How many annual plannung procedures should there be?

Hej! I’m new to this forum. I’m currently reading “A Participatory Economy” by Robin Hahnel, and have some basic questions or ideas…

Should there be an annual planning procedure for each level of consumer federation (neighborhood, city, state, …), or just one for the highest available level (nation, continent)?

I.e. separate IFBs for city-level planning, state-level planning and so on. This wasn’t entirely clear for me from the book.

It feels to me like there should be separate planning procedures for e.g. the city and nation level: Because a quarrel (i.e. a slow convergence of prices) over the supply of hairdresser-hours in Berlin shouldn’t affect planning in Leipzig. Geographically separating planning procedures might make the system more robust against destabilizing actors (people malevolently trying to prevent planning convergence).

This is why there must be one annual planning procedure:

  1. One thing the annual planning procedure DOES is generate estimates of the opportunity costs of using all the different categories of labor, natural resources, and stocks of produced “capital goods” available. This is important for knowing where, and by whom they can be used most productively. Since these “means of production” could all be used to produce anything, ANYWHERE in the national economy, they can only be estimated through a unified, annual participatory planning procedure for the country as a whole. They cannot be estimated separately, through planning procedures for only one region or part of the national economy.

  2. This does not mean that the estimates of the opportunity cost of using something… for example, an acre of land with a certain amount of top soil, and a certain amount of annual rainfall… will be the same no matter where the acre is located. In one part of the country it might have a higher opportunity cost when used than it does in another part of the country. But fortunately, our annual planning procedure will handle this well, and provide slightly different estimates of the opportunity cost of using such an acre in the two different places.

faudd78, I think there were two questions you posed. One is whether planning needs to be separate for different levels of councils (city, state, national, etc.). The other question is whether you could have separate planning procedures for different locations. In the U.S. for example, this could mean you have a planning process for Michigan, and then separately have a planning procedure in say New York.

I think Robin’s reply answered the last question. And you have to do planning for all different locations at once due to the reasons he described.

In relation to your other question: the planning doesn’t happen separately, but the higher level consumer councils make their proposals first in each iteration of planning. So you have to have the national federation submit its proposal, then the state level, etc. This doesn’t mean you do all of the planning iterations for the higher level and then do a totally separate planning procedure afterwards for lower levels. It just means that in every iteration of planning, higher levels make their proposals first, and the lower levels use this information as context to make their proposals. The reasons for this are given in Democratic Economic Planning:

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There are different “levels” of public goods. Some public goods are consumed by everyone in the nation, some are consumed only by those who live in a region, some by residents of a state, some by residents of a county, some by residents of a city, some by residents of a ward, and some are consumed only by those who live in a particular neighborhood. We recommend that requests for higher-level public goods be drawn up and announced in each round of the planning procedure before requests for lower-level public goods and private goods are drawn up and submitted for three reasons:

  1. The inefficient bias favoring private over collective consumption in market economies has been affecting human attitudes, expectations, and behavior for centuries and will only be overcome by a major change in how people approach consumption decisions. To help facilitate this change in approach we want people to think about their collective consumption first and their private consumption second.

  2. Before I can know how much of a lower-level public good I want, I need to know how much of all higher-level public goods will be available. For example, before making a decision about state highways, residents of a state need to know what the federal highway system will look like. And before I can know how much private goods I want, I need to know what bundle of public goods of all levels will be available to me. For example, before deciding if I want a swing set for my kids in my backyard, I need to know whether or not there will be swing sets in the neighborhood park only a block away.

  3. Finally, there is a practical reason to proceed in this way: In any round of proposals, before a household can know if its private consumption request is socially responsible – that is, warranted by the effort ratings and allowances of household members – it needs to know how much of household income is left to cover private goods, which means it needs to know how much of household income has already been allocated to pay for the household’s fair share of all of the public goods that would be available to its members.
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