Democratic Planning
Interview: Gar Alperovitz on Democratic Planning
Interview by Geoff Gilbert.
"* You consistently return to economic planning as necessary for any system seeking stability, for both the entire economy and for communities. Can you explain our current system of backdoor corporate planning?
Every area you look at, either tax or regulation or loans or loan guarantees or combinations of those strategies bolster or don’t bolster certain directions in the economy. So the idea that we have a free market in the economy and that there is open competition is absolutely absurd. If you look at the oil industry, for example, it’s supported by special tax programs that give it a particular direction.
The way it’s organized, lobbyists have found ways to get these programs out of the government. As you know I worked in both houses of Congress at one point. The way in which the lobby system works — this is very well known and most people close to the political process just take it for granted.
* What would democratic planning look like?
You are going to have to have national economic planning for the big areas — for example, energy, climate impact, transportation. Right now we let the free market control where the major air transport goes. What that means is a city like Cincinnati loses its transportation, then it loses its business. The same thing is going to happen to Cleveland, which is ridiculously inefficient, as well as inhumane. A planning system needs to begin to coordinate that.
* How can we do this?
Partly we need to build up local experience through participatory budgeting and planning. That is a whole area for activists to work on.
We also need a theory of how to do it at the national level. Making it explicit — for example, if we want to deal with climate change, saying here are all of the implications captured in an economic plan. Similarly, if we want to stabilize communities, and so on. And then we should debate it back and forth.
* Given our country’s size, the region becomes an important political unit in your work. Can you explain this?
Most people haven’t faced this question or wanted to face it. The country is almost obviously too big for the government to be a genuinely democratic institution — it’s almost 3,000 miles from corner-to-corner with 318 million people.
Now, most states are too small, economically. The most logical solution is something bigger than a state and smaller than a continent — a region. Most European societies are radically smaller than the United States. You could drop Germany into Montana. Large scale gives control to elites — and to money and media. So, at some point, any serious model that wants to be democratic is going to have to decentralize where decisions are made. California, New York, Texas could probably do it on their own — they are regional scale units. That’s a whole set of questions that have to be put on the agenda.
* In your writing on democratic planning, you often confront the tension between the need for action and its centralizing tendencies, and participatory democracy and the decentralization needed to make it a reality. How can this apparent contradiction be overcome?
First, you have to have inclusive units that include everybody — community models, not just worker-ownership models.
The second piece is using both planning and markets. Using Cleveland and the Evergreen Cooperatives as an example, you’ll see that the big institutions — hospitals and universities — both of which have a lot of public money, buy from worker-owned companies that are embedded in the community structure. That’s a planning system, using the purchasing power of these institutions, a lot of which is public money — Medicare, Medicaid — to help stabilize companies that are owned by the community and workers. It’s not just a free market system.
* How can markets be used?
You want some sort of mix of planning and markets, because you want to challenge the planning systems, which can get rigid. If you take this model to the national level, then the government, using just one example, would support mass transit and high-speed rail as one element of its transportation system. That would mean there are a lot of public contracts to build that. They could purchase the goods from worker and community-owned companies. You could have several of them that are quasi-competitive, so that the planning system can be efficient.
* What are the basic types of alternative political-economic models that could achieve this?
Most of the models have an element of worker-ownership in them. It’s not the only thing, but it does change the ownership of capital. I think it’s a mistake to say that’s the only element — I don’t agree with some theorists who think that the system is going to be just adding up worker-owned companies.
Another model is a city-ownership model. For instance, in Boulder, Colorado, they have municipalized a private electricity utility. So that’s a different strategy that emphasizes a community model at the city level. Now, you can put both together — I believe in a pluralist system that will include several different models.
A third model is neighborhoods. It’s particularly important for the United States, where neighborhoods are often organized around race. The work we’ve done in Cleveland is a combination of neighborhood ownership and worker ownership.
* And you write about the problems that come with economic entities that achieve scale, even if they are worker-owned.
When you get to the larger scale and economies of scale become available, even worker coops develop power relationships because they have to. If somebody else is in the game who can cut costs by polluting, even good guys in the coop will lose their jobs and their company if the other group is able to undercut them. Especially, if you invest in new equipment that can lower your cost, if somebody else does that in another company, you must do the same thing, otherwise you will be out of business. They have to grow; they have a growth dynamic, as well as a cost cutting dynamic, built into the model. So when you get to significant scale — and that changes in different industries — worker coops, in a market economy, have very similar forces operating against them that any company in a private economy has.
* How can problems of scale be overcome?
First I want to say that worker coops make sense on a smaller scale and are doable.
One way to address scale is to build a culture of community that internalizes externalities, through, for example, community-wide ownership. That is to say, a community-wide ownership system can decide to pollute, but it pollutes itself. So it must make the choice of what to do. Whereas a company, worker owned or not, may like to not pollute, but if it pollutes, it’s polluting the community, not just itself, and it might do that because of cost competition.
* How can some of these different ownership models begin to be implemented right now?
I think we are going to see a lot of this. We’re already seeing activity at the city government level. Several city governments — New York, Madison — are beginning to pick up on supporting worker ownership. Some states — Vermont and Ohio — have supported worker-owned companies. That’s a step forward.
- How can local government be used as a resource for this type of change?
It’s not just funding. People don’t realize, a worker-owned coop is a “business.” In the United States, there are enormous subsidies and laws and national government policies in support of business. For progressives and people on the left, the light bulb needs to come on that almost all of this could be used for worker businesses.
For example, with the Cleveland model, once the city officials realized they wanted to help, they could begin to use all of the existing tools for this direction. And the mayor often looks good if he or she does this. People are often in opposition and they don’t realize there are a lot of opportunities in government where politicians would look very good if they helped.
- And what about the role for anchor institutions, like with the Cleveland Model?
The other strategy is big institutions that have a lot of money in them and can’t move — like hospitals and universities. Medicare and Medicaid, educational money, etc. They buy a huge amount of goods and services. They can be requested, or pressed, or organized to help support these new directions. That’s what’s going on in Cleveland, of course. In many cities, actually, but Cleveland has done the most dramatic work." (http://wagingnonviolence.org/feature/time-new-political-economic-system-talk-gar-alperovitz/)
More Information
- Article: Lowy, M. (2006) ‘Ecosocialism and Democratic Planning’,
in L. Panitch & C. Leys (eds), Socialist Register 2007. London: Merlin.
* Article: An international interface: Democratic planning in a global context. By Sophie Elias-Pinson et al.
Competition & Change, November 2023 (DOI: 10.1177/10245294231212681)
"There has been a renewal of discussions about alternative economic systems in recent years. Democratic planning has received a lot of attention, especially in view of the way it could help address social and ecological challenges. However, little has been written about how a democratically planned economy could relate to other economies through trade or financial flows. This lack of interest is surprising, considering that any country aspiring to plan its economy democratically would have to take into consideration its integration in global value chains and that few would likely aim for complete autarky once fully democratized. In this article, we address this issue by delineating five principles that an institution responsible for international economic relations should follow in a democratically planned economy and giving an example of how it could function in practice."