Participatory Economics Interview

KATE REDMOND: We’re in the studio today with Michael Albert, activist and author of several books, including Looking Forward from South End Press and Political Economy of Participatory Economics from Princeton University Press, and co-founder and editor of Z Magazine. Welcome to KFAI in Minneapolis.


MICHAEL ALBERT: Thank you very much for having me. Actually, I’m co-author of the two books you mentioned, with Robin Hahnel, an economist who teaches at American University.




Tell us, what is participatory economics?


It’s a different way of organizing an economy. We have in the U.S. now a capitalist economy in which some people own corporations, markets regulate allocation, and if you look inside workplaces you find a hierarchy in which some people do rote manual labor, some people have more skilled tasks, and a few people make decisions. That’s the heart of our system of economy–private ownership of workplaces, markets, and hierarchical workplace organization–and I don’t like it.


I don’t like the private ownership because it leads to few people owning and controlling almost all the wealth and therefore having tremendous power. In our economy, commentators discuss the bottom 90 percent of the population, and while that’s an amazing and embarrassing concept, it’s accurate. The top 10 percent, and actually just the top few percent, effectively run the whole economy. That’s inequitable, unjust, and undemocratic, so we ought to be able to do better.


And I don’t like the hierarchical division of work because it ensures that most people have little or no say over their labor and are can’t be equal to one another in the workplace or have a fair share of fulfilling as well as not so fulfilling tasks. Yet, there’s no ethical reason and not even any compelling economic reason why some people should enjoy better work circumstances and have more fulfilling and less dangerous or boring responsibilities than others, much less greater decision making power. So, again, we ought to be able to do better.


And I don’t like the market because the market forces people to be out for themselves with no social conscience. The market doesn’t work unless people advance only themselves. When people who own businesses advance only themselves, they seek profit regardless of adverse effects on the ecology, regardless of adverse effects on their workers, and even regardless of adverse effects on consumers. If you are an individual worker and consumer and you advance only for yourself–you ignore the well being of the people who produce what you consume or consume what you produce, or who live in your community with you. This means you operate in isolation from others, even trying to get ahead at their expense. And markets have many more ills, creating inequality, fostering unemployment, causing ecological disruption, embodying alienation, promoting personality distortion, and so on. So, again, why not try to do better?


So participatory economics is a new type of system based on different defining institutions.


In participatory economics, instead of private ownership of capital, everybody equally owns the means of production. It’s just shared among the whole populace, so ownership is equal and generates no income or well being or power differences. How well off each person is, how much income and how much say in decisions each person has, are affected instead by allocation–and the way allocation is handled in participatory economics is very different from the market system we’re familiar with in our society–and by workplace organization.


For participatory allocation, people develop a scenario or agenda for what is to be done. Everyone is a participant in that process. We each figure out what we want to do or consume, either individually or with our work group, and everybody proposes their view. The mesh of those proposals is refined, back and forth, in a number of rounds of give-and-take, until a comprehensive agenda is settled on. Everyone participates in this give-and-take in proportion as they are affected by the decisions under consideration so the system is participatory and self-managing.


Likewise, the way you organize the workplace in participatory economics is also unlike what we’re familiar with under capitalism. In capitalism, you take all the tasks in the workplace and combine them into jobs where each actor has numerous instances of only one kind of task. One person does a variety of janitorial tasks and is a janitor. Someone else answers the phone and does some other secretarial tasks and is a secretary. Someone else administers and is a manager. Another person determines financial policy, projects revenues, etc., and is CEO. Each job occupies a place in a hierarchical scheme.


In participatory economics, in contrast, we combine tasks into jobs so each person has a fair share of different kinds of tasks. It’s like taking items from a Chinese menu to make a meal. The capitalist way is to take only one thing and call it a meal. Some get good ones, some get bad ones. The participatory way is to take a balanced serving of a variety of complementary things as a meal. Each person gets a fair and comparable meal.


