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AI Summary:
Source: “Ludwig von Mises, in his notorious 1920 essay promoting markets over the then rapidly developing trend toward socialist economic planning, aimed at presenting markets as an efficient computational machinery. As discussed in the introductory essay of, ‘The challenge that Mises laid down for socialism was a resolutely technocratic one: to come up with a rival infrastructure of computation that could match that of the price system [...] It was a challenge that few socialists have been successfully able to duck altogether, and fewer still have successfully risen to.’ The lack of a convincing development of such a ‘rival socialist infrastructure of computation’ is highly regrettable. However, to be honest, it is quite possible that the mathematics required to provide a viable socialist/communist answer to Mises’ challenge had simply not been available at the time, and for quite a long time after that. Even at the time of the main attempts at implementing forms of Cybernetic Communism, in the ’60s and early ’70s, the theory of complex networks was still in its infancy. It is likely that, despite having the correct general idea in mind, the efforts of both Victor Glushkov and Stafford Beer would have failed when implemented within the available science and technology framework of the time, simply because the information processing capacity was still too low and some crucial mathematical tools still unavailable. We are in a much better position today to provide a viable opposition to markets, so there is no excuse any longer for eschewing this task. What I am writing in this section should be regarded as an exercise in the kind of ‘Economic Science Fictions’ that are discussed at length in [Will Davies’ book] and in the kind of mathematical imagination I was mentioning above. It is meant to envision the mathematical form of a cybernetic communist infrastructure of computation that would replace the profit optimization mechanism of markets.”
Source: The Planning Machine: Project Cybersyn and the origins of the Big Data nation
Source: The Cybersyn Revolution: Five lessons from a socialist computing project in Salvador Allende’s Chile
Source: "In July 2021, readers of the Financial Times may have been surprised to read an op-ed calling for central planning to meet the challenges of global warming. While the article’s proposals were hardly as radical as recent calls for a renewed 'war communism,' it is remarkable enough that a liberal newspaper was considering economic planning in the first place. Elsewhere, however, the debate over the affordances of economic planning has been going on for a while, often by way of a return to the so-called 'socialist calculation debate' that begun in the 1920s. While it is often acknowledged that Friedrich Hayek won the debate with his 1945 article 'The Use of Knowledge in Society,' more recent developments in information and communication technologies suggested to some observers that increased computing power could render possible an effective coordination of production and distribution, after all. In recent years, a number of contributions have served to revive the calculation debate and reflected on the possibilities of a 'digital socialism,' the relationship between information technology and socialist construction as well as 'Planning and Anarchy,' and the feasibility of a 'Society After Money.' The English Department at Christian-Albrechts-Universität invites you to a workshop in which contributors to the 'Socialist Calculation Debate 2.0' (Jan Groos) and other scholars will present and discuss their research on (digital) technologies and postcapitalist imaginaries. The workshop will take place in-person only, but the presentations will be recorded and made accessible at a later date. If you want to attend the workshop, please register via email at [email protected]."
Source: Economic Planning is Back: “In the 20th century, economic planning came with authoritarian political structures. In the USSR, a bureaucracy of planners decided the qualities and quantities of goods to produce, i.e. which needs to satisfy and which needs not to. This was done top-down. But this correlation between planning and authoritarianism is not unavoidable. For one thing, capitalism also generates its own political authoritarianisms, as the current rise in right-wing ‘populist’ governments shows. Now is the time to be creative in matters of institutional design, so as to combine democratic control on the economy and individual emancipation from consumerism. Economic planning should be bottom-up. Experiments in ‘participatory’ or ‘deliberative’ democracy have been numerous throughout the world during the past twenty years or so. To this day, however, focus groups, citizen’s juries, participatory budgets or consensus conferences have not been used to influence productive choices... One of the great questions of the early 21st century is this: do algorithms and big data change the nature of this problem? ‘The Big Data revolution can revive the planned economy’, according to a September 2017 Financial Times column. Digital platforms are a powerful tool for centralizing and managing information. Unlike what happened in the USSR, this centralization is not done by human beings with limited cognitive faculties, and prone to error and corruption. It is done by algorithms.”
