Democratic Economic Planning presents a concrete proposal for how to organize, carry out, and integrate comprehensive annual economic planning, investment planning, and long-run development planning so as to maximize popular participation, distribute the burdens and benefits of economic activity fairly, achieve environmental sustainability, and use scarce productive resources efficiently. The participatory planning procedures proposed provide workers in self-managed councils and consumers in neighbourhood councils with autonomy over their own activities while ensuring that they use scarce productive resources in socially responsible ways without subjecting them to competitive market forces.
Certain mathematical and economic skills are required to fully understand and evaluate the planning procedures discussed and evaluated in technical sections in a number of chapters. These sections are necessary to advance the theory of democratic planning, and should be of primary interest to readers who have those skills. However, the book is written so that the main argument can be followed without fully digesting the more technical sections.
Democratic Economic Planning is written for dreamers who are disenamored with the economics of competition and greed want to know how a system of equitable cooperation can be organized; and also for sceptics who demand "hard proof" that an economy without markets and private enterprise is possible.
Author(s): Robin Hahnel
Series: Routledge Frontiers of Political Economy
Publisher: Routledge
Year: 2021
Cover
Half Title
Series
Title
Copyright
Dedication
Contents
Preface
The authors
About the main author
Intellectual challenges
Intended audiences and readers’ guide
About the contributors
Introduction
Semantics
Political context
Socialist planning in the history of economic thought
First socialist calculation debate
Post–World War II debate
Post-Soviet debate
Part I Preliminaries
Introduction to Part I
1 Defining goals
Efficiency
Economic self-management
Economic justice
Environmental sustainability
Solidarity
Variety
2 Social democratic capitalism
Better than neoliberal capitalism, but not good enough
Why not private enterprise?
Private enterprise is incompatible with economic justice
Why not markets?
Markets are inefficient
Externalities are pervasive
Markets are often not competitive
Markets often fail to equilibrate
Practical problems with policy correctives
Labor markets are unfair
Markets subvert democracy
Markets undermine the ties that bind us
Conclusion
Part I: conclusion
Part II Central planning
Introduction to Part II
3 Central planning: how to do it
A multi-good, one-year model
A multi-good, multi-year model
Information issues in central planning
Finding the social welfare function
Responding to the tacit knowledge critique
Material balances
Trial prices
Trial quantities
Gradient procedures
4 Central planning: why not to do it
Central planning: an information game of cat and mouse
Central planning obstructs worker self-management
Conclusion
Part II: conclusion
Part III A participatory economy
Introduction: answer to Auntie Tina
5 A participatory economy in brief
Social ownership
Major institutions
Worker councils
Balanced jobs
Neighborhood consumer councils
Federations
Income based on effort and need
Participatory planning
The challenge
The annual planning procedure in brief
A participatory economy and self-management
6 Digging deeper into a participatory economy
Social ownership
Indigenous cultures and the natural commons
Socialism and the productive commons
A productive commons for modern times
Worker councils
Outside stakeholders
Birth and death of worker councils
Objections to balanced jobs
Incentives
Fairness, trust, and solidarity
Measuring effort and sacrifice
Capping average effort ratings
Motivational efficiency
Allocative efficiency
Dynamic efficiency
Consumption
Allowances
Saving and borrowing
Councils and federations
Councils
Governance of federations
Assessments for public goods
7 The participatory annual planning procedure
Who says no?
Treatment of capital goods during annual planning
Public goods
Pollution
The pollution demand revealing mechanism
Overcoming perverse incentives
Multiple victims
Misrepresentation
Conclusion
An important caveat
Welfare theoretic analysis
A heuristic model
Consumer councils
Worker councils
A formal model
Comparing assumptions
What participatory planning is not
Participatory planning is not central planning
Participatory planning is not one big meeting
Participatory planning is not a Walrasian auctioneer
Appendix on efficient levels of emissions
8 Dispelling common confusions
The size 6 purple women’s high-heeled shoe with a yellow toe problem
Post-plan adjustments
If it looks like a market, and smells like a market . . .
9 Computer simulations of participatory planning
Purpose
Platforms
The algorithm
Practicality: how many iterations will it take?
Threshold
Price adjustment rule
Initial prices
Changing exponents in production and well-being functions
Tracking when different thresholds are achieved
Robustness: sensitivity to relaxing assumptions
Intervention by IFB personnel
Benefits of human intervention
Dangers of human intervention
Future simulation research
Conclusion: a practical possibility?
10 Reproductive labor
Conceptualizing reproductive activity
Different kinds of reproductive labor
Assumptions about education and healthcare
The public vs. private choice
Reproductive labor in the participatory economy
Women’s caucuses
Balance jobs for caring labor
Anti-discrimination legislation
Affirmative action
Reproductive activity in households
In-home domestic labor
In-home caring labor
In-home socialization labor
Conclusion
Part III: conclusion
Dangers to be avoided
Unique features of participatory planning
Part IV Investment planning
Introduction to Part IV
11 Aggregate investment planning
A one-good, three-year model
An omniscient investment planner
Reality vs. theory
Missing information
Missing people
Inherently undemocratic
Participatory aggregate investment planning
Challenges
The investment planning procedure
Sequencing investment and annual planning
Welfare gains from updating investment plans
Conclusion
12 Comprehensive investment planning
Producing the efficient amounts of different capital goods
Allocating user rights for different capital goods efficiently
Part IV: conclusion
Participants in aggregate investment planning
Participants in detailed investment planning
Part V Long-run development planning
Introduction to Part V
13 Participatory educational planning
What does education planning decide?
“Producing” education
Benefits of education
Investing the efficient amount in education
A note on time frames
Participants
Education planning proposal
14 Participatory environmental planning
Unique features of environmental planning
What does environmental planning decide?
Investing the efficient amount to protect the environment
Participants
Environmental planning proposal
15 Participatory international economic planning
International context
Goals
Issues to keep in mind
Three rules to guide trade policy
Evaluating comparative advantages
Achieving efficient trade during annual planning
International financial investment
What does participatory international economic planning decide?
An efficient transformation of comparative advantages
Participants in participatory strategic international economic planning
Does size matter?
Conclusion
Appendix on investment in infrastructure
Investing the efficient amount in infrastructure
Part V: conclusion
Education planning
Environmental planning
International economic planning
Conclusion
The socialist calculation debate a century later
Reconciling democratic planning and autonomy
Opportunity costs, social costs, and social rates of return
A level playing field for public and private consumption
Externalities extinguished!
Income distribution and incentives
Addressing concerns about impracticality
Integrating long-run and short-run plans
Reproductive labor
Looking forward
A bridge too far?
Appendix: other democratic planning proposals
Introduction
1 Community-based economics
2 The “Scottish” model
3 Multi-level democratic iterative coordination
4 Negotiated coordination
5 Amazon socialism
Epilogue on prices in socialism
Index
