1. If some receive more than their efforts warrant, others will receive
   less than their efforts warrant.
    
2. Those who receive less than their efforts warrant do so because
   others receive more than their efforts warrant. And
    
3. This means those who receive more than their efforts warrant are
   exploiting those who receive less than their efforts warrant.

Or, suppose I’m particularly competent and energetic and more than
willing to spend all my work time analyzing and evaluating different
options for my workers’ council. Shouldn’t I be free to work in a
job complex where I am engaged full time in analytical and decision-making
activities? But if I am permitted to work at a job complex significantly
more empowering than others, before long my work mates’ formally equal
opportunities to participate in economic self-management will not
be effectively equal to mine.

What appear to be simple desires for “personal freedom”
are not always so simple. But there is another way to see the logic
of participatory economics: from the bottom up. The first priority
is to guarantee economic justice for those who have never enjoyed
it by making sure that people’s consumption is commensurate with their
sacrifices and by making sure that people’s work experience equips
them to participate in economic decision making should they want to.
And there is also another way to look at talent and education. A participatory
economy encourages people to use their talents. In a participatory
economy esteem and social recognition for outstanding abilities that
create great social benefits for others will be very high. The idea
is not to keep people from using their talent or education. But there
is no material reward for anything other than effort and sacrifice—since
to do otherwise would be inequitable. And while those with greater
talent and education may spend part of their work time analyzing complicated
consequences, and may have their opinions more highly regarded than
others because historically their opinions have been more accurate,
they do not get greater decision making authority in a participatory
economy because this would infringe on the self-management rights
of others.

We wish to emphasize that personal freedoms are not sacrificed in
the interest of solidarity or community in a participatory economy.
This concern, voiced by advocates of markets, has no basis. Only protecting
the freedoms of others and the dictates of justice limit the freedoms
individuals enjoy in a participatory economy. And in our view limiting
one individual’s personal freedom or rights because they infringe
on the more important freedoms or rights of others is perfectly consistent
with the only kind of libertarianism that can be justified.

So how do we answer specific criticisms that participatory economies
are “unfree?”

For example, “Wouldn’t a participatory economic system tend
to be too intrusive in restricting individuality, privacy, and freedom
of choice?” (Weisskopf 1992, page 18) And: “The more weight
one places on… individuality, privacy, and freedom of choice…
the more skeptical one will be about the desirability of participatory
socialism.” (Weisskopf 1992, page 20)

In fact, there simply are no restrictions on individuality or privacy
in participatory economics. Anyone who wishes to submit anonymous
consumption proposals and avoid feedback from neighbors about the
content of their consumption requests is free to do so. Many people
have reasonably good relations with their neighbors and would appreciate
helpful suggestions. But if this is not the case, in a participatory
economy privacy in consumption is available with no questions asked.
We see no reason to think that other privacy issues are any less tractible
in a participatory economy than any other. Regarding freedom of choice,
as explained above, it is restricted only when it infringes on the
freedom of choice of others and only in ways that distribute decision-making
authority in proportion to the degree people are affected.

Weisskopf says: “Freedom of choice—in how to live, what
to consume, what kind of work to do, how to express oneself, how to
define one’s social identity, etc.—is an important value.”
(Weisskopf 1992, page 19) Exacly. And there is complete freedom of
choice in where and how to live, what to consume, how to express oneself,
and how to define one’s social identity in a participatory economy.
Presumptions to the contrary are unfounded. And the restrictions on
what kind of work people do—that job complexes be balanced for
empowerment—are only those necessary to protect everyone’s right
to economic self-management.

And Weisskopf says: “A participatory system is likely to require
people to justify many of their choices… to some kind of collective
decision-making body, which in turn is bound to limit the extent to
which people can really get their choices accepted—no matter
how democratically decision-making bodies are constituted. By enabling
individuals to make most choices without reference to what others
think about their decisions, a market system provides much greater
freedom of this kind.” (Weisskopf 1992, page 19) But, if a participatory
economy achieves its goal of self-management—which we understand
can only be approximate—then only people affected by decisions
will have influence over those decisions, and only to the degree they
are affected. If life style, social identity, and what kinds of goods
to consume are decisions that only affect an individual—and we
agree, for the most part, that they are—then individuals will
have control over those decisions in a participatory economy. But
there are many decisions some individuals make in a market system
that affect other people as well. A participatory economy is designed
to provide others affected with influence proportionate to the magnitude
of what are “external” effects in a market system. We believe
this is only seen as intrusive from the perspective of people accustomed
to a market system where people make decisions without reference to
the opinion of others even when those others are affected by the outcome.
True, factory owners are used to being “free” to pollute
the air in market economies and chafe at environmental regulations.
Those who make decisions that affect others in market systems are
used to being “free” from the opinions and influence of
others. But those affected by decisions in a market system who have
neither voice nor influence just as surely have their freedom curtailed.
The question is not “free” or “unfree” but when
unrestricted freedom is legitimate and when it is not.

