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Robin Hahnel Interview on Participatory Economics – Part 4 – Outsourcing and ‘Wage Labour Through the Back Door?’

Editor’s note: discussion topics include how to decide which workers are members of a particular worker council in Participatory Economics (parecon), whether this threatens wage labour exploitation through the back door in market socialism or parecon, balancing jobs and reproductive labour in parecon, and outsourcing in capitalism.

[After the Oligarchy] Hello everybody, this is After the Oligarchy. Today I’m speaking with Professor Robin Hahnel.

Robin Hahnel is a professor of economics in the United States, co-founder with Michael Albert of the post-capitalist model known as Participatory Economics (Parecon), and author of many books.

Today’s conversation is in association with meta: the Centre for Post-capitalist Civilization. This is the first in a series of interviews with Professor Hahnel about Participatory Economics, and in particular his latest book Democratic Economic Planning published in 2021. If you haven’t watched the first interview check out Part A and Part B here.

It’s an advanced discussion of the model proposed in that book so I recommend you familiarize yourself with participatory economics to understand what we’re talking about. You can do that by visiting participatoryeconomy.org. You can also read Of the People, By the People for a concise introduction to parecon.

The discussion will also continue on the forum of participatoryeconomy.org.

Robin Hahnel thank you very much for joining me.

[Robin Hahnel] Great to be with you.

[ATO] So, the question is about how to decide who is a worker council member and who isn’t. In parecon, how does a worker council decide who is a member who isn’t?

For consumer councils the answer is a simple matter of geography, if you live in a certain area you’re part of that consumer council. That’s easy.

However for worker council it’s more complicated. A worker council will use many labour inputs, but some of them will be considered internal inputs of labour from the worker council members and some will be considered external inputs of labour from non-members. How is this distinction made in practice? And how is this distinction made such that wage labour isn’t introduced through the back door by excluding certain workers from membership? For example, just to illustrate that, again coming back to our furniture factory, let’s say you have a handful of cleaners who come in and they clean the offices every day. You could imagine that those cleaners would be part of the furniture factory worker council. You could also imagine that there’s almost a subcontracting situation where the worker council hires the cleaners as external labour and then pays them differently.

But then again, maybe I’m thinking of this just in terms of a market. But please, anyway, just come in.

[RH] There are no external workers.

I mean, first let’s just deal with the basics. So, how do you become a member of a worker council? You go to their personnel department and you apply. So for existing worker councils you’re free to quit the one you’re in and apply to work in any other one.

There’s a more complicated issue about how do new workers councils come into being, particularly because as soon as we have a worker council they get to participate during the annual planning process and they could be allocated social resources. So there’s a question of do you have to establish some sort of credentials and credibility before we have you participating in the planning process.

But you’re not you’re not concerned with that.

[ATO] No.

[RH] You’re concerned with an issue that basically comes down to how integrated is an industry. So you could have a single company that makes its own steel and then makes its own automobiles. On the other hand, you could have two companies, one that makes the steel and sells the steel to the automobile company, and the automobile company buys the steel and then goes ahead and makes the automobile out of the steel.

[ATO] Yes. But do you mind if I just make the question a bit more pointed? So, I think probably in the context of parecon the question might be a confusion. But I’m thinking about it because this is a concern that I have about market socialism. And, for example, let’s look at Google under capitalism, then consider it under market socialism, say, and this will explain where I’m coming from.

So, Google today has wonderful conditions, like many such workplaces with highly skilled labour, where you can get your food there, and relax on bean bags, and blah, blah, blah. However, if you clean the offices where the software engineers work, you have no labour rights, you’re considered self-employed, you’re paid very little, and you’re just treated like human waste essentially. Okay, that’s capitalism.

