11. Q&A: Participatory Allocation
As it happens, there are no columns in standard
double-entry book-keeping to keep track of satisfaction
and demoralization. There is no credit entry for feelings
of self-worth and confidence, no debit column for
feelings of uselessness and worthlessness. There are no monthly, quarterly, or even annual statements of pride
and no closing statement of bankruptcy when the
worker finally comes to feel that after all he couldnt
do anything else, and doesnt deserve anything better.
Is It A Market?
This question has been raised as well by a couple of economists, three or four years ago, if I remember right, in Socialist Review magazine. It only got raised once, because most economists are so horrified by what we propose that they would never see it this way, or because they perceive just how different it isI dont know which. Those two economists look at participatory planning and see
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a) There are numeric indicators we call indicative prices, but which look quite like any price you have ever known, which people and institutions consult to make their decisions.
b) The mix and match of the decisions people make come into accord, by a meshing of supply and demand.
You then deduce, as they do, that this is, after all, some kind of market system, prices and supply and demand being market features.
Well, the answer I offer depends on what we mean by a market system.
If we mean a system in which there are any prices at all and in which supply and demand come into accord, then, yes, you would be right. But by this logic, all non-trivial allocation systems would be some kind of market system (including even central planning which also has prices and supply and demand coming into accord) and instead of markets being a specific kind of allocation mechanism, the word market would be a synonym for allocation itself, and we would need a new word for what economists more typically mean by a market system...
More, when you use the term markets in that very encompassing way, which many people do, it makes folks think that having markets is essentially inevitable, so that what we have in the U.S. is essentially inevitable.
Suppose you looked at the Soviet Union some time back. You would see the same thing as what has caused you to identify parecon as some type of market system. Everything had a price. Supply and demand came into proximity, and it happened via a process that in large part took note of responses of actors to prices. Yet you wouldnt have called it a market economy, I think, quite rightly.
Any economy beyond direct personal barter includes some kind of mechanism for people to make comparisons among options (including some kind of prices perhaps accompanied, as in our parecon case, by qualitative information as well) and if it isnt horribly wasteful, any such system also involves supply and demand coming into proximity of one another, as did the Soviet economy. But no one would mistake the old Soviet economy for a market economy, nonetheless.
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Why? Well, because the Soviet institutional framework and its components, and in particular the roles for each actor in allocation established by these institutions, were quite different than those that define what we call market exchange. In the Soviet Union, prices were ultimately set by planners (who did, however, consult peoples reactions to those prices). The workers had only to respond regarding their ability to fulfill instructions and to convey information about available resources, etc., as well as to obey instructions. The planners had only to calculate and set prices and issue marching orders. Managers had to administer as well as obey. Consumers had to go to the store and pick what they wanted to consume, paying the established price and keeping within their budgetseemingly quite like at A&P in the U.S. And so on.
My point is that, yes, parecon has, among other features, a kind of prices, a kind of budgeting, and a meshing of supply and demand. But, nonetheless, it is not a market system because it not only doesnt have the basic defining features of marketsbuyers and sellers each motivated to maximize their own advantage at the cost of the other; competitively determined prices; profit or surplus maximization; remuneration to labor according to its bargaining power or its outputbut because it has other features that are entirely contrary to these, such as balanced job complexes, worker and consumer councils, remuneration according to effort and sacrifice, participatory planning guided by human well being and development.
It would be an iterative (round by round) process in which what consumers want to receive matches up to what producers are ready to offer and each side steadily expands or diminishes its preferences until there is a mesh. The interchange would be facilitated by comprehensive quantitative and qualitative information concerning social costs and benefits of all production and consumption, both in text form (qualitative) and in what are called indicative prices (for calculation purposes). There are also various facilitating institutions that encapsulate and relay information. As to its efficiency properties (would it waste anything people value) no economist has challenged these, perhaps because of the proofs we offer in our more technical presentations of the model.
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Individual Participation and Local Effects
Individuals would partake as well as other size units, but for a year, and, as you imagine, it would be largely based on past years, and on projections for changes in overall output and in each individuals share for the year, etc.
Any system that has any connection to actual humans must, of course, respond to human choices. Markets do this daily. Parecon gets a prior indication of totals, a good one, during the yearly planning period. There are many reasons for this. Suppose you are in a local community that could as a collective, buy a new park, or new joint music equipment, or large computers for a kids center, or whatever. Such collective consumption is charged against the incomes of all the community members ,of course. So getting more means getting less individual consumption, and getting less of the collectively enjoyed items means getting more individual consumption. So, one reason for planning with a longer period at stake is to decide on this ratio. Another thing to be aware of is possible changes in output, and thus income. Another is changes in taste, particularly for new outputs. And so on. But all this adjustment is manageable in participatory planning, and consistently with our values (as is described in considerable detail in longer works on the vision, such as Looking Forward (SEP).