In the workplace, the thing you create is a job and the things you take from the menu are tasks. In capitalism, each worker gets one or at most a few very similar kinds of tasks at one level of authority, skill, empowerment, etc. In the participatory version, you instead combine a diverse selection of tasks into jobs so that everybody has a fair share of the more rewarding and more onerous tasks. It’s essential to do this, first because its equitable. There’s no more reason why some people should take risks and others shouldn’t, why some people should give orders and others only be ordered around, than why some people should be rich and others poor. It’s also essential to balance workplace circumstances because it empowers people to participate in decision-making. Instead of some of us being deadened and kept relatively ignorant by our work while others are continually refining their decision making skills and monopolizing relevant knowledge, as in the hierarchical case–with participation and balanced jobs we all develop our potentials to participate with readiness and skill.


The difference between capitalism and participatory economics is the difference between the kind of economy that spends immense sums building missiles that sit in the ground but little to finance quality health care for all, and the kind that does the reverse. It’s the difference between the kind of economy that uses schools to teach most people how to endure boredom so they’ll be prepared to work obediently for other people who have had elite schooling, and the kind of economy that emphasizes developing all peoples’ skills and talents so everyone will be prepared to participate and contribute in a balanced way. It’s the difference between elites making all decisions, and everyone playing a fair and proportionate role, between a few people having immense power and wealth while most are barely getting by or worse, and everyone having a fair share.




So your approach eliminates specialization, which some would argue decreases efficiency?


We don’t eliminate specialization so much as narrow specialists. Take the favorite example of a hospital. We’ll still have surgeons. We don’t do away with surgery or with the special skills, knowledge, and talents needed to do surgery well. It’s just that people who do surgery will do other things too so that their overall work responsibility is fair. More important, the ex-secretary and everyone else at the hospital will now also do a job that combines a variety of tasks and responsibilities in a fair mix.




But if surgeons have to spend some time doing things other than surgery, like cleaning up part of the hospital, then aren’t we losing output?


Yes, if you can only have the number of people trained in doing surgery as now and we take away some time that they now do surgery. But suppose we have more surgeons. Then, there’s no new surgery shortage. Or, for that matter, suppose we have today’s surgeons spend some of the time they devote to golf doing non-surgical work so they have their fair share of diverse types of task. Again, there’s no new surgery shortage.


In our economy what happens is that most people don’t have their skills and capabilities developed. Most people don’t have their talents elaborated. What we do is intentionally not utilize most people’s capacities. To keep some people at the top, capitalism under-utilizes many other peoples’ talents and even squashes their creativity out of existence. What participatory economics does instead is establish fairness while getting more productivity by not wasting most people’s abilities and potentials so only a few can dominate.




But how do we get there from here? It seems we’re about as far from what you’re suggesting as we could be.


I can’t give you a road map because there is no road map. The basic rough answer is that people get together and develop an understanding of the roots of the problems in society so they are not distracted by peripheral issues, they begin to organize into movements to deal with those problems, to win reforms and win changes, whether in their income or for more control over their job, or other gains, and they build those movements larger and larger until eventually they begin to make demands that are more structural. They may create new institutions as they proceed, for example, councils in workplaces and communities that start to do the kind of things they will later be responsible for in participatory economics. That’s the way change has occurred throughout history, whether around this issue, economics, or around issues of race, sexuality, ecology, or whatever: partly winning reforms, partly building new relations, finally redefining basic structures. It’s very difficult, especially at the outset, but once the process reaches a certain level of awareness and involvement and a certain scale of its own institutions and organizations, progress is very rapid indeed.




Under the participatory approach, would everyone get paid the same?


