an
> ?indicative price? is achieved through subsequent
> iteration of proposal of councils, at different
> levels
> of ?social aggregation?. Let us concede ?just for
> critical purposes? that the entire set of Albert?s
> extremely loose concepts and assumptions are right
> until the participatory planning. Let us assume an
> economy (or economics?) in transition with
> workers?consumers decided to jump from a market
> economy to a participatory planning in, let?s say,
> year 0. Following Albert?s social engineering,
> workers
> and consumers would develop a first proposal ?using
> last year?s final prices as starting indicators of
> social costs and benefits? (p. 125). Here we have
> two
> alternatives: (i) the society develops, for all the
> commodities of the economy, a huge vector with the
> initial (artificial) prices that better represent
> some
> measure of ?social costs and benefits?; (ii) the
> society let the planning iteration to take place
> based
> in the old capitalist-market price system. If the
> society chooses the first system and we assume that
> the decentralized planning works well: will the
> subsequent prices depend on the first prices
> centrally
> assigned (and, of course, on the method of price
> calculus)? If the society chooses the second system,
> and assuming also that the decentralized planning
> works well: is there anything that assures that the
> prices are going to reflect the so-called ?social
> costs and benefits?, whatever they are?
>
> But this is not the main problem with Albert?s
> allocation. Once the society decides the system of
> initial pricing, the iterative planning starts. The
> day 1 of year 0 the workers-consumers has to make
> their first proposal. There is no need of "Economics
> of Information" to realize that the system faces an
> enormous "asymmetry of information" (the workers
> have
> much more information about their products than the
> consumers) and that the set of decision of the
> consumers are big enough to paralyze the best
> trained
> shop-aholic ?even if the society chooses the
> abovementioned first option. Summing up: we have two
> ?actors? that have to reach a ?consensus? on the
> prices of the commodities: the worker is very well
> informed and has a very limited ?if not unitary? set
> of decision, whereas the consumer has a very poor
> information that worsens vis-à-vis the size of the
> decision set of consumption. The final question is:
> what would assure that the system would not collapse
> the very first day of implementation?
>
>
>
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