Weisskopf says: “Many people are likely to prefer doing more
specialized work activities than would be permitted under a balanced
job-complex requirement which means that enforcement of the requirement
might well involve implicit or explicit coercion…. Apart from their
inhibition of personal freedom, balanced job complexes designed to
avoid specialization seem likely to deprive society of the benefits
of activities performed well only by people who have devoted a disproportionate
amount of time and effort to them.” (Weisskopf 1992, page 20)
First of all, balanced job complexes are not designed to avoid specialization.
They are designed to avoid disparate empowerment and desirability.
As already explained, this is to protect the freedom of those who
otherwise would not have equal opportunity to participate in economic
decision making, and to ensure equity. It is designed to prevent oppression
and class divisions. But it does not curtail specialization as usually
understood. People will still specialize in brain surgery, electrical
engineering, high voltage welding, etc. But those who perform these
specialized tasks if they are more empowering than average tasks,
will also perform less empowering tasks as well. And if these tasks
are more desirable than average, those who perform them will perform
some less desirable tasks as well, unless they wish to accept a lower
effort rating. We admit this does require training more brain surgeons,
electrical engineers, and welders than if none of these specialists
ever had to work at any other tasks, assuming, for the sake of discussion,
that skilled workers didn’t use their advantages to reduce their work
time in any event which imposes the same social cost. But this does
not mean an end to specialization, nor mean that society will be deprived
“of the benefits of activities performed well only by people
who have devoted a disproportionate amount of time and effort to them.”

Weisskopf says: “Critics of participatory socialism question
whether it can adequately protect the legitimate interests of those
who hold and wish to act on minority views. True democracy requires
not only that people have more or less equal influence over decisions
that affect them to the same degree, but that minorities be protected
from majority decisions—however equally and fairly arrived at—which
disadvantage them in important ways.” (Weisskopf 1992, page 18)
But advocates of participatory socialism, such as the well known libertarian,
Noam Chomsky, are among the first to recognize the importance of protecting
minority views and rights. This is a matter of civil liberties and
protection of civil liberties. And while we have not written much
on this subject—since we have no particular expertise in constitutional
law, civil rights, and civil liberties—we see nothing in the
procedures of participatory economies that make protection of minority
views or rights more difficult than their protection in other kinds
of economies. The only opinion we ever expressed on this matter was
to argue for the importance of implementing minority plans for economic
projects along with majority plans, whenever possible. We argued this
is preferable because it is not only desirable for minorities to allow
them to pursue their ideas, it is better for the majority as well,
to have contrary opinions tested by their advocates since no majority
has ever been right all the time. If there is something specific in
the procedures of participatory economies that threatens minority
rights and interests we would like very much to hear what it is so
it can be reexamined and corrected.

Nancy Folbre says: “The
tone of Looking
Forward sometimes reminds me of a parent telling the kids they
can’t have any dessert until they’ve eaten their spinach. Albert/Hahnel
sound just as certain that they are right about what’s healthy and
what’s not. They are willing to allow the children to choose different
jobs but not to choose specialization and hierarchy. I think many
children may feel just as oppressed by this rule as by current structures
of constraint that preserve free choice for the privileged few….
Individuals who don’t like aspects of their job, specified for them
by the larger group, may be as likely to shirk as those who feel that
capitalists or coordinators are in control.” (Folbre, 1991, page
70) We apologize for our tone if it was condescending. We did not
feel at all certain we were right about how best to pursue economic
democracy, equity, and solidarity when we published Looking
Forward and Participatory
Economics. Instead, we felt the discussion of what constitutes
a desirable economy had gotten badly muddled in the context of recent
world events. We also felt that a degree of professional managerial
class “skin privilege” had intruded into the debate. When
working to build a movement dedicated to democracy and justice it
is critical to examine the possibility of convenient “blind spots.”
Few engaged in the debate over “market socialism” versus
participatory planning have large amounts of private capital they
may be tempted to rationalize. There is little need for self-scrutiny
on that account. But many of us do enjoy advantages in human capital,
and empowering, desirable job complexes. In this context, we wished
to clarify some issues we find critical and present an alternative
to both central planning and “market socialism” that was
sufficiently coherent to permit others to evaluate it seriously. And
we are gratified that to an extent a serious evaluation has occurred.
But that does not bind us to agree with all criticisms. And not agreeing
is not the same as claiming omniscience.

