There’s an old joke that uses various concepts to illustrate “oxymoron.” “Military intelligence” is probably the cheapest laugh; “small crowd,” “jumbo shrimp,” and “dull roar” are the most hackneyed. It’s not the intention, but Robin Hahnel adds to the list with something fresh: libertarian socialism.
That’s the label for the economic system Hahnel outlines in A Participatory Economy. Hahnel is a radical economist who has devoted his career to thinking about alternatives to capitalism that bring democracy to the systems in which we make our livelihood.
A Participatory Economy is a blueprint for such an alternative—not only to capitalism, but also to state-centered socialism. It’s a response to the challenge the author issues in the opening pages: “Twenty-first-century socialists owe concrete answers to those who ask what we would replace capitalism with.”
AK Press
In place of the “comprehensive authoritarian planning” that was the central feature of Soviet-style communism, Hahnel’s model proposes a collection of democratic councils and federations representing workers and consumers, as well as an “Iterative Facilitation Board” that sets an annual agenda based on the availability of natural resources, capital goods, and human labor, along with providing estimates of the social cost for producing various goods and services.
Consumer councils operating at a neighborhood level make proposals based on what they want, while worker councils make production proposals; all of these are evaluated with respect to both their social benefits and costs. The councils collectively evaluate proposals, in what Hahnel says is a procedure “designed to make it clear when a worker council production proposal is inefficient and when a consumption council proposal is unfair, and allows other worker and consumer councils to deny approval for proposals when they seem to be inefficient or unfair.”
In a similar vein, Hahnel suggests a compensation system set collectively by worker councils that is based on “effort and sacrifice,” as assessed by the council members for each other. The proposed system makes “allowances” for people with disabilities, parents and guardians responsible for raising children, and those who have reached some predetermined retirement age, “to be decided democratically by the political system.” Services such as education and health care are all free.
Mainstream economists have dismissed such ideas, arguing that consumers often don’t know what they want until someone makes it. Hahnel rebuts that argument by noting that “in market economies producers guess what to produce,” then “use advertising to try to influence consumers to buy what they have produced.” In short, producers “are still guessing” in market economies—and if they guess wrong, they ply consumers to persuade them that they indeed need what the producers have made.
Perhaps the most inviting aspect of the conceptual outline Hahnel offers is its accounting for “externalities”—the catch-all term for the costs that economic activity imposes on our environment. The theoretical planning process would account for the pollution generated by any particular production proposal and include measures to ameliorate it.
This brief tour of the system Hahnel describes barely scratches its surface, but already objections are predictable, even obvious. At the top of the list: How can this even work without getting bogged down in minutiae?
One place that Hahnel does not go is just how a libertarian socialist economic system would arise. He is straightforward about that omission: “This is not a book about strategy for achieving ‘economic system change,’ much less political, gender, or racial system change.” Still, some thoughts about small-scale, contained, and more easily imagined models with the potential to seed a larger transformation would help readers who are not already deeply steeped in the discussions of participatory economics take an interest in the ideas set forth here.