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Parecon and Society: Parecon Overview


This would be an opening chapter of this possible new book, summarizing parecon itself. Remember, these are merely drafts I am sharing in the blog…looking for some reactions.

Parecon: An Overview

Participatory economics, or parecon for short, is a proposal for the defining features of a post capitalist economy. Economies incorporate an almost infinite array of components. Two different societies, whether France and Mexico or the U.S. and South Africa, even with the same type economy, say capitalism, certainly won’t have the same exact economic attributes. There will be a myriad of differences ranging from population numbers and skills, to resources and infrastructure, to different specific industries, organizational approaches, secondary institutions, and class histories and relations. And the same holds for other economic types, including parecon. Different societies that have participatory economies will have different features beyond a few shared ones that define the economic type.

Capitalism’s defining features include private ownership of the means of production so that a few percent of the population owning almost all industry, machinery, farmland, and so on. Capitalism is also defined by corporate workplace divisions of labor and authoritative decision making. Some people do mostly conceptual and empowering tasks for their jobs, others do mostly rote and obedient tasks. It is generally about 20% doing the former, and 80% doing the latter. The former make many decisions and impact social choices. The later mainly obey orders.

Decisions are made using various means, but always conveying authoritative power to a relative few people from among the 20% plus, of course, even more authoritatively, owners.

People’s income or remuneration comes mostly from their bargaining power as people get what they can take. In turn, a very important contributor to bargaining power is ownership of property which conveys rights to profit, and to a lesser extent the control one has over needed assets or skills, the output one generates, one’s social attributions like gender and race, one’s organizational affiliations, etc.

How much of each item is produced and the relative valuations of items is guided by market allocation in which buyers and sellers seek to enhance their own situations (essentially oblivious to the impact on others) in transactions with one another.

Beyond these key shared attributes–private ownership of means of production, corporate workplace organization, authoritative decision making, remuneration for bargaining power, property, and output, and market allocation–myriad variations in secondary institutions, in the population size and makeup, in local history, in impositions from other parts of society, etc., distinguish different instances of capitalism from one another.

Parecon has completely different defining features, which is what makes it a different type of economy than capitalism, of course. This book largely assumes the reader knows about participatory economics and is interested in what having a parecon would imply for or require from other non-economic parts of society. There are numerous detailed presentations of parecon and explorations of its economic logic and implications available, not least online at the parecon web site (www.parecon.org), and we don’t want to repeat all that, in comparable detail, here. But we do need to at least summarize the system’s main features.

In summary, parecon seeks to fulfill four key values (in addition to meeting needs and fulfilling potentials) via the use of four defining institutional commitments. The values are solidarity, diversity, equity, and self management. The institutions are workers and consumers councils with self managed decision making norms and methods, balanced job complexes, remuneration for effort and sacrifice, and participatory planning.

The first value a good economy ought to have is solidarity. Capitalism is a system in which to get ahead one must trample others. You must ignore the horrible pain suffered by those left below or literally step on them, pushing them farther down. In capitalism, as a famous baseball manager used to say…”nice guys finish last.” A good economy should be, in contrast, intrinsically a solidarity economy. Its institutions for production, consumption, and allocation should propel even antisocial people into having to address others’ well being. To get ahead in a a good economy, you should have to act on the basis of solidarity. And this first parecon value is entirely uncontroversial. Only a psychopath would argue that all other things equal, an economy is better if it produces hostility and anti-sociality.

The second value we want a good economy to advance is diversity. Capitalist markets homogenize options. They trumpet opportunity but in fact they curtail most avenues of satisfaction and development by replacing virtually everything human and caring with only what is most commercial, most profitable, and most in accord with existing hierarchies of power and wealth. In contrast, good institutions for production, consumption, and allocation not only wouldn’t reduce variety, but would emphasize finding and respecting diverse solutions to problems. A good economy should recognize that we are finite beings who can benefit from enjoying what others do that we ourselves have no time to do, and also that we are fallible beings who should not vest all our hopes in single routes of advance, instead insuring against damage by exploring diverse avenues and options. And this value too is entirely uncontroversial. Only a perverse individual would argue that all other things equal, an economy is better if it reduces options.

