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Democratic Social Economy Part 1

Written By: - Date published: 12:00 pm, September 3rd, 2010 - 31 comments
Categories: Deep stuff, democratic participation, Economy, science - Tags:

Due to the discrepancies in the spread of knowledge the free-market is irrational but there is no doubt that we, collectively, have the needed information to make more rational decisions. The problem that occurs is that neither the knowledge nor the tools to help make rational decisions on that information are readily available. We’ve tried to pass standards based upon the best information to enforce some rationality but that got the political right up in arms about “Nanny State” and so the regulation, and the government that brought it in, was tossed out.

The question, I suppose, is: would that regulation have been removed, and the “Nanny State” attack by the political right have succeeded, if people had had access to the necessary information to make a rational decision? I may be being optimistic in believing that they wouldn’t have. So that raises another question: How do we get that information out to the people in such a way so that they can use it and understand it?

This is where modern technology comes in in the form of computers and the internet but it’s not good enough just to put the reports online and hope that people read them. Most people just don’t have the time with working 40+ hours per week, trying to have some sort of social life some of the time and sleeping for the rest. What we need is some software (government developed, freely available and perhaps Open Source) that can easily and rapidly show what differences will ensue if changes are made according to the research available. Using the example of the light bulb saga the software could be set, using real information, to show what happens to power usage if inefficient lights are continued to be used and the extra costs involved in keeping them on the market and showing the decreased costs (savings made) of using efficient light bulbs. Being able to see all of this in an easy to understand format, IMO, it is unlikely that the people would have allowed inefficient light bulbs to continue to be sold.

Basically, what we’re looking for is a top down administrative tool available to everybody that also links through to the raw data and research (Government and, perhaps, private). The software will be able to use this data to show how resources are used and so how a change in one area of resource use will affect resource use elsewhere. With this information available to them people would be able to see what decisions mean and how they’re personally affected.

In Part 2 I’ll be looking at how this could be used to bring about a rational and free political-economy.

Draco T Bastard

31 comments on “Democratic Social Economy Part 1”

  1. nzp 1

    What we need is some software (government developed, freely available and perhaps Open Source) that can easily and rapidly show what differences will ensue if changes are made according to the research available.

    Respectfully, it appears that you don’t do a lot of modelling in your life. Models tend to be too broad brush to be useful, or so specific that you can just read the research. The other problem is that research conclusions never fit into models nicely. Especially social things. Moderate drinking helps, excessive drinking is terrible. How do you model this? Can you model the social enjoyment of drinking in the model? If the model says ban it, is it right?

    On the lightbulbs, ‘the right’ did get a lot of headway with the issue. But I don’t think banning the bulbs isn’t a good way of addressing the problem – just tax their ‘whole life’ cost. If you really want them (you graphic designers and die hards) you can have ’em, but they’ll cost you a tenner a bulb!

    Good luck with the model though -…

    • Draco T Bastard 1.1

      I’m more looking at resource use and that can be measured and input into models. I still expect humans to do their own thinking for themselves.

  2. randal 2

    of course the free market is irational.
    it depends on irrationality for its existence.
    where else in the world would you find a country that is obsessed with toys and meaningless status distinctions that rely on mindless destruction of species and habitat to stroke the peanut heads.
    now that is irrational to the max.

  3. Bill 3

    You really think that the vagaries of the market can be captured by a piece of computer software?

    I’d be of the persuasion that the predictability resulting from such an effort would be no better than what we might expect from predicting the weather using computer programmes. At best.

    What would the inputs be? Who would determine them? What would the relative objectivity/ subjectivity of the input values? And who would rise to be the authoritative voice on the whole matter?

    Because the answer to those questions points to where the potential for the next dictator resides.

    • Draco T Bastard 3.1

      You really think that the vagaries of the market can be captured by a piece of computer software?

      No, I’m thinking that “the market”* can be refined by the use of better tools and the use of better knowledge so as to minimise irrational use of scarce resources.

