Saturday, October 29, 2005

Cigarettes, Parecon and Externality

In discussions with comrades on Z Mag's blog comments, blogs.zmag.org, some errors have come up. Bwong, an otherwise progressive and intelligent individual, even claimed that externalities have to do with any complex system. But that's simply false. Under market systems (and, of course, central planning, tribal, etc. systems have also destroyed ecologies), one not only acts in destructive ways out of ignorance, but is even given incentives to do so when one knows perfectly well. To get more concrete, here's an example:

Take the cigarette worker's council in a theoretical American parecon circa 1950. This worker's council begins to discover evidence that their products cause cancer. None of them have any incentive to lie about this fact, as their personal incomes are not tied to net cigarette sales. It is highly unlikely that a parecon would ban cigarettes after such a revelation, and would indeed violate civil rights and thus would be checked by any competent judiciary. But even if it were, it is unimaginable that the cigarette council workers would be so specialized that, either after a reasonable period of training that costs them nothing or no training at all given the general utility of most of their skills, they could not be rehabilitated to work. If they could not, they would be taken care of by society. Further, the scientists council, likely the ones doing the epidemiology, will presumably demand frequent reports and papers from their scientists, so a scientist working for the cigarette council would have little reason to lie, both due to the lack of bribery ability of the worker's council in question and the obvious concerns over reputation and getting paid. And since the whole process is far more transparent, with the "worker bees" having far more say and information (indeed, there are no "worker bees" to contrast against "queen bees"), each individual potential whistleblower has far more impact. And the consumer's council in question can always launch investigations pending complaints, yes, with a law enforcement council of civil servants, and encounter far fewer obstacles of transparency. And those who are externalized upon, whether it be from global warming or similar, have not only judicial redress but also direct economic redress, and since political power is not connected to money as a matter of course, they have as much political say and capacity. Under capitalism, the opposite is true in almost every respect. Cigarette companies squashed data, then when it became too difficult to squash they hired mercenary scientists (who could be doing good work) to defend their interests, put legislators and health industries into their pockets, launched suits against scientists and newspapers who dared to differ, and began a trend of "junk science" questioning of anti-corporate science leading to USSR-like questioning of real science.

Now, the above remains true even if corporations are gone, as managers are still around to muddle the waters of transparency, the workers' success is still linked to sales, scientists and regulatory agencies can still be bought, etc. etc. etc.

11 Comments:

Anonymous bwong said...

"Bwong.. even claimed that externalities have to do with any complex system. But that's simply false."

Of course that is false. I never made such a silly claim. Read my rejoinder at Zblog.

Actually, it is not the tobacco workers who lie, but the executives.

The workers would have an incentive to keep their jobs, but they could have become unemployed just as easily through outsourcing.

The impact of job transitions can be mitigated through a lot of mechanisms like generous pensions, retraining, small business start up loans/grants etc.In the case of tobacco farmers, one can provide them with incentives to switch to other crops, retraining is not even necessary.

I don't see parecon being the only option.

Your cigeratte example makes the point that people would not have an economical incentive to lie about the harmful effects of their professions in parecon because there is no economical incentive, peroid.

But the example can be used equally well to argue for a Soviet model.

In such a model there would be no economical stake to compel tobacco workers to lie about their products as well, and for the same reason. The system does not permit economical incentives, peroid.

I don't think you have made a compelling case for pareconize the whole economy.

But you do raise an important point. That is, SOME key industries should not be in private hands because of the corrupting effects of the profit motive.

I can give you much better examples than tobacco companies. How about Phamacheuticals?

12:51 PM  
Anonymous bwong said...

"Now, the above remains true even if corporations are gone, as managers are still around to muddle the waters of transparency, the workers' success is still linked to sales, scientists and regulatory agencies can still be bought, etc. etc. etc."

From experience the most effective way of keeping managers honest is through regulations and overseeing mechanisms.

The implementation of rules and oversight necessitate another layer of bureaucracies,--watch dog angencies such as the auditor general office, etc. This is the dialetics of the situation.

Parecon argues we can eliminate all problems assocaited with managers and bureaucracies all at once by simply doing away with managers altogether.

Managerial decisions would instead be made through direct, "particpatory management".

But the structural vehicle to achieve this feat is sketchy except for some vague allusions to "consultations", "voting" "council meetings" etc and star trekish references to high tech communication gadgets that allow instant relay and so on.

"Participatory management" may be feasible for the South End Press or the moutain bike co op, but it is laughable to think that these examples extrapolate to the governmnet of California.

Albert's solutions are actually quite predictable. His strategy is commonly known as the "greedy algorithm"
in computer science.

That is, you try to solve all problems all at once in the most direct way. But the GA almost never works as any programmer would tell you.

1:42 PM  
Blogger Frederic Christie said...

"Of course that is false. I never made such a silly claim. Read my rejoinder at Zblog."

I saw that. But you did make the claim about balance sheets, ignoring that that general claim ignores the way the market adjusts the balance sheets.

"Actually, it is not the tobacco workers who lie, but the executives."

Of course. But that's only when there are executives as classes to speak of. Since I can't mention non-existent entities in a parecon, I discussed what would occur and why the incentives are so much different.

"The workers would have an incentive to keep their jobs, but they could have become unemployed just as easily through outsourcing."

