Saturday, 13 June 2009

Non-monetary coordination

At the heart of any economic model is its system of distribution or allocation: How is it decided and organized what resources go where? More than anything else, this is what makes different models distinctive.

Speaking very broadly, under capitalism there is no overall control. Instead, the allocation of resources is determined by the fluctuation of prices. In theory, this results in resources being directed to those products and services for which there is most demand (high demand for a good raises its price; this increases the potential profits to be gained from investing in its production; such investment continues, and through competition the price drops, until supply matches demand) although the reality is rather different. Under most communist systems that existed, by contrast, a plan was drawn up for the whole economy by a small number of people, using information gathered by an official bureaucratic agency. Production and consumption then proceeded in accordance with this plan.

The system of economic distribution/allocation in existence within a society is very important. It is not an exaggeration to say that this will determine its parameters – the overall level of production, social justice, the plight of the disadvantaged, waste, economic vibrancy, and on and on – more than any other single factor.

Angel Economics has a number of different elements to its system of distribution: i) the use of natural units of account; ii) information agencies collecting and supplying economic data; iii) experienced handlers of arrays of the economic data pertaining to specific fields making judgments about the best use of resources in given circumstances; iv) democratic forums taking economic decisions.

This entry describes in more detail how these elements fit together in Angel Economics' system of economic coordination.

* * *

It will help, in visualizing how the system works, to give a brief birds-eye description of what it might look like in a geographical sense.

So, we might imagine a small region having strewn about it, just as today, a great number and variety of different workplaces, producing all manner of different things – factories producing plastic bottles, brick-making plants, manufacturers of windmill blades, institutes researching livestock use, egg farms, wood sawing mills, and on and on.

(The specifics as to what would be produced under Angel Economics and how it might differ from today can be left aside in this discussion of economic structure).

There will also, of course, be a lot of people resident within the region. Again, probably in patterns similar to today – some collected together in towns, some relatively isolated in the countryside.

(Angel Economics would be likely to have a significant effect on settlement patterns but here too, the details are relatively unimportant for the present discussion).

Also spread throughout the region will be a great number and variety of democratic forums. (These are institutions rather than physical structures, of course. But to aid visualization, it will help to think of them geographically). Every workplace has one. Every neighborhood and locality has one. The region as a whole has one. And there are also likely to be forums between the level of the workplace/neighborhood and that of the region, which focus upon specific sectors (like farming or publishing, for example) or groups of people (the elderly, groups with a common interest).

The region will also have its information agency (quite possibly with smaller branches dotted around in particular locations, or more specific branches relating to particular sectors). Whatever its specific location, all the information it produces is available to everybody.

Finally, we should mention the people with experience of the economic situation relating to particular goods, sectors, and locations. Again, they will have no particular location, traveling simply to where they are needed, although it may help to think of them as attached geographically to their particular 'economic object'.

To complete this sketch, its worth making a remark about how this hypothetical region is likely to stand in relation to other regions and the wider world, from an economic perspective.

Regions can either be relatively self-contained, producing most of what they need from within their borders, or they can be merely part of a world-wide system of production, in which what is produced at any particular location is unimportant. Most economies lie somewhere between these extremes, with the history of the past centuries of capitalism involving, ever more, a move towards the latter: today, while there is still a surprising amount of economic activity confined within small geographic regions, as a rule, firms tend to draw their inputs from the world over, and consumers likewise.

There are a number of reasons why a certain degree of worldwide interconnection is a good idea. Mineral resources, for example, are not equally distributed around the globe, nor is productive farming land; the concentration of a large workforce, and technical specialization, within a few large workplaces around the world, can improve efficiency; hubs that collect together many people pursuing similar activities (like Silicon Valley in California, or the CERN complex in Switzerland) can be very dynamic.

But on the other hand, there are also reasons why an amount of local autonomy is important, and why a global organization of production is problematic. If a region produces a lot of what it needs, it becomes less vulnerable to any disturbances that may affect the distant regions producing the goods it would otherwise be dependent upon – it provides 'ecological stability'; shipping goods over long distances uses a lot of fuel, and a great deal of logistical infrastructure, making it both inefficient and a big source of carbon emissions; dropping humans into vast organizations which have little connection to their location, or to the communities surrounding them, ignores our natural need to be able to relate to our institutional homes, and become involved in the environment in which we live.

