Vancouver Participatory Economics Collective

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Hahnel Book Review

By David Pehota of the Vancouver Parecon Collective

The following is a book review of Robin Hahnel's new Book Economic Justice and Democracy


Economist and author Robin Hahnel's new book EconomicJustice and Democracy: From Competition to Cooperation is a comprehensiveattempt to explain what went wrong with past movements for economic justice anddemocracy and why. Hahnel's central thesis is that progressives need to go backto the drawing board and re-conceive economic justice and democracy intorigorous models and at the same time reform movements need to be combined withalternative prefigurative experiments living the economics of cooperation andjustice.


I will try to tease out the basic themes and strengths ofthe work and its relevancy for progressives working toward social change ingeneral and economic justice in particular.


In the first part of the book Hahnel examines the fourconceptions of distributive economic justice:

1. distribution according to contribution of physical andhuman capital

2. distribution according to contribution of human capital

3. distribution according to effort and sacrifice

4. distribution according to need


He proceeds to expose the logic of the first two maxims as ajustification for inequality based on self-interest of the well endowed interms physical and human capital. Hahnel then suggests that the maxim three isthe more appropriate maxim because it effectively places everyone on the sameplaying field – you work harder (greater social sacrifice) you get moreof the pie. However, Hahnel is quick to point out that economic justice basedon maxim three is necessary but insufficient, the sufficient aspect is maximfour that states where persons beyond their control either cannot or can onlypartially contribute to the general well-being be compensated according toneed. Next, Hahnel addresses the importance of substantive economic democracyexplaining that without real participation in decision-taking, or in otherwords in the absence of economic self-management, notions of democracy aresimply window dressing. And to end this section he focuses on the myths thatmajor groups of anti-capitalist in the last century used to keep morale upamong their members when the crises they thought would result in sendingcapitalism to its grave did not manifest themselves. Conversely, by the end ofthe twentieth century capitalism had eroded away many of the  reforms won and expanded its reach intoformally non-commercial institutions. Posing the question, "What went wrong?"


In the next section of his book Hahnel, now that he asdefined economic justice and democracy, applies it the dominant economic systemsof the last century: liberal capitalism and state communism and finds them bothwoefully lacking. Whereas, capitalism empowered the lucky, the powerful, andthe naturally talented it did little for the majority in terms of creativityand empowerment. Furthermore, it produced a barrier between the interests ofemployers and employees often leading to inefficient conflicts. Finally, itrewarded the privileged with not only a free ride but ability to pass external costs on to others, including thenatural world. While communism reduced the gap between haves and have-nots itsystematically denied economic self-management to both consumers and workers.Moreover, even with a centralized political bureau in control, it could notovercome the problem of particular interests planners, managers, andworkers  attempting to subvert thiscontrol by any means available. Finally, the polit bureau's focus on keeping upwith western capitalism in terms of economic growth was at the sacrifice ofexternalizing source and sink costs, resulting in considerable environmentaldamage. 


In the remaining two chapters of this section Hahnel turnshis attention to the failure of two currents of progressive socialism: socialdemocracy and libertarian socialism. Starting with social democracy  Hahnel argues that social democracydrove a devils bargain and ended up alienating it base of support. In order towin elections social democrats had to appeal to the demands of the growingmiddle classes and as such it diluted its programme for economic justice anddemocracy. Moreover, their explicit support of capitalism served to underminetheir moral authority. As for the rapid departure of libertarian socialistsafter the Spanish Civil War Hahnel attributes this to two basic reasons: first,an unwillingness to compromise ideals to work on pragmatic reforms in advancedcapitalist countries; and second, a failure to provide a compelling case thatan economy based on libertarian socialists' ideas was feasible.  Hahnel continues, that some of theideas of libertarian socialism resurface in the halcyon years of the New Leftand later in the development of the "New Social Movements" in the 1970s, butnever in a clearly presented theoretically informed practice.


In part III of his book Hahnel considers the alternatives tothe afore mentioned failures to create economic justice and democracy. Hebegins by explaining why economic vision is vital to the success of anyproject. Next, he critically examines different forms of market socialism statingwhile they are vastly superior to neo-liberal capitalism but also how theyleave unfinished the institutional framework to secure the economics ofequitable cooperation. Hahnel is critical of the various versions ofcommunity-based economic visions claiming none have worked out rigorous proofsof how they would function in theory and left aside some critical economic questions. As a prelude to his chapteron participatory economics, he briefly mentions the progenitors of otherdemocratic planning models but fails to provide the reader with anysubstance. 


In chapter nine Hahnel begins by assuring his readers that a"participatory economics" is a coherent economic model readily subject toanalysis and critique. He then presents the reader with a synopsis of his"participatory economics" explaining its basic institutional framework and whyhis economic vision would fulfill, what he views as the necessary criteria ofeconomic justice and cooperation: solidarity, equity, participation, andself-management.   Inaddition, Hahnel demonstrates how his "participatory economics" model wouldrespond to ecological concerns and international trade.