      What would the inputs be? Who would determine them? What would the relative objectivity/ subjectivity of the input values? And who would rise to be the authoritative voice on the whole matter?

      Good questions and I don’t have complete answers to most of them. Even Part 2 will only have broad categories. The one answer I do think I have is about the authoritative voice and that is, and should be, the community. Not an individual.

      * The Market is a means to distribute the scarce resources available to the community. It is a social construct. In the capitalist system the market is used for delivering those resources to the wealthy. What I’m looking at is turning it to the betterment of the community.

      PS, I attempted to post this before but kept getting a server error

  4. Bill 4

    On a positive note, I believe that a democratic and socially orientated economy is possible. And no computer programmes are necessary.

    In a participatory economy, producer councils and consumer councils input their respective data ( Producer councils on what they are able or willing to produce and consumer councils on what they want or need to consume).

    When potential production and consumption balance, we just get on with the job of producing and distributing said product. The information coming from the consumer councils and production councils is not ‘capturable’, so no ruling elite arises as a result.

    Importantly, there is no market, so no ( often destructive) competition being rewarded. And no centralised authority as an overseer because such a function is not required.

    It’s complex (not complicated) and beautiful in it’s subtleties. There is no way I can even begin to do the concept justice here. Here’s that old predicable link I post from time to time where in-depth discussion debate and analysis alongside entire books on participatory economics are available http://www.zcommunications.org/topics/parecon

    • Draco T Bastard 4.1

      I believe that a democratic and socially orientated economy is possible. And no computer programmes are necessary.

      I see the computer program as enhancing the needed communication and coordination of the resources that a community has available.

      And no centralised authority as an overseer because such a function is not required.

      Except for your producer councils and consumer councils. Sounds remarkably like central planning to me.

      there is no market,

      The market is a social construct and so we can make it anyway we want it to be.

      • Bill 4.1.1

        It’s not central planning at all. A major impetus behind the development of parecon was the desire to imagine a system of production and distribution that was deeply democratic and that was not subject to the dysfunctions of the market or central planning.

        Paracon consists of a number of elegant yet robust subtleties, and as I said in my previous comment, I couldn’t begin to do the whole concept any justice here. I can only suggest you read some of the material I provided a link to.

        The producer and consumer councils are not static bodies peopled by bureaucrats or any other type of functionary. They are peopled by you and me, the producers and the consumers. (And since we are both consumers and producers, we would participate in both consumer and worker councils.) They aren’t in any way, shape or form centralised or capable of exerting or projecting any type of illegitimate authority.

        As for the market being a social construct that we can make to be whatever we want it to be…that doesn’t make any sense. Either there is a construct with certain characteristics that we call a market or there isn’t. If there is, then what you are claiming sounds to me to be akin to saying that we can grow whatever fruit we choose to on apple trees.

        edit. If there are 300 tonnes of resource y available and a demand for 400 tonnes by consumer councils, then it doesn’t take too much of a computer programme to do the simple math. And simple math is all that’s required to inform the inevitable resetting of demands until the numbers even out.

        • Draco T Bastard 4.1.1.1

          They are peopled by you and me, the producers and the consumers.

          And so is what I’m proposing – it just doesn’t have the councils as they’re not needed.

          Either there is a construct with certain characteristics that we call a market or there isn’t.

          False dichotomy. The market doesn’t have to be what the capitalists tell us it is – see above.

          If there are 300 tonnes of resource y available and a demand for 400 tonnes by consumer councils, then it doesn’t take too much of a computer programme to do the simple math.

          The problem is communicating that simple math.

          • Bill 4.1.1.1.1

            “…it just doesn’t have the councils as they’re not needed.”

            So how does a community determine and communicate it’s infrastructure requirements if there is no forum where it can communicate with itself, inform itself, determine what it’s legitimate demands are and communicate those desires to other consumer bodies as well as actors in the productive or industrial sphere? And how is it in turn communicated to by outside agencies (producers or/and consumers)?

