Participatory Economics and Why The Occupy Movement Was Destined To Fail From The Start.
Posted: November 15th, 2011 | Author: Joe | Filed under: Economy | Tags: news, Occupy, Opinion, OWS, Participatory Economics | 3 Comments »
Much of the coverage of the Occupy Wall Street protests has focused on whether there is a single, overall point or purpose to the movement and even whether it is a movement at all.
It’s hard to argue that a gathering – be it a movement or simply a protest – is successful if no one can come to a consensus as to the what it’s all about.
The folks at NPR’s Planet Money went down to see what the OWS protests were about, and they concluded that it is more of a “venue” than a movement. It seems that the OWS group is a loose conglomerate of disparate interests – at least on the surface.
“We went downtown this week to talk to the protesters at Occupy Wall Street. We asked people why they were there. We heard lots of different answers.”
But delve a little deeper and you find that it’s a platform for launching a whole new society. One based on Participatory Economics. More on that in a minute. First, the General Assembly.
The General Assembly.
At the heart of the OWS gathering is what the organizers call the “General Assembly” It takes place nightly, and it’s where everyone goes to discuss topics important to them.
For example:
“Should we buy some sleeping bags? What if we just buy fabric and make our own sleeping bags? How will we keep the sleeping bags clean?”
But in the midst of such discussion, a challenger arises to question the authority of the “facilitators.” Asking if they alone grant the power to be heard – without the general consent of the group body – can they be consider legitimate themselves? That’s right, before the meeting can be facilitated the very framework must be agreed upon and legitimized by the group body!
This led the Planet Money team to conclude that:
“It’s not a movement; it’s a venue. Standing around, talking about what everybody wants — this is a model of how the protesters want society to be.”
But could this ever really work? Could you base a society on this model and have it function better than the current society?
It turns out that an economics professor has been dreaming up such a system for the past 40 years and he calls it Participatory Economics.
Participatory Economics (ParEcon): A Theoretical Alternative to Capitalism
Participatory Economics is the brain child of economics professor Robin Hahnel. Hahnel, a self proclaimed “libertarian socialist” (you figure it out, because I can’t), has spent 40 years developing a new model for economics that is more democratic than capitalism.
The basic theory is that the best system of economics (and society in general) is one that is based upon group participation. In Hahnel’s world, there are no owners, no bosses and everyone is equal. In Participatory Economics, people gather in groups to do business as a worker group.
Businesses would be run by the employees, broken down by committee. There would be a committee to determine what kind of product to make, in what styles. Compensation would be determined by peer review and have little bearing on success of the company.
Supply and demand would be managed by a national network of these worker groups coming together to make requests for more goods and services. Some other committee would employ a computer algorithm developed by Mr. Hahnel that seeks to optimize utilization of resources.
Besides sounding like a plot for some cautionary sci-fi apocalypse tale, it’s likely to fail utterly when dealing with shocks to the system like a natural disaster destroying a food crop or other “unexpected” demands of the supply. In fact, when questioned about this Professor Hahnel admits that his system “may be a little weak” in such situations. He essential goes on to say that it would be worth such problems in the end because it’s a more fair system overall.
This is antithetical to the society the founders created for America and the basis of free market capitalism. The framework which the founders created grants the power to the individual, not groups. Once the power and control moves to groups, the individual is lost. In free market capitalism, supply and demand is managed by the price mechanism which has proven itself to be the fastest and most efficient way to manage the consumption of scarce resources with alternative uses.
In essence, the protestors want a society in which an idea is floated by an individual but everybody gets a say in whether that idea is accepted or not, and to what degree it is accepted. Rule by committee in it’s most benign form, rule by the mob in it’s malignant form.
History shows this is folly.
NPR asks, “But is this effective?”
No. Of course not. In fact, even one of the protestors himself – a former facilitator no less – when interviewed by NPR admitted it’s not effective. But that’s not the point he says. The problem with effective governance is that “some people will feel disenfranchised and that their feelings are not being heard”.
It sounds like the individual is first and foremost, but by structuring decisions based by committee or group quickly absorbs the individual into the collective.
Like the 1825 failed socialist experiment New Harmony of Robert Owen, this model is destined to fail.
Josiah Warren (original participant in New Harmony) wrote:
“It seemed that the difference of opinion, tastes and purposes increased just in proportion to the demand for conformity. Two years were worn out in this way; at the end of which, I believe that not more than three persons had the least hope of success. Most of the experimenters left in despair of all reforms, and conservatism felt itself confirmed. We had tried every conceivable form of organization and government. We had a world in miniature. –we had enacted the French revolution over again with despairing hearts instead of corpses as a result. …It appeared that it was nature’s own inherent law of diversity that had conquered us …our ‘united interests’ were directly at war with the individualities of persons and circumstances and the instinct of self-preservation… and it was evident that just in proportion to the contact of persons or interests, so are concessions and compromises indispensable.” (Periodical Letter II 1856).
Participatory Economics. Mutualism. Socialism. Call it what you like, it amounts to Collectivism and it doesn’t work. It aims to replace an imperfect system (Capitalism) with an even more imperfect system.
No system is perfect. The best we can do is devise a system that provides the individual with the most latitude and freedom to make of his own life what he wishes (provided he does not harm others in the process).
That’s capitalism. Not the crony capitalism of Washington D.C., but free market capitalism.
The founding fathers new such collectivist systems were doomed to fail. They considered many forms of government throughout history and after careful deliberation and much spirited debate settled upon a representative republic as the surest way to promote prosperity and preserve liberty and freedom of the individual. Pure democracy devolves to mob rule (Greece, anybody?) and monarchy is dictatorship by a different name. At either end of the spectrum, individual liberty and freedom cannot exist.
The founding fathers knew that there was no single, perfect system. It’s why the preamble of the constitution states:
“We the people of the United States, in order to form a more perfect union, ..”
It’s a more perfect union, not a perfect union.
Collectivism fails every time it’s tried, and the Occupy movement is no different.
The saddest part of this whole episode is that it is fueled by people who are frustrated with the current system as they see it, and feel the only solution is to riot for revolution. While the solution already exists and has been hiding in plain sight.
Perhaps if their education had been a bit more complete and less radical, they would focus their efforts on occupying the voting booth instead of everything else.
For more about what made America great and how it can be again, check out The 5000 Year Leap (Original Authorized Edition)
For more of NPR’s Planet Money interview, listen to the NPR Planet Money podcast from October 7th:
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