Now let’s look at market socialism. I have concerns that even in a market socialist society that that worker council which operates Google could have an incentive to treat the cleaners in a similar way. That the cleaners would not be part of that worker council, they wouldn’t get the profit divided by number of members, because there is an incentive to have as few members as possible and it’s still a competitive market situation. So you can reduce costs by paying these cleaners less. And, of course, there’s a whole coordinator class element there, where there’s an issue of bargaining power, and that’s why I picked the cleaners because they have less bargaining power.

So that’s in a market economy. But is that even a question in parecon?

[RH] First of all, this is not an issue that I have thought about so I’m thinking out loud here.

You have a place like Google, and one of the things that has to happen at that place is offices have to be cleaned and the cafeteria has to be [served]. I can tell you that back 30 years ago, thinking about this, the way I would have thought about it would have been well those are some unpleasant tasks and we have to be sure that when we create jobs we have to be sure that everybody is going to have to do some of those unpleasant tasks along with those more pleasant tasks. So I would have viewed this as an issue of how do you balance jobs for both empowerment and desirability. And if you don’t balance them for desirability, how do you compensate that in terms of greater sacrifices and therefore effort ratings.

And I think those are perfectly good answers, but what you’ve introduced is a is a second possibility which is, well, wait a minute, you’ve imagined the more integrated production process where a single worker council is both producing software and also cleaning offices. What if we have a whole separate workers council that is cleaning offices? Now the place that that that I’ve actually done some thinking about this is in the chapter on reproductive labour. And there it’s not a question of a workplace, it’s a question of are there going to be households that hire people to [do reproductive labour]? Are you going to be able to [hire someone to do] gardening for you and they’re going to be all male? And are you going to be able to hire people to come and make your beds, and do your laundry, and do a deep cleaning on your house, and those people in that workers council are going to be all female? It was that sort of problem and issue that we were trying to address. But it introduces the same issue which is if we have this place that says ‘we don’t want to clean our offices at all, we want to hire another worker’s council to come and do this’ …

Yanis Varoufakis Interview on Another Now – Part 2 – Housing, Taxation, Inequality, Monopoly, Workplace Democracy

Editor’s note: discussion topics include security in commercial housing in the Another Now model (AN), taxation in AN, income and wealth inequality in AN, inheritance in AN, time-limited or depreciating money, whether divergent incomes combined with compound interest can lead to class divisions in AN, firm size in AN, monopoly in AN, workplace management structures in AN, and the argument for equal decision-making rights within enterprises.

[After the Oligarchy] Hello everybody, this is After the Oligarchy. Today I’m speaking with Professor Yanis Varoufakis.

Yanis Varoufakis is the former Greek Finance Minister, a professor of economics, co-founder of DiEM25 and the Progressive International, leader of MERA25, and a member of Greek parliament. This is the second in a series of interviews with Professor Varoufakis, if you haven’t watched the first check that out.

Today’s conversation is in association with mέta: the Centre for PostCapitalist Civilization. And the topic is Yanis’s latest book Another Now, published in 2020, which presents a vision of a post-capitalist society. It’s an advanced discussion of the model proposed in that book. If you want an introduction, I wrote an essay and made a 40-minute video doing just that. Though I do recommend that you read the book.

Yanis Varoufakis, thank you very much for joining me.

[Yanis Varoufakis] Well thank you very much for having me on After the Oligarchy. We are living under the oligarchy, but anyway let’s imagine, let’s imagine.

[ATO] Exactly.

So again I have a lot of questions for you. We’ll begin with a question about housing, because after I posted the first interview and also the model summary something that kept coming up again and again from commenters was that they were worried about security in the commercial housing sector. The problem raised was basically that you’re saying that every year, or every period of time, I have to keep bidding to retain access to my house. And if somebody comes along who has more money than me then then I get kicked out.

And, of course, I certainly appreciate the ingenuity of the mechanism, to try to constantly reveal the opportunity cost of the land and the housing for society to be able to get that back so that there isn’t a rentier dynamic in housing.

How would you respond to that question of security?