            • Draco T Bastard 4.1.1.1.1.1

              Pretty much the many to many relationship that I previously said was impossible but I’m still working on that so you’ll have to wait for part 2. ATM, suffice to say that the software would be able to determine what is needed from everyone’s input. The one I’ve roughly outlined above is one way, government outward, with a purpose to get people informed. The total set up would be two way. Actually, thinking about it, would possibly still need some form of administration.

              I actually think you and I are talking past each other here. We both want the same thing, participatory democracy, but we seem to be using slightly different meanings to the language, i.e. a council to me is a small body of people that quite specifically does not include everybody and is empowered to make decisions for everybody else.

        • Vicky32 4.1.1.2

          Er… Maths, not math, which is a Welsh name (unless you’re in the USA…)
          Deb

  5. People need to want to be engaged with the process of government to actually be able make conscious and rational decisions about particular policies. Too often those political unengaged will simply follow the dominant media spin on a particular policy. There are so many examples of this in addition to the mentioned “light-bulbs”; the infamous shower-heads, folate compulsion in bread etc.

    From the reaction of those types, you’d think that any type of compulsion was bad, yet we recognise compulsory education as necessary to sufficently skill our population for a life of hopefully both economic and social value. Besides, if you don’t want to have your shower heads pressure limited, take a bath. If you don’t want to have to use the efficient light-bulbs, use a candle. If you don’t want folate in your bread, bake your own.

    In the case of light-bulbs specifically, there is a legitimate criticism – that even though households are getting more energy-wise and efficient they are being continually charged more for their power, to the extent that any action taken by individuals means that they don’t feel like they are even saving. But then, a big FU to Max Bradford for that one.

  6. Kleefer 6

    The most “democratic” economy is the free market. Every time anybody makes a purchase they are making a “vote” for that product or service. The prices people pay for these goods and services send a signal to entrepreneurs to either produce more of them to make more profit or, alternatively, to cut down on production and use their time and capital to produce something more profitable. Central planning never works because values are subjective and differ from person to person, making “aggregates” meaningless.

    • Vicky32 6.1

      Kleefer, what you say is very simplistic. The whole ‘a purchase is a vote’ thing falls down the minute buyers are constrained by price, or availability. It’s like TV ratings. I may loathe cop and reality shows, but be constrained in showing my support for particular shows because cop and reality and cop/reality are all that’s available! So, I vote with my dollars for 500g of peanut butter that’s dry and unpleasant because it’s the only one without sugar – whereas if another brand produced one without sugar I’d buy it enthusiastically. All the PB manufacturer knows is his isn’t selling, and Bob’s is – but the “democratic” system doesn’t tell him to produce a creamy product without sugar, and I’d buy it in a heartbeat!
      Deb

    • Puddleglum 6.2

      Kleefer, while attempting to explain the democratic credentials of the market you have, probably unwittingly, described the very democratic failings of the market. Its strengths are its weaknesses.

      Each ‘vote’ of demand provides an incentive to increase supply. Similarly, the ability to supply something at low cost provides an incentive to seek out and/or create demand for it. In a world full of reflexive agents (i.e., people who can think about this feedback loop that the price mechanism enables), what this all means is that incentives are created to ‘un-free’ the ‘free market’.

      There’s a strong ‘double shot’ incentive, that is, to make sure that a free market doesn’t happen, at least in relation to your trading. That’s why most lobbyists on governments come from commercial interests – it’s an obvious tactic that is implicitly embedded in the incentives provided by a market. I call it corruption – certainly corruption of the market. Others call it a sensible business strategy.

      Examples of this are legion: Subsidised corn in America (leading to overproduction, farmers debted off the land, corn allergies, obesity …); the design of health systems to maximise pharmaceutical company profits; subsidised oil via wars and interference with others’ governments, etc., etc.. The market economy provides the incentive for this to happen. It’s strong ‘signalling’ element actually signals to anyone who notices (i.e., most ‘serious’ business people) that the best way to make profit is to rig the market. (That’s the problem with people, once they see the rules of a game they cheat. In a market, the best cheaters tend to win.)