So, we should imagine our hypothetical region to incorporate elements of both these tendencies (the specific form depending upon what its inhabitants democratically decide). Many workplaces will have a great number of links to other workplaces and individuals outside the region; but equally, we might imagine that in much of its food production, energy generation and low-level manufacturing it is relatively autonomous.

*

Having gotten a picture of how things might look on a map, lets turn to the structural elements of the economy, beginning with the system of natural units.

Consider a saucepan. It is a fairly simple product, yet of course it still incorporates a great number of different resources and labor processes. Its main body will be made of a metal, such as aluminium, steel, iron or copper, which may in turn be coated with another material such as a porcelain enamel, or teflon. It will have a handle made of plastic or wood which must be attached to the body with some kind of screw or pin. The main body of metal must be molded, cast, cut or pressed, and of course this metal must have gone through a great number of prior processes, from mining to refining to forming, in order to be usable in this way. The coating, the handle-material, the screws, and any other elements, likewise must have been previously manufactured before being available to use, as must their constituent ingredients, and so on. Each of the labor processes involved in these stages, and the tools they employ (as well as the resources and labor processes and tools involved in their production) also need to be taken into account. As does the transportation of all these factors, and the design and conception work involved at each stage.

One can use a narrower or a wider definition of “input”. A very narrow one might include only the pre-formed body, handle and screws, and the labor involved in putting them together. A very wide one might extend out beyond those mentioned above, to include the tarmac that made possible the smooth running of the lorry that transported the waste copper mining materials to a dump, or the language developments that made possible the conception of the idea of a 'saucepan'. But let's suppose that “input” has a certain agreed-upon scope, that is useful for practical purposes, and that as such, the constituent inputs of the saucepan are the sheet metal for the body, the unformed plastic (of a certain type and grade) necessary for molding the handle, and the screws; also the labor and tools involved in casting, cutting and finishing both the body and the handle, those involved in putting it together, the design work involved in the conception of the saucepan, and all the logistical and management tasks involved in transporting goods from one place to another, overseeing the project, and so on.

This forms the basis of the array corresponding to the saucepan, that specifies, in natural units proper to each input, its economic profile. Thus, the saucepan may use 0.5 square meters of aluminium sheeting; 235g-dry of pvc of such-and-such a grade; and 5 steel screws of such-and-such a size. Also, the molding, cutting, polishing and finishing labor involved in forming the body and the tools used in those processes, and so on. We must also take into account the premises in which this work occurs, the energy used in all operations, and any other necessary factors, accounted for in their appropriate units

This array informs us how much a saucepan costs, in real terms. Of course, we must understand “cost” in a different, wider, more realistic sense than today. The cost is 'what it costs' to make a saucepan, in terms of each of the constituent elements. There isn't a 'total', in the form of a single number, that can stand for this cost; it is irreducibly heterogeneous.

Every product has such an array corresponding to it. Almost always, the array belonging to an item will be capable of being decomposed into a great number of further arrays, specifying in the same way the cost of the constituent inputs to each individual item of the first list. Thus for example, the entry '0.5 square meters of aluminium sheeting' could be taken. Its array might specify the mining, refining, casting and transport costs involved in the the production of a piece of sheeting of that size.

In a similar manner, arrays can be 'compiled into' those corresponding to more composite objects. Thus, a 'standard restaurant kitchen' (insofar as this can be considered an 'object' or product) might include in its array an entry reading “7 saucepans of such-and-such size and quality”, among a list of many other items. The cost of a saucepan is not expanded upon in this array, just as the cost of aluminium sheeting is not expanded upon in the array corresponding to the saucepan. They are taken as 'facts'.

Having established what an “array” is, in this context, and what is meant by “natural units”, we need to look at how they are used.

Lets suppose that a workplace is considering the production of a line of saucepans (ignoring for the moment how it arrives at this decision). It comes up with a range of different prospective designs, to each of which there obviously corresponds a different array, depending upon the type of materials it uses, the complexity of the design, the specific suppliers to be involved, and so on. In other words, each prospective design has a specific cost.