[YV] Well, firstly, remember that this is about the commercial zone. In in my blueprint, every county – think of it as counties – chooses to create a space that’s not … I mean, it’s democratically determined how large this commercial zone will be. The purpose of this commercial zone is for it to be run commercially by the many, for the many, in order to extract rents from those who want to operate in the commercial zone; rents with which to build social housing, social zoning, social entrepreneurial activities, common spaces, the commons. So it is a good feature, a well-designed feature of the commercial zone, that anybody who wants to operate in it has to live in fear. If you wanted to live in a house that that you paid for, not in a social house, not in a unit within social housing, then yeah I mean live in fear.

Remember, it’s not just that once a year you bid for it, but it’s something like a perpetual auction whereby anybody can actually outbid you and throw you out. Which is great because the commercial zone is there to make money for the many, for every citizen who lives in the social zone and whose activities – whether they’re poetry readings, or paintings, or producing social goods – are being funded by the commercial enterprises within the commercial zone. So it’s okay if you if you live in fear. And the whole point of this permanent auction is to ensure that there is complete incentive compatibility. In other words, that when you declare to the authorities what you value that building or piece of land as that you’re truthful. And you will only be truthful if … you can undervalue it if you want, but then somebody can come and outbid you and throw you out. So I have no defence to those who say that ‘oh, the people who live there in commercial zone will live in fear’. We want them to live in fear.

And, you know, it’s a game for them. The crucial point here is that you don’t have to live in the commercial zone. I would live in the social zone. But if you want a fancy house, a much fancier house than you deserve, or you want to create an enterprise in a place that society does not deem that you should have it, then yes you pay for it. And if you make the money for it, yeah good it all goes back to social housing and the social zone.

[ATO] Okay, so it’s really that that the priority is being put on the redistributive function of the commercial housing zone.

To move on to something else, I’ve a series of questions about income and wealth inequality. This is also a concern for some people, it’s a concern for me as well and any kind of market system … so, for example let’s talk about taxation. In Another Now there are two taxes. I mean, maybe there could be a carbon tax but let’s not go into that. There is a corporation tax, which is a tax on the revenue of all firms, and then there’s a land tax and we were talking about that there.

[YV] Land tax only in the commercial zone, only the commercial.

[ATO] Yes exactly, on the commercial zone. One might say ‘well, are you serious? There’s no income tax?’

[YV] Yeah! There’s no income tax.

[ATO] Because there could be seriously divergent incomes, because different firms could have much different rates of profitability or revenue streams, so it’s likely, one might say, that there is a lot of inequality generated. But there’s no progressive income tax.

[YV] I’m not convinced. I don’t believe there will be. If you look at the capitalist system, or techno-feudal system, in which to live today, inequality – mind numbing and soul-crushing inequality – is the result of two things. Firstly, the private ownership of firms, of the means of production, shares, share markets. That’s one, and finance is the second one. That’s where the huge inequality that is destroying our spirit comes from. Not to mention our planet.

In Another Now there would be neither. Because shares are distributed on the basis of one employee, one member, one share, one vote. And there is no financial sector, the financial sector has been taken over by a distributed ledger of the central bank. And therefore this highly problematic toxic duet – duetto in Italian – between the banker and the mogul, the banker creating, printing, money out of thin air, lending to the mogul, who uses the printing presses of the private bank in order to corner the market in the share market and effectively own everything. And then the wealth begets wealth.

Now why is Zuckerberg so much wealthier today than he was at the beginning of the pandemic. Nothing to do with the profitability of Facebook. It’s got to do with the fact that there is this combination of financial capital – the printing presses of the central bank working for Zuckerberg, not for the people, not for the many unlike in Another Now – and ownership of Facebook. And if you break down ownership of Facebook, and Facebook is equally owned by everybody who works in Facebook, and if you end the printing presses both of the state and the private sector banks operating at full throttle on behalf of the very, very, few, then the inequality that you and I are used to goes.