Economic Planning in an Age of Climate Crisis

* Book: Economic Planning in an Age of Climate Crisis. By Paul Cockshott, Allin Cotrell and Jan Philipp Dapprich.

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Contents

Renato Flores:

"The book addresses the Austrian formulation of the planning program at the end of Ch. 3 (pp. 66-71), with arguments by the authors available elsewhere in more detail. Von Mises is dealt with by stating that labor-time can be taken as this objective method for value. On the other hand, to Hayek’s objection, the authors counterpose the abundant historical experience of state-driven innovation, especially in times of crisis, and postulate that there are other methods for gathering information from consumers aside from the act of trading a commodity for money.

In Chapter 4, “Wartime Planning”, the authors show optimism for applying exceptional planning efforts to the current existential climate crisis. And in Chapter 5, “Post-War Experience with Planning”, the authors give further examples of successful planning after the Second World War; they show that their schemes are not utopian but have a basis in history, and that planning efforts are still widely applied today. I have little to object here: I believe that planning will be necessary to overcome the climate crisis; I also agree that a lot of scientific innovation happens through public means, and that most businesses incorporate heavy planning within them.

The book follows with Chapter 6, “Theory of Optimal Planning”, where the authors return to the area they are strongest at: they describe algorithms for planning increasingly complex problems, which were not present in TaNS. In Chapter 7, “Is Planning Tractable?”, the book discusses the type of hardware required to run software with these algorithms that could simulate society as-is; here, they also show that objections that the market is infinitely complex and cannot be simulated do not hold up to reality. Again, I largely agree with the authors’ perspective here, so I will not dwell on it.

However, in the book’s final chapter “Planning and Value” the gaps in the authors’ perspective shine most thoroughly. Thus far, the gaps had been glossed over, covered mainly by silences that did not make them explicit. The authors recognize that a way of valuing products, including raw materials such as steel and aluminum, is needed for planning (p. 156). They recover their idea of using labor values here, but the authors warn the readers that “an objection to measuring cost of production via labor values is that they don’t take into account non-reproducible natural resources” (p. 159). The authors then proceed to address this issue by “propos[ing] a measure of value that considers all factors of production, including both labor time and emission rights” (p.159). An example is worked through, where “emission rights” are added to the picture: the economy must not only hold to requirements on the amount of labor, it must also not exceed a certain threshold of emission. And voilà: the carbon emission problem has been correctly incorporated into our planning without compromising the labor-time solution to the calculation problem.

Here, we see one of the consequences of reducing the ecological crisis to the carbon crisis: after all, emitted CO2 is a measurable number on which quantifiable restrictions can be placed. And one could argue that scientists have already made some reasonable recommendations on how much CO2 should be emitted in the IPCC reports. What is needed is for society to follow them. But this is not the crux of the issue. The problem comes in the following four and final pages. There, the authors state several ways of making their planning methods more flexible. The first idea was already present in Towards a New Socialism: if a good cannot be sold, it is better for the government to sell it at a price lower than its value and to produce less next time, than to let it go to waste. And if there is too much demand for a certain good, it can be priced up temporarily, until the plan can adjust for society to produce more. They state that even if this mechanism “mimics to some degree the operation of a market economy”, it is still “perfectly consistent with planning of their production” (p. 165). Up to here, nothing too objectionable. But the authors then discuss how to extend this idea to incorporate the effect of emissions, proposing incorporating CO2 emissions into the picture and finding a way to mark up products which are ecologically unfriendly and so undesirable for society to produce. By doing this, they incorporate a very neo-liberal theory of ecological change. "

(https://cosmonautmag.com/2023/07/how-not-to-economically-plan-in-the-age-of-climate-crisis/)

Review

Renato Flores:

"I worried Economic Planning in an Age of Climate Crisis fell rather short of its predecessor. And after a more in-depth read, my initial fears were confirmed: even if the (incremental) developments of the planning algorithms included in the book are interesting, there are no new serious proposals inside. It is a marginal contribution to finding solutions for the present ecological crisis, but in some respects it’s a downgrade from TaNS.

The book has nine chapters and one appendix with computer code. The first chapters are literature reviews of climate science where I have little to object, even if the authors underestimate the breadth of the ecological crisis by reducing it to a climate/carbon crisis, something already apparent in the title. This is a weakness of the book which is not unique to the authors: in too many recent eco-socialist books, the problem of ecological collapse is reduced to one of climate and carbon emissions. Climate is surely a large component of the ecological crisis, but it is not the entirety of the problem. This flaw could, in principle, be worked around – after all, the authors do talk about planning algorithms that avoid over-exploitation of non-renewable resources. One could add here land nutrients or use of certain rare metals as variables in the model. However, the problem is deeper than just accounting with more variables – it is a problem of method. And this becomes clear as the chapters pass: the authors clearly fail to outline a positive and actionable ecological program that goes beyond constraints in linear programming models. Only in the last four pages do the authors give some (rather weak) suggestions, ones which end up reproducing the logic of neo-liberal ecological economic methods like carbon pricing that assign a “value” to pollution.

One could argue that the book simply proposes planning algorithms, or a defense of planning, for the age of climate crisis, and it is up to us to pick up the threads and tie it all into a nice whole. However, the number of loose ends is not small, and tying them up is a work of very high order. This limitation was already present in TaNS, which has led to many misinterpretations of the book as a call for an “algo-cratic” central planner (that is, political life being subordinated to algorithms), or mistaking the entire system for market socialism behind a veil. The failure to address these gaps makes reading the new book even more frustrating: thirty years have passed since TaNS and the few algorithms the authors offer are not a significant step that takes us closer to a New Socialism. Instead, with the additional ecological dimension, the task has grown and is now even more formidable. And by removing the valuable discussions on democracy present in TaNS, the amount of practical tools the authors give us became practically zero.

The gap between Economic Planning and a workable ecological program is indicative of deeper issues. What is at stake here is the abyss between a more “math”-oriented branch of cybernetic planning and a more “systems”-oriented branch of cybernetic planning, and this is something I hope to bring to light in this review. The beauty of C&C’s approach is that it provides a method for deflating the calculation problem and gives us quantitative variables to work with. But it lacks serious discussions of implementation at different levels of organization, and provides little flexibility for multivariate accounting systems, ones which could work better at smaller scales and are more consonant with the environment. This is something the “systems”-oriented planning methods do much better: they focus on supervising the existing self-organized systems rather than managing society. However, these methods often fall into localism without providing a viable answer on how to organise the world. And when they do, it usually takes the shape of recursive models, such as attempts to concretize Stafford Beer’s Viable System Model. While Beer himself opposed prescriptive formulas for concrete organization and combined tools from different fields, some of his followers transform his work into an abstract schema which does not address the necessity of different approaches at different scales nor what types of information can be transmitted to avoid dilution and address the calculation problem.

Between these two worlds lies this review of Economic Planning. Needless to say, I will not solve the issues at stake. However, I do hope to make them clearer so others can take their chances at contributing to a solution. The planning community is seeing very active debate, but I think it often focuses on the wrong things in a way that misses the forest for the trees."

(https://cosmonautmag.com/2023/07/how-not-to-economically-plan-in-the-age-of-climate-crisis/)