The third value we want a good economy to advance is equity. Capitalism overwhelmingly rewards property and bargaining power. It says that those who have a deed to productive property by virtue of having that piece of paper deserve profits. And it says that those who have great bargaining power based on anything from monopolizing knowledge or skills, to having better tools or organizational advantages, to being born with special talents, to being able to command brute force, are entitled to whatever they can take. But a good economy should be an equity economy in that its institutions for production, consumption, and allocation not only don’t destroy or obstruct equity, they propel it. But what is equity?

People seeking equity of course reject rewarding property ownership. And weof course also reject rewarding power. But what about output? Should people get back from the social product an amount equal to what they produce as part of the social product? It seems equitable…but is it?

Supposing in each case they do the same work for the same length of time at the same intensity, why should someone who has better tools get more income than someone with worse tools? Why should someone who happens to produce something highly valued be rewarded more than someone who produces something less valued, but still socially desired? Why should someone who was lucky in the genetic lottery, perhaps getting genes for big size or for musical talent …get rewarded more than someone who was less lucky genetically?

In an equitable economy for those who can work, remuneration will be for effort and sacrifice in producing socially desired items. If you work longer, you get more reward. If you work harder, you get more reward. If you work in worse conditions and at more onerous tasks, you get more reward. But you do not get more reward for having better tools, or for producing something that happens to be more valued, or even for having innate highly productive talents, nor even for learned skills (though you do get rewarded for the work of learning those skills).

Rewarding only the effort and sacrifice that people expend in their work is controversial. Some anti-capitalists think that people should be rewarded for output, so that a great athlete should earn fortunes, and a quality doctor should earn way more than a hard working farmer or short order cook. An equitable economy will reject that norm. In fact, rewarding according to effort and sacrifice, if one person had a nice, comfortable, pleasant, highly productive job, and another person had an onerous, debilitating, and less productive but still socially valuable job, for comparable intensity of work the later person would earn more per hour, not the former.

So, we have our third value, a controversial one. We want a good economy to remunerate effort and sacrifice, and, of course, when people can’t work, to provide full income anyway based on need.

The fourth and final value on which a good economy ought to be built has to do with decisions and is called self-management. In capitalism owners or capitalists have tremendous say. Managers and high level intellectual workers who monopolize daily decision-making levers like lawyers, engineers, financial officers, and doctors, have substantial say. And people doing rote and obedient labor rarely even know what decisions are being made, much less impact them.

In contrast, a good economy will be a democratic economy. People will control their own lives to appropriate degrees. Each person has a level of say that doesn’t impinge on other people having the same level of say. We impact decisions in proportion as we are affected by them. This is called self management.

Imagine a worker wants to place a picture of a daughter on his or her workstation. Who should make that decision? Should some owner decide? Should a manager decide? Should all the workers decide? Obviously none of that makes sense. The one worker whose child it is should decide, alone, with full authority. He or she should be literally a dictator in this particular case.

Now suppose instead that the same worker wants to put a radio on his or her desk, and to play it very loud listening to raucous rock and roll. Now who should decide? We all intuitively know that the answer is that those who will hear the radio should have a say. And that those who will be more bothered – or more benefited – should have more say.

And at this point, we have already arrived at a value vis-à-vis decision making. We don’t need a Phd philosopher. We don’t need incomprehensible language. We easily realize that we don’t want one person one vote and 50% rules all the time. Nor do we always want one person one vote and some other percentage required for agreement. Nor do we always want one person to decide authoritatively, as a dictator. Nor do we always want consensus. Nor do we always want any other single approach. All these methods of making decisions make sense in some cases but are horrible in other cases.