Outsourcing, of course, another market problem that has very little to do with parecon, but is just another way that markets hold a pendulum over the workers to keep them still. A whistleblower faces severe problems in a market. Far less so here.

"The impact of job transitions can be mitigated through a lot of mechanisms like generous pensions, retraining, small business start up loans/grants etc.In the case of tobacco farmers, one can provide them with incentives to switch to other crops, retraining is not even necessary."

All very true, yet if tobacco is more expensive than those other crops, which it almost undoubtedly is and is probably why they're trying to defend it in the first place, these people have concrete incentives to push against the data being revealed so none of this has to occur. No such concurrent incentive in parecon. I was dealing with the pre-whistleblowing phase, not the post.

We know perfectly well how such proposals, by the way, actually deal with things like tobacco: not very well. Risks of regulatory capture are just too present, among other difficulties. Whenever a state bureaucracy must regulate the market, whether it be through incentive programs (there the incentive is to continue the bad behavior but hide it to continue receiving the incentive), institution of new markets (virtually every "pollution trading" mechanism has resulted in less effective regulation and more pollution; see Palast), or banning certain practices, we see inherent inefficiencies. The society is being schizophrenic: the right hand is admonishing the left for playing by the rules.

"I don't see parecon being the only option."

Of course it isn't. If I implied that I would be undermining my own position vis-a-vis reformism. But it is the best option I am aware of.

"Your cigeratte example makes the point that people would not have an economical incentive to lie about the harmful effects of their professions in parecon because there is no economical incentive, peroid."

Wrong. People have an economic incentive: to work hard and do the best job they possibly can. There are wages that vary. I in fact have defended this component from Paul, who prefers we set everybody literally equal in terms of remuneration. I find this not only unfair, as it means if I work less hard I get just as much, but also inefficient. But the incentive is NOT towards asocial but towards social behavior.

Your bit about the Soviet Union merely replicates this inaccuracy. Parecon is an incentive based system. I've loudly proclaimed this advantage. I have no problem with economic incentives to do the right thing, especially when those incentives have the beneficial side effects of correcting price systems, offering information (prices should give us some kind of idea of the social costs/benefits of a product; only parecon can do this to any real extent), regulating and normalizing behavior while simultanously allowing diversity, etc. etc.

I fail to see how pharmaceutical companies change the example. In fact, it's better for me, because this is a case where everyone likes what's going on, yet they regularly release poisonous products with side effects worse than the ailment, then blast their messages constantly over every broadcast channel to get people to strongarm their doctor into buying drugs for every conceivable malady, undercutting alternative ways of practicing and leading to the catch-22 of modern meds: they're so good people stop using them because they think the problem is cured. The pharmaceutical industry steals its innovations from the public sector then makes money selling copycat drugs. It is among the least innovative, most monopolistic, and worst industries around, not least thanks to externality limitations.

"keeping managers honest is through regulations and overseeing mechanisms."

Which implies implementation by more managers and bureaucrats, who are far more likely to view their class interests as one with the managers as with who they're managing. This is among the many places we get regulatory capture.

I discussed numerous barriers, including the raw money that can be put to bear for bribery both of regulators and scientists, that you didn't discuss.

"Parecon argues we can eliminate all problems assocaited with managers and bureaucracies all at once by simply doing away with managers altogether."

This may be a semantic difficulty, one that has caused quite a bit of misunderstanding.

Orchestras will still have conductors. Work teams, depending on the decisions of the worker's council, may or may not have foremen. And so on. Different people with different expertise obviously will contour what happens on the ground. But they are given no institutional, consistent decision-making authority beyond the norm.

A parecon would not make the brain surgeon lead just as much as the heart surgeon in a heart operation. The institutional means would be set up wherein the heart specialist would lead the operation. But this is not an intrinsic setup that defies individual circumstance. When the brain surgery comes in, the brain surgeon immediately takes back control. Markets force not just expertise, but make that "expertise" (often actually not there thanks to barriers of nepotism, etc.) determine consistent decision-making authority and rules of hierarchy and domination. None of your arguments do or can establish this as necessary, because it simply isn't; in fact, it is not only injust, but inefficient, and leads to the further cementing of inequity.

The structural vehicle is "sketchy" precisely because each worker's council has an infinite array of ways to achieve it. If you were to read the extensive material on the topic, you would see numerous examples and distinctions. The orchestra conductor is drawn from the literature, for example. The examples get quite concrete.

What is laughable is to think that bureaucracy extrapolates to the government of California. Bureaucracies, managerial arrangements and markets universally fail at what we want: liberty, equity, classlessness, efficiency, influence over decisions, diversity, and possibly survival. The fact that we remain alive despite these institutions is an incredible feat.

Many of my friends are computer programmers. I know perfectly well about the GA. You often have to build in inefficiencies to make the program work at all. But markets are the equivalent of writing an incomplete program then fusing on another inflexible program that regularly causes system errors. Parecon is the ultimate in flexibility, and this is one of the attributes that I continue to point up to no rebuttal.

11:24 AM  
Anonymous Anonymous said...

hi frederic,

I think little thought experiments like these are eminently useful for elucidating parecon's features.

While I agree with the substance of your arguments, my impression (which may be wrong) is that in your description you left out some of the more immediate motives that workers would likely have in such circumstances.

To begin the gist of your argument is that obstacles to positive changes in economic structure are considerably less in a parecon, and that a parecon can make transitions equitably. I agree with this position. However there are some differences in the way I would have envisioned how a parecon would have worked and changed under those circumstances. I'll try to explain...

