In the aftermath of the collapse of communism, debate about alternatives to capitalism has divided into three camps: advocates of market socialism, proponents of democratic planning, and supporters of community-based economics. Few anti-capitalists—whether they favor market socialism, democratic planning, or community-based economics—deceive themselves that there is more than a tiny minority in any advanced economy who are ready to replace capitalism at this time. Most of us understand all too well how strong capitalist hegemony is at present. Moreover, market socialism, democratic planning, and community-based economics are all visions of a thoroughly democratic economy, and supporters understand that this means that until a super-majority supports their vision of a more desirable future, it cannot come to fruition. Therefore, advocates of all three alternative visions understand that—with the exception of a few countries where significant portions of the population may now, or soon, support abandoning capitalism—the struggle to eventually replace capitalism must, for the foreseeable future, concentrate on fighting to reform capitalism and building experiments in equitable cooperation within capitalism.
The Importance of Economic Vision
Despite important differences of opinion about how best to organize a desirable alternative to capitalism, advocates of market socialism, democratic planning, and community-based economics should be—and usually are—staunch allies both in most reform struggles to combat the ill-effects of free-market capitalism and most projects that promote equitable cooperation over competition and greed. But if replacing capitalism is not on the near horizon in most of the world, why devote time and energy to debating the pros and cons of different post-capitalist visions now, particularly if this reminds people who need to work together of their differences?
Some anti-capitalists advocate denouncing capitalism as the root source of many of today’s problems. But when asked what kind of economy should replace capitalism, they answer in deliberately vague and general terms: “a just and democratic economy” or “an economy that is not wasteful and destructive of the environment.” There are understandable reasons to be concerned about the pitfalls of visionary thinking. But rejecting discussion and debate over how we can better organize our economic activities to achieve economic justice, economic democracy, and environmental sustainability is self-defeating—no more so than today, when the destruction wrought by capitalism to the natural world and the human community is becoming increasingly apparent and impossible to ignore.
Some hesitate to spell out how a post-capitalist economy should be run for fear of putting people off. They worry that saying we are anti-capitalist risks alienating people we work with in reform movements, since most people working in reform movements assume the capitalist system is sound and only flawed in its application. However, it makes little sense to risk putting people off by saying we reject the capitalist system itself without trying to explain in concrete terms what we want instead. Others eschew debates about economic vision for fear it will lead to sectarianism that divides us unnecessarily and distracts us from focusing on more urgent tasks. Given the history of sectarianism on the Left, there is every reason to fear this dynamic. But we must guard against sectarianism on many issues, and the advice to table economic vision would only be sensible if it were true that deliberations on this issue were unnecessary.
Still others claim that specifying how societies or communities can create economic systems that incorporate social justice, environmental health, and other democratic values is totalitarian, because it robs those who will live in post-capitalist economies of their democratic right to manage their economy as they see fit when the time comes. This argument is nonsense. Since when did discussing difficult and momentous issues in advance impede deliberative democracy rather than advance it? I can’t see that this would be a problem unless those debating such matters attempt to impose their formulae on future generations. And nobody I know who discusses democratic post-capitalist possibilities has any such pretensions.
Of course there is a time and place for everything. There are venues where pontificating on the inherent evils of the capitalist system is inappropriate and counterproductive. Similarly, there are venues where discussing arrangements for how those in worker councils could manage themselves or how different groups of workers and consumers might coordinate their interrelated activities fairly and efficiently is out of place. The question is not whether every commentary, speech, conference document, article, or book must explain how a problem today is linked to capitalism, or how it could be solved in an alternative economy. Rather, it is whether theorizing about economic vision and testing our convictions in the flesh, where possible, plays an important role in the movement to replace the economics of competition and greed with the economics of equitable cooperation.
The simplest argument for the value of visionary thinking lies in the question: How can we know what steps to take unless we know where we want to go? For those of us who believe we are attempting to build a bridge from the economics of competition and greed to the economics of equitable cooperation, we must have some idea of where we want the bridge to end as well as where it must begin.
But the strongest reason for embracing the issue of what we would do when capitalism falters is our track record of failure. This is not the first time people have been entreated to jettison capitalism for a better alternative. While communist economies were not failures for the reasons widely believed, they were colossal failures nonetheless. And they were certainly not the desirable alternative to capitalism that was promised. So people have every reason to be skeptical of those who claim there is a desirable alternative to capitalism. They also have every right to demand more than platitudes and generalities.