At this point, an economic decision needs to be made. We want to choose the best option. What does “best” mean, in this context? That involving the least total labor and resources? That involving the least of one particular resource? That involving the highest quality labor and resources? That involving the closest labor and resources in geographical terms? That involving labor which is least unpleasant? That involving the least-polluting resources?

There isn't a right answer to this question. All of these considerations are important, and it is a matter of policy and judgment how they are each going to be weighed up and factored in; whether a particular issue is deemed all-important or whether a compromise between competing demands is going to be settled at. One of the virtues of Angelic Economics is that it recognizes that economic decisions are judgments and provides a means for them to be properly expressed.

(Under a price-based system, the issue does not arise. All else being equal, one would simply choose the option with the lowest number, i.e. the lowest price. But this apparent simplicity is an illusion. If the decision were made simply by flipping a coin, nobody would remark at how elegant and uncomplicated a system it was. They would rather say that this is not a suitable way to address important questions. The case is not as stark with the use of prices but it is of the same kind: the system of measurement has no way of representing appropriately the facts it is supposed to measure).

Now, each of the possible considerations listed above makes reference, implicitly or explicitly, to matters that are not expressed in the array. For example, suppose that use of the least unpleasant labor was a particularly important consideration. There is no information about the labor conditions involved in the production of any of the constituent items in the arrays. Or suppose that avoiding the use of a particular resource was deemed necessary, perhaps because it is non-renewable and scarce, and therefore better employed in more important items than saucepans. Again, there is no information about the scarcity of the resources present in the arrays, nor about the other demands on them.

This type of information is brought into the picture by the next element of Angel Economics' system of organization, the information agencies. In the most general terms, these bodies collect, process, and make available economic data. Everything from the levels of cod available in the north east Atlantic, to the relative proportions of the global industrial uses of zinc, to the expressed preferences of various age groups and sexes for different colors of hot water bottle, to the rate of use of wood chippings in south-west England as compared to projected availability in the same region, to the conditions of work in copper-wire manufactures - any and all useful economic information is collected, and accessible.

If we now turn back to our range of potential saucepans and their matching arrays, we can see that the blank spaces we previously encountered outside of them have been filled in. Suppose, for example, that we wish our saucepan to be made from resources that can be obtained from as near to our workplace as possible. Drawing upon data provided by the information agency we would be able to construct maps displaying the geographical fingerprint of each potential design, and make our decision with reference to them. Or, surveying the different proposals in the light of the now-available wider economic information, it might become apparent that a couple of them involve the use of a metal which is rather scarce, and also needed in a vital medical application wherein it has no substitutes. In general, the means necessary to make an informed economic judgment are now available.

This is not quite the end of the process. To see why, lets briefly put ourselves in the shoes of the decision-maker, and suppose that, on the list of issues to be resolved, the particular question they are presently addressing is the type of metal to be used for the body of the saucepan. Taken together, the candidate designs involve steel, aluminium, tin, and copper, with a few of them available in a number of different grades. For each of these metals, a great number of considerations – and data to answer them – needs to be addressed: Are there available supplies in sufficient quantity nearby, or would they have to be shipped from a long way away, therefore incurring a certain level of pollution and energy waste? What is the level of demand for each metal from other industries, and in the light of that, is this a worthy application? What sort of metal is most demanded by users of saucepans of this type? Have workers within the mining industries for any of these metals expressed a desire that its use be minimised, due to the unpleasant nature of the labor? (Note that these are all economic considerations, which are separate from and in addition to design considerations about which metal to use).

What these questions make apparent (especially if we bear in mind that the issue of the appropriate metal for the saucepan is merely one of a great number, and that it is among the relatively more simple) is that this is a decision which would best be made by someone who knows the field, i.e. has knowledge and experience of the economic situation regarding metals. This, then, brings us to the third element of Angel Economics' system of allocation, namely experienced handlers of arrays pertaining to particular domains, who are capable of making judgments about them.