What we hope to accomplish when we choose a mode of decision making and processes of discussing issues, agenda setting, and so on, is that each actor should have an influence on decisions in proportion to the degree they are affected by them.

Participatory Economics, pursuing the above listed values of solidarity, diversity, equity, and self management, is built on a few centrally defining institutional choices.

Workers and consumers need a place to express and pursue their preferences. Historically these have been workers and consumers councils. In a parecon, within these councils, there is an additional commitment to using decision making procedures and modes of communication that apportion to each actor about each decision a degree of say proportionate to the degree he or she is affected.

Votes could be majority rule, three quarters, two-thirds, consensus, or other possibilities. They are taken at different levels, with fewer or more participants, and using procedures that depend on the particular implications of the decisions in question. Sometimes a team or individual makes a decision pretty much on its own. Sometimes a whole workplace or even an industry would be the decision body. Different voting and tallying methods would be employed as needed for different decisions.

The next institutional commitment is to remunerate for effort and sacrifice, not for property, power, or even output. Who decides how hard we have worked? Our workers councils in context of the broad economic setting that is established by all the economy’s institutions. If you work longer, you are entitled to more of the social product. If you work more intensely, again you are entitled to more. If you work at more onerous or dangerous or boring tasks, again, you are entitled to more. But you aren’t entitled to more due to owning productive property because no one owns productive property – it is all socially owned. And you aren’t entitled to more due to working with better tools, or producing something more valued, or even having personal traits that make you more productive, because these traits don’t involve effort or sacrifice, but luck or endowment. Greater output is appreciated, of course…but there is no extra pay explicitly for it. Both morally and in terms of incentives, parecon does precisely what makes sense. The extra pay we get is for what we deserve to have rewarded – our sacrifice at work, and elicits what we can in fact generate more of–our effort.

Suppose that as proposed we have workers and consumers councils. Suppose we also believe in participation, democracy, and even self management. And also suppose our workplace has a typical corporate division of labor. What will happen?

The roughly 20% of the workforce who via their positions in this corporate division of labor monopolize the daily decision making positions and the knowledge that is essential to knowing what is going on and what options exist and their implications, are going to set agendas. Their pronouncements will be authoritative. Even if other workers have voting rights, it will be to vote on plans and options put forth only by this coordinator class. It will be the will of this class that decides outcomes. In time this elite will also decide that it deserves more pay to nurture its great wisdom. It will separate itself not only in power, but in income and status.

So what is parecon’s alternative?

Participatory economics utilizes balanced job complexes. Instead of combining tasks so that some jobs are highly empowering and other jobs are horribly stultifying, so that some jobs convey knowledge and have authority while other jobs rob mentality and only obey orders – parecon says let’s make each job comparable to all others in its quality of life effects and in its empowerment effects.

Each person has a job. Each job involves many tasks. In a parecon, of course each job is suited to the talents and capacities and energies of the person doing it. But each job contains a mix of tasks and responsibilities such that the overall quality of life and especially the overall empowerment effects of the work are comparable for all.

A parecon doesn’t have someone who does only surgery, but instead has people who do some surgery and some cleaning of the hospital, and some other tasks – such that the sum of all that they do incorporates a fair mix of tasks. A parecon doesn’t have managers and workers. It doesn’t have lawyers and short order cooks. It doesn’t have engineers and assembly line workers – though all the associated tasks get done. A parecon has people all of whom do a mix of things in their work such that each person’s mix accords with their abilities and also conveys a fair share of rote and tedious and interesting and empowering conditions and responsibilities.

Our work doesn’t prepare a few of us to rule and the rest of us to obey. It prepares all of us to participate in self-managing our activities via our councils. It readies all of us to engage sensibly in self managing our lives and institutions.

But what if we have a new economy with workers and consumers councils, with self-managing decision making rules, with remuneration for effort and sacrifice, and with balanced job complexes – but we combine all this with markets or central planning for allocation? Would that work?