Reasonable people—not only doubting Thomases—want to know how our alternative to capitalism would differ from the last one and how it would work in concrete terms. Literally billions of people were misled by our anti-capitalist predecessors, with terrible consequences. We should not deceive ourselves that many today are willing to accept our assurances on faith that we have it right this time. We avoid contentious issues about the alternative to capitalism only at our own peril. It may be that God has given 21st-century capitalism the rainbow sign, but salvation from doomsday will be no faith-based initiative. We must show an overwhelming majority of the victims of capitalism how a better system can work. We must provide convincing answers to hard questions about why our procedures will not break down, get hijacked by new elites, or prove incapable of protecting our natural environment. If we cannot do these things, the economics of equitable cooperation will remain little more than a prayer on the lips of the victims of competition and greed.
The time has passed for excuses and intellectual laziness. Critics of capitalism must think through and explain to others how we propose to do things differently and why outcomes will be significantly better—especially since the sacrifices people must make on the road to replacing capitalism will often be great. Therefore, there must be good reasons for people to believe the benefits will be great as well—if not for themselves, then at least for their children.
This does not mean we must agree right now on what the best alternative to capitalism looks like—which is fortunate, because at this point there is no agreement on whether the best alternative is some form of market socialism, community-based economics, or democratic planning. The debate about alternatives to capitalism in the wake of the collapse of communism is still in its infancy. Nevertheless, the quality of the debate over economic vision must inspire confidence that the movement for equitable cooperation is busy tackling this crucial task effectively. How best to organize a system of equitable cooperation is not a trivial intellectual problem, and the answers will not be obvious without a great deal of deliberation, which must take place before the answers are needed.
Supporters of community-based economics reject corporate capitalism, market socialism, and democratic as well as authoritarian national planning. In their place they 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.
Supporters of community-based economics seek to avoid the negative repercussions of both markets and bureaucratic 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 does not work in large groups where people do not know one another and cannot meet face-to-face, it can work in small communities where it is possible for people to know each other personally. 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 many different flavors. Murray Bookchin was the founder of the school of social ecology and is the best known proponent of their post-capitalist vision, libertarian municipalism. Howard Hawkins, a long-time activist and 2006 Green Party candidate for the U.S. Senate in New York has also written along similar lines.David Korten and Paul Hawken have argued that an ecological society can best be achieved through democratic pluralism in books that have reached wide audiences. Gar Alperovitz and Michael Shuman have both written widely about the advantages and feasibility of what Shuman calls self-reliant communities and Alperovitz calls a decentralized, pluralist commonwealth. E.F. Schumaker’s classic defense of localism has helped spawn a whole school of Buddhist economics. Kirkpatrick Sale is a well-known proponent of bioregionalism. Herman Daly, founder of the school of ecological economics, argues for a less radical version of regional self-reliance, while Roy Morrison has written persuasively about a more radical vision he calls ecological democracy. These are only some of the different versions of community-based economics that appear in a wide-ranging and growing literature.
While I recognize that community-based economic visions have important differences, I believe many suffer from important weaknesses they share in common. But before exploring their weaknesses, I want to reaffirm important points of agreement between supporters of at least one version of democratic planning, known as “participatory economics,” and supporters of community-based economics.
Points of Agreement Between Participatory Economics and Community-based Economics
Supporters of participatory economics and community-based economics have a great deal in common.
1. While today’s capitalist economies can and must be reformed to make them more just, democratic, and less environmentally destructive, as long as our economies are dominated by giant corporations and driven by market forces, we will never achieve environmental sustainability, economic justice, or economic democracy.
2. The traditional socialist response to capitalism was fatally flawed and does not serve as a positive model. Those who ruled in centrally planned economies unfortunately chose to compete with capitalism in a race that confused economic growth with economic development and ignored the importance of environmental preservation. But more fundamentally, central planning and hierarchical management are inherently incompatible not only with economic self-management but also, ultimately, with economic justice. As Steve Welzer aptly put it: “The socialist experiment was increasingly discredited during the 20th century as it became clear that the promise of egalitarianism and ‘peoples’ control’ was a chimera in one socialist experiment after another.”
3. While employee-managed models of market socialism overcome some of the flaws in capitalism and centrally planned socialism, and while worker-owned firms, or producer cooperatives, can play an important transitional role in combating the economics of competition and greed, as long as market forces play a dominant role in economic decision-making, we will never achieve a sustainable economics of equitable cooperation. So worker-ownership by itself is no panacea, nor is market socialism the alternative to capitalism that we seek.