To begin with, I think it's worth mentioning that information about the negative effects of cigarettes would perhaps more likely have originated from the sphere of consumption, and more specifically from those bodies, including scientists and researchers in participative interaction with consumers, responsible for health care consumption. Eventually it would be argued in a democratic forum at the federal council level, that certain components of cigarette production and consumption, such as tar and nicotine, were responsible for relatively high social and environmental costs. In other words nicotine, tar, etc. would be identified as pollutants by a democratic process guided by scientific enquiry and accessible to public participation, in which there are no incentives to offer misleading information. This I find to be a legitimate way of dealing with social problems.

Now to get to my main point. Once substances are publicly recognized as pollutants and assessments of the their damage is made, each pollutant is given an indicative price which is internalized in the parecon price system. When worker's submit their production proposal there is an in-built incentive to reduce pollution just as there is an incentive to economize on any costs of production. I think it is a reasonable assumption that people prefer stability in their work life over change so that the immediate motives of workers in the cigarette industry would likely be to reduce the toxic elements in production processes and final products, while meeting consumer demands for cigarettes. A parecon price system favours such developments because more "natural" cigarettes will have a favourable price than cigarettes produced with toxins. The same inherent tilt towards quality extends throughout the price system. Another example is that organically produced orange juice will be reflected in lower prices relative to orange juice produced with pesticides causing soil depletion, etc. A more exact internalization of the costs of producing and distrubuting goods is one of the primary virtues of a parecon. I find it eminently superior to the regulated market approach. As Hahnel notes: "The crucial difference between participatory planning and market economies in this regard is that the participatory planning-planning procedure generates reliable quantitative estimates of the costs and benefits of pollution while markets generate no quantitative estimates whatsoever. Consequently, even "good faith" efforts to internalize the cost of pollution through taxes in market economies are "flying blind," and opportunites for bad faith are ever present." (Hahnel- Economic Justice and Democracy-p.200)
Market allocation, accompanied by the excluding aspects of private property, and hierarchical political structures informed by elitist pre-dispositions all present formidable barriers, first, to the identification of pollutants, and secondly, to equitable implementation of policies that would reduce pollution to socially efficient levels, satisfy the "polluter pays" principle, compensate victims and put in train a process of qualitative improvements in production processes.

Finally it's worth mentioning something that Wallerstein has pointed out. The regime of production for private profit currently faces unprecedented challenges coming from multiple directions. On the one hand private enterprise faces a global context where there is definite secular trend towards deruralization and subsequent proletarianization of the world population as a whole, the obvious implication is upward pressure on costs of production and diminishing profit rates. On the other hand the environmental costs of our current economic system have exceeded a threshold whereby they can no longer be denied or ignored. According to Wallerstein within the the logic of the global market this two-pronged problem confronts us with three possible alternatives:

1. "One, governments can insist that all enterprises internalize all costs, and we would be faced with an immediate acute profits squeeze."

2. two, governments can pay the bill for ecological measures (clean-up and restoration plus prevention), and use taxes to pay for this. But if one increases taxes, one either increases the taxes on the enterprises, which would lead to the same profits squeeze, or one raises taxes on everyone else, which would probably lead to an acute tax revolt.

3. three, we can do virtually nothing, which will lead to the various ecological catastrophes of which the ecology movements warn. So far, the third alternative has been carrying the day. In any case, this is why I say that there is "no exit," meaning by that that there is no exit within the framework of the existing historical system. (Wallerstein, Ecology and The Costs of Capitalist Production: No Exit)

As Wallerstein also notes this dilemna intensifies incentives for private enterprise to "foot-drag" on environmental reform, often quite actively by renting pseudo-scientists, by manufacturing consent via "greenwashing" media campaigns, etc.

I can't cover all bases in a single post, nevertheless I would welcome any comments.

bernard

7:59 AM  
Blogger Frederic Christie said...

"would perhaps more likely have originated from the sphere of consumption, and more specifically from those bodies,"

What I'm wondering is, how? I don't think scientists would just of their own volition experiment with every random consumer product, though that may occur as part of broader research. Rather, I think either a worker's or consumer's council would ask for a product to be studied. Though scientists may have come up with theories that would make an exploration of science occur. My point is that even if it was the worker's council that discovered it, analogously to the modern corporation, the array of incentives to blow the whistle combined with the lack of disincentives and the number of people with the information/access necessary to do it is far higher.

"In other words nicotine, tar, etc. would be identified as pollutants by a democratic process guided by scientific enquiry and accessible to public participation"

This would be the next phase, I agree, the stage of forming policy; I was merely talking about the stage of discovery. In my view, a parecon would not put into place some kind of "sin tax" on drugs. It may, depending on the degree to which health costs are socialized (i.e. would plastic surgery be free? Would there be a limited number of accesses before one would pay?), slightly raise the cost to take into account the long-term health cost. It also might raise the cost to take into account the opportunity cost of growing this destructive crop or, far more likely, the cost of second-hand smoke. But I would think it would make all drugs as easy as possible and fair to access.

I do appreciate the argument about "natural" cigarettes without additives, but there's a reason why people smoke cigarettes with additives: more natural, Native American-style tobacco is incredibly harsh. And even natural cigarettes carry the health costs, though obviously substantially less.