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All the component calculations and sorting done by such boards would be on record and easy to checknot simply the final data sorted and summarized information that is plugged back into the planning process. This isnt very important, I think, as a guard against ill-doing, not only because parecon would have gentle people, but because in a parecon it would be virtually impossible even for someone intent on doing so and with no qualms about it, to misuse their role at a facilitation board. What the availability of facilitation boards data and ruminations would be useful for, however, is learning about past algorithms to make improvements in the future.
Personal consumption requests, however, would presumably be private, though the requests could be be accessed without the accompanying names. (This choice of privacy, like many other choices one might make about a parecon, isnt somehow intrinsic to being a parecon, thoughat least in my thinking. That is, I think one could have a parecon with all requests publicly accessible or not, with no effect on the defining economy per se, though other issues people may care a lot about are at stake. I think privacy is preferable but it isnt intrinsic to parecon, only quite consistent with it.)
Would there be smaller production units and larger ones? Sure. But there would be no marketing in the sense that it exists now. There would be no sales aimed at volume/profits rather than at fulfillment/use. No one would have any interest in having someone consume something unless the consumer benefits thereby.
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Why do you think there are such things? If you mean one cant know in advance that one will want a product that only arrives as an option six months latersay a book not yet published, for examplesure. But you can know that last year you got x books and your prediction, flexible and updateable as the year proceeds, is that this year you will want y more or less than last year (perhaps due to having more or less time for reading, or a change in your taste, etc.) And similarly for other choices; sometimes your expectations are quite precise, sometimes they are general and broad. Individuals dont know the precise clothes they will want (new designs, etc.) but can say, pretty closely (with up and down fluctuations across many people averaging to near zero change for the total request), what overall clothes expenditures they anticipate making. (All this kind of thing is dealt with in considerable detail in the longer books on the model such as SEPs Looking Forward or PUPs Political Economy of Participatory Economics, by the way.)
Of course one doesnt plan for the whimsical personal purchase, or items that are just not known about in advance (responses to illness, for example). But one can in broad terms indicate the parts of ones income that will go to this and that areasometimes only broadly, sometimes in detail (e.g. wanting a new vehicle or other large items). When averaged over communities and societies, this data becomes powerful information that translates into requests for products that exist alongside offers of production from the workplaces, which then must be brought into alignment by a back and forth modifying of desires in light of continually updated information.
Allocation Details - Creeping Authority?
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Each actor (which is sometimes an individual, sometimes a unitsuch as a workplace or a community council, etc.) would enter a proposal for their economic activity, that is, for what they wish to take in (consume or in any event receive) and for what they wish to give out (that is, to produce).
These proposals obviously wouldnt mesh into a workable plan right off. In all likelihood, for most goods there would be more desired than offeredeven when people were trying to make sensible proposals based on projections of the likely average income for the coming period and on awareness of their past periods actual results. The demands would be brought into touch with the supplies and vice versa by a decentralized process of refining proposals in light of data from prior rounds of proposals, technical data about capabilities, etc.
Facilitation Boards would be workplaces like any others in the economy. They would have various tasks, combined into job complexes. If the Facilitation Boards average job complex were better than the average for society, people working there part of their time would have to work at sub-average options outside. If it were worse than for the rest of society, then people working there would have to work at better than average tasks outside the board itself, some time each week
Basically they accumulate proposals and information more generally, work on the data to prepare it for access by others sometimes using various algorithms socially agreed upon to cull insights from it. This might be to help the planning process itself, to help people find available jobs, etc. That is it. No decisions. Also, everything they do can be checked and evaluated by anyone. All the information received and processed is accessible. Moreover, as far as we can tell, virtually everything they do could be largely and perhaps completely automated, at least in theory.
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No. The planning process has no need for anyone to play such a role as you indicatethe proportionate impacts emerge organically, not by being decreed by someone or some group.
However, just to take up the underlying concern you raise, suppose such estimates did have to be made. That does not inexorably mean there would be a coordinator class in an economy any more than does there being a managerial function in some industries, or an engineering function, or a surgical one, or a need to have agencies that do important calculations or summarize important information, mean that folks involved in those activities will be a separate and privileged class. If everyone has a balanced job complex, then no one has disproportionately more empowering work than others...so no one does only this type work even though the specialized and empowering and consequential work does get done. Moreover, if there are no ways to make aggrandizing decisions for oneself or for a separate class by virtue of doing such work as a part of ones job complex, then abuse of even temporary powers is virtually impossible, certainly in any systematic way that leads to on-going structural hierarchies of wealth or power. This is all dealt with in great detail, down to workplace circumstances, in Looking Forward (SEP), with examples, etc., but I hope the idea is clear enough.
Well, what is this institution that you have in mind to work in and thereby benefit from? And what advantages does it bestow upon you, and others like you working in it, such that you are a class with advantages to defend and enlarge? Your fear is valid enough in the abstract, of course