      Notice that not many of these are particularly democratic outcomes from the market, at least not in the common or garden sense of the word.

      • Draco T Bastard 6.2.1

        (That’s the problem with people, once they see the rules of a game they cheat. In a market, the best cheaters tend to win.)

        And it certainly doesn’t help that our present system was designed by the cheaters to help them cheat.

    • Draco T Bastard 6.3

      The price signal, as is, doesn’t send enough information. If it did there wouldn’t be any international trade. I’ve covered this, you’re reaction is just to spout irrational dogma.

      Then there’s the simple fact that the “free-market” isn’t democratic at all (it’s actually anti-democratic) and that it’s not “free” either as it’s owned by the capitalists.

  7. Lew 7

    Basically, what we’re looking for is a top down administrative tool

    Leaving aside your bizarre conflation of purpose and mechanism, this quoted bit is the fundamental conceptual flaw right here. Democracy ain’t this way.

    You can’t buy it off the shelf, you’ve got to grow it from the seed.

    L

    • Draco T Bastard 7.1

      The heart of democracy is communication. This tool that I’m thinking about is to help that communication. Still, it does need people to participate but quite often to get people to participate you need to show them results. If people can see the results of their actions the chances are that they will be more likely to participate. ATM, they don’t get that. They go down to the store, buy whatever they want, and go home. There’s no connection to the reality that is that entire transaction.

      • Bill 7.1.1

        “…to get people to participate you need to show them results.”

        Who or what is it that is it that is going to be doing the showing of the results to ‘the others’? Again, it appears you are overlooking possible concentrations of power, in this instance based on knowledge and knowledge flow if I read you correctly.

        We already live in a situation where we are shown results and expected to participate…but only in a very minimal fashion; as consumers.

        The reason many people don’t participate in a more meaningful fashion is because there are no avenues allowing for meaningful participation. There is no possibility of meaningful participation in our conventional workplaces. There are no avenues for meaningful participation in matters pertaining to our communities.

        What we have is managers and bureaucrats and so on taking exclusive charge of important decisions and killing democracy in the process. And if I have no real say in matters, then I lose interest and become cynical and detached. At which juncture I become vulnerable to manipulation by all types of unsavoury parties.

        And I don’t see where any part of what you’ve been saying challenges the managers/ functionaries/ bureaucrats hegemony of our society’s decision making processes.

        • Draco T Bastard 7.1.1.1

          Who or what is it that is it that is going to be doing the showing of the results to ‘the others’?

          An impersonal computer program extrapolating from peer reviewed research. Perhaps I should have phrased that differently: For people to want to participate they need to see results.

          What we have is managers and bureaucrats and so on taking exclusive charge of important decisions

          I trying to devolve that so that the decisions are made by everyone and not managers, councillors or bureaucrats. Part of doing that requires the dispersion of knowledge in such a format that people can understand it. IMO, part of the reason why bureaucrats exist is because not everyone can no everything and so we end up with specialised roles. The people in those specialised roles begin to only see what they do and not how it relates to the rest of society which results in the need for administration, bureaucrats, to allow a complex society to function. The bureaucrats then start to contain and control information (Note how difficult it is, even with the OIA, to get information out of the government) which further disconnects people from society. This one idea here is to get that information back out to the people in an open and understandable format and, hopefully, remove the power from the bureaucrats.

          • Bill 7.1.1.1.1

            So now we’ve got peer reviewed research? Research of what? And who determines what is researched and assigns it it’s level of importance? And why the software again?

            If I’m participating in decisions that will have an effect on me…in my community and workplace…then I don’t need a computer programme to extrapolate from any information or research for me. There isn’t really anything that we can’t understand.

            Computers being used for communicating across distance is fine. We already have that.