The profit drop is no problem unless corporations can, say, use capital flight to shift. Were there a global initiative, a treaty like Kyoto, and perhaps revocation of corporate charters and seizure of assets for malcontents, then we could keep corporations around, though I would be against it.

8:42 AM  
Anonymous Anonymous said...

"What I'm wondering is, how? I don't think scientists would just of their own volition experiment with every random consumer product, though that may occur as part of broader research."

I think there would be an institution, like the National Health Institute, whose concern it would be to monitor public health and to research the causes of costs in the health care system. Such an institution would certainly be accessible to any concerns from producer or consumer councils as well as individuals. I recognize your point about the lack of obstacles to whistle blowers; workers obviously do not have to feel insecure about losing their jobs if they are openly critical what they happen to be producing. It's a world of difference from capitalism.

"In my view, a parecon would not put into place some kind of "sin tax" on drugs. It may, depending on the degree to which health costs are socialized (i.e. would plastic surgery be free? Would there be a limited number of accesses before one would pay?), slightly raise the cost to take into account the long-term health cost. It also might raise the cost to take into account the opportunity cost of growing this destructive crop or, far more likely, the cost of second-hand smoke. But I would think it would make all drugs as easy as possible and fair to access."

Well a comparison to "sin tax" does not seem entirely apt. The point of departure for my commments comes from a passage in Hahnel's latest discussing pollution, it stands to reason that this discussion is germane to cigarette prodction..."In each iteration in the annual planning procedure there is an indicative price for every pollutant in every relevant region representing the current estimate of the damage, or social cost of releasing that pollutant into the region...If a worker council located in an affected region proposes to emit x units of a particular pollutant they are "charged" the indicative prices for that pollutant in that regions times x, just likie they are charged y times the indicative price of a ton of steel as inputs into their production process, and just like they are charged z times the indicative price of welding labour if propose to use z hours of welding labour." (Hahnel- EJ&D, 198)

The point seems to me that different inputs and processes in production have different relative values which factor into the social opportunity cost of each commodity. I guess one might stretch and equate this with sin taxes however this is far more exact, objective, and legitimate than sin taxes, and as Hahnel explains people in different parecon federations are free to "choose different trade-offs between less pollution and more consumption."

"I do appreciate the argument about "natural" cigarettes without additives, but there's a reason why people smoke cigarettes with additives: more natural, Native American-style tobacco is incredibly harsh. And even natural cigarettes carry the health costs, though obviously substantially less."

That may be but there seems to be little or no option to not charge charge for the production of carcinogenic additives even when there is demand for it because the social costs are considerable. Besides if Native Americans smoked it for centuries why could'nt others "get used to it?"

Getting back to an earlir question ... would plastic surgery be free?.. i suspect it would for obvious congenital birth defects that affect socialbility (as it is in Canada) but not for reasons of vanity.

"The profit drop is no problem unless corporations can, say, use capital flight to shift. Were there a global initiative, a treaty like Kyoto, and perhaps revocation of corporate charters and seizure of assets for malcontents, then we could keep corporations around, though I would be against it."

I must confess I don't understand the point you are trying to make. No problem to whom? A profit drop typically does not mean "no problem" but rather a crises as the supposed capital generating sectors of the system (ie: the stock market) are pessimistic about risking their money on new production and instead prefer to save- the result is unemployment and social disruption.

regards- bernard

6:40 PM  
Blogger Frederic Christie said...

"I think there would be an institution, like the National Health Institute, whose concern it would be to monitor public health and to research the causes of costs in the health care system."

Of course there would be. But I doubt that they would randomly decide to audit the effect of cayenne pepper upon health, though I'm sure this would occur sometimes if a scientist decided it was a topic of interest. Rather, they would respond to requests from worker's or consumer's councils.

Re: Pollutants: Of course. Second-hand pollution would be incorporated into parecon cigarette costs. But I truly doubt that FIRST-HAND costs, the costs to the individual in terms of health care, would be incorporated into the cost system. This is actually a question I'd want to ask Albert: do they put material disincentives against things like drugs that harm the body? Could a parecon do it, or would that be against right to influence decisions...?

"Besides if Native Americans smoked it for centuries why could'nt others "get used to it?"

Why should they have to? I think that the presence of the natural alternative and the cost disincetive of the modern cigarette would do just fine.

Where does one draw the line between obvious health requirement and not? I suppose the doctor's council would make the first call, with abilities for redress through consumer's and judiciary councils.

"A profit drop typically does not mean "no problem" but rather a crises as the supposed capital generating sectors of the system (ie: the stock market) are pessimistic about risking their money on new production and instead prefer to save- the result is unemployment and social disruption. "

That's assuming that they are allowed to cut workers, which a full employment policy would ban, and allowed capital flight, which would be banned, and that the stock market was as important as it is, which anti-speculative capital laws like Tobin taxes prevent, etc. I agree with Bwong that a lot is possible under the rubric of capitalism and more is possible under markets without private ownership of the MOP, corporations, etc.

2:01 PM  
Anonymous Anonymous said...

me: "I think there would be an institution, like the National Health Institute, whose concern it would be to monitor public health and to research the causes of costs in the health care system."

frederic: ”Of course there would be. But I doubt that they would randomly decide to audit the effect of cayenne pepper upon health, though I'm sure this would occur sometimes if a scientist decided it was a topic of interest. Rather, they would respond to requests from worker's or consumer's councils.”