Yes. The work that we do has a mix of tasks different for each person but comparable in terms of their fulfillment or onus. My workday is like yours and ours is like everyone else’s, not in details, but in overall demands and rewards. So why should one person get paid more than another? The only way to earn a little more than someone else, or than you did last year, is to work extra hours. You could work some overtime, or you could work less than society’s average to earn less. But the basic point is that income would be geared to effort where effort is measured by how long you work at a job equally demanding as everyone else’s. So other than people working a little more or less, income would be equal. Compare that to a system in which the CEO of a corporation not only has less risky, boring, and debilitating tasks and more tasks that are intrinsically rewarding, but also earns as much as 80 or 100 or even 200 of his employees. Capitalism is theft, greed, exclusion. Participatory economics is equity, solidarity, participation.




It sounds a lot like socialism. Is this socialism?


It depends on what we mean by socialism. The word has for decades been applied to the Soviet system, and participatory economics is nothing like that. I described the system we live under now, capitalism, as private ownership of capital by a small group at the top, markets, and a hierarchical workplace. The Soviet system doesn’t have that small group owning the means of production. Their revolution got rid of that and replaced it with state ownership. But that was still an elite group, so that change was one elite, the capitalist class, replaced by another, the state bureaucracy. The Russian revolution also replaced the market with central planning. But that’s again very different from what I want. That’s where a particular group of planners decides an agenda for the whole economy. The central planners send down a set of orders to all the workplaces. All the actors in the society respond to the orders by saying whether they can fulfill them. That information goes back to the center. New orders come down. Up goes obedience. It’s just a very authoritarian, hierarchical system. And finally, the Soviet workplace was organized just like Ford Motor Company or other U.S. workplaces. They would be hard to distinguish, except by level of technology. The internal structure of the Soviet workplace and the U.S. workplace were otherwise quite alike. So no, the system that I’m proposing is not that.


But, of course, that’s also not what socialism was supposed to be. The reason why the Soviet system was called socialist was twofold. The Soviet elite called it socialism so they could be legitimated by the label. Who could rebel against the system if it was already the best one conceivable? The U.S. elite called the Soviet system socialism, in contrast, so socialism would be delegitimated by the identification. If the Soviet Union was socialist, what sensible citizen of the U.S. could want to oppose capitalism? So if socialism means the Soviet system, what we’ve been talking about has nothing to do with socialism. On the other hand, if socialism means people controlling their own lives and economy with equity, diversity, participation, and self management, then you could call the system I’m proposing socialist.




Let’s talk a little more about markets. You want the abolition of the market…


That’s exactly right. I’m an abolitionist regarding markets. Obviously, it’s not a popular position right now, when there is a general conception that markets are somehow the panacea for everything. But I think that’s a giant con job.


Markets are actually quite a simple institution. By a market we don’t mean just the place where you go and purchase something. We mean a system where producers offer things, consumers purchase things, there are prices that mediate between the two, and a balance comes by way of pressures associated with supply and demand. But market competition requires that everybody be greedy. That everybody be for themselves. It’s produces the opposite of solidarity and empathy. Nice guys finish last is actually true. Markets not only don’t reward caring about others, they make it impossible for people to take into account the conditions of others. When we buy a compact disc, we don’t think about the condition of the workers that produced the disc. We have no information that would let us do that. It isn’t even an option. And the same goes in reverse. At work, we don’t think about the people who are going to consume the product we’re completing. I try to get ahead and so do you, and we all do it without regard for the impact on others.


Markets also misvalue things. They undervalue the worth of products that have positive public impact. So they undervalue public goods like parks or public education or public health care and ecological balance. Conversely, markets overvalue things which have private good effects but public bad effects. So they overvalue a car which pollutes and hurts the public but helps the person who individually buys it. So with markets you get a very skewed development. Markets bend of the direction the economy goes to emphasize narrow individualism and reduce sociality.


Also, markets foster a class division between people who make decisions and people who don’t, and this is not only not fair, but the conflicts that arise between managers and workers, experts and clients, limit productivity, as does the under utilization of many peoples’ talents.


I could go on, but all in all, markets lead toward privatization, inequality, and ecological decay and away from social concern, equity, and ecological balance. They under utilize capacities and waste talents. They serve certain elites very well, and are therefore defended by those elites who tell us that markets are wonderful. But it’s a con job. And you only have to look around to see it. But the massive propaganda about markets is overwhelming, and people sometimes succumb.