In this particular case, and in general, the judgments of a wide range of people will be called upon. A metals expert for the body of the pan. A plastics expert for the handle. Maybe a saucepan expert for the project as a whole. They do not have to be different people, but in the case of complicated items involving thousands of different components, it is inevitable that they will in fact be. How they interact to form a combined decision is an important question, but there is no real need to to to imagine a procedure concretely – it would simply involve some form of discussion. The important, structural element is just the involvement of the expert per se.

(If the necessity for such expertise does not come through fully in the example, where it is at least plausible that a lay person might be able to come to a reasonable decision after studying the data, consider a case in which the question at hand is which of a thousand different synthetic chemical compounds to use in the formulation of a washing-up liquid. A lay-person could come to a decision, but it would be terribly inefficient. Moreover, another point to bear in mind is that there is no reason to think that more than a small proportion of the data produced by the information agency will be quantitative. Qualitative information (such as reports of workers' experiences, reports about what people like about certain materials used in certain products) generally requires a much fuller and rounder grasp of its object to properly interpret).

The last part of the process is the democratic forum through which the final decision is made. Let's suppose that, after due consultation with experts on each of the various resources involved in the designs, a candidate is chosen which nicely balances each of the various considerations. If it were now to be put into production, quite a number of constituencies would be affected, other than those directly making it: the workers supplying the resources necessary for the chosen design (and those involved in supplying the resources for their work, and so on); people peripherally connected with those workers and their industries (for example, those living next to an iron foundry which is being proposed to be contracted); people potentially using the saucepans; other interest groups (such as, for example, those who might be concerned about resource depletion). All of these people need to have a say on the proposal (possibly through a vote, possibly via some other kind of input, depending on the case) if economic activity is accurately going to be said to be under democratic control, and if the free, voluntary nature of participation is going to be maintained. The way such a forum might operate practically is described below. The important formal point is that because all those affected are involved in the decision of whether to produce something, the value of it is fully represented.

*

This short discussion gives some content to the four elements of the allocation process stated at the beginning. Before continuing to elaborate the picture, it is worth making a couple of remarks about a likely objection at this stage: Isn't it all rather cumbersome? Is the price system not much simpler?

There are two parts to a response. The first is to point out that in its actual operation, the process would be far more streamlined than it appears above, just as the operation of money is simple in daily transactions, but complicated in its theoretical description. So, for example, the team developing the saucepan would probably know full well, from common knowledge, which metal would be most appropriate for its body. Nor would they be likely to actively pursue a whole host of different designs, since again, many would be ruled out by factors that were obvious to the participants, without their having to consult the arrays corresponding to each of them. Experts would probably release guidelines outlining the circumstances in which the use of certain materials was appropriate – so again, this would become a 'common sense' matter. And the democratic forums would probably only be time-consuming processes in the more important cases.

But the more significant response to this criticism is to draw attention to the fact that processes resembling those described take place today anyway. It is a myth that price fluctuations alone regulate the flow of resources within capitalism in an automatic, self-regulating fashion. Every day, within the procurement departments of companies (to focus on only one example) people are making economic decisions in no way related to the price of the goods they buy. In other words, the actual process of economic coordination under capitalism is far more complicated than is suggested in its supposed theoretical summary.

Furthermore, it is not an advantage, but rather a severe defect that such decisions are only expressible economically through price, and its quantitative movements. It makes precise, intentional coordination virtually impossible, because you cannot translate complex considerations into quantities. Under Angel Economics by contrast, such considerations remain expressible and effective in their natural form, i.e. as considerations taken into account by rational people.

(These points come across today most prominently in debates over the environment. A money-based economy cannot 'see' the environment because it does not have a price. It is of course possible, artificially, to put a price upon its elements. But this invariably simply leads to more distortions and irrationalities.

In reality, those parts of the world that are not represented through the price-system are defended and protected by a great mass of government regulations, intergovernmental agencies like the UN, and through the voluntary work of hundreds of thousands of NGO's and pressure groups. Yet they are always battling against the pressures of the market. Under Angel Economics, the considerations they highlight would simply be internalized within economic processes).

*

Having considered the four elements in the context of a single workplace making a single economic decision, lets now zoom out and consider things from a larger perspective, namely that of the region, which we briefly described earlier.