Source: “Both climate change and the covid-19 pandemic have increased interest in a contemporary discourse around questions of planned economies. This discourse had been boiling up over the last decade and now meets a political landscape that has rather quickly and substantially re-assessed its relation towards planning. However, if the concept of planned economies is not to merely mean a more extensive role of the state within a social market economy, but fundamentally different types of political economy, substantial open questions need to be addressed. This article analyses the current discourse around non-capitalist planned economies and argues that there is a need for new conceptions of planned economies that neither resort to central planning nor variants of market socialism. For further work towards such alternative conceptions it proposes the term distributed planned economies.”
Source: “This paper gives an interpretation of Michael Polanyi’s vision of government and economics as spanning between Hayek and Keynes. The influence of Hayek is manifested by his opposition to central planning and the defence of self-organization as a superior mechanism for coordinating individual plans, while the influence of Keynes is evidenced by his strong support for government interventionism in order to dampen economic fluctuations, fight unemployment and limit income inequalities. Polanyi blended these two influences and produced an idiosyncratic approach to government and economics, which has until recently been underrated in the literature… Our aim in this paper is to show that, by considering Polanyi’s mixed vision of the market economy as embedded in his broader pursuits into the nature of knowledge and liberalism, one can find coherence in his overall understanding of the interplay between spontaneous and organized orders of coordination, which otherwise cannot be found. One of the arguments is that Polanyi’s and Hayek’s views on liberalism and tacit knowledge are different, which made it possible for Polanyi to agree with Keynes that government should intervene to reduce unemployment while also upholding the concept of a self-organized economy and society in line with Hayek.”
Source: “Markets are often proposed, also within anarchist settings, as a computational model to address the scale problem. Alternative computational models can be envisioned, which do not rely on profit, but on the optimization of a form of integrated informational complexity. These can provide an alternative to the market system to address the scale problem in an anarcho-communist perspective.”
Source: “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.”
Source: “The core of the book consists of a series of chapters spelling out what we believe would be efficient and democratic methods for planning a complex economy. We also examine issues of inequality and its elimination, systems of payment for labour, a democratic political constitution for a socialist commonwealth, the commune as a set of arrangements for living, and property relations under socialism.”
Source: “The Centre for Postcapitalist Civilisation, civilisation, mέta, presents Alexandria Shaner’s & Michael Albert’s mέta Working Paper entitled Participatory Economics Overview: What, Why, How (accessible here), part of the ‘Towards (a Better) Postcapitalism: A Handy How-To Guide’ series under ‘Allocation.’ mέta Working Papers’ series “Towards (a Better) Postcapitalism: A Handy How-To Guide” publishes solicited policy papers on aspects of how would a non-dystopian postcapitalism look like. The series focuses on three ‘pillars’: i.e., how could/would postcapitalist production be like (and who would own the means of production), what shape would the allocation of goods take (and which alternatives to the market economy may be explored), and what would be the main tenets of postcapitalist decision making and democracy. In this paper, Alexandria Shaner & Michael Albert provide an overview of PARECON (‘participatory economics’) as a viable postcapitalist model. (Earlier additions to the ‘Towards (a Better) Postcapitalism: A Handy How-To Guide’ series include Professor Robin Hahnel’s paper on Participatory Planning, Michael Albert’s papers on Postcapitalist Decision Making, on Postcapitalist Work: Balanced Jobs and Equitable Remuneration and on Postcapitalist Allocation: Participatory Planning, and Professor Stephen R. Shalom paper Decision-Making in a Good Society: The Case for Nested Councils.)”
Source: “What might a desirable and viable alternative to our current economic system look like beyond vague ideals and nice sounding words? Participatory economics, sometimes abbreviated to Parecon, is a relatively easy to understand and yet comprehensive model that describes how an economy can be organised as an alternative to capitalism and centrally planned socialism. The purpose of this website is to raise awareness and popularise an understanding of participatory economics amongst the general public, and to provide a springboard from which readers can go on to explore the model in greater detail.”
