Robin Hahnel has taught political economy at American University for over 25 years. He has co-authored, along with Michael Albert, numerous books on participatory economics. His forthcoming book is Economic Justice and Democracy: From Competition to Cooperation published by Routledge. Chris Spannos is a member of the Vancouver Parecon Collective

Spannos: Radical environmentalists and movements seeking ecological balance have proposed small scale, self-reliant, community based economics; even 'bioregonialism'. How does environmental sustainability fit into these proposals and why do you think many people find them appealing?

Hahnel: Some who reject capitalism, authoritarian planning, and market socialism, offer a vision of largely self-reliant, local economies governed by the kind of direct democracy once used in New England town meetings. A growing number of radical environmentalists and young anarchists argue that only reducing the scale of economic institutions, and increasing the self-sufficiency of local communities can satisfy libertarian goals, reduce alienation, and promote ecological balance. They seek to avoid the negative repercussions of both markets and planning by eliminating the "problem" these allocative mechanisms address -- coordinating a division of labor among geographically dispersed groups. By decentralizing large, national economies into small, autonomous economic communities they also hope to promote face-to-face democratic decision making and create incentives for local communities to take the environmental effects of their activities into account. They argue that while participatory democracy doesn't work in large groups where people do not known one another and cannot discuss things in person, it can work in small communities. They also reason that once the consequences of choices all fall "in my back yard," the IMBY principle will force local communities to protect their environment. Of course, just as there are different models of market socialism and democratic planning, community-based economics comes in different flavors: Social ecology and libertarian municipalism (see Murray Bookchin, Post Scarcity Anarchism, Black Rose Books, 1986, original 1970, Murry Bookchin with Janet Biehl, The Politics of Social Ecology, Black Rose Books, 1998, and Howard Hawkins, "Community Control, Workers' Controls, and the Cooperative Commonwealth" in Society and Nature, Vol. 1 no. 3, 1993); an ecological society through democratic pluralism (See David Korten, The Post-Corporate World: Life After Capitalism, Kumarian Press, 1999, and Paul Hawken, The Ecology of Commerce, Harper Collins, 1993); Buddhist economics (E.F. Schumacher, Small is Beautiful, Harper and Row, 1973); bioregionalism (Kirkpatrick Sale, "Principles of Bioregionalism" in J. Mander and E. Goldsmith eds., The Case Against the Global Economy, Sierra Club Books, 1996); ecological economics, (Herman Daly and Joshua Farley, Ecological Economics, Island Press, 2004); and ecosocialism (Joel Kovel, The Enemy of Nature: The End of Capitalism or the End of the World? Zed Books, 2002, and Roy Morrison, Ecological Democracy, South End Press, 1995) are some of the versions, and they all differ from one another in significant ways. While I sympathize with the participatory and ecological goals of radicals who propose small scale, democratic autarky, all versions of community-based economics suffer from a major problem. Unlike many versions of market socialism and democratic planning, no "model" of community-based economics is a real model in the sense that it specifies rules and procedures for how to make all the decisions that must be made in any economy. For this reason all versions of community-based economics are really "visions," not coherent "models."

Sometimes proponents are blissfully unaware that they have failed to address important issues that will inevitably arise. Sometimes proponents refer to the lack of specific, concrete answers regarding how something would be decided, as a virtue compared to what they criticize as "deterministic" models of market socialism and democratic planning. But this response misses the point. It is impossible to evaluate a proposal for how to run the economy until it is a full and complete proposal. This failure should not be confused with the problem of explaining how to move from today's capitalist system to a community-based economy. Advocates of community-based economics often address this issue more extensively than they answer exactly how they propose particular issues be decided once we get to a community-based economy. Nor should the failure be confused with lack of speculation about what kinds of decisions they imagine people will make in a community-based economy. Since proponents of community-based economics are motivated by strong convictions that people need to choose radically different technologies and products, need to change their priorities regarding leisure versus work, and need to accept the necessity of zero growth of "material throughput," authors usually write at length about the differences between the decisions they believe will be made in their community-based economy and the decisions made in today's capitalist economies. The problem is that any professional economist knows there are certain categories of decisions that must be made in any economy, and until a proposal is comprehensive enough to specify how a proponent suggests these necessary decisions be made -- i.e. until we have what economists call a formal model -- it is literally impossible to evaluate whether or not the economy would do what its proponents claim it would.