How do those within the region allocate resources among its various different economic parts? And how do all the workplaces and individuals comprising the region's economy coordinate their activities with each other? To get more of a grip on the question, let us remind ourselves of the background to it. Under Angel Economics, people freely and voluntarily devote themselves to working in whatever jobs they are inclined to, for whatever length of time. They also freely take whatever they need in terms of articles for personal use. This basic situation clearly throws up a number of questions centered around the issue of coordination. How is it ensured that all necessary functions are filled: for example, might one end up with all the parts for complex machinery except rubber washers, because nobody wants to work in the rubber factory? How are the output and input of different workplaces matched up – what if many people like working at the saw mill, which consequently churns out mountains of cut wood, only a small amount of which is used by other workplaces? How is it that people do not take too much of certain things like cakes, leading to shortage, and too little of others, like toilet brushes, leading to oversupply?

Lets take the question of inter-workplace coordination first. As should have become apparent through the course of the initial discussion, the relation between different workplaces is in many respects not unlike that of today. When it requires inputs for something it is producing, a workplace will engage in a 'contract' with another to supply it. So, if we take a snapshot of our region, at any one time what we will see is a complex web of interlinking contracts connecting the different workplaces scattered around the region. Now these arrangements are engaged in freely, and one can expect that in many cases there will be a choice of potential candidates. But although there is this free basis to inter-workplace contracts, like today, a great number of them will be long-term relationships, and involve a great deal of regular intercommunication. So much of the 'web' is both permanent (or very slow to change) and built from 'thick' connections.

With respect to individuals acquiring goods for their own use, (i.e. what is called “consumption” today) again, while it too has a free basis – people take whatever they need, when they need it – still, considered as a whole, a large portion of it will exhibit great regularity from year to year. And when changes occur in the patterns of what people want, they will to a significant degree display predictable trends.

Finally, with regard to the third element - what work people choose to do - one can rely on a pattern of natural distribution to ensure that there is reasonable coverage of the necessary functions (some people are more inclined to do teaching work, others to do engineering work, and so on).

This is the background against which questions about higher level coordination should be discussed – there is a high degree of self-organization within Angel Economics. Moreover, it should be borne in mind that what might be called the “public atmosphere” of the system, and the institutions which underlie this, permit this self-organization to be fairly finely tuned. Thus for example, everyone has access to all the data produced by information agencies (and indeed converting this data to a form in which it becomes comprehensible by laypeople will be a common, valued job). So the long- and short term trends, needs, deficiencies and over-supplies of the economy, in every area – work-skills, articles of personal use, inter-workplace supply, infrastructure – will be “generally known”, and people will therefore take them into account when they act. Similarly, and more specifically, workplaces use this data, and utilize all the statistical and analytical techniques common today, so that they can organize their production with foresight. And the democratic forums mentioned in the previous section, involving all affected parties, and through which individual workplaces decide what to produce, obviously allow significant coordination among workplaces and between them and individuals.

Nevertheless, there remains the need for our region to self-consciously reflect on its activities, and collectively direct them. It does this through democratic forums informed by experts drawing upon data provided by information agencies. These forums will occur at many different levels – in neighborhoods, in local villages, in industry sectors, among interest-groups – in each case differing in their exact structure as their size, content and objects of attention vary. But we can examine the forum responsible for the region as a whole, which will let us see how they work in some detail.

Let us suppose that our region contains a few million inhabitants, is a couple of thousand sq. kilometers in extent, has several thousand workplaces and hundreds more institutions of other kinds (clubs, orchestras, book groups, industry roundtables, and so on). Its workplaces, of every type, are connected with the wider world through a plethora of contracts, while still managing to supply the region with a fair amount of what it needs, autonomously. This is its economy, in thumbnail form.

The regional forum, because it involves such a large number of participants, will have to exist as an electronic forum, to be practicable. Its focus is, self-explanatorily, those matters that are best addressed at a regional level. This will probably include many things beyond economic matters – perhaps a regional health policy, regional events, regional laws and so on. And in each case (economic and non-economic) some of these will fall into the category of issues which are so important as to require participation by everybody, while others (probably most) will only elicit the participation of those who are particularly interested in them. Finally, it is likely that the forum will be open or 'in session' all year round, but take its major coordination decisions at intervals – say, yearly.

