What transition? Part 4: Renewing the framework (Installment #3: New Governance -- Participatory coordination and communalism)

3. Implementing social ecology: Communalism and participatory coordination as a compromise between bottom-up and top-down

From now on, I will focus most of my discussions and proposals on the so-called "developed" world. The task I want to undertake presently is to set out the most important framework conditions that might help in bringing about the "first-world de-growth" portion of the global de-growth compact -- i.e., of what I earlier called the economic Kyoto protocol. After having understood the basic rationale for such a protocol (installment #1) and having argued that its worldwide implementation needed global collective action in the form of a World Transition Organization or WTransO (installment #2), we can now ask ourselves to what sorts of national, regional, subregional, and municipal governance structures such an Organization should come as a transnational complement. In effect, as I announced in Part 3, we are looking at the need for a new worldwide governance structure in the form of nested decision-making levels that will ensure a smooth and exhaustive use of citizen-generated information so as to counteract both the bio-environmental externalities and the anthropo-environmental internalities that massively characterize our current economic system.

The mere capitalist market economy is not able to perform such an informational task. Markets, regardless of the degree of competition on them, are ill-qualified to internalize externalities (because prices reflect myopic profit maximization bottom lines and don't spontaneously allow for profit-curtailing criteria to enter economic calculations). And markets are -- even more so -- virtually unable to externalize internalities, i.e., to allow "voice" to express itself in anonymous arbitrage mechanisms that turn on "exit" (to take up Albert Hirschman's classical, and enlightening, distinction). Price information transmitted by markets reflects, at best, the aspirations, needs, and wants of those who momentarily have the effective means to pay (i.e., to contribute to GDP-enhacing transactions). At worst, it reflects the short-term interests of the most powerful and/or mobile and agile agents, including speculators, who have no qualms about alienation, exploitation, or environmental degradation. But in a de-growth economy where the reduction of economic accumulation has to be judiciously selective, it's all the more important that non-price information be massively injected into the allocation of goods and services, both private and public. This is because, actually, in a growing economy with steep competition between sellers, prices actually tend to fall as quantities sold and consumed rise -- so that the rise in the "consumer surplus" due to price competition actually rhymes with higher output (if profits are going to remain at all stable), and this may -- and does, in many cases -- mean huge tensions on working conditions and even a tendency for total throughput to increase (even if throughput per item sold decreases). I suggest the reader consult the excellent sequence of books by Juliet B. Schor (see her website in the sidebar): The Overworked American (1991), The Overspent American (1998), and most recently Plenitude: The New Economics of True Wealth (2010). She offers a compelling picture of how what she calls BAU (business as usual) leads to all sorts of effects which standard economists who defend market "efficiency" have long viewed as virtuous but which are now turning out to be highly perverse -- so that, effectively, a decentralized market economy is no longer able to provide the right incentives for a finite, fragile planet peopled by finite, fragile, and exhausted humans. Too much important information gets lost when the only goal of policy is to ensure that the sum of all values-added in the economy, as measured by market prices multiplied by quantities circulated, increases each year.

Let me emphasize outright that the alternative to a capitalist market economy should not only not be Soviet planning (does one really need to keep saying this?) but should also not be an archipelago of micro-entities all striving for near-total self-sufficiency. Sure enough, as I have surmised before, some sort of re-localization and de-globalization is bound to result from the global de-growth compact, simply because reducing growth rates in the richest areas and reducing greenhouse-gas emissions in the most polluting areas is bound to have an impact on the rhythm and geographical scope of trade flows. However, the global de-growth compact must be managed and steered in such a way that it does not generate sudden, brutal, and massive disruptions. (This is why such a compact and the accompanying WTransO are so terribly long overdue.) It should allow countries, regions, subregions, and municipalities to carefully select, upon due public deliberation, and after having coordinated their decisions with all other same-level and higher-level instances, which quantities of goods and services need to be reduced and which, on the contrary, need to remain stationary or even to keep growing. I want to re-emphasize that first-world de-growth -- seen as a threatening perspective these days when countries such as Portugal or Greece face massive deflation and recession because of IMF debt-reduction prescriptions -- has nothing to do with sudden deflation and everything to do with a concerted, gradual, and politically validated reduction is the production and circulation of various items on the list of available goods and services.

