Both Planning and Markets

Most discussions of planning versus markets simply bypass the obvious fact that virtually all economic systems already utilize some (often crude) forms of planning alongside (some also very crude forms of often highly manipulated) markets. The United States national budget, for instance, is a de facto plan—and the economic as well as sectoral implications of the de facto plan are commonly projected by various agencies (the Congressional Budget Office, among others) and the implications calculated and specified for various sectors (e.g., transportation, health, housing, energy, etc.). Similarly, the actions of the Federal Reserve Board constitute a crude plan utilizing monetary policy to achieve broad planning goals. In time of war (see World War II) much more direct planning has been utilized, with extraordinary economic effect. Recent studies of Soviet planning suggest much greater efficiencies than have commonly been recognized (but vast inefficiencies with regard to innovation!).
For more on questions related to planning and markets, see "A Note on Certain Themes of the Emerging Systemic Design," in the 2nd edition of America Beyond Capitalism.
The Parecon model is an exception to this. See this site for Parecon: Life After Capitalism and a comprehensive debate between author Michael Albert and David Schweickart.
In virtually all forms of planning, in fact, market relationships of a certain kind are also assumed (though often in highly regulated markets, or in markets where monopolies or oligopolies define relationships through de facto private rather than public plans). The Pluralist Commonwealth model rejects as both misleading and hypocritical abstract discussions of planning and markets that ignore such realities. In general, it assumes that the most important parameters of economic management must be and will be decided by some form of public authority. The questions of interest involve how this is done, how democratic forms of planning might be developed, and what role market relationships also play.
For more on democratic planning, see Chapter 15 of Rebuilding America.
The answer to the first question both requires fundamental institutional changes of the kind contemplated in the Pluralist Commonwealth model and the development over time of information systems far beyond those now available in most countries—systems that allow for the much more explicit (and more easily understandable) presentation of the implications of alternative planning choices. This in turn requires a capacity both at the level of the executive and legislative branches of government to calculate and evaluate the implications of alternative “plans” or “scenarios” so that clear choices are illuminated, and a coherent plan can be decided upon.
At the same time, the Pluralist Commonwealth model is based upon a commitment to citizen participation in generating inputs to the plans and to clarifying the implications of alternative citizen choices. New developments in participatory planning at the local level begin to suggest some of the processes that might be developed and built upon over time.  One possibility is a system of “two ups and two downs”—i.e. the generation of a preliminary set of inputs both from ongoing experience and from new citizen proposals; calculation of the implications, and choices this involves; the further re-assessment by citizen forums, with further refinements; and then calculation and affirmation of an agreed plan. Variations on such processes are obviously only at the beginning stage, but a good deal of work on citizen choice procedures and on planning is now available to be drawn upon. 
Given the importance the Pluralist Commonwealth attaches to local community stability, this is one of the key elements that must also be addressed in the planning process. The issues involved concern both costs and benefits, on the one hand; and processes and choices on the other. Current procedures and relationships, for instance, pay little attention to community stability. Indeed, huge portions of entire cities (e.g. Detroit, Cleveland, and St. Louis) have commonly simply been largely thrown away—at extraordinary human, economic and carbon cost. At the same time, homes, schools, roads, hospitals and all other elements of city life must be built elsewhere to service the populations once served in such cities—again, with extraordinary economic and carbon costs. The Pluralist Commonwealth model postulates local community stability as one of the outcome goals of planning modalities. It holds that alternative planning scenarios must include calculation of the implications for local community stability. This in turn has implications for transportation planning.  (Commonly such planning today also has little interest in community stability or in the waste involved in discarding communities as airline and other locational decisions are simply made on quite different and unrelated criteria).
Although the Pluralist Commonwealth model holds that de facto planning of a highly inefficient and covert nature goes on all the time—and although it urges a more explicit, open and coherent form of planning—this does not mean market relationships are totally abandoned. Again, any serious assessment of all forms of planning suggests that the role of the market can be of great importance in holding various institutions to account under partial planning regimes, in offering “yardstick” competitive relationships, and, generally, in the management of smaller scale economic activity." Innovation must also be protected, and this too requires support of market relationships in certain areas. In general, the model suggests a much broader and more sophisticated approach to the exploration and definition of binary models that utilize more than one process—in this case planning in certain key areas, with markets used to keep such planning in check in other areas, and to encourage innovation and so on.

More work on planning and markets