[We seek] a condition of society in which there should be neither rich nor
poor, neither master nor master's man, neither idle nor overworked, neither brain-sick
brain workers, nor heartsick hand workers, in a word, in which all would be living
in equality of condition and would manage their affairs unwastefully, and with
the full consciousness that harm to one would mean harm to all--the realization
at last of the meaning of the word commonwealth.
- William Morris
The fall of communism confirms century-old libertarian claims
that equity and justice cannot be imposed by force, that interpreting "to
each according to work" as "to each according to the marginal revenue product
of one's labor" rationalizes privilege, and that central planning stifles
workers' creative potentials. Clearly, enterprises whose inputs and outputs
have been determined by a central planning procedure exclude workers and consumers
from decision making, separate conceptual and manual tasks, and offer unequal
consumption and work opportunities. For the Soviet, East German, Polish, Czechoslovakian,
and Hungarian people to reject these injustices is encouraging. But it is
dishonest to say this demonstrates that capitalism is optimal. It only bespeaks
a lack of alternatives.
In this book we argue for a new alternative based on public
ownership and a decentralized planning procedure in which workers and consumers
propose and revise their own activities until an equitable, efficient plan is
reached. The vision, which we call a participatory economy, strives for equitable
consumption and work which integrate conceptual and manual labor so that no
participants can skew outcomes in their favor, so that self-motivation plays
a growing role as workers manage their own activities, and so that peer pressure
and peer esteem provide powerful incentives once excelling and malingering rebound
to the advantage and disadvantage of one's work mates.
Heretofore, most professional economists have accepted that
human nature and modem technology rule out egalitarian, participatory options.
They have generally claimed that efficient production must be hierarchical,
that effective incentives require inegalitarian consumption, and that allocation
can be carried out either by markets or central planning, but not via some alternative
"participatory" approach. The following chapters challenge this professional
consensus by presenting a plausible, efficient, participatory, egalitarian economic
In chapter 1
we review our understanding
of traditional economic institutions and practices-markets, central planning,
private ownership of the means of production, hierarchical production relations,
and inegalitarian consumption-showing how each subverts efficiency, equity,
self-management, solidarity, and/or variety.
In chapters 2, 3, and 4 we present a comprehensive description
of exactly how participatory production, consumption, and allocation could facilitate
economic democracy and justice. In chapter 2
a participatory organization of production and address whether this entails
a sacrifice in efficiency. In chapter 3
we describe a participatory
organization of consumption and examine whether this implies a dearth of necessary
incentives or a loss of individual freedoms. In chapter 4
we describe a participatory allocation system and explain how it reinforces
the democratic, egalitarian properties of workers' and consumers' councils.
In chapter 5
we construct a formal model
of participatory planning and use it to carry out a welfare theoretic analysis
in terms comparable to welfare analyses of traditional models. We determine
under what conditions participatory planning can generate Pareto optimal outcomes
as well as whether its procedures are incentive compatible. We evaluate likely
discrepancies between realistic versions of our economy and its formal model,
as well as realistic versions of traditional economies and their formal models.
In chapter 6
we suggest computer simulations
and social experiments that could substantiate the feasibility of participatory
economics. A concluding postscript
the debate over alternative economic models stands.