The environmental content of the goods and services is certainly one important parameter that should influence deliberation and coordination in de-growth. In that sense, as I said, the current Kyoto protocol is a substantial part of the global de-growth compact. But there is more. The "economic emissions" component is also crucial -- all the aspects through which the forced economic growth built into our current system hurts persons, communities, and cultures. How are we to decide which goods and services have to be considered harmful, and which can be seen as innocuous or even favorable? Clearly, this is not for the WTransO to decide from the top down with a bunch of well-informed and well-meaning experts -- and in that precise sense, the broader economic Kyoto protocol may differ from the merely environmental one. There simply cannot be the equivalent of the IPCC for the issue of human and cultural degradation and for the question of what will happen if anthropo-environmental internalities accumulate and are not externalized. The main reason for this difference is linked to the sort of knowledge that is required: The IPCC makes use of objective, externally measurable data about gas concentrations, nonlinear effects on climate, and so on, whereas the reduction of humanly harmful "economic emissions" involves more elements which, while still objective, are not externally measurable -- they are linked to human emotions and suffering, ethical judgments, and more generally things that can only be conveyed through the use of language. And that inevitably means deliberative conversation and discussion instead of merely scientific evaluation and quantitative measurement. Please don't read this as a disparaging of science -- it isn't at all. It's just that, if we want to avoid falling into the positivist trap of "scientific Marxism" which sought to measure exploitation and alienation using profit rates and commodity flows (in the same way we might measure CO2 concentrations or ppm's), we need to acknowledge that the modes of deliberation and the ways in which legitimate decisions are reached are going to be different.

Basically, the need to collect qualitative information above and beyond market prices, so as to coordinate selective de-growth and to decide which areas can still grow, requires a participatory democracy. Participatory coordination means that it is citizens -- not just as buyers and sellers and producers and workers, but as fully-fledged, conscious participants in public decisions about their lives -- who have to be consulted and whose aspirations, demands, and suggestions have to be gathered at each level n so as to be synthesized and sent "up" to level n+1. The corresponding governance structure is one of nested popular assemblies -- neighborhood assemblies, worker councils in firms, town assemblies, regional assemblies, national assemblies of a more classical, parliamentary kind, and so on -- which would in such a way that natural resources, work effort, consumer goods and services (both private and public, local and foreign), and investments (both private and public) get allocated optimally given (i) the overall de-growth norm for a country as determined in the WTransO and (ii) the multitude of local values and priorities that flow into determining how this norm is "shared downwards" across the country's towns, sub-regions, and regions. While not at all reducible to a market economy, such a multilevel participatory setup does require some complex feedback mechanisms, since higher-level constraints -- which can't be deliberated on at lower levels because these lower levels are the ones who have to respect the constraints -- need to be distributed downwards after having been calculated through a synthesis of the information sent upwards by the lower levels. (Quite obviously, here the adjectives "lower" and "higher" have no evaluative meaning at all, just a descriptive one.)

This idea of nested levels of political decision-making about economic issues is underpinned by the principle of subsidiarity, which I set out in Part 3, installment #1 (posted on April 19, 2011). The basic point is simply that decisions ought to be made at the level where the variables in question are "closest" to the people whose lives they affect. This is quite different from the idea that all stakeholders should have an equal say in decisions -- since in many cases, as Michael Albert and Robin Hahnel insist in their discussion of participatory economics, all persons don't really have the same stake in a decision. This is, in fact, the case of the world market, where each buyer has a "one dollar, one vote" decision-weight in many matters that concern a firm he's buying goods from, regardless of how far away that firm is located or how culturally different it might be. Subsidiarity posits that decisions need to be taken by those who are most impacted by them -- subject, of course, to various higher-level constraints which embody (but not only in the form of price information) the desiderata, priorities, and impact estimates of all other agents in the economy. This means, in particular, that citizens should be able, at the most decentralized level possible, to formulate their aspirations and choices as to the variety of modes of economic organization (how to work, how to organize production, how much and what to consume, how much and in what to invest, and so on) and to have these aspirations and choices be taken into account at higher decision levels. This is why the principle of subsidiarity trumps the old "top-down/ bottom-up" distinction: As they move upwards along the nested hierarchy of deliberative and legislative instances, the qualitative aspirations and choices of citizens at neighborhood, town, and regional levels, as well as their quantitative data, become constraints on higher-level decisions -- so that, for instance, national or European economic policy could not simply override citizens' desires to live in a more cooperative, less competitive economy and make some of their considered life choices impracticable. That, as we saw in previous posts, would amount to a blatant violation of the enlarged equality-of-opportunity principle. So in a very significant sense, subsidiarity as embodied in a nested structure of participatory councils is the operational aspect of our enlarged equality-of-opportunity principle.