Source: “…the larger the corporation, the more planning that has to inevitably take place. Bezos’ Amazon is the ultimate planning machine. It has perfected planning using two things: big data and algorithms. Despite, or better, because of the free market ideology, our so-called neoliberal free market economies and adjacent corporations show a very high degree of planning, at least when it comes to how actual corporations operate in the real world. A participatory planning economy would introduce the element of people and democracy into planning. In every large corporation, planning is happening on a daily basis. This sort of planning would then happen inside a ‘participatory economy’ (p. 185). With this, such a participatory economy would remove all class hierarchies from society. Albert closes his book by saying that the ‘participatory economic vision has just five core components’ (p. 209): commonly organised productive assets, ‘workers and consumer councils, balanced job complexes, equitable remuneration, and participatory planning’ (p. 209).”
Source: “Model-Based-Institutional-Design (MBID) and Computer-Aided-Governance (CAG) represent innovative approaches to understanding and designing institutions in an increasingly complex and interconnected world. These practices acknowledge the crucial role that artificial intelligence (AI) and other technologies play in shaping modern institutions and aim to leverage these advancements for improved institutional outcomes. At the core of MBID is the application of Model-Based Systems Engineering (MBSE) to Elinor Ostrom’s Institutional Analysis and Development (IAD). This approach emphasizes the importance of understanding the ways in which social, operational, legal, technical, and economic elements, including AI components, constitute modern institutions — enabling those organizations to address their particular local resource allocation problems, social dilemmas and collective action challenges. By creating comprehensive models that account for these varied elements, MBID provides a powerful machine-readable framework for designing and analyzing institutions, ensuring their alignment with their intended purpose and adaptability to changing environments.”
Source: “Each time a new [public development] project was proposed, it could be broken up into small parcels that people could own and invest in — a bit like community shares or cooperative investment funds. This would give people a say in what they think their neighbourhoods need; from more green space, backing local businesses, or a shared solar energy grid. Residents could form local investment groups and vote for projects they want. If there’s enough support they could agree to fund them, forming a covenant between local property owners and the investment group. Investments could be made in several different ways. For those who own property, a digital property deed could link the investment in a new project to equity in their home, allowing homeowners to exchange a portion of equity to cover the investment without creating huge amounts of paperwork or legal costs. This could only be realised and shared at the point of sale, or when the covenant runs out. Property values could be calculated on a quarterly or yearly basis, with homeowners voting on and sharing a part of their uplift (say 10%) to the communal fund in the form of equity. The covenant would come to an end once the original construction cost and lifetime maintenance costs have been covered, or they could be reinvested in new community projects. For projects that are less likely to cause the land value to go up, but instead generate money or reduce costs (ie. installing a micro energy grid), community bonds could be issued. Those who contribute would get cheap or free renewable energy, as well as a share of the future revenue from excess energy sold back to the grid... Redesigning the nature of how we invest in this transition is vital to ensuring this is not a transition which concentrates wealth but is one that’s truly just and equitable. The need for transition goes hand in hand with addressing the erosion of trust in top down, centralised government methods for making that happen (and create huge amounts of resistance when we try). We need to give people the control to decide what their future neighbourhoods can become. Time and time again we see that when people have a stake in how their neighbourhoods can change for the better, they are far more likely to help make it happen. Whereas 10–15 years ago this type of system would have created a huge amount of bureaucracy, advances in technology now make these types of local, decentralised investment models feasible. HM Land Registry have recently trialed property and ownership transactions using smart contracts and blockchain. Applied in the right way, these type of new digital platforms could allow local infrastructure and assets to become collectively owned and relink the value they create to the neighbourhoods around them.”