Yes, we have presented a case against hierarchical relations of production,
as well as a set of procedures to prevent hierarchy from sneaking
in the back door after the front door is barred. We do not believe
we have thereby prohibited specialization, but we are aware that some
aspects of balanced job complexes will not be personally gratifying
to those who carry them out. On the other hand there are many aspects
of most people’s jobs in capitalist or “market socialist”
economies that are not gratifying to those who must carry them out,
which most assuredly does lead to shirking. But as long as there are
unpleasant tasks—and unlike traditional Marxists and modern day
high tech utopians, we believe this will always be the case—someone
will have to do them. The difference in a participatory economy is
not that nobody will ever have to perform a task they dislike, but
that a valid case can be made that any task in a job complex that
is not gratifying is there because it would be unfair if it were not.
How much less shirking would take place in an economy where unpleasant
tasks are fairly distributed, remains to be seen.

Weisskopf says: “Certain libertarian objectives associated with
personal freedom of choice can best be satisfied only if individuals
have the kind of opportunities for choice and for exit that a market
system alone can provide.” (Weisskopf 1992, page 22) The assumption
that “exit” is more difficult in participatory economies
than other systems is unfounded. In capitalist economies what can
workers do who don’t like their boss? In public enterprise market
economies what can you do if you don’t like your boss or the majority
decisions of your work mates? Switching work places or starting up
a new enterprise is the exit option in any economy. In a participatory
economy, workers are free to leave their workplaces and apply for
work in any other workplace. And we believe participatory economies’
iteration facilitation boards would make finding a new, more compatible
work site easier than even social democratic Swedish-style Labor Market
Boards. Moreover, convincing an industry federation committee of the
social usefulness of a new enterprise is similar to convincing a bank—whether
privately or publicly owned—that a new enterprise will prove
profitable. As for what you do if you come to dislike your neighbors—if
it gets bad enough you move in a participatory economy, just like
you do in any other economy. But with your income secure, and consumer
facilitation boards for assistance, again, it should be easier.

Insufficient
Incentives

When working on the procedures for a participatory economy we assumed
the primary concern would be with allocational, or static efficiency.
After all, we were advocating abandoning both markets and central
planning, which most economists presume are the only conceivable ways
to determine the social opportunity costs of productive resources
in order to allocate them efficiently. In the words of Sam Bowles:
“The debate proceeds as if the menu of institutional choices
offers just two items: command—meaning centralized planning;
and competition—meaning the neoclassical textbook rendition of
the market. Our task, one imagines, is to find some judicious combination
of these two conceptually homogeneous and unproblematic poles….
But the plan versus market debate reflects an impoverished view of
markets and the alternatives to markets, one that thwarts the consideration
of the essential political and moral issues: namely, the manner in
which markets shape human development and structure the exercise of
power. Thus if the economists first disability is to ignore the non-economic
impacts of economic choices, the second is the economist’s tendency
to assume that the alternative to the invisible hand is Big Brother’s
fist.” (Bowles, 1991, page 11-12) So we assumed this was the
major obstacle—demonstrating that a qualitatively new allocation
procedure was capable of generating accurate estimates of social opportunity
costs and thereby able to allocate resources efficiently.

Predictably, those who practice free market ideology as their religion
and presume that only markets can allocate resources efficiently,
felt no need to examine the procedures of participatory planning or
the analysis we offered. But surprisingly, among those whose faith
is less strong, and who examined the procedures of participatory planning,
none has challenged our claim that, in theory, participatory planning
will yield socially efficient outcomes under less restrictive conditions
than market models. Some find participatory planning undesirably cumbersome
and time consuming, but no one has claimed it fails to yield efficient
outcomes under the assumptions we specified.

On the other hand, there has been widespread skepticism about participatory
economies’ ability to employ scarce human talents and skills efficiently,
and to achieve dynamic, or motivational efficiency. Would balanced
job complexes under employ scarce talents and socially costly training?
Would people be motivated to work sufficiently hard? Would efforts
be directed toward fulfilling socially desirable needs? Would people
be sufficiently motivated to pursue education and training in socially
useful careers and skills? Would individuals be sufficiently motivated
to search for new innovations? Would workers’ councils be adequately
motivated to pursue and implement new innovations? Would participatory
economies be sufficiently dynamic?

Folbre argues: “Personal endowments as well as preferences differ
greatly. Up to a point, specialization provides important efficiency
gains. A certain level of specialization and hierarchy lowers transactions
and training costs.” (Folbre, 1991, page 70) Indeed, specialization
does lower training costs. So we agree that requiring those whose
training is more socially costly than average to also perform tasks
in areas requiring less training incurs extra social costs since it
means more people must receive socially costly training. But we pointed
out that this efficiency loss needs to be weighed against efficiency
gains from real worker self-management, better morale among
workers, and greater familiarity with the overall work process for
all workers. If there are still net efficiency losses, which we find
unlikely, these are the price of making self-management real, rather
than a hollow sham.