Markets destroy the remuneration scheme, instead rewarding bargaining power, and also create a competitive context in which workplaces have to cut costs and seek market share. To do this workplaces virtually have no choice but to insulate some people from the discomfort that cost-cutting imposes, precisely those people who are earmarked to figure out what costs to cut and how to generate more output at the expense of fulfillment—and so emerges, again, the coordinator class, located above workers, violating our preferred norms of remuneration, accruing power and obliterating the self-management we desire.

And the same would hold for central planning. It too would immediately elevate planners, and shortly after that elevate planners’ managerial agents in each workplace, and then also all those actors in the economy sharing the same type of credentials. Central planning would also impose a coordinator class division and coordinator rule over workers, who would be made subordinate.

The allocation problem we face in trying to propose a good economy is that markets and central planning each subvert the values and associated structures we have deemed worthy. So suppose in place of top-down imposition of centrally planned choices and in place of competitive market exchange by atomized buyers and sellers, we opt for cooperative, informed self managed negotiation of allocation by socially entwined actors who each have a say in proportion as choices impact them and who are each able to access accurate information and valuations, and who each have appropriate training and confidence to develop and communicate their preferences. That choice, if we could conceive it to be effective in getting economic functions accomplished, would compatibly advance council centered participatory self-management, remuneration for effort and sacrifice, and balanced job complexes, and it would also provide proper valuations of personal, social, and ecological impacts, and promote classlessness.

Participatory planning is a system in which worker and consumer councils propose their work activities and their consumption preferences in light of best available and constantly updated knowledge of local and global implications and true valuations of the full social benefits and costs of their choices. The system utilizes a back and forth cooperative communication of mutually informed preferences via a variety of simple communicative and organizing principles including what are called indicative prices, facilitation boards, rounds of accommodation to new information, and other features—all of which permit actors to express their desires and to mediate and refine them in light of feedback about other actor’s desires, arriving at compatible choices consistent with advancing the values we have highlighted.

Actors indicate their preferences. They learn what others have indicated. They alter their preferences in an effort to move toward a personally fulfilling pattern of behavior and consumption, as well as a viable plan. At each new step in the cooperative negotiation each actor is seeking well being and development, but each can get ahead only in accord with social advance, not by exploiting others. It is impossible to describe this whole system and all its features, and to show how they are both viable and worthy in a single chapter. I’d like to recommend the website www.parecon.org which has all kinds of material about parecon, and here provide only a brief summary of the model’s features.

Participatory economics creates a context of classlessness. I can get better work conditions if the average job complex throughout a parecon improves. I can get higher income if I work harder or longer with my workmates, or if the average income throughout society increases. I not only advance in solidarity with other economic actors, but I influence all economic decisions, including those in my workplace and those throughout the rest of the economy, at a level proportionate to the impact of those decisions on me.

Parecon not only eliminates inequitable disparities in wealth and income, it attains just distribution. It not only doesn’t force actors to violate one another’s lives, it produces solidarity. It not only doesn’t homogenize outcomes, it generates diversity. It not only doesn’t give a small ruling class tremendous power while burdening the bulk of the population with powerlessness, it produces appropriate influence for all.

Parecon’s economic viability and worthiness are argued in great detail in the book Parecon: Life After Capitalism (Verso Books) and on its web site at www.parecon.org Reader who aren’t familiar with its features and who haven’t thought through their economic logic may wish to consult either. But, suppose you have done so, or you do so, and you decide that yes, parecon can produce plenty, produce desirably, and allocate justly, all while propelling values you hold dear. The issue of whether to become a strong advocate of parecon, also trying to improve its feature with insight you lend, will still be open. Because it could be that parecon works as an economy in the abstract, but would fail as one in a real society due to its interconnections with other parts of social life. Are the implications of a parecon for the rest of society desirable, or not? That’s the question we want to broadly address in coming chapters.

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