Can I change what I want to consume during the year?

Neighborhood consumption council proposals are just best guesses for planning purposes. Nobody is going to hold households to their consumption requests when it turns out they want to consume more of some things and less of others than they preordered. We simply ask households to place a preorder so neighborhood consumption councils can participate in the planning process. What we envision is consumers spending a couple of hours of their time going over their consumption from the previous year and adjusting up and down here and there. That is less time than it takes the average person in the United States to prepare his or her federal and state tax returns every year!

However, explaining why it is not unrealistic to expect consumers and producers to do what is required of them to create a comprehensive plan for the following year is not the same as explaining what will happen when people discover they want to do something different. We understand consumers will misestimate what they ask for and need to make changes during the year, and that some consumers will be more reliable while others will be more fickle. How will adjustments during the year be made when consumers change their minds?

The easiest way to think about this is to imagine each consumer with a debit swipe card that records what they consume during the year as they pick it up and compares their rate of consumption for items against the amount they had asked and been approved for. If one’s rate of consumption for an item deviates by say 20% from the rate implied by the annual request, consumers could be “prompted” and asked if they want to make a change. In any case, if at the end of the year the total social cost of someone’s actual consumption differs from the social cost of what they had asked and been approved for, they would simply be credited or debited appropriately in their savings account.

How will changes be coordinated?

One of the functions of consumer councils and federations will be to coordinate changes in consumption among themselves. If another consumer wants more of an item I pre-ordered but no longer want, there is no need to change the amount the agreed upon production plan called for. Whenever consumer councils and federations which will function like clearing houses for adjustments discover that changes do not cancel out, the national consumer federation will have to discuss adjustments with industry federations of worker councils. Computerized inventory management systems and “real time” supply chains are already fixtures in twenty-first century economies, making adjustments much smoother than they would have been only a few decades ago.

Actual purchase patterns during the year reveal more than needed details about consumer desires as already discussed, they also signal when consumers have changed their minds. At the individual level people reveal by their purchases that they want more of some things and less of others than they indicated during planning. At the aggregate level individual increases and decreases sometimes cancel out and therefore require no changes in production. When they do not cancel out, how to increase or decrease production of shoes because consumers have changed their minds must be negotiated between the shoe industry federation and the national consumer federation. Again, there are different ways these adjustments might be handled, each with its pros and cons. But the relevant point is that adjustments can be made.

When making adjustments in production the crucial questions are:

• To what extent will shoe producers and the shoe industry bear the burden of adjustments or will shoe consumers bear any burdens of adjustment?

• Will shoe customers who change their demand for shoes be treated differently from shoe customers who do not?

In the case of excess supply, the issue reduces to whether producers will be credited for shoes that are added to inventories, and if so how much. The case of excess demand is more complicated. To raise shoe production more resources will have to be drawn away from industries experiencing excess supply. Beyond crediting shoe workers for working longer hours, will the indicative prices of shoes and resources used to make them be increased above their levels in the plan, or not? If shoe production is not raised sufficiently to satisfy all who now want shoes, will those who did not increase their demand above what they ordered be given preference?

In any case, to whatever extent consumers do foresee their needs, a participatory economy is positioned to capture the efficiency gains of planning over the considerable inefficiencies of market disequilibria. To the extent that consumers cannot accurately gauge their desires, councils and federations will have to negotiate mid-course adjustments. But a participatory economy is certainly not powerless to respond to changes in consumer desires. 

While those living in a participatory economy will have to debate the pros and cons of different answers to these questions, our point is simply that these questions can all be answered. Is it possible that some consumer may not receive some particular item exactly when they want it if it was not in their original order? Yes. But that need not occur often, and if memory serves, not every child living in the US capitalist market economy found a Cabbage Patch doll under his or her tree the first Christmas those dolls became all the rage.

In sum: The difference between a planned economy and an unplanned, market economy, is that to the extent that consumers submit proposals that reflect changes they anticipate in their tastes, and to the extent that worker councils submit proposals that reflect anticipated changes in their technologies and work preferences, the approved annual plan is our best guess of what should be done and therefore reduces the number and size of adjustments necessary. All options for making adjustments in a market economy are available if wanted in a planned economy as well, although presumably a participatory economy would put a higher priority on mechanisms which distribute the costs of adjustments more fairly.