While hierarchy does lower transaction costs, this does not mean
that we must tolerate permanent hierarchies. Permanent hierarchies
subvert self-management and create class distinctions. But clearly
enforced lines of responsibility and authority in workplaces do not
require permanent hierarchies. Making sure that workers who exercise
managerial authority in one area are subject to authority from others
in other areas lowers transaction costs in production just as much
as permanent hierarchies do, but without creating social inequities.

Alec Nove complains that: “In the absence of a market `the supplier
is usually designated by the supply plan, and is therefore in a position
of an absolute monopolist.’ The supplier therefore can sacrifice quality
to meeting quantity goals, by which fulfillment is measured. `I can
be meaningfully instructed to give 50 lectures, but it is not so easy
to enforce an order that I give good lectures.’ How can one measure
quality except by consumer choice, which negates planned supply, in
turn negating plan, and which requires a market?” (Mandel, 1993,
page 350 quoting Alec Nove) In fact, in participatory economies consumer
councils and federations, answerable only to the consumers they represent,
are the recipients of deliveries. We see no reason to believe quality
will go uncontested under these circumstances. Negotiations over expectations
and quality between consumer and producer federations rather than
between individual consumers and suppliers should increase pressure
on producers to maintain quality. Is it harder for producers to hoodwink
Ralph Nader consumer protection organizations or the average individual
citizen?

Weisskopf says: “Wouldn’t it be very wasteful to try to allocate
labor without an incentive system that rewards individuals according
to the market-determined value of their work contributions?”
(Weisskopf 1992, page 16) Well, it is true that in participatory economies
workers are not “paid” according to the social value of
their contributions. Workers are “paid” according to effort
expended on the job, because that is what is fair. But the process
of participatory planning charges workplaces for workers according
to the value of their laboring capacities in their most socially useful
and efficient employment. And since participatory planning is the
procedure for allocating labor in a participatory economy, Weisskopf’s
concern does not apply to a participatory economy. Yes, in market
economies allocating labor efficiently requires paying people “according
to the market-determined value of their work contributions,”
which means market systems must pay people unfairly. But participatory
economies have been designed precisely so we can have our cake and
eat it too. People are compensated fairly—wages based on effort—but
labor is allocated according to productivity—users are charged
true social opportunity costs.

Mark Hagar argues: “Because success, even in a non-capitalist
order, may easily turn on talent, luck, and other morally undeserved
factors, it is easy for the authors to show that equity favors distribution
according to effort. My question, however, is whether they succeed
in showing that distribution according to effort achieves efficiency
alongside equity…. A society seeking optimum production needs to
discourage clumsy effort and encourage proficient effort so as to
avoid waste. Otherwise, the less successful have no material incentive
to modify bungling methods or to seek work where their comparative
advantage in contribution is greater. For efficiency, one must at
least reward efforts to improve the success of efforts, and rewarding
contribution may be the only feasible way to do so.” (Hagar,
1991, page 71)

And Weisskopf adds: “They [Albert & Hahnel] propose that
the consumption opportunities available to individuals be linked to
an individual’s input into the production process—in the form
of personal effort made or personal sacrifice endured… Albert &
Hahnel’s proposal would surely lead to greater equity in the reward
for labor than the market-based alternative, but their claim of greater
efficiency is misguided…. First of all, it is very difficult to
observe and measure an individual’s sacrifice or work effort…. Any
input-oriented incentive scheme would tend to encourage the substitution
of quantity for quality of effort. Moreover, people would have an
interest in understating their natural talents and abilities…. Second…
[while] it would presumably elicit greater work effort and sacrifice
on the part of individuals, it would do nothing to assure that such
effort and sacrifice were expended in a desirable way. The social
good is best served by encouraging activities the results of which
are highly valued relative to the cost of undertaking those activities.
In order to motivate people to expend their efforts in a desirable
way, it is therefore necessary to reward activities according to the
value of work output rather than according to the quantity of work
input.” (Weisskopf 1992, page 16-17)

Hagar and Weisskopf make an important point here. It is a different
point than the previous concern with allocating labor to its most
productive use. Here the issue is whether people who are rewarded
for effort and sacrifice will be motivated to expend their efforts
in socially desirable ways rather than clumsily. For example, will
they work to produce more, rather than better?

In market economies a single incentive is used to motivate both quantity
and quality of effort and to direct effort in socially desirable ways—material
rewards for the value of outcome. But rewarding the value of outcome
does not just reward these three things. It also rewards talent and
luck—luck in what job one occupies and with what equipment and
work mates one works, luck in whether applied effort yields smaller
or greater output, and luck in one’s own, or someone else’s guess
about what others find socially useful. So market economies do not
reward only the things that efficiency requires. They reward those
things, and other things as well.