Of course, citizens' aspirations and choices can't be simply expressed in an anything-goes vacuum. We all face top-down limits on our choices, in the form of legal principles (which, however, we should be able to challenge, discuss, and possibly change in a democratic way) and of various other large-scale, systemic constraints (which, again, should not be unassailable by citizens' groups, as I have argued at length in my book Critical Political Economy). The global de-growth compact and its associated "growth quotas," as put together and given binding legal force by the WTransO, and as translated into national and regional limitations within nations, would be one eminent example of such additional top-down constraints. This means that citizens would, at the grassroots levels where they formulate their aspirations and choices, have to take into account the constraints associated with first-world de-growth. This is likely to make some economic options more difficult to realize than others -- resource-consuming, humanly stressful, and purely profit-driven choices might much more quickly come up against the collective limits than would more frugal, reasonable, and balanced life choices.

Since this participatory coordination process would involve multiple citizens' assemblies, deliberative bodies, parliamentary counter-checks, and supra-national entities where global norms are negotiated, we would be very much in a "muddling-through" process. It is highly unlikely that the transition emerging from such a device would be brutal and disruptive -- in fact, it might seem much too sluggish and uncertain in the eyes of many committed environmentalists. But as Warren A. Johnson has repeatedly emphasized, this is actually a major virtue of a democratic system. Not that our democracies wouldn't need a fairly deep overhaul; they would, in fact, since as the late Murray Bookchin (probably one of America's most articulate progressive-libertarian political philosophers, and still vastly underrated) spent his whole life claiming, we are not currently living in genuine democracies. "Statecraft," as he called it, has been a late modern attempt to water down the democratic ideal by conflating the demos, the State, and an exclusively parliamentary mode of functioning. Autonomous infra-State entities, as well as fully participatory, direct modes of functioning, have been all but totally evacuated -- or, if they haven't, they have become part and parcel of a centralized State that has stopped seeing them as sources of bottom-up information to be used in devising the appropriate top-down constraints and has degraded them into being mere recipients and executors of national directives and instructions designed in the more removed circles of expertise and parliamentary commissions. (The demise of participative budgeting in Kerala under the centralizing pressure of the Indian State, as well as the emptying-out of territorial autonomy in France despite a budding rhetoric of "décentralisation" in the early 1980s, are two blatant examples of this degradation.)

As a practical basis for implementing subsidiarity-guided, nested decisions with a view to creating a truly participatory economy that can stand up to the ecological crisis, Bookchin has proposed and expounded a model he calls "libertarian municipalism," embedded in a philosophical doctrine called Communalism. This is no wide-eyed, bucolic dream inspired by some neo-Luddite fantasy of a little house in the prairie, or of a Walnut Grove that is small, hence beautiful. It is an entirely concrete proposal for new democratic governance structures, rooted in the conviction that (a) our current ecological problems are really the visible side of much deeper social-structure and human-relations problems (Bookchin calls this position "social ecology"), and that (b) since Man's domination over nature is really rooted in Man's domination over Man, non-parochial local structures of decision-making need to replace the large-scale, over-sized economic and political structures of capitalist social democracy. This, according to Bookchin, implies a network of bio-regionally embedded communes oriented towards reasonable frugality -- which is, of course, precisely what the "first-world de-growth" portion of the global de-growth compact will eventually require:

"Logistically, 'free nature' [that is, a reasonable articulation between free human agency and the evolutionary fact that humans are an integral part of nature] is unattainable without the decentralization of cities into confederally united communities sensitively tailored to the natural areas in which they are located. Ecotechnologies, and solar, wind, methane, and other renewable sources of energy; organic forms of agriculture; and the design of humanly scaled, versatile industrial installations to meet the regional needs of confederated municipalities -- all must be brought into the service of an ecologically sound world based on an ethics of complementarity. It means, too, an emphasis not only on recycling but on the production of high-quality goods that can, in many cases, last for generations. It means the replacement of needlessly insensate labor with creative work and an emphasis on artful craftspersonship in preference to mechanized production. It means the free time to be artful and to fully engage in public affairs. One would hope that the sheer availability of goods, the mechanization of production, and the freedom to choose one's material lifetsyle would sooner or later influence people to practice moderation in all aspects of life as a response to the consumerism promoted by the capitalist market." (Murray Bookchin, Social Ecology and Communalism, pp. 47-48, © 2007, AK Press)

One of the key ideas underlying Bookchin's thought -- although he doesn't express it in those words -- is that while many goods need indeed to be considered as public and/or global instead of private and subject to international trade flows only, it's of little use to have large, supranational entities profer "ex cathedra" lists of goods to be considered global public goods. What is to be considered a public good is dependent on many local preferences, cultural options, life choices, and so on -- and what is to be considered a global public good should, it seems, emerge from a near-unanimous consensus between cultures, local options, and preferences -- always, of course, subject to certain large-scale constraints such as, in our case, the economic and environmental Kyoto protocols. Of course -- and this will be crucial when we investigate the "Next-Step Economy" in Part 5 later -- Bookchin's approach relies on his confidence that, under favorable circumstances, human beings will actually switch to more frugal ways of life because they will have discovered within themselves a desire to do so. (A desire which, perhaps, under current circumstances, is stifled and even censured by the systemic constraints we are all facing.)

The communalist structure of governance is based on the idea that, as Bookchin puts it, the city or "commune" is organic to human life in a modern society: It strikes the right balance between openness and universality, on the one hand, and human scale and manageable size, on the other. Municipalities, or neighborhoods in larger cities, are the adequate places from where the upward movement of citizen-generated information can begin. This certainly does not mean that the process should also end there, as if we could count on the "blind" emergence of a new economy from merely parochial, uncoordinated decisions made at municipal level. Bookchin is adamant that there should be a confederative logic at work -- and I believe that this confederative logic should, in fact, be induced from the top down in an "optimal social engineering" perspective. The WTransO and the national representatives inside it should be instrumental in pushing for confederalism in all regions and nations, so that each municipality is embedded in a region structured as a "commune of communes" where regional-level assemblies perform the role of coordinating communal information into regional data on desired goods and services, working conditions, investments, and so on. It is fundamentally a matter of pulling all communes into a broader logic where universal constraints of a human as well as environmental nature are taken into account -- and this requires interdependence, not independence. Here is how Bookchin conceives of the rationale for confederalist communalism:

"Any self-managed community (...) that tries to live in isolation and develop self-sufficiency risks the danger of becoming parochial, even racist. Hence the need to extend the ecological politics of a direct democracy into confederations of ecocommunities, and to foster a healthy interdependence, rather than an introverted, stultifying independence. Social ecology would be obliged to embody its ethics in a politics of libertarian municipalism, in which municipalities conjointly gain rights to self-governance through networks of confederal councils, to which towns and cities would be expected to send their mandated, recallable delegates to adjust differences. All decisions would have to be ratified by a majority of the popular assemblies of the confederated towns and cities. This institutional process could be initiated in the neighborhoods of giant cities as well as in networks of small towns. (...) a truly ecological society would open the vista of a 'free nature' with a sophisticated eco-technology based on solar, wind, and water; carefully treated fossil fuels would be sited to produce power to meet rationally conceived ends. Production would occur entirely for use, not for profit, and the distribution of goods would occur entirely to meet human needs based on norms established by citizens' assemblies and confederations of assemblies. Decisions by the community would be made according to direct, face-to-face procedures with all the coordinative judgments mandated by delegates. These judgments, in turn, would be referred back for discussion, approval, modification, or rejection by the assembly of assemblies (or Commune of communes) as a whole, reflecting the wishes of the fully assembled majority." (Murray Bookchin, Social Ecology and Communalism, pp. 49-50 and p. 51, © 2007, AK Press)