I never actually suggested a random approach. I suggested an institution one of whose main concerns would to assess health care costs and their causes. The difference in our positions on this point seems to be that you seem to afford no role for initiation of research except to worker’s or consumer’s councils and individuals therein, while I would expect worker’s and consumer’s councils, etc. to be interacting with, and guiding something like a “health facilitation board” which would play an active, rather than merely reactive role, in elucidating public health concerns. To this end, the facilitation board might ask general questions such as why are people seeking medical treatment? – and they would try to address those costs which fall under the purview of human control. My position assumes socialized health care, this seemingly reasonable assumption legitimizes the existence of a public health agency concerned with mitigating social costs by having them internalized in the economy.

“Re: Pollutants: Of course. Second-hand pollution would be incorporated into parecon cigarette costs. But I truly doubt that FIRST-HAND costs, the costs to the individual in terms of health care, would be incorporated into the cost system. This is actually a question I'd want to ask Albert: do they put material disincentives against things like drugs that harm the body? Could a parecon do it, or would that be against right to influence decisions...?”

A socialized, free healthcare system is consistent with parecon norms, a user pays system is not. Albert says as much…”The rest of the above is simply fanciful, again, since in a parecon healthcare would of course be free and likewise schooling. “ (http://www.zmag.org/content/showarticle.cfm?SectionID=41&ItemID=4476). So many harmful health effects are either unavoidably social in nature, or they are unavoidably natural, meaning they are beyond the culpability of the individual. Moreover, the consequences of not treating people who are suffering are themselves social consequences even if we set aside the more obvious moral considerations. It follows from this that the FIRST HAND costs incurred by the system as a result of the smoking habits of individuals is a social concern, and that a parecon should make every effort to reduce social costs within its control. Otherwise you would have a situation where individuals are freeloading off the social body as a whole. So if a large portion of lung cancer cases are attributable to smoking then those who choose to undergo the risks by smoking will be paying for it almost prohibitively whenever they buy a pack of carcinogenic cigarettes. Smoking “natural” cigarettes is certainly an option as is turning to other healthier consumption choices reflecting more favourable social opportunity costs.


”Where does one draw the line between obvious health requirement and not? I suppose the doctor's council would make the first call, with abilities for redress through consumer's and judiciary councils.”

This sounds more plausible. I would suspect a public health agency comprised of scientists, doctors, researchers, etc. to be in cooperative interaction with worker’s in the health industry. Information about health costs would go to the federal councils for discussion with industry and consumer councils.


I wrote…"A profit drop typically does not mean "no problem" but rather a crises as the supposed capital generating sectors of the system (ie: the stock market) are pessimistic about risking their money on new production and instead prefer to save- the result is unemployment and social disruption. "

Fred wrote: “That's assuming that they are allowed to cut workers, which a full employment policy would ban, and allowed capital flight, which would be banned, and that the stock market was as important as it is, which anti-speculative capital laws like Tobin taxes prevent, etc. I agree with Bwong that a lot is possible under the rubric of capitalism and more is possible under markets without private ownership of the MOP, corporations, etc.”

The first set of reforms you describe, full employment, strict capital containment, and Tobin-like taxes is a limited program although it might seem radical to a multinational. Full employment would aggravate the costs of capitalist production because the market price of labour goes up (and profits down) thanks to the increased bargaining power of labour. To counteract this one certainly would require effective controls against capital flight and a wishful “let’s be friends” global compact between capital and labour to keep inflation in check. Private capital beset by historically unprecedented labour costs would have a strong incentive to foot drag on the environment so some sort of “flying blind” environmental compact would need to be construction by the guardian government as well. All of these reforms logically imply one another (as does a relatively free media), if only to maintain a modicum of sustainability for each prong of the program. The more substantive change the more the power of private capital is challenged and the inevitable question is raised -“who are the bearers of change?” If strenuous efforts by a mass movement are required for meaningful change why would such a mass movement consent to stopping at their own subordination under a social-democratic elite rather than following through towards self-management?
So far nothing has been done about fundamental property relations. Yet fundamental property relations are the cause of much of the uneven development of capitalism. Powerful first-world oligarchies with access to advanced publicly or privately funded R&D will perpetuate in power and likely threaten to undermine those reforms that hinder their god-given right to private profit. It’s not for no reason that Albert and Hahnel have stressed the fundamental instability of social democracies, so long as nothing is done about underlying property relations in most of the economy. One might also add that historically the ultimately elitist disposition of the social democrats has left their regimes vulnerable to neoliberal ideological coups because the socdems preference for rigid hierarchies promotes passive and subaltern attitudes among their subjects. When their system comes under attack from private interests social democrats, whether in governments or unions, cannot muster the support of their disengaged subjects. Flowing into this problem is something that Tony Smith pointed out in his critique of social democrats like Stiglitz who never “call(s) into question the reign of the money fetish and the capital fetish over human life.” Don’t get me wrong. I’m all for reforms because they mitigate immediate suffering, and in the experience of fighting for reforms we can learn how to best struggle for fundamental changes. Let us not however, harbour any illusion about the fundamentally elitist predispositions of social democrats, who when in power, have been abject failures at developing people’s capabilities for self-management mainly because of the self-serving belief the general population can never, anytime, anywhere exercise self-management. Later I will post something that Paul Sweezy wrote concerning a few more aspects of the strategy of liberal reforms.