Participatory economies use three different incentives to reward
quantity of effort, proficiency of effort, and socially useful application
of effort, in slightly different proportions. There are material rewards
for quantity of effort. Proficiency of effort is motivated in enterprises
by the incentives in participatory planning for enterprises to increase
the ratio of the social benefit of outputs to the social cost of inputs
(SC/SB), and within enterprises by the interests of coworkers and
the supervisory system to motivate proficiency in each worker because
lack of proficiency in one requires greater effort from others. Thus,
peer pressure from those inside and outside one’s workplace is important
in motivating proficiency. Socially useful application in training
and work effort is primarily motivated in participatory economies
by social esteem and recognition. I maximize my chance for social
esteem if I educate and train myself in areas that are my comparative
advantage and if I orient my efforts toward maximizing the social
benefit of what I do.

But it is important to bear in mind who is doing the monitoring,
rating, and evaluating in a participatory economy. My work mates and
I decide how our work will be monitored. My workmates judge my efforts.
And social recognition comes from my workmates, other workers in the
same federation, and from consumers through their consumer federations.
It is easy to point out that maximizing effort input is not really
what we want to motivate. Weisskopf is right that we want to maximize
the social value that results from a given human effort. But when
we talked of rewarding effort rather than outcome, we meant effort
expended proficiently to socially useful ends. And in a participatory
economy that is the only kind of effort it makes any sense for one’s
fellow workers to try and reward in either supervision or effort ratings.
Why would my fellow work mates give me high effort ratings for taking
two hours longer to mop rooms because I mopped from the door to the
far wall and had to mop over my foot prints as I left? Why would my
fellow workers give me high ratings because I worked four hours to
copyedit a piece because I didn’t use the spell checker and grammar
checker? We think many of the problems Weisskopf and Hagar foresee
stem from misconstruing what we meant by “effort” and disappear
in the context of who is doing the judging.

It is also important to keep in mind who is judging, when thinking
about measurement problems. Of course there are problems measuring
effort—just as there are problems measuring the value of output
and attributing that value to different people involved. In a participatory
economy effort rating committees in different workplaces can put as
much or as little time into measuring effort as they wish. And they
can collect whatever information they wish—hours worked, indications
of output, improvement, comparisons with other enterprises, self-evaluation,
evaluation of team members, etc. Nothing is perfect. To the extent
they measure inaccurately, there will be inequities in effort ratings.
But we have a hard time believing those inequities would not be considerably
less than the inequities built into the normal, successful operations
of “market socialist” or capitalist economies.

In participatory economies there are both material and social incentives,
and both kinds of incentives can be used to motivate proficient work
effort, socially useful training and education, and innovation in
product design and production technique. But 1) every attempt is made
to maximize the use of peer pressure and social esteem. And 2) there
is relatively greater reliance on social incentives to motivate socially
useful education, training, and innovation, and relatively greater
reliance on material incentives to motivate work effort. The reason
for the first choice is obvious to any parent who has tried to minimize
the use of allowances to get children to do their chores. The reasons
for the second choice are: a) Greater material rewards for greater
sacrifice is equitable, greater material rewards for education or
innovation is usually not. b) Contributions that comes from innovation
and education are usually owed to a diffuse network of people rather
than a single individual.

We also believe that while those pursuing education in more socially
valuable careers could be rewarded with greater consumption rights
as an incentive, it should seldom be necessary to do so since 1) the
social and personal cost of the training is born by society rather
than the individual, 2) it is not unusual to like to study what you
are good at, and 3) chances of earning greater social esteem are better
if one trains in one’s comparative advantage. In any case, if someone
who would have been an excellent surgeon decides not to pursue graduate
studies, we have no doubt there will be many other talented people
who will accept admission to medical school.

Stimulating innovations is somewhat different. Most innovations are
the result of cumulative human efforts with a good deal of luck involved,
and this provides good reason for not awarding an individual who puts
the finishing touch on a cumulative advance with substantial material
rewards. That is why we think efforts to minimize material rewards
for innovation are warranted, and why we suggest 1) stimulating innovation
directly through planned expenditures on R&D under the management
of consumer as well as producer federations, and 2) social esteem
and recognition for both individuals and enterprises that are particularly
innovative. But participatory planning can award innovative enterprises
with job complexes that are more desirable than average and/or with
consumption allowances that are higher than average for specified
periods of time. And this can be done without retarding the spread
of the innovation to other enterprises. If the citizens in a participatory
economy decided in a democratic dialogue that their economy was insufficiently
dynamic, material incentives such as these could be deployed. We think,
however, that very few, if any, material rewards for innovation would
prove necessary, except in early phases of a participatory economy,
and we believe there are good reasons to work particularly hard to
hold them to a minimum.