            So if the community I live in wants to source the necessary materials to put in a sewerage system, then the community will have sat down and discussed the various options and come to a decision that then needs to be communicated to others who have the resources (skills, plant and machinery, raw materials etc) .

            And that is where the councils come into the picture…to facilitate the coming together of ‘citizens as consumers’ demands and ‘citizens as workers’ production capabilities.

            If you are living in Auckland and I’m in Hamilton, then I won’t be participating in the decision making processes that you are participating in unless the decision you are working on has a capacity to impact on me.

            eg At the moment we have centralised and utterly inefficient and disempowering infrastructures (like our electricity network) that lend themselves to ‘capture’ by bureaucrats and the like. But if your community and or workplace makes moves to generate electricity and set up autonomous systems, then that’s got nothing to do with me in Hamilton. Except that maybe the community I’m in and dozens, or hundreds, of others are embarking on the same project and maybe the resources are not available that would allow us all to do the thing at the same time. And again, that’s where councils and to-ing and fro-ing of information comes into play in such a way that novel solutions can be explored or demands altered to fit with reality.

            And short of AI, no computer programme can do that.

            • Draco T Bastard 7.1.1.1.1.1

              So now we’ve got peer reviewed research? Research of what? And who determines what is researched and assigns it it’s level of importance? And why the software again?

              Peer reviewed because it’s the most trustworthy means of obtaining valid results from research. The people will determine what is researched, it’s importance and the resources used for that research. To assist with communication of the findings of that research and how it affects resource use.

              And that is where the councils come into the picture…to facilitate the coming together of citizen’s as consumers demands and citizens as workers production capabilities.

              I’m sure the USSR said the same thing in 1917 and it’s still the process that led them to authoritarian control and oppression.

              If you are living in Auckland and I’m in Hamilton, then I won’t be participating in the decision making processes that you are participating in unless the decision you are working on has a capacity to impact on me.

              Almost all decisions everyone makes impacts upon everyone else. You drive a car – it impacts me. You drink a glass of water – that impacts me as well. The nation has a limited amount of resources available and they’re not all local. That’s what the economy is about – getting those resources to where they’re needed.

              But if your community and or workplace makes moves to generate electricity and set up autonomous systems, then that’s got nothing to do with me in Hamilton.

              Unless we decide to use the coal that sitting under Hamilton in which case you’re going to be affected in two ways at least: 1) Your house is going to subside in to a large, dark, pit and 2) the air you breath is going to be more filled with climate changing smog.

              And short of AI, no computer programme can do that.

              I’m not expecting it, or wanting it, to. It’s a tool to help people to make those decisions based upon real information rather than emotive response.

              • Bill

                Draco, I get it that peer reviewed research gives better quality research results that can be relied on more than research that is not peer reviewed. But you can’t say that ‘the people’ will determine what is researched without explaining exactly how the people will determine what is researched. Same goes for deciding the relative importance of any research to be undertaken.

                On the worker and consumer council front. One of the very first things the Bolsheviks did was abolish worker councils and implement one person management systems controlled by and answerable to ‘The Party’. Trotsky is on record saying that that they would have adopted Taylorist/Fordist management strategies in the workplace sooner if they could have.

                On the impact of my/your decisions.

                It’s just not true that ‘almost all decisions everyone makes impacts upon everyone else.’ We seem to agree that the economy is about bringing society’s productive capabilities and society’s consumptive demands into balance. And we seem to agree that a democratic means of doing that is preferable to other options.

                Meanwhile, why would anyone seek to build a coal power station if autonomous electricity generation is being sought? It’s not even remotely sensible. But anyway. Who would have the greater say in any mining proposal for Hamilton. Hamilton communities or Auckland communities? The answer lies in who will be impacted more by any such decision. And short of being either on the wrong side of a gun or the wrong side of the asymmetrical power relationships integral to the market…but by necessity we abolish that if we want to develop and maintain a democratic system of production and distribution…. you’d have to conclude that mining would probably be off the cards.

