A Marxist Take on Market Pricing for Parking

[A little old parking meter in Pasadena.]
I'm just finishing up Four Futures, a short and sweet book that ponders social choices for "life after capitalism" using a science fiction lens. The author, Peter Frase, was at Boneshaker Books about a year ago and I got to hear him speak about it. He's an editor at Jacobin magazine, and one of the people at the center of a new wave of socialist and radical activism in the US.

Anyway, I was surprised and delighted to come across this example in his discussion of socialism, one of the "four futures" that might emerge from our current political and economic present. Warning: As is the case with most Marxist texts, it's long and complicated.

Here it is:

But if we posit a world in which everyone is allocated the same basic income and nobody has control over vast pools of wealth, this objection disappears. Think of the basic income as the ration card that gives you access to your share of all that is scarce in the world. Rather than allocate specific amounts of each scarce resource, the pricing mechanism of the market is used to protect against overuse.

To illustrate what this means, consider a mundane example: parking. In American cities, street parking has traditionally been free in most areas or available at a small fixed price. This is a dramatic under-pricing, in the sense that it leads people to over-consume the limited resource of parking spaces, leading to a shortage of free spaces and many cars cruising around looking for spaces. In some areas of New York, most of the traffic on the streets is people looking for parking, wasting their time while creating pollution and congestion.

As an alternative, some cities are experimenting with various schemes for pricing street parking, often under the influence of UCLA parking theorist Donald Shoup. One of Shoup's key themes is that urban governments should avoid under-pricing street parking, because to do so leads to Soviet-style shortages as described above, along with tedious rationing rules such as two-hour limits and the like.

Under the influence of this theory, the city of Los Angeles decided to implement a wireless smart-metering system called LA Express Park. Sensors are installed in the pavement below each space, and they detect the presence of cars in a given area. The computerized system then automatically adjusts the price of parking depending on how many spaces are filled. When spaces are in high demand, the price can rise as high as $6 per hour, and when many spaces are available they can be as cheap as 50 cents.

The LA Express Park scheme has been widely discussed and promoted as applying the "free market" to parking. This naturally grates on those of the Left who equate the market with capitalism and with inequality. But in this case talk of "markets" is more than just an ideological subterfuge to further enrich the powerful; it gives some hints at the potential of markets as limited technologies separable from capitalism.

Marxists have commonly made two objections to capitalist markets. The first is narrowly economic: under the "anarchy" of capitalist competition, the pursuit of private profit leads to unjust and irrational results. Luxury goods are produced while the poor starve, inventories pile up that no one can afford to buy, factories lie idle while thousands are looking for work, the environment is despoiled, and so on. In Leon Trotsky's Transitional Program, in which he laid out a short term reformist program for his communist followers, there are repeated references to this kind of market anarchy, which will inevitably be superseded by a superior form of rational, conscious, worker-controlled planning. Indeed, says Trotsky, "the necessity of 'controlling' economy, of placing state 'guidance' over industry and of 'planning' is today recognized -- at least in words -- by almost all current bourgeois tendencies, from fascist to Social Democratic."

Yet Trotsky himself was adamant that market mechanisms had to be part of planning the economy. In his 1932 critique The Soviet Economy in Danger, he writes:
The innumerable living participants int he economy, state and private, collective and individual, must serve notice of their needs and of their relative strength not only through the statistical determinations of plan commissions but by the direct pressure of supply and demand. The plan is checked and, to a considerable degree, realized through the market.

Seen from this perspective, the Los Angeles system is not a capitalist "free market" deregulation. The city is not turning parking over to private companies to compete for customers. The LA Express Park experiment is in fact an exemplary case of central planning. The city begins by decreeing a production target, which in this case is maintaining one empty parking space on each street. The complex system of sensors and pricing algorithms is then used to create price signals that will meet the target. In a fundamental way, the capitalist market's causal arrow has been reversed: rather than market price fluctuations leading to an unpredictable level of production, it is the production target that comes first, and the prices are dictated by the quota.

There is another argument against markets. That they are not merely anarchic and inefficient, but also induce ideological mystifications that perpetuate capitalism and exploitation. The Marxist political scientist Bertell Ollman has often argued this. "a major virtue of centrally planned societies," he said, is that " it is easy to see who is responsible for what goes wrong." this is a precondition for democratic accountability, because "only a critique of market mystification will enable us to put the blame where it belongs, which is to say -- on the capitalist market as such and the class that rules over it."

But this critique too fails. Despite the presence of price signals, and a market, it is no mystery who is responsible for the new regime of fluctuating meter prices: the city of Los Angeles, urged on by its adviser Donald Shoup. Indeed, it is the very visibility of the planners that makes projects like this controversial among those who take their right to free parking for granted and who oppose policies like congestion pricing that would mitigate traffic by charging drivers for entering busy areas. This is also part of what makes climate policies such as a carbon tax vulnerable to right-wing attack: whatever its "market-based" costume, everyone knows that the policy begins with government lawmakers and bureaucrats.

The real failing of LA Express Park and all systems like it is that they exist within a dramatically unequal capitalist society. In such a society, $6 for a parking space means less to a rich person than to a poor one, and so the system is inherently unequal. The answer is not to attack the system of market planning, but to overthrow that underlying inequality. Ultimately, this means overcoming the capitalist system of resource distribution and approaching a world in which control of wealth is equalized -- that is, where "the distribution of the means of payment" (to use Gorz's phrase cited in Chapter 2) is essential equal.

Given how market-based pricing is often viewed as an attack on the working class, this is an intriguing take that offers a much more nuanced view of urban policy than most analyses. 

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