“and more is possible under markets without private ownership of the MOP, corporations, etc.”

I don’t think markets and capitalism are the same thing at all and certainly historical capitalism is no natural outgrowth of markets for consumer goods. For my part I prefer Pat Devine’s model of negotiated coordination which features heterogenous forms of social ownership; principal economic allocation by inclusive, participatory, democratic planning; no markets for land, labour, and money; but with markets only for consumer goods. I consider this the most desirable long term version, while allowing for experimentation with parecon (which I believe is for more vulnerable to counterrevolution)and others in its mature stages. In any case, I have always hoped for more comparative analysis of these visions than currently exists. Many of these authors works complement one another. They can form a more compelling framework as a whole than their respective visions taken in isolation may allow for.

7:58 PM  
Anonymous Anonymous said...

Two of the finest recent reads on the implications of global environmental crises and attempts to address it have appeared in the Monthly Review.

John Bellamy Foster criticizes various establishment (including social democratic) attempts at programmatic solutions...Organizing Ecological Revolution

"Private corporations are institutions with one and only one purpose: the pursuit of profit. The idea of turning them to entirely different and opposing social ends is reminiscent of the long-abandoned notions of the “soulful corporation” that emerged for a short time in the 1950s and then vanished in the harsh light of reality. Many changes associated with the New Sustainability Paradigm would require a class revolution to bring about. Yet, this is excluded from the scenario itself. Instead the Global Scenario Group authors engage in a kind of magical thinking—denying that fundamental changes in the relations of production must accompany (and sometimes even precede) changes in values. No less than in the case of the Policy Reform Scenario—as pointed out in The Great Transition report itself—the “God of Mammon” will inevitably overwhelm a value-based Great Transition that seeks to escape the challenge of the revolutionary transformation of the whole society."

Secondly, eco-socialist Paul Burkett expands upon insights in the writings of Marx and Engels to derive a non-market vision that I find compelling...Marx's Vision of Sustainable Human Development

"the reason communism is “a society organised for co-operative working on a planned basis” is not in order to pursue productive efficiency for its own sake, but rather “to ensure all members of society the means of existence and the full development of their capacities.” This human developmental dimension also helps explain why communism’s “cooperative labor...developed to national dimensions” is not, in Marx’s projection, governed by any centralized state power; rather, “the system starts with the self-government of the communities.” In this sense, communism can be defined as “the people acting for itself by itself,” or “the reabsorption of the state power by society as its own living forces instead of as forces controlling and subduing it."

8:55 AM  
Anonymous Anonymous said...

fred,

One more comment...

on about p.144 of Parecon:Life After Capitalism, Albert briefly discusses cigarette production. It is made pretty clear that because cigarette smoking is a largely avoidable individual choice, FIRST HAND costs incurred by the health care system are to be internalized in the price system. Albert's discussion affords more attention to first hand costs than costs from second-hand smoke although he mentions that too.

Now I would imagine that part of the "well-care" system's mandate would be to provide services for folks who have developed chemical addictions to various substances to try to kick or at least ameliorate their habit if they so choose.

10:58 AM  
Blogger Frederic Christie said...

"I never actually suggested a random approach. I suggested an institution one of whose main concerns would to assess health care costs and their causes. The difference in our positions on this point seems to be that you seem to afford no role for initiation of research except to worker’s or consumer’s councils and individuals therein, while I would expect worker’s and consumer’s councils, etc. to be interacting with, and guiding something like a “health facilitation board” which would play an active, rather than merely reactive role, in elucidating public health concerns."

Well, no, that's not my position. But I must admit that I approach the problem from a very Bakunin-esque standpoint. I want expertise to inform, propose, refine, etc. but not to decide. However, I imagine that the scientist's councils would have quite a degree of autonomy to choose what they would want to research. My point was less a social than a scientific one: I don't imagine that scientists would randomly say, "Hey, let's see the effects of eating out of glass instead of ceramic bowls" unless they had good theoretical reasons or evidence from other fields to guide them. Rather, that a worker's council thinking that it may unconsciously be peddling a dangerous product or a consumer's council with similar concerns would request a scientific survey. Of course if a scientist decides that investigating the health benefits versus costs of cayenne, or doing taste tests of various dishes served with varying degrees of ginger, is valuable and no one objects in an appropriate manner, sure, go ahead and do that, but I just don't see that happening too often. Clearly I would want scientists doing research on whatever they wish, but as a practical matter what science internal to itself decides is valuable to study may not be what everyone else decides it to be; thus the means I describe.

"To this end, the facilitation board might ask general questions such as why are people seeking medical treatment? – and they would try to address those costs which fall under the purview of human control. My position assumes socialized health care, this seemingly reasonable assumption legitimizes the existence of a public health agency concerned with mitigating social costs by having them internalized in the economy."

Sure. But notice how in a parecon, if we decide to make the health care "privatized" (that is, if people pay every time they access rather than paying collectively for the service), no one will unduly be impacted or affected and people will have enough resources that it won't be an inequity-boosting policy.

"A socialized, free healthcare system is consistent with parecon norms, a user pays system is not."