Having presented his case Hahnel then subjects his economicmodel to critiques raised by some other progressive economists.  He provides answers to their"legitimate" concerns in a detailed manner but the reader is forced in theirown minds to consider the merit of the explanations without  access to whether or not the answersprovided are considered satisfactory by the people who raised them.


In the final section of his book, Hahnel makes it clear thathe has no expectation that the economics of greed and competition will bereplaced by something like participatory economics any time soon and thereforeprogressives need to focus on ways to resist twenty-first century robber baroncapitalism. Hahnel emphasizes using a two-pronged approach -- reforms andprefigurative experiments.  Becausethe forces arranged against ordinary people are truly staggering in their powerto construct social reality, it is absolutely essential that organisations andactivists devise strategic, coordinated campaigns to chip away at thisformidable foe with something akin to economic guerilla warfare; pressing forreforms that will lessen the pain on ordinary people (i.e., welfare and taxreform, campaigns to strengthen the public sector, campaigns to halt urbansprawl, and living wage campaigns to name a few.) Hahnel then proceeds to makeconcrete suggestions as to how organised labour, the environmental movement,consumer groups, anti-corporate groups, poor peoples' movements andanti-globalisation movements can work more effectively for reforms.


Hahnel completes the book with a chapter that examines amultiplicity of experiments in equitable cooperation. Everything fromintentional communities, to workers co-operatives, to local currency, toparticipatory budgets, and much more. He does an excellent job of explaininghow these alternatives empower ordinary people but also how they can be either co-optedor left to stand on their own, are insufficient to create a generalised sphereof economic justice and cooperation. 


The strength of Hahnel's thesis is his explicit contentionthat neither reforms nor prefigurative experiments alone are sufficient butthat each is a necessary part of the equation for economic justice anddemocracy. Unfortunately, for various reasons, this truism has largely eludedsocial democrats, left liberals, and radicals alike. 


Overall I like what Hahnel has done in this book, and Ibelieve he contributes to furthering the discussion and cause for economicdemocracy and justice. However, I do have one misgiving with Hahnel's thesis,his decision to focus primarily on agency and strategy while diminishing therole of structure. I think this impairs his historical, macro-analysis withderivative effects on the feasibility of some of his economic reformsuggestions. A case in point is his tacit criticism of the Mbeki and Lulagovernments for not following his prescribed social democrat/neo-Keynesianmacro-economic reforms which virtually ignore the historical and structuralconditions that made such reforms possible in the aftermath of WWII (i.e., thefour compromises on which the postwar Fordist accumulation regime could be stablilised:a capital-labour compromise, a capital-capital accord, a worker-citizencompromise, and  an internationalsocial liberal consensus settlement.[1])Continuing in this vane, since the crystallisation of the market economy inBritain at end of the eighteenth century, societies have been engaged in thestruggle to resist and contain the market's expansive and invasive logic. KarlPolanyi referred to this conflict as the "double movement;" the tug-o-warbetween social regulation of the economy and the self-regulation of themarket.  The institutional order ofthe market economy constitutes itself as a separate entity, dis-embedded fromthe complex matrix of social relations, and once freed from these social bondssubordinates them to produce a society (and a world) in its own image. Hahnel'sneglect of the qualitative differences between a Fordist and post-Fordistmarket economy and his subsequent failure to high-light the dynamic forces thatdrive the market economy onward at an accelerated rate forcing the other sloweradjusting social spheres, to accommodate to the logic of commercialism issignificant.


My other, although lesser criticism of Hahnel's work, stemsfrom his incomplete (the chapter on social democracy) treatment of "crises oflegitimacy."  He argues that"crises of legitimacy" result because oppressed people begin to see through thecracks in the facade of the dominant ideological and institutional orders andbelieve a better world is possible and therefore they are encouraged to resistoppression and exploitation. While this is certainly true for oppressed groups,it represents only one side of the issue. The other side that needs to be givenconsideration is that "crises of legitimacy" are also precipitated by a failureof institutions and ideologies to deliver the goods for those who arerelatively empowered by them (i.e., the political/middle classes). It is atthese qualitatively different, exceptionally fluid moments in history that acascade of social change, for better or worse, occurs. It is in these briefvacuous interludes  that thepossibility for a  restructuring ofsocial institutions, roles, and relations exists, if and only if, the hard workof organising a series of networked prefigurative experiments has been donebefore hand . Conversely, if such experiments are scattered and few ashistorical experience bears out, then there is the real and present danger ofeither the descent into a co-opted "reformism" or worse -- totalitarianism.

David Pehota lives in a small border town in British Columbia's southern interior region, is an organic peasant farmer/worker, a grassroots community and union organiser, and an associate member of the Vancouver Parecon Collective.