Surely, Bookchin is too much of an anti-Statist -- and of an anti-centralizer -- to give enough weight to planet-wide macro-constraints such as those which the WTransO would have to impose. But he can inspire an interesting vista: that of a WTransO which would not only distribute differentiated "growth quotas" to countries, but which might also serve as the Commune of communes at a planet level -- with (as we saw) third-world countries having a disproportionate say in order to create incentives for first-world countries to renounce time-honored power plays. Now, the question as to how the "rational" decisions would be taken and how "the community" would arbitrate between various citizens' desiderata, aspirations, and choices, I have already stated that there is inspiration to be taken from Albert's and Hahnel's model of a participatory economy -- a model where "price" signals are calculated by coordination offices rather than by markets, and are complemented not only by macro-regulations (as in today's so-called regulated market economies) but also by qualitative signals embodying citizens' wishes about working conditions, the sharing of workloads, and more political aspects of production, consumption, and investment. (See, for instance, pages 59-62 of their analytical book The Political Economy of Participatory Economics, published in 1990.) I will devote more specific posts to this "ParEcon" model later in the blog. Let me just emphasize here that Hahnel, even more than Bookchin, is skeptical of the possibility of communal self-sufficiency and even quasi-self-sufficiency. He believes that an extensive division of labor, and hence also trade between communes and between countries, will continue to be a priority and will therefore have to be managed collectively -- and for that, participatory coordination on a world scale (hence with nested levels going all the way up to a WTransO) is paramount as a complement to grassroots communalism. Although Hahnel seems a bit one-sided in his judgment of the dangers of parochialism and collective egoism in Bookchin's scenario, he does have a point which we need to heed carefully so that our discussion of alternatives doesn't retain too much of a "head-in-the-clouds" quality:

"How would communities decide how much of a division of labor they would want to engage in? What if one community wants a greater division of labor than another community wants? A careful reading of Bookchin's vision of libertarian municipalism reveals that no community must acquiesce to a greater division of labor than it wants to. While this is a specific rule, it is a problematic one. This rule means the community that wants the least division of labor among communities can impose its preference over the preferences of all other communities. Why a community that is better endowed with natural, human, and/or physical capital would not be tempted -- even if unconsciously -- to take unfair advantage of this veto right is unclear. Even if communities could agree on a division of labor with other communities, how would they go about deciding how to distribute the burdens and benefits of this division of labor? How would they jointly manage the division of labor? Should goods and services not produced by every community be traded between them in free markets? If so, why would this not lead to the usual litany of inequities, instabilities, and inefficiencies that advocates of community-based economics (correctly) criticize in capitalism and market socialism? Should communities attempt to plan mutually beneficial economic relations? If so, how would they go about it, and how would the authoritarian dynamics of central planning be avoided? Simply asserting that the communities will decide all this 'democratically' is not a good enough answer." (Robin Hahnel, Economic Justice and Democracy, p. 183, © 2005, Routledge)

I think the framework we are contemplating in this blog will definitely go beyond the wishy-washy answer that everything should be "democratic." Everything should indeed be democratic, of course, but it all depends on how exactly the traditional bottom-up/ top-down distinction is bridged and overcome. We can go a long way towards a full alternative by combining a global-norm-enforcing World Transition Organization with a Commune of communes that are linked to one another in interdependence and engage in a participatory-economy process of supplementing market allocation with various devices to make economic agents internalize bio-environmental externalities and externalize anthropo-environmental internalities. I know that put in this dry, compact way, it sounds awfully theoretical. But actually, this combination of institutions contains -- or so I believe -- the potential for being the driving force of a genuine ecological and economic transition based on sound principles of social ecology.

We aren't through yet with the framework conditions, though, because we still need to see how modifications in (a) income redistribution (installment #4), (b) entrepreneurship (installment #5), and (c) monetary creation and circulation (installment #6) are to complement these large-scale institutions, so that citizens can feel more comfortable in contemplating and, eventually, embracing new and more frugal ways of life. The whole idea, remember, is to build a scenario that's both a vector of fundamental change and a purveyor of smooth, gradual shifts in behavior and constraints, so that we get a stepwise transition and not a sudden, catastrophic breakdown of the dominant system. On the side of procedural mechanisms, I think these three first installments of Part 4 give some assurance that, indeed, the modest realities of muddling-through will prevail over the illusion of a grand apocalyptic transformation.

This post from the "Eco-Transitions" blog by Christian Arnsperger is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.