Monday, November 07, 2005

Parecon: A Ration Economy

Is parecon a ration economy? This allegation has been raised in discussion.

Does this mean that sometimes people won't be able to get what they want? Of course. Every economy does this. If I were to try to buy a million bottles of cold medicine at my local pharmacy, I probably wouldn't have enough money or storage space, they wouldn't have enough cold medicine, and certain laws against methamphetamine production would prevent me from doing so. Economies thereby restrict access to shared resources through "prices" or pre-set allocation limits per unit or similar (the latter of which is called "rationing"). The way someone gets money to purchase things vary. At smaller levels, things can be more flexible, of course, but with more complex resources there tends to be a need to formalize access.

Does this mean that certain rarer objects may be distributed by lottery or rationing to each household? Yes, but this strikes me as an advantage. Why should the first person on the scene or the wealthiest person have the most access to a rare resource? After all, the bastion of "free markets", the United States, chose rationing in WWII.

Does this mean that if a local store had too much supply it would still deny it to people based on "the plan"? Of course not. The local worker's council and consumer's council have the latitude in that regard to distribute. Anyone who has read Steinbeck, on the other hand, knows that markets offer an incentive to deny excess production (oranges) even when that production is perishable because they don't want to encourage giveaways.

A parecon sets prices and wages according to a participatory planning process that has different methods for determining inputs and outputs than a market society as well as different actors, but it's not a "ration economy" any more than a market society is. It can use what is commonly accepted as rationing for some goods, of course, but it does so quite naturally and normally. The rebuttal is that black markets form, but that difficulty was faced by the US and largely surmounted, and I think that shows up the problem of markets, not their success: they form at least as often to allow some to break the fairly determined rules of society and trump other people's decisions.

I would hope that parecons would allow as much "unplanned" consumption as possible and as much free traffic as possible. But I believe history and institutional analysis of markets tell us that in fact they do not offer freedom, convenience, equity or fairness.


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