Lets now look at a part of one of these decisions, to see how the forum functions, and therefore how economic coordination occurs under Angel Economics.

Lets suppose, then, that there are an insufficient number of people teaching within the schools of the region. The size of classes has been slowly creeping up for a long time, and a over the last couple of years a number of other factors have combined to increase this sharply – some recent evidence about the benefits of schooling to younger groups than was previously thought suitable, has increased the number of children; a dispute about the advisability of teaching Nietzsche to under-14's has led to a section of teachers resigning from their duties; a flood in one locality has meant its schools have had to close for refurbishment.

The issue has been brought to the attention of the forum and become an item on its agenda, through a number of channels. Teachers groups, parents circles, school umbrella organizations, and concerned individuals have all brought it to prominence, through the means available to them within the procedures of the forum.

As such, it now has a 'scheduled' status – in the terminology used by the forum. This means that the question of what to do about the issue has been opened up for debate. The information agency is commissioned to supply relevant data to the forum, and write a report in plain language that time-pressed laypeople can understand, outlining the major difficulties and policy options. Groups that are particularly closely involved – such as those, above, who initiated the debate – submit their own analyses and proposals. Individuals chip in with their own observations, experiences and suggestions, and these are recorded. People with particular expertise or experience contribute their own proposals. Models are created of different scenarios, knock-on effects of different options are examined, articles about the questions are written and debated.

At the end of this process, a special group is tasked with drawing up several policy alternatives that, between them, include and exhaust all the various suggestions made during the debate. These are then presented to the forum, and a vote is taken on them.

(This basic process could, of course, be modified in an enormous number of ways to make it fairer, quicker, more in-depth, more rigorous, more easy-going, more accessible, more wide-ranging, narrower etc etc. Different issues would no doubt be treated in different ways).

Lets suppose that the adopted policy is as follows. To address the short-term problem, several builders outside of the locality in which the flooded schools reside are contacted and asked to help in their repair. A compromise is drawn up addressing the 'Nietzsche faction's concerns, so that in each school it is decided that an alternative program of study will be made available. And on local “jobs needing doing” boards, teaching is given a higher priority. To address the longer-term trends, a greater number of teachers are required, and along with them school buildings, books, and many other connected resources. These changes, however, would have an impact well beyond the realm of schools, since devoting resources to the production of these goods would require diverting them from other things. It is not, therefore, an issue on which this particular sub-forum can make an authoritative decision, but what it can do is to draw up an outline policy that specifies exactly what the increased resource requirements are, plans how they would be put in place, and also identifies some candidate other areas from which resources might be taken. This outline is then tabled to be part of the yearly 'regional budget', where all large regional economic matters can be treated in their interrelation.

*

This, then, is the basic form in which the more self-conscious element of economic coordination occurs under Angel Economics. The same type of process would occur in all the lower-level, higher-level and sector-specific forums, and with respect to all the different economic issues that might arise (as well as non-economic issues, of course). As alluded to, there is some degree of hierarchy involved in some of the forum-structures, since some issues depend on others.

The status of the decisions that issue from these forums is worth a brief comment. Are they 'orders' or 'decrees' which will subsequently be 'enforced' by some power or other? To some degree, obviously, the measures that they outline need to be followed by the institutions they are directed towards, otherwise there is no point in the forums existing. It is inevitable that some people are going to disagree with the decisions they arrive at, given that these are the product of a vote. And whatever re-consideration procedures, appeals rounds, or consensus-reaching efforts are pursued, it is not plausible to think that there will not be some who are unhappy with the final plan.

However, there is no necessity for everyone within a given geographic region to be part of a common system, on all matters. The ground-principle of Angel Economics is free and voluntary participation, and so if some of those affected severely disagree with it, the outcome of such a forum decision might be 'decoupling' on a particular issue. One might expect that more often than not, those who loose a vote will nevertheless agree to implement it because they value the system that results – i.e. none other than Angel Economics - when other people also do so when they do not agree with the outcome of a decision. But this is not absolutely necessary. What 'Angel Economics' is describing is that system that results from successive decisions by people to interlink their affairs; but in any given geographic region, there may in fact be many parallel, relatively autonomous systems.