What if the marketplace were taken out of the political realm. If there was still competition, which the U.S. seems so hooked on as a motivator, and yet economics was not dictated by different political mechanisms that drive it.


Most of those mechanisms really are economic. The government certainly participates in economics and can make outcomes worse or better, but the basic features I’ve been talking about are due only to the economic attributes I emphasized: private ownership of capital, markets, and hierarchical workplace organization.


But let’s just consider competition itself, for a minute. Suppose you’re organizing a running race and you want to motivate the best outcomes. One way you can organize your race, the way any high powered competitor type would say to do it, is to have some prize money and give most of the prize money to the winner, and a little less for second and third place finishers, and that’s it. Then we’ll get the best race times.


But look how this really works. Imagine that one person is really fast and can win the race relatively easily. Do she have an incentive to run as fast as she can? Not at all. Instead, at great cost, you’ve given her an incentive to run just fast enough to win and no faster. And what about the person who is going to come in fourth, fifth, eighth, or twentieth? They have no incentive whatsoever. As soon as they see they’re out of the money, as far as competitive incentive is concerned, they might as well walk over the finish line. But suppose we say we’re going to reward everybody in line with their previous efforts. If you run as well as you’ve done in the past, we’ll give you this baseline amount. If you do better, we’ll give you more of a payoff in proportion to the improvement. So if you work harder, and your effort is greater, you’ll get more. We’re not going to give more to whoever finishes first just for winning. We’re going to give more for doing better than you’ve done before. If you think about that, you’ll see that the overall speed of the whole assembly of people in the race is going to be greater in the second case than in the usual approach. Each runner has an incentive to go as fast as she can, regardless of how fast anyone else goes. In fact, simple-minded competition is not so efficient after all. It is good for the few who win, but it isn’t good for the overall productivity of the whole group. Does rewarding those at the top tremendously and those below barely at all elicit production? Well, yes, you can have a society with industry and output that functions that way. We’ve got that all around us. So it works in that sense. Especially if you’re willing to use military power throughout the rest of the world to rip off riches to make up for inefficiencies. But could we do much better? Yes. It’s just that in my way of doing better, you have to have equity, and the people at the top are much more concerned to prevent equity than to maximize productivity.




What’s the scale you’re looking at? What’s the scale of a participatory economy?


It’s any scale. You can have a participatory economy in a small country or a large one. Participatory economies can have many differences depending on cultures, levels of development, and what not. It would be different in different places, but you can have it at any scale…but I think maybe you’re referring to what’s the scale of the institutions within the economy. Do we break down large firms and communities…




And are these communities self sufficient? Is there an exchange going on which could mean the marketplace…


What you are perhaps leading toward is that there is a fourth alternative to the market, central planning, and participatory economics. We could just get rid of allocation entirely. Have collective ownership, no hierarchy, and small self-sufficient communities where there is face-to-face economics in which you don’t have people in point A producing stuff that’s consumed far away at points B, C, and so on, so you don’t have an elaborate allocation system at all. This is a solution. But it’s a solution that gives away, I think, a great amount of development and economies of scale. I don’t think a good economy is one in which you don’t have hospitals, in which you don’t have computers, in which you don’t have cellos, and in which you don’t have telephones. I also don’t think a good economy is one in which you do have these types of things but you have to have 40,000 plants to manufacture each–from toothpicks to pencils to bicycles to heart-lung machines–so every community can have them without having to get them from any great distance away. This immense duplication of effort and of workplaces is not even the most ecologically wise way to create things. There is too much redundancy and waste of resources.