Cybernetic
Overload

Weisskopf says: “Wouldn’t the allocation of resources in a complex
economy by means of participatory decision-making institutions place
impossible demands on information processing and inordinate demands
on people’s time?” (Weisskopf 1992, page 13)

And he adds: “The mere listing of [the requirements for decision-making
in a participatory economy] is enough to generate skepticism about
whether and how they can possibly be met. Even if, in principle, institutions
and processes can be developed to accomplish the necessary tasks (and
Albert & Hahnel and Devine have advanced some ingenious ideas
to do so), one is bound to wonder whether the whole system would actually
function in practice. Assuming that computer technology could be relied
upon to process and disseminate the enormous amount of information
needed to make the system work, how would people be persuaded to provide
the needed information in an unbiased and disinterested manner? And
even if all the needed information could be accurately compiled, wouldn’t
participatory planning require each individual to dedicate so much
time, interest and energy to assessing the information and participating
in decision-making meetings that most people would get sick and tired
of doing it?” (Weisskopf 1992, page 14-15)

In defining participatory economic institutions, we paid close attention
to the incentives for people to provide needed information truthfully.
It is in the interest of any person who wants to win approval for
a consumption request or production proposal to provide qualitative
information explaining why the quantitative estimates based on estimated
social opportunity costs fail to account for some particular circumstances.
As to whether people would go overboard and exaggerate needs and disabilities,
perhaps they will. But such accounts are only testimony others will
review when deciding if exceptions should be granted, and presumably
people will learn to evaluate such qualitative information with a
critical eye. Regarding the quantitative information and genesis of
our indicative prices, we are familiar with the literature on incentive
compatibility and believe we have designed an incentive compatible
mechanism. Participatory planning is completely different from central
planning where individual producers have incentives to hide their
true capabilities from planning authorities. If anyone thinks otherwise,
we would appreciate a specific criticism, until which time we can
only dismiss worries such as “how would people be persuaded to
provide the needed information in an unbiased and disinterested manner”
as confusing our system with a better known but completely different
system.

Weisskopf wonders: “Isn’t the process of democratic decision-making
sufficiently complex and problematic that it should be applied only
to a limited range of critical decision-making areas?” (Weisskopf
1992, page 15) And adds, “Isn’t the practice of participatory
democracy sufficiently difficult, time-consuming and emotionally draining
that it would in practice have to be limited to a relatively small
range of decisions?” (Weisskopf 1992, page 15) As well as: “These
kinds of concerns about the operation of democratic decision-making
processes should not of course be read as a condemnation of democracy….
Rather, such concerns suggest that democratic political institutions
ought to focus on a critical and manageable range of decision-making
areas, rather than be used for all kinds of economic as well as political
decisions.” (Weisskopf 1992, page 15-16)

No. This sounds reasonable, at first listening. And it is certainly
true that we should devote more decision-making time to more important
decisions and less to less important ones. But people should have
decision making input in all decisions to the degree they are affected.
And people, themselves, should decide which decisions are of little
importance and therefore those on which they do not wish to
spend much time. In fact, many of the decisions that people care a
great deal about are ones concerning their own neighborhood and workplace—so
spending time on these issues is not unwarranted. But excluding people
from a say over long-term national investment plans is also undesirable.
In participatory economies people are free not to attend meetings,
or to call for closure, or leave meetings early as they desire. But
this is not the same as saying some issues are too small to warrant
democracy, or that some issues are too complex and distant for people
to decide for themselves. Any time a decision is not worth spending
any more time over, people are free to call a halt to the debate,
vote, and move on. But democratic decision making is a process that
is more likely to occur efficiently and with good result the more
it is practiced wherever people have an interest.

Weisskopf asks: “Won’t the politicization of all kinds of decisions
lead to excessive conflict, strife, and anger?” (Weisskopf 1992,
page 15) Market systems are clever at disguising exploitation and
oppression. Painful consequences often seem to be the result of market
competition that none can forestall, and we are taught that market
competition is socially beneficial. In market economies the distribution
of inequity is largely impersonal, which is an important reason the
inequities have been tolerated so long. Participatory economies, in
contrast, make every attempt to make the consequences of individual
and group choices for others as graphic and plain as possible—because
otherwise people cannot engage in knowledgeable, collective self-management.
So, we plead guilty to politicizing economic choices, but with cause.
If you get a low effort rating you will know it is because your fellow
workers thought that’s all you deserved. If your enterprise’s proposal
is not accepted, you will know it is because other workers’ councils
thought it was inefficient or too lazy. If your consumption proposal
is rejected, you will know your neighbors did not think your work
effort rating merited consuming that much, or that your special needs
requests were not compelling. However, we do not believe participatory
economies will lead to the kind of conflict, strife, and anger that
plague private enterprise and market economies. By providing an open,
democratic, efficient, and fair procedure for negotiating conflicts
of interest, we feel participatory planning minimizes the probability
of strife and anger after the plan has been agreed to.