I just don't see why. My personal predilections lean towards socialized health care, of course, but if we make it user-pays, what's the problem? Providers have literally zero incentive, and substantially disincentive, to turn away patients who want help or to raise prices to get that effect. And in parecon, if a community demands more socialized health care, it pays too. Albert also makes clear that "free rider" problems enter into the calculation, the notion that we're all paying 10 units for health care yet I only use 5 and you only use 20. We do have to take into account that sometimes people involved are blameless, that they didn't do anything to make a disease affect them, so I imagine parecon norms would lean strongly towards socialization (hence the term "health insurance"), but even in Canada people can't literally get unlimited service all the time for free. A hypochondriac person should see slight material disincentives because he is using time and energy that could be used treating patients with more serious ailments.

The confusing matter, and this question comes up a lot when discussing alternatives under capitalism, is that with a market system OF COURSE the only just thing is public health care: the inequity is just too deep and the inefficiencies too high because of the incentives, institutions and roles. But those are all gone in parecon.

"Moreover, the consequences of not treating people who are suffering are themselves social consequences even if we set aside the more obvious moral considerations."

But we also have to balance out that we don't want a paternalistic society either. Yes, people have the right to suffer. Obviously there's a different question when we MAKE them suffer, which can 99.999% of the time never be justified, but in a just society, if someone chose for themselves to spend too much on a car and accessing the health care system means that they are demanding far more resources than they earned through effort and sacrifice, I see substantially fewer problems. People should have the right to harm themselves if they so choose. I personally would lean towards at least allowing the person to promise to pay it back, as it were, through extra hours at his BJC, but I really think that the free rider problem is one that parecon should not gloss over, and indeed Albert and Hahnel discuss avoiding it as an advantage. Further, discussing the "free rider" problem actually means we can appeal to a lot of people who feel that they don't want to support people who are just lazy. There's something legitimate there, even when we have to cut through all the rhetoric and myth.

"It follows from this that the FIRST HAND costs incurred by the system as a result of the smoking habits of individuals is a social concern, and that a parecon should make every effort to reduce social costs within its control. Otherwise you would have a situation where individuals are freeloading off the social body as a whole."

I agree. So you have to have some way of putting into place the health costs. But as you noted with plastic surgery, this could easily be done by making some pay for the end operation if it's determined that they were culpable in it.

"Smoking “natural” cigarettes is certainly an option as is turning to other healthier consumption choices reflecting more favourable social opportunity costs."

I would more point up that natural cigarettes undoubtedly externalize less agricultural and pollutant costs and thus should be favored anyways. I hope you see where I'm coming from when I try to be anti-sin tax and against any societal imposition on voluntarily chosen behavior, no matter how seemingly inconsequential.

"This sounds more plausible. I would suspect a public health agency comprised of scientists, doctors, researchers, etc. to be in cooperative interaction with worker’s in the health industry. Information about health costs would go to the federal councils for discussion with industry and consumer councils."

And within a broad range I would hope implementation would occur within the doctor's offices, hospitals, etc.

"The first set of reforms you describe, full employment, strict capital containment, and Tobin-like taxes is a limited program although it might seem radical to a multinational."

Of course it is. I'm arguing against capitalism on a revolutionary standpoint. I also didn't list all of the proposals I feel would be necessary to sedate capitalism and markets.

"Full employment would aggravate the costs of capitalist production because the market price of labour goes up (and profits down) thanks to the increased bargaining power of labour. To counteract this one certainly would require effective controls against capital flight and a wishful “let’s be friends” global compact between capital and labour to keep inflation in check."

But here's the thing. Inflation of consumer goods would most certainly occur, unless price ceilings and profit ceilings were also instituted, but that inflation would be roughly distributed across the society. Full employment and minimum wage policies do require some folks to pay, of course, but a) it's just, b) it lowers inequity which then raises growth, c) every person who is employed gainfully now can be investing into the social fabric and buying goods which means greater growth (and real growth as well).

"Private capital beset by historically unprecedented labour costs would have a strong incentive to foot drag on the environment so some sort of “flying blind” environmental compact would need to be construction by the guardian government as well."

Revocation of corporate charters and regulatory systems that offer mild incentives plus harsh disincentives would be vital. At the moment, most ecological bills, successful though they have been, and of course other regulations, have fines so small that companies just add them into their operating expenses, sometimes even asking for a deduction or exemption from the IRS!

"All of these reforms logically imply one another (as does a relatively free media), if only to maintain a modicum of sustainability for each prong of the program."

Fair enough. But each can be gained individually. On the ecological ground, one can point up positive externalities, increased competition, technology incentives, possibly creating of new markets alongside the "carbon-trading" line, etc. And while they are vulnerable to rollback, so's everything before the revolution. People can't stand still even in parecon.

"The more substantive change the more the power of private capital is challenged and the inevitable question is raised -“who are the bearers of change?” If strenuous efforts by a mass movement are required for meaningful change why would such a mass movement consent to stopping at their own subordination under a social-democratic elite rather than following through towards self-management?"

I'm sure they would. But the point here is that I believe there are at least two barriers we face when we say "Well, if it's big enough to do all that then it's revolutionary."

The first is that the rift between revolutionary speech and revolutionary institutions remains abyssal. We will need time and growing movements to experiment with the practical application of a classless society. During that time, if only for self-defense we need the state to stop actively trampling on our experiments.