One manifestation of this problem is that when push comes to shove, no version of community-based economics proposes that communities be entirely self-sufficient -- for understandable reasons. In other words, it turns out that autonomous communities are only semi-autonomous. And when it comes down to explaining precisely how the "semi" part be handled, we invariably find no answer beyond hand waving, and declarations of faith that democratic communities can work this out between themselves satisfactorily. Of course if communities were completely self-sufficient there would be inefficient duplication of efforts and inequities. But in the likely event that communities rediscovered the advantages of some division of labor, no proposal in this literature -- precisely because they are not truly models -- provides an answer to the question how communities which are no longer completely autonomous should arrange their division of labor. How do communities decide how much of a division of labor they want to engage in? What if one community wants a greater division of labor than another community wants? For example, 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 can agree on a division of labor with other communities, how do they go about deciding how to distribute the burdens and benefits of this division of labor? How do they jointly manage the division of labor? Should goods and services not produced by every community be traded 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 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.

Joel Kovel's "model" of ecosocialism, defined as an expanding network of "ecological ensembles," is in many ways even more opaque than other so-called models in this literature. In truth it is more an interesting and insightful proposal about movement strategy than a coherent post-capitalist economic model. But Kovel provides an excellent critique of the disadvantages of extreme localism: "A pure community, or even 'bioregional' economy is a fantasy. Strict localism belongs to the aboriginal stages of society: it cannot be reproduced today, and even if it could, it would be an ecological nightmare at present population levels. Imagine the heat losses from a multitude of dispersed sites, the squandering of scarce resources, the needless reproduction of effort... This is by no means to be interpreted as a denial of the great value of small-scale and local endeavors... It is rather an insistence that the local and particular exists in and through the global whole; that there needs to be, in any economy, an interdependence whose walls are not confinable to any township or bioregion; and that, fundamentally, the issue is the relationship of parts to the whole." (Joel Kovel, The Enemy of Nature: The End of Capitalism or the End of the World, (Zed Books, 2003): 156.)

Proposals for community-based economics simply fail to address this fundamental issue. In the end, the problem of devising desirable allocative mechanisms to coordinate the division of labor between communities that are not completely self-sufficient won't go away, and advocates of autonomous economic communities provide no coherent or satisfactory answer to how they would coordinate cooperation between communities that always turn out to be only "semi-autonomous" under careful cross examination.

Advocates of community-based economics also fail to provide concrete answers to crucial questions about how communities would make different kinds of internal decisions. Even in a community of several thousand people there will be different groups of workers and consumers. There will be different kinds of economic decisions to make. It is impractical for the whole community to vote on each and every economic question that comes up. What would the agenda for such a meeting look like? Who would be responsible for setting this agenda? Moreover, a democratic vote of a community does not provide its citizens with decision making power in proportion to the degree they are affected in cases where not all members of the community are equally affected by a particular economic choice. Nor can all decisions be left to the work groups who form within these communities. Many of the decisions groups of workers make affect other groups of workers and must be coordinated with consumers in the community as well. Proponents of community-based economics unfortunately have precious little to say about how these internal decision making problems should be solved. Saying that the ultimate power over all economic decisions resides in the community assembly where all have voice and one vote is not a good enough answer.

Not all proponents of community-based economics reject private enterprise and markets altogether. Some whose vision includes space for private firms along side producer cooperatives, and for markets when "properly socialized," seem to do so because they confuse what we must tolerate during the transition from competition and greed with economic relations that are truly consistent with equitable cooperation itself. Others seem to mistakenly believe that private enterprise and markets are compatible with equitable cooperation. They fail to realize, in the words of Joel Kovel, that combining private enterprise and market forces with people seeking to practice equitable cooperation is like trying to raise weasels and chickens in the same pen. More radical visions of community-based economics do reject private enterprise and markets entirely. Like those of us who support participatory economics, advocates of libertarian municipalism, ecosocialism, and communitarian anarchism all argue that there is no place for either private enterprise or markets in a truly desirable economy. However, all who espouse community-based economics -- whether inclined to abolish or to retain markets and private enterprise to some degree -- are staunchly democratic, egalitarian, and pro-environment. Because advocates of community-based economics and supporters of participatory economics share these same values, I believe as discussion continues we will become even closer allies than many of us already are. I see nothing in a participatory economy that I believe should displease proponents of community-based economics. In fact, I think those attracted to community-based economics will find that many problems for which they lack solutions are nicely resolved by some features of a participatory economy. In my opinion there is little if any disagreement over values, and much of the criticism of participatory economics voiced by advocates of one or another version of community based economics is based on a misreading and misinterpretation of participatory economics. In other words, I regard most modern, libertarian communalist visionaries as allies -- like our council communist, syndicalist, anarchist, and guild socialist forebears -- and ask them to consider the procedures of participatory planning when they think further about how they would coordinate economic relations among semi-autonomous communities, and how they would propose communities comprised of different groups of workers and consumers apportion decision making authority internally as well.

Go to Pt. 1 / Pt. 2 / Pt. 3 / Pt. 4

Robin Hahnel has taught political economy at American University for over 25 years. He has co-authored, along with Michael Albert, numerous books on participatory economics. His forthcoming book is Economic Justice and Democracy: From Competition to Cooperation published by Routledge.