Folbre complain: “One perverse incentive could be labeled `The
Dictatorship of the Sociable.’ Some people really like meetings. They
like to talk, to negotiate, to debate. As a result, they often attend
meetings enthusiastically, and they often prevail at them.” (Folbre,
1991, page 69) And Weisskopf adds: “In practice such a system
might well enable some people to exercise much greater influence over
decisions than others. Disproportionate influence would not arise
from disproportionate wealth or income, but from disproportionate
interest in and aptitude for the relevant decision-making processes.”
(Weisskopf 1992, page 15)

We should be frank. Long live the dictatorship of the sociable if
that is the only alternative to the dictatorship of the wealthy or
the dictatorship of the better educated—which is what capitalism
and “market socialism” come down to. But isn’t it ironic
that those who worry about the dictatorship of the sociable are the
same people who find balancing job complexes—which is done precisely
to guarantee equal opportunity to participate effectively for all—unjustifiable
infringements on personal freedom? The purpose of balancing for empowerment
is to prevent the economic system from generating unequal endowments
of what we might call “social capital” that effectively
disenfranchises significant segments of the workforce. Balancing for
empowerment is the only way to preclude a “Dictatorship of the
Educated and Managerial,” who needn’t be all that sociable!

Folbre adds: “A related problem is the “Let’s Not Piss
Anybody Off” principle…. Many individuals would rather accept
some decline in collective efficiency rather than risk their social
reputation as a nice person. Nobody wants to be seen as a hard-ass.
So discipline is weak. Individuals who fail to do what they promised
to do are not sanctioned. Individuals who always do what they promise
to do are ripped off.” (Folbre, 1991, page 69) Enterprises in
a participatory economy that indulge in this kind of “liberalism”
will have a difficult time achieving an acceptable ratio of social
benefits of product to social costs of inputs. If the hard-working
nice people Folbre is so concerned about want to carry their irresponsible
workmates, they may choose to do so rather than struggling with them.
But participatory planning and effort ratings are “incentive
compatible” in the sense that people who engage in this kind
of liberalism “pay a price.”

We freely admit that most people would spend more time in workplace
meetings in a participatory economy than a hierarchical one. But this
is because most people are excluded from workplace decision-making
in hierarchical economies. And we also freely admit that democratic
decision-making takes more “meeting time” than autocratic
decision-making. [Having everyone get vacations, not just a few; or
having everyone get work breaks, not just a few; or having everyone
get weekends off, not just a few, also reduces output. In all cases
the issue is whether the lost output is worth it. In any case, we
should note that decisions arrived at democratically should take less
time to enforce than ones arrived at autocratically.

But, we think critics have failed to appreciate an important feature
of participatory planning when criticizing the amount of “meeting
time” our “social, iterative planning process” would
require. For the most part people and their delegated representatives
do not meet face to fact to discuss and negotiate how to coordinate
their activities, as critics seem to assume. Instead, individuals
and councils submit proposals for their own activities, receive new
estimates of social costs, and summit revised proposals. Moreover,
rather than have delegates from federations meet to hammer out the
“end game” of the planning process, we proposed that after
a number of iterations had defined the basic contours of the plan,
the professsional staffs of iteration facilitation boards would define
a few feasible plans within those contours for constituents to vote
on without ever meeting and debating. We also did not propose face-to-face
meetings where different groups plead their cases for consumption
or production proposals that did not meet normal quantitative standards.
Instead we proposed that councils submit qualitative information as
part of their proposals, so that higher level federations could grant
exceptions should they choose to. And the procedure for disapproving
proposals is a simple up/down vote of federation members, rather than
a rancorous meeting.

We
are Homo Economus Not Homo Socialis

Weisskopf worries: “Wouldn’t a participatory economic system
be viable only if there were a prior transformation of people’s basic
consciousness from one that is individually oriented to one that is
socially oriented?” (Weisskopf 1992, page 17)

And adds: “In order for mechanisms [of participatory economics]
to add up to a workable system of motivation which could substitute
for individual material incentives, there would surely have to be
a wholesale conversion of human behavior patterns from homo economus
to what might best be characterized as homo socialis—i.e. a person
whose very consciousness was socially rather than individually oriented.”
(Weisskopf 1992, page 18)

He argues: “The first issue is whether and how people could
be expected to change from homo economus, as we know him/her in contemporary
capitalist societies, to homo socialis, as he/she is depicted in the
operation of participatory socialist societies…. If people act essentially
as homo economus, it follows that a significant amount of inequality,
hierarchy, competition, etc. is a necessary ingredient of an efficient
economic system.” (Weisskopf 1992, page 21)

Finally: “To transform homo economus into homo socialis would
thus involve a massive change in people’s mind-sets. Such a transformation
might conceivably be imposed on a society by an authoritarian elite,
but it is virtually impossible to imagine it being generated by a
democratic process that respected the current attitudes and preferences
of the general public.” (Weisskopf 1992, page 21-22)

Concerns such as these—that a participatory economy assumes
people are altruists, or that a participatory economy requires a different
set of human motivations than those people have currently, and that
there is no way to get from here to there—are usually the last
line of argument against pursuing participatory economics as a political
project. Weisskopf poses the essential dilemma of all fundamental
social change well when he asks how fundamental human and social change
can be compatible with democracy.