Source: “In Gaia 2.0, horizontal transfer of information, functional diversity with redundancy, and distributed control will likely be important to a successful circular economy. The challenge is to support diverse, autocatalytic networks of human agents that can propel transformations toward goals such as sustainable energy, fueling the efficient cycling of resources. This is particularly challenging given a social and economic paradigm of short-term localized gain and relatively weak global, unifying, long-term structures to counteract this paradigm... maintaining a self-regulating, human life–supporting planet is not the primary goal of some dominant modes of collective human activity today. Despite a flood of monitoring information, present industrial societies seem less able to track changes in their environment than the life-forms that compose Gaia, because that information is often ignored where it matters by those in power. It's as if purposelessness had shifted from the natural to the social domain... Creating an infrastructure of sensors that allows tracking the lag time between environmental changes and reactions of societies is the only practical way in which we can hope to add some self-awareness to Gaia's self-regulation. This framing of the problem gives a clear ethical direction: Any attempt to tamper with the sensors or slow down the reaction to errors jeopardizes the chance to learn from Gaia how to close the loops that would enable Gaia 2.0 to better sustain the human population than the present world.”
Source: “Global supply chains have long been geared towards keeping quality relatively constant while driving lower costs at every step. This has resulted in significant concentration risk in terms of geographies and vendors for most companies. For example, China scaling down due to Covid-19 and creating a knock-on supply impacts we are seeing today has exposed the lack of resilience in this approach. There is a sharp need for a more distributed, coordinated and trackable supply of components across multiple geographies and vendors while maintaining economies of scale. This would require global platforms to be erected that use sophisticated technologies such as 5G, robotics, IoT and blockchain to help link multiple buyers with multiple vendors reliably across a ‘mesh’ of supply chains. This will also have a knock-on impact on the adoption of self-driving cars and delivery drones as the demand for ecommerce logistics will far outstrip the number of drivers needed to fulfill them. The usual B2B platform suspects such as Amazon and Ali Baba are likely to step up and compete for the ownership of this more sophisticated supply chain ecosystem in the next decade... As governments learn from the Covid-19 experience, it will shift investment in favor of smart cities as it would be critical to have them in order better manage the next black swan event. Key players benefiting from this shift in gears would be smart governments, focused companies such as Cisco, Microsoft and Siemens as well as digital city startups across Europe and the US... It is straight forward to predict that the Covid-19 is going to be an accelerant for remote working as well as online education. What is harder to figure out is what will happen once a majority of the knowledge workforce needs to work together remotely, indefinitely.“
Source: One of the sticking points that is generally across-the-board relevant to the debate is the charge that ParEcon maintains a wage system and some form of state authority to calculate the labor value, as opposed to exchange value, of different forms of work. This creates several points of tension. Anarchists are fundamentally opposed to state authority and the wage system. They believe the administrative class that ParEcon creates will invariably perpetuate exploitation, because administrators have the power to calculate value, albeit scientifically, but without the voluntary and democratic involvement of producers or consumers. Likewise, those who have more market power because their labor is deemed more valuable by the system can exploit others, and begin collectively organizing and shaping the system through their increasing monopoly power. Here are a few passages that I extracted from an article to give you the crux of the Anarchist Federation's critique:
“Parecon has within it the scope for large inequalities since it allows people to accumulate wealth over time and its only defence against people or groups taking control of parts of the economy and using it for their personal benefit is that the rest of us wouldn't let them. If true, we wouldn't be in the mess we are today. In parecon society, workers councils and producer federations control the means of production; after all, they are in physical possession of the mines, factories and transport systems. The federations exist, in part, to get the highest price they can for their member's labor. The iterations between consumer, producer and coordinator can easily become negotiations in which monopoly of the productive power can be used to bargain up consumption shares (wages) and bargain down prices. Consumers may be able to resist price-fixing for 'luxury' items but what about bread? Many people fascinated by parecon ask would there be a government to control all this? Pareconomists reply that government exists to correct market deficiencies or supply goods (like national defence or healthcare) that markets are bad at supplying. In the perfect world of the parecon, these goods can be supplied by the producer federations. But there will still, apparently, be a need for political institutions to make decisions about: ‘war and peace, whether drugs are legal or not, what the rules and procedures of the criminal justice system will be, immigration policy, etc.’ Pareconomists tend to argue that the political and economic spheres would be largely separate. But political institutions making policy decisions do intrude into the economic arena. Immigration policy determines the supply of labor and the cost to local economies of losing or gaining workers. Drugs policy can make certain products illegal and close down the factories producing them. A criminal justice system could declare 'economic sabotage' (strikes) illegal. Parecon does not seem to rule out political parties...