Have you read, for example, Parecon: Life After Capitalism – or any other long presentation? Your question is basically saying to me – how does participatory planning work – and, well, since that is addressed, at length, carefully, in many places, it seems like the thing to do would be to read one rather than, well, asking me to essentially reproduce one here. Then, if you have a specific question, I could deal with that.
You didn’t get it right, or wrong. The real issue is, given an economy’s institutions, how does it arrive at relative prices, and what do they indicate? So, in a central planned economy, they are largely set by planners and indicate the will of planners. Of course planners may take into account all manner of other information, or may not. In a market system they are set largely by a kind of war – competition – between actors, in which bargaining power is a key factor, though in turn also influenced by many variables. In parecon, it is a cooperative negotiation of inputs and outputs that finally yields relative valuations – prices.
In central planning the prices arrived at will reflect the will of planners, mainly, though off set by other constituencies and of course having to account for certain real constraints, and the process is top down, breeding authoritarianism and class division. In markets the prices reflect largely bargaining power, and the process again yields class division. In participatory planning the prices reflect a summary of true personal, social and ecological costs and benefits and the process is consistent with classlessness.
If the above summary makes you feel like this would be, if true, really valuable and important – and you are interested in the mechanics so you can judge for yourself – then you should read a full presentation.