                Back to computers and computer programmes. What we need is already there. If I want info on wood burning stoves I can get all the info I need in the next 5 min. It has functionality.

                And a simple calculator can do all the arithmetic that would be necessary to fully inform consumer and worker councils on resource availability and desired resource use. You could ( I guess) have a programme sitting on the web that did it in real time as councils entered their data. But whether that would be desirable and efficient or not is another question.

                • Draco T Bastard

                  But you can’t say that ‘the people’ will determine what is researched without explaining exactly how the people will determine what is researched.

                  That’s in Part 2 as I’ve already said (I’m still working on it so I probably won’t post it for a couple of weeks).

                  It’s just not true that ‘almost all decisions everyone makes impacts upon everyone else.’

                  If we use a resource then we are preventing someone else from using that same resource which, last time I looked, made an impact upon them and almost every decision we make uses resources.

                  If I want info on wood burning stoves I can get all the info I need in the next 5 min.

                  Really? I’d be highly surprised. How many man hours went into producing that wood burner? Including the mining of the metals, minerals and stone. Do the people who did the mining have enough to live on? How much ecological damage was done in the mining? How much oil was used? How much wood does it burn? What difference does that make to the forests if only you have one? How much if everyone has one? (It’s been said that the reason why the coal age started in Britain wasn’t because they found coal but because they were running out of trees) What difference is it making to the atmosphere? To the ecosphere?

                  Yes, when you buy a wood burner you’re making decisions on all these questions and probably more most of which you don’t have an answer to.

                  There’s a lot of information that people just don’t know and have no access to and yet they’re making decisions that need that information. It’s how we ended up on the edge of calamitous climate change from a century and a half of burning oil.

                  But whether that would be desirable and efficient or not is another question.

                  The computer program would be able to show that you’re making decisions based upon real costs (both resource use and opportunity costs). The simple calculator won’t. The program will also, due to being connected to the internet, be able to get that information out to everyone in an understandable format which is easily searchable. Everything may already be on the internet but being able to find it is another question.

                  As for the councils – we already have them and both you and I have referred to them as elective dictatorships that respond only to the rich. If you’re talking about having everyone in the council then what you’re talking about is a really large discussion with nothing getting done as everyone will be arguing instead.

                  • Bill

                    Sorry draco.

                    But you need to do some reading on worker councils etc and how they function, who participates in them and so on, if you truly believe that we already have comparable structures operating today in the mainstream.

    • tea 7.2

      umm…at the risk of getting in trouble- you can have it imposed by an invading power- but they may forget to include opposition parties as part of the upgrade!

  8. Draco T Bastard 8

    A bit of a clarification
    Basically, what we’re looking for is a top down administrative tool available to everybody that also links through to the raw data and research (Government and, perhaps, private).
    People don’t understand numbers all that well but they do understand charts and graphs.

    Visualisation renders complex data accessible. Graphics and interactive visualisations make visible things we never expected to see.

    So what I mean by top down administrative tool is software that, when you open it up, shows you, as an example, all the different sectors of government and how they’re inter-related. It’ll show resource sources and sinks etc. Selecting a resource will show more detail about how it’s used.

    Selecting Electricity will show you sources (Damns, coal and gas fired power stations, wind) and it’s uses (Residential, commercial, transport, etc). A different view of its uses could also show that as Heating, Lighting, Dishes etc, as well as projection into the future for those uses. Selecting Lighting would then show more details on that such as what type of lighting is being used and from here you’d probably have links to the actual research papers. If you’d gone into here with the question of How to save power? and saw that incandescent light bulbs used up far more power than any other type while also producing less light (i.e. really inefficient) then you’d probably look at enforcing certain standards on lighting because there are better uses for that power.

    By selecting Electricity you’d also be able to see what resources (Man power, cement, coal, gas etc,) were being used to produce that electricity and the research underpinning that as well.

    It would be one hell of a database project.

  9. B 9

    Keep up the good work Draco T – ur posts are always v interesting!

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