So my answer regarding scale is that the scale you choose for communities and the degree to which you choose small industries versus larger ones is a social decision. You weigh off the gains of decentralization versus the gains of economies of scale. What’s nice is that in participatory economics this is a decision you can make and implement, self-consciously, with a full debate, and with room for correction as you learn more. But in capitalism and the Soviet system alike, there is a drive toward centralization and a drive toward large scale units regardless of their bad effects and way past the point that centralization and large scale make sense. So I think the scale will be smaller and more decentralized in a participatory economy. But not so small or so decentralized that there is great waste or loss of valuable capabilities.




Going further into the details, is there room for things like insurance companies, the media. What role would media play?


There are no insurance companies. There’s not really any banks. No IRS. No Wall Street. Many institutions we’re familiar with are gone, or at least don’t exist in anything resembling the form they now take. There’s no advertising as we know it because you only want to let people know about the way things actually are, not trick them into buying stuff that’s inferior or that they don’t really need or won’t benefit from. There’s no redundancies of products in the sense that we know it. No real estate firms, brokerage houses, surveillance and control systems, as we know them. And obviously there’s no military production in the sense that we know it. The savings associated with all this that could be put to social good are immense. And the reason these things don’t exist is they just don’t have any role. You don’t need insurance when your income is guaranteed, when health care is guaranteed, when housing is guaranteed. You don’t need banks when you’re not doing private investments and you don’t have cause to use the banks for mortgages and the like. Participatory economics doesn’t have those institutions. No welfare system. No unemployment bureaucracies. It has new institutions, though, associated with the allocation procedures we talked about earlier.


But, of course, media still exists. Media is communication and it’s crucially important in any society. A critical problem with our own society today is the kind of media we have. The media is, like every other economic institution, controlled by a relative few who have certain interests and make sure that the media–with the exception of radio stations like this one, of course–comply with those interests. And radio stations like this, as a result, are very important. Community radio is very important. Alternative print media is very important. It’s very hard for these efforts to become large, in a society like ours, but they are nonetheless an important outlet.


In a good society media is important because you can’t have democracy, participation, and self-management, unless you have knowledge. It doesn’t make any sense to have a right to make a decision about something if you don’t have the information you need. As an example of that thesis, suppose there’s going to be a first-in-a-long-time election in a Central America country where the U.S. is involved in an-ongoing struggles. If you look behind the news in the mainstream press and TV, you discover that before one of those initial "free elections," the U.S. and its local client regimes destroy the local labor unions, disrupt the religious community groups, close down local independent radio stations and newspapers, and eliminate the means for people to get together to develop a position and share ideas about agenda. Then they have an election to choose between candidates Washington finds acceptable. Like in U.S. elections, there is no real discussion of program or issues, but just a couple of interchangeable people competing for an office. Once you get rid of the possibility of real serious public grappling with ideas and possibilities, then you can have a free election, because nothing is at stake. So in participatory economics, since participation and freedom are taken seriously, of course there will be media at many levels and scales, all, however, operated according to the equitable, balanced, and participatory norms of the economy as a whole.


One of my concerns is always the accessibility of these ideas to the folks who need them most. People who are struggling day-to-day with survival and who have the least to lose and most to gain from the system changing. How are you putting this out in a popular fashion, like the Green’s conference you’re here to speak at, and in the media?


Just as you see here, coming on a radio show like this and trying to get the ideas across. I have a hard time, though. There is never enough time to really do justice to alternative ways of thinking and organizing on a single show or even at a conference. And, also, I don’t know whether I’m as clear as a I could be. It’s particularly difficult to get information to struggling folks, because you can’t do it by way of Time Magazine. You can’t do it by way of NBC. So we instead try to develop our own media and our own outreach. We’re doing it at Z. And we’re trying to expand into other means of reaching out as well. You’re doing it in community radio. Other periodicals like Dollars and Sense, In These Times, Monthly Review, Radical America, the Progressive are doing it in print, and so on. Of course, a free press isn’t particularly relevant if the only people who have access to it and control over its contents are the rich. Then it’s a rich press. Or a press for the rich. And we have to try to overcome that as part of the process of developing movements and winning change.

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