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Robin Eric Hahnel (born March 25, 1946) is an American economist and professor emeritus of economics at American University. He is best known for his work on participatory economics with Z Magazine editor Michael Albert.
Politically, Hahnel considers himself a product of the New Left and is sympathetic to libertarian socialism. He has been active in many and organizations for forty years, notably as a participant in student movements opposed to the American invasion of South Vietnam, more recently with the Southern Maryland Greens, a local chapter of the Maryland Green Party, and the Green Party of the United States. Hahnel's work in economic theory and analysis is informed by the work of Karl Marx, Keynes, Piero Sraffa, Michał Kalecki, and Joan Robinson, among others. He has served as a visiting professor or economist in Cuba, Peru, and England.
Their technical study of mainstream welfare economics, A Quiet Revolution in Welfare Economics, was originally published by Princeton, but did not receive wide distribution. The underground interest in the book prompted its being made available online. They argued that traditional welfare economic theory was in an intractable crisis. The core approach that competitive markets produce social efficiency was yielding diminishing returns and "has thwarted, rather than facilitated, advances in analyses of the labour process, externalities, public goods, preference development and institutional structures." The traditional socialist solution of public enterprise combined with centrally planned allocation was found equally lacking. In conclusion they argued that in clarifying the reasons why traditional models were deficient they had cleared a path that suggested probable directions for an alternative paradigm. The significant social and ecological inefficiencies of private enterprise market economies, public enterprise centrally planned economies, and related variants, necessitated both the re-organization of production and consumption institutions and the search for compatible "allocative mechanisms that allow informed individual rationality to be fully consistent with social rationality." Their next step, the formulation of a relatively detailed "full" vision of an economy based upon participatory democratic planning was their attempt to provide an answer to this challenge.
In terms of the current day ecological problems Hahnel acknowledges that green and pollution taxes are likely to be more effective than alternative schemes such as the marketization of natural resources using permit systems or regulatory "command and control" methods. An optimally efficient green tax requires taxing polluters an amount equal to external costs. Corporations can be expected to try to pass the extra costs on to consumers by raising prices; however, Hahnel notes that "part of the reason pollution taxes improve efficiency in a market economy is that they discourage consumption of goods whose production requires pollution precisely by making those products more expensive for consumers." He recommends linking tax increases related to "bads" such as pollution to tax decreases on "goods" related to productive work, as exemplified by social security taxes. (The ABC's of Political Economy, 272)
From an international strategic perspective however, he has thrown his support behind a cap and trade system. He argues that progress has been made toward a cap and trade system and should not be discarded, that such a system would foreground scientific and climatological expertise rather than economic expertise, and that such a system is much more achievable on an international level.Robin Hahnel, Why Cap And Trade And Not A Carbon Tax?" (February 25, 2010) (retrieved 2-10-2013)
His first major book authored without Michael Albert was "Panic Rules". The book features concise analysis of crises due to financial liberalization in the era of globalization, a critique of the ideology and practices of global institutions such as the WTO, IMF, and World Bank, and a tightly argued explanation of the conditional insights and much overlooked limitations of international trade theory based upon Ricardo's theory of comparative advantage.
Hahnel acknowledged core insights within comparative advantage theory, noting that "if opportunity costs of producing goods are different in different countries there are potential gains from specialization and trade." However, he explained that the potential gains are realized only under specific conditions, and expounded on the many real world factors that can account for significant efficiency losses. Among the most significant factors for efficiency losses from trade are inaccurate prices due to significant externalities that cause misidentification of comparative advantages, unstable international markets that create macro inefficiencies, and adjustment costs of moving people in and out of industries that can be considerable. Moreover, in spite of Ricardo's theory, international trade usually aggravates global inequality because terms of trade are set inequitably as a result of the dominant bargaining positions of northern countries, and thanks to class structures that ensure the costs and benefits of trade are distributed unfairly within countries. (see ABC's of Political Economy, 176–207)
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