AnarWiki/markdown/Horizontal_Economic_Planning.md

**Horizontal Economic Planning** or **Decentralized Economic Planning**
is is a type of economy in which the investment and allocation of
resources and goods is done accordingly to an economy-wide plan built
and coordinated through a distributed network of disparate economic
agents (ie [community assemblies](Democratic_Assembly "wikilink") and
[confederations](Confederation "wikilink")) production units
([self-managed workplaces](Workers'_Self-Management "wikilink")).

## Theory

### Calculation in Kind

### Supply and Demand

### Investment and Growth

From An Anarchist FAQ:

In a communist-anarchist society, things would be slightly different as
this would not have the labour notes used in mutualism and collectivism.
This means that the collectives would agree that a certain part of their
output and activity will be directed to investment projects. In effect,
each collective is able to draw upon the sums approved of by the Commune
in the form of an agreed claim on the labour power of all the
collectives (investment <em>“is essentially an allocation of material
and labour, and fundamentally, an allocation of human productive
power.”</em> \[Cole, <strong>Op. Cit.</strong>, pp. 144–5\]). In this
way, mutual aid ensures a suitable pool of resources for the future from
which all benefit.

How would this work? Obviously investment decisions have implications
for society as a whole. The implementation of these decisions require
the use of <strong>existing</strong> capacity and so must be the
responsibility of the appropriate level of the confederation in
question. Investment decisions taken at levels above the production unit
become effective in the form of demand for the current output of the
syndicates which have the capacity to produce the goods required. This
would require each syndicate to <em>“prepare a budget, showing its
estimate of requirements both of goods or services for immediate use,
and of extensions and improvements.”</em> \[Cole, <strong>Op.
Cit.</strong>, p. 145\] These budgets and investment projects would be
discussed at the appropriate level of the confederation (in this,
communist-anarchism would be similar to collectivist anarchism).

The confederation of syndicates/communes would be the ideal forum to
discuss (communicate) the various investment plans required — and to
allocate scarce resources between competing ends. This would involve,
possibly, dividing investment into two groups — necessary and optional —
and using statistical techniques to consider the impact of an investment
decision (for example, the use of input-output tables could be used to
see if a given investment decision in, say, the steel industry would
require investment in energy production). In this way social needs
<strong>and</strong> social costs would be taken into account and ensure
that investment decisions are not taken in isolation from one another,
so causing bottle-necks and insufficient production due to lack of
inputs from other industries.

Necessary investments are those which have been agreed upon by the
appropriate confederation. It means that resources and productive
capacity are prioritised towards them, as indicated in the agreed
investment project. It will not be required to determine precisely
<strong>who</strong> will provide the necessary goods for a given
investment project, just that it has priority over other requests. When
a bank gives a company credit, it rarely asks exactly where that money
will be built. Rather, it gives the company the power to command the
labour of other workers by supplying them with credit. Similarly in an
anarcho-communist society, except that the other workers have agreed to
supply their labour for the project in question by designating it a
<em>“necessary investment.”</em> This means when a request arrives at
a syndicate for a <em>“necessary investment”</em> a syndicate must try
and meet it (i.e. it must place the request into its production schedule
before <em>“optional”</em> requests, assuming that it has the capacity
to meet it). A list of necessary investment projects, including what
they require and if they have been ordered, will be available to all
syndicates to ensure such a request is a real one.

Optional investment is simply investment projects which have not been
agreed to by a confederation. This means that when a syndicate or
commune places orders with a syndicate they may not be meet or take
longer to arrive. The project may go ahead, but it depends on whether
the syndicate or commune can find workers willing to do that work. This
would be applicable for small scale investment decisions or those which
other communes/syndicates do not think of as essential.

This we have two inter-related investment strategies. A
communist-anarchist society would prioritise certain forms of investment
by the use of <em>“necessary”</em> and <em>“optional”</em> investment
projects. This socialisation of investment will allow a free society to
ensure that social needs are meet while maintaining a decentralised and
dynamic “economy.” Major projects to meet social needs will be organised
effectively, but with diversity for minor projects. In addition, it will
also allow such a society to keep track of what actual percentage of
resources are being used for investment, so ensuring that current needs
are not sacrificed for future ones and vice-versa.

As for when investment is needed, it is clear that this will be based on
the changes in demand for goods in both collectivist and communist
anarchism. As Guilliame puts it, <em>“\[b\]y means of statistics
gathered from all the communes in a region, it will be possible to
scientifically balance production and consumption. In line with these
statistics, it will also be possible to add more help in industries
where production is insufficient and reduce the number of men where
there is a surplus of production.”</em> \[<strong>Bakunin on
Anarchism</strong>, p. 370\] Obviously, investment in branches of
production with a high demand would be essential and this would be
easily seen from the statistics generated by the collectives and
communes. Tom Brown states this obvious point:

As a rule of thumb, syndicates that produce investment goods would be
inclined to supply other syndicates who are experiencing excess demand
before others, all other things being equal. Because of such guidelines
and communication between producers, investment would go to those
industries that actually required them. In other words, customer choice
(as indicated by individuals choosing between the output of different
syndicates) would generate information that is relevant to investment
decisions.

As production would be decentralised as far as it is sensible and
rationale to do so, each locality/region would be able to understand its
own requirements and apply them as it sees fit. This means that
large-scale planning would not be conducted (assuming that it could work
in practice, of course) simply because it would not be needed.

This, combined with an extensive communications network, would ensure
that investment not only did not duplicate unused plant within the
economy but that investments take into account the specific problems and
opportunities each locality has. Of course, collectives would experiment
with new lines and technology as well as existing lines and so invest in
new technologies and products. As occurs under capitalism, extensive
consumer testing would occur before dedicating major investment
decisions to new products.

In addition, investment decisions would also require information which
showed the different outcomes of different options. By this we simply
mean an analysis of how different investment projects relate to each
other in terms of inputs and outputs, compared to the existing
techniques. This would be in the form of cost-benefit analysis (as
outlined in section I.4.4) and would show when it would make economic,
social and ecological sense to switch industrial techniques to more
efficient and/or more empowering and/or more ecologically sound methods.
Such an evaluation would indicate levels of inputs and compare them to
the likely outputs. For example, if a new production technique reduced
the number of hours worked in total (comparing the hours worked to
produce the machinery with that reduced in using it) as well as reducing
waste products for a similar output, then such a technique would be
implemented.

Similarly with communities. A commune will obviously have to decide upon
and plan civic investment (e.g. new parks, housing and so forth). They
will also have the deciding say in industrial developments in their area
as it would be unfair for syndicate to just decide to build a cement
factory next to a housing co-operative if they did not want it. There is
a case for arguing that the local commune will decide on investment
decisions for syndicates in its area (for example, a syndicate may
produce X plans which will be discussed in the local commune and 1 plan
finalised from the debate). For regional decisions (for example, a new
hospital) would be decided at the appropriate level, with information
fed from the health syndicate and consumer co-operatives. The actual
location for investment decisions will be worked out by those involved.
However, local syndicates must be the focal point for developing new
products and investment plans in order to encourage innovation.

### Regulation of Industry