4. A desirable alternative to capitalism must be up to the challenge of replacing today’s environmentally destructive technologies and products with technologies and products that are much more environmentally benign. In particular, our energy and transportation systems must be completely transformed to halt rapid environmental deterioration. A desirable alternative must also eliminate perverse incentives in capitalism that relentlessly drive consumers to seek satisfaction through invidious consumerism and drive producers to engage in what ecological economists call “uneconomic growth.”
5. Desirable economies promote diversity rather than uniformity and initiative rather than passivity. This means that local communities and “direct producers” must be free to run their own economic affairs—as long as they do so in socially responsible and environmentally sustainable ways. As Welzer put it, our “vision runs counter to the civilizational trend lines which have been leading in the direction of compelled uniformity and monoculture.” Instead, we advocate “re-empowerment of communities and participatory decision-making, enhanced local autonomy, and more humanly scaled institutions and technologies.”
6. Finally, we must discard old theories of how capitalism will be replaced and face up to the fact that, in Welzer’s words, “there will be no ‘final conflict’ ushering in the new era, but rather a generations-long challenge to build the new society within the shell of the old.” Much of my most recent book, Economic Justice and Democracy: From Competition to Cooperation is devoted to developing a more realistic understanding of how capitalism can be replaced and the role different kinds of social activism can play in this process. More specifically, I agree with Welzer that for the time being we must “a) constrain corporate power through regulation, b) undermine the dominance of corporations by fostering the development of community-based alternative organizations [such as] co-ops, credit unions, Community Supported Agriculture, land trusts, locally owned businesses, [and] municipally owned enterprises, and c) gradually reallocate social resources away from the corporations toward the emergent alternative institutions.” But while we agree on all this and more, I have serious reservations about community-based economic visions.
Critical Questions About Community-Based Economics
Although I recognize differences between various versions of community-based economics and sympathize with the participatory and ecological goals of those who propose them, all versions suffer from the last four problems raised below. However, since many of the more popular versions of community-based economics do not reject private enterprise, I’ll address that issue first.
1. It is one thing to ally with small, locally owned businesses in campaigns against Wal-Mart and another thing to argue that privately owned business has a positive role to play in our long-run vision of a truly desirable economy. Welzer is among those advocates of community-based economics who argue that we should be “hospitable to many forms of free enterprise and private ownership, provided always that the size of private enterprise is not so large as to divorce ownership from personal involvement.” While it may be the case that big business is always bad, it does not follow that small business is necessarily good.
Large corporations are not the only businesses that exploit their employees, overcharge their customers, and despoil the environment. Single proprietorships, family-owned businesses, and locally owned businesses—where ownership is not “divorced from personal involvement”—have also been known to pay their employees poorly, provide inadequate benefits, deny their employees control over their work lives, and price gouge their fellow community members who find it difficult to travel to shop elsewhere. Local chambers of commerce—which are invariably dominated by local business owners—are seldom reliable allies in campaigns against local pollution and sprawl. Moreover, it is no accident when local business owners behave in socially and environmentally destructive ways. There is every reason to fear that small, locally owned businesses—which are subject to the forces of market competition just as larger businesses are—will engage in socially and environmentally destructive behavior whenever their profits are increased by doing so. This is not to say that large corporations do not usually do more damage than small businesses. But often this is simply a matter of scale—i.e., when a large, powerful organization acts in a harmful way, it does more damage than when a small organization with less power behaves in the same way.
In other words, not all proponents of community-based economics reject private enterprise and markets as part of their long-run vision. Some, whose vision includes space for private firms alongside producer cooperatives and “properly socialized” markets, seem to accept private markets, 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 mistakenly believe that some private enterprise and some markets are compatible with sustainable, equitable cooperation.
However, proponents of community-based economic visions do not need advocates of participatory economics like me to raise this point. For many years proponents of community-based economics have engaged in active debate over whether or not private enterprise—even if small and locally owned—is ultimately compatible with economic justice, economic democracy, and environmental sustainability.
More radical visions of community-based economics do reject private enterprise and markets entirely, even if they recognize that we must put up with them during a lengthy transition period. 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. In this matter advocates of participatory economics agree with Joel Kovel, an ecosocialist who appreciates the need for local power but is critical of making it an end in itself, and who argues 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.”
2. Unlike some 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 different kinds of decisions that must be made in any economy. For this reason, all versions of community-based economics are really “visions” rather than 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 problems of transition 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 enthusiasts imagine people will make in a community-based economy. Since proponents of community-based economics are motivated by strong convictions that people need to a) choose radically different technologies and products, b) change their priorities regarding leisure versus work, and c) accept the necessity of zero growth of what ecological economists call “material throughput,” authors often 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 of the economy proposed—it is literally impossible to evaluate whether or not the economy would do what its proponents claim it would.