Note also that it is quite possible that there are some who wish to have nothing to do with any system. A world in which Angel Economics existed could perfectly well coexist with them – it just doesn't describe them.

The point that these various remarks make implicitly is that Angel Economics is not intended as something to be imposed upon people. The various structures outlined are rather the ones that one might expect people to adopt, whose economic relations with each other were free and voluntary.

*

It has been mentioned that such geographically-based forums as described above are far from being the only kind in Angel Economics' system of economic coordination. We don't need to describe every kind, since the basic principles will be similar in all. But for clarity, we should perhaps briefly look at a second.

Our region, it so happens, is an important source of platinum. It is home to several large mines, and there are only three or four sites around the world where there is such easy access to large deposits of the mineral. Platinum is scarce.

As such, it is important that its distribution is under supervision. Some kind of 'trust' is necessary which ensures that the limited supplies are used in the best way possible and not frittered away to anyone who demands it. How would this work?

We can suppose that the quantity of available platinum – already-mined and resting deposits - is known, in a rough way, by the trust. In light of this, a number is put on the total amount to be used each year and on each of the different proposed uses of it. This can take account not only of the usefulness of the applications which employ platinum, but also, for example, how easy it is for substitutes to be used in each of them. When an application is made to the trust by a workplace for a quantity of platinum, it is assessed, and its relative priority compared to other potential uses is determined.

The standards as to what counts as a worthy use of this scarce resource can be set in the usual way. Namely, a forum is held in which contributions are offered by all those interested, affected, or concerned, especially specialists and those who would be potential users of it. A policy is then formulated on the back of discussions and voting. It is an issue which would affect people all over the world, so in this case the constituency for the forum is not limited to, or best described in terms of, a particular geographical region. Insofar as there are differences in the degree of participation by different people, they would rather be determined by the degree to which they are involved in the use of platinum-involving applications.

This example illustrates the non-geographical basis of many of the coordination structures of Angel Economics. It also brings to light the heterogeneity of the meaning (and therefore, the actual workings) of the term “value” within this system. In the first case we looked at (where the resources for a saucepan were being chosen) the meaning of “cost” meant principally what it cost to produce each of the various candidate resources, in labor- and resource terms (it meant other things as well, but this was where the emphasis lay). Here, the full expansion of “value” under Angel Economics becomes apparent, since it is the value-to-humans of its different applications which stands out as the dominant meaning where platinum is concerned, as that which above all gets considered and measured in economic accounting.

*

The mechanisms by which Angel Economics organizes the distribution of resources should now be reasonably clear. The intention is not to specify the system in detail – after all, we are contemplating a hypothetical system which, if it began to be translated into reality would no doubt very soon depart from the model in ways that that could not be envisaged, simply because reality is more varied than thought ever allows for. But the basic outline could be implemented. Above all, the value of this exercise is to demonstrate that such an alternative economic system, embodying some noble values, is perfectly possible. There is no theoretical impossibility, nor any practical one.

Further entries will look more closely at aspects of the system of distribution (as well as, of course, at other aspects of Angel Economics) and at its theoretical and philosophic underpinnings. (Arguments relating to the 'calculation debate'; the economy looked at as an information-theoretic entity; philosophical questions in the domain of value-theory; all of these are very pertinent). None of this blog is intended as the final word, however. The enterprise of imagining an alternative economy would surely be best pursued by many people. Hopefully this can be part of an extended debate.

4 comments:

  1. I turns out I had so much to say about this that I had to post it on my own blog since it became too big to be a comment.

    http://n8chz.blogspot.com/2010/06/suggestions-for-modeling-non-monetary.html

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  2. I should elaborate on my use of the term 'closure-seeking.' In your Outline, of course, 'open' is good and 'closed' is bad. I understand these uses of 'open' and 'closed' to be analogous to 'inclusive' and 'exclusive.' I meant closure in the mathematical sense, meaning basically no informational loose ends, or eliminating (or at least reducing) the need to go outside the system for necessary production processes. Hence closure is a means of establishing a degree of independence from the existing economic infrastructure.

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