The second is that the barrier to get policies shoved down legislative or corporate bodies through numbers and smart tactics is far lower than the barrier to completely alter existing institutions. There will be a period, and Marx describes his proposals for this period in the Manifesto, wherein the movement will be developing nascent revolutionary institutions and will be successfully winning incredibly revolutionary reforms but will not quite be ready for the revolution. At that point, critical theorizing like an anti-managerial/anti-coordinatorist critique will be most vital to retain the revolutionary momentum. After all, bear in mind that reforms, even mild ones, can be battlegrounds to prevent rollback of past successes and to continue spreading hope and a "winners win" attitude of progressive wins each dovetailing from the last. I differ a lot from many anarchists in that I view policy reform of existing institutions as almost intractably important.

"So far nothing has been done about fundamental property relations. Yet fundamental property relations are the cause of much of the uneven development of capitalism."

But even here, we see that we can have markets without corporations, corporations without corporate irresponsibility and greed, and capitalism without gigantic imperialism, statism, inequity, etc. For example: We can make coop corporations with every member a shareholder. There's no law that says a corporation must be totalitarian, though most are and the market does steer that way. I mean, just imagine even the existence of a corporate charter, even a totally toothless one. It would imply that a corporation serves only at public leisure just like any other hierarchical institution.

"Powerful first-world oligarchies with access to advanced publicly or privately funded R&D will perpetuate in power and likely threaten to undermine those reforms that hinder their god-given right to private profit. It’s not for no reason that Albert and Hahnel have stressed the fundamental instability of social democracies, so long as nothing is done about underlying property relations in most of the economy."

But they have also loudly proclaimed, as has Shalom, the necessity to have change of the society we've got and who have attacked the "rollback" claim as being too simplistic and hopeless. There are ways of making reforms so thoroughly integrated and popular that capitalism views them as basically eternal. Social Security and socialized health care are perfect examples, though they also do show that given enough time there can be rollback pressures.

"One might also add that historically the ultimately elitist disposition of the social democrats has left their regimes vulnerable to neoliberal ideological coups because the socdems preference for rigid hierarchies promotes passive and subaltern attitudes among their subjects."

Not to mention the inevitable rightward drift Bookchin identifies, and the attempt to create fascist foot soldiers, and... But that all assumes we do basically nothing. Even a very nascent and contingent resistance can stop rollback if they fear its dormancy will end. This has been part of the reason why the Vietnam syndrome was and is so hard to exorcise.

"When their system comes under attack from private interests social democrats, whether in governments or unions, cannot muster the support of their disengaged subjects. Flowing into this problem is something that Tony Smith pointed out in his critique of social democrats like Stiglitz who never “call(s) into question the reign of the money fetish and the capital fetish over human life.” Don’t get me wrong. I’m all for reforms because they mitigate immediate suffering, and in the experience of fighting for reforms we can learn how to best struggle for fundamental changes. Let us not however, harbour any illusion about the fundamentally elitist predispositions of social democrats, who when in power, have been abject failures at developing people’s capabilities for self-management mainly because of the self-serving belief the general population can never, anytime, anywhere exercise self-management."

I agree. But bear in mind that there are social democrats and then there are those like Bwong arguing for elimination of corporations, radicalization (though not elimination) of the state, accountability of managers, co-ops, limited markets, and a patchwork of institutions. It IS anti-capitalist and it IS better than capitalism. It's just not better than parecon.

"For my part I prefer Pat Devine’s model of negotiated coordination which features heterogenous forms of social ownership; principal economic allocation by inclusive, participatory, democratic planning; no markets for land, labour, and money; but with markets only for consumer goods. I consider this the most desirable long term version, while allowing for experimentation with parecon (which I believe is for more vulnerable to counterrevolution)and others in its mature stages."

I imagine a Devine model (what Bwong proposed) as being a possible nascent transitory system to reduce "system shock". Markets for consumer goods are all right, I guess, but when participatory planning becomes refined, I will eagerly prefer it.

"In any case, I have always hoped for more comparative analysis of these visions than currently exists. Many of these authors works complement one another. They can form a more compelling framework as a whole than their respective visions taken in isolation may allow for."

I constantly invite green bio-regionalists, syndicalists, libertarian municipalists, mindful market advocates like Korten/Devine/Howe, pareconists, primitivists, democratic central planning, etc. advocates for discussion and debate. And I strongly cautioned Eric Patton against accepting parecon as the gold standard.



"on about p.144 of Parecon:Life After Capitalism, Albert briefly discusses cigarette production. It is made pretty clear that because cigarette smoking is a largely avoidable individual choice, FIRST HAND costs incurred by the health care system are to be internalized in the price system. Albert's discussion affords more attention to first hand costs than costs from second-hand smoke although he mentions that too. "

See, to me that sounds like a sin tax. I think I have the right to poison my body as I please. AT THE MOMENT that I access the health care, and not a moment before, should I have to pay. Now, depending on the degree to which the health care is socialized, obviously those putting undue demands on it need to see disincentives of some kind somewhere, and we then have the dilemma, do we want to make health care less accessible or put disincentives on voluntary behavior? The risk I see, of course, is that the community's notion of what is "ethical" gets put into products, which could translate to, say, abortion costs shooting through the roof. Sure, you still have the right to do it... it just costs more than you want to pay.

I see no informational or incentive good in raising the price of cigarettes to penalize the smoker for what they do to their own body, unless that is the only way to capture the undue cost they put onto the system with their uniquely higher demands.

1:15 AM  

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