We are under no illusions that a democratic economy cannot result
from a non-democratic political process. Only a social movement committed
to democracy and justice in all spheres of social life, supported
“body and soul” by at least a third of the population, and
approved of by at least another third of the population, could possibly
establish a participatory economy. That means that a third of the
population would have to be convinced that they wanted an economy
that was compatible with homo socialis rather than reproductive of
homo economus. And it means that the solid beginnings of such a system
of motivation and reward would have to be well established during
decades of struggle—which places important conditions on the
internal dynamics such a movement requires. But this is precisely
the democratic process that can lead to a participatory economy. Those
who are sufficiently disgusted and or oppressed by the results of
the economies of greed to struggle for a just economy of cooperation
and to engage in that struggle respecting the principles they are
fighting for will establish the “living proof” of the possibility
and advantages of an economy based on those principles. That is also
presumably how they could win the approval of another third of the
population. We always assumed a transition could require many decades
of blood, sweat, and tears with no guarantees. But, for us, that is
a better prospect than another 500 years of solitude, with present
results guaranteed.

But notice that the third of the population that is the movement
for social change does not impose a participatory economy on the rest
of the population. Only when there is another third that votes along
with the diehards to take the plunge, would a democratically elected
government have a mandate to set up a participatory economy.

But when this occurs, there will still be 33 percent of the population
who neither believe in nor support many of the features of a participatory
economy. And there will be more than 33 percent who are acclimated
only to incentives reproductive of homo economus. Moreover, few in
the 33 percent who have been exposed to different incentives via participation
in a democratic, equitable movement will have both feet firmly in
the psychological world of the “new man and woman.” But
we are under no illusions about this either, which is why the features
of a participatory economy are designed not to assume homo
socialis, but to work with people who are homo economus, and to help
transform most of them, over time, into homo socialis.

Unless we are interested in an economy suited only to saints, a participatory
economy must have mechanisms that pressure people to behave
in socially responsible ways. The principle mechanism that compels
workers’ and consumers’ councils to behave in a socially responsible
way is peer pressure. Workers’ councils must demonstrate that their
proposals generate an acceptable excess of social benefits over social
costs. And consumers’ councils must demonstrate that the social cost
of the goods they request is consistent with the work effort ratings
of their members. Ultimately, if self-imposed social responsibility
as well as peer pressure fail to yield socially responsible behavior,
a suitably defined majority of other councils imposes an acceptable
proposal. The principle mechanism that compels individually responsible
behavior are effort ratings by one’s work mates and consumption allocations
based on effort ratings, as well as need. The logic here is to run
the economy in a way that ensures that even homo economi will behave
as homo socialis. The idea is that practice makes perfect, not that
any of us are, or ever will be, 100% homo socialis. We are not surprised
that people who are drawn to participatory economies have a spasmodic,
confessional reaction. As one student put it, “I believe that
people, myself included, want to, on some occasions, think only of
themselves.” Participatory economies are not unmindful of this
aspect of the human condition, despite what critics have assumed.

Incidentally, this is why we cannot accept the olive branch from
“market socialist’s” who are kind enough to offer it: “Even
if one’s ultimate hope is to progress to a participatory form of socialist
society, a gradual move to some form of `market socialism,’ which
would begin to change people’s actual socioeconomic environment in
a more socialist direction, would appear to be a necessary first step
in achieving a democratic transition.” (Weisskopf 1992, page
22) The problem is that the logic of “market socialism”
is precisely a socioeconomic environment conducive to the reproduction
of homo economus and the eradication of homo socialis! If people have
both potentials, and if the principle obstacle to a transition to
a participatory economy is a long history of reinforcing the former
and repressing the latter, how can an economy that continues to do
just that be an important part of a transition strategy? True, things
would be far easier if it could. But to pretend “market socialism”
will lead to participatory economics seems illogical and utopian to
us.

Incapable
of International Economic Relations

One initial criticism of participatory economies was that they could
not engage in international economic relations with other kinds of
economies. In the April 1993 issue of Z Magazine we gave some
tentative suggestions regarding how participatory economies might
engage in international economic activities: We said “we should
not be too disapproving if a group of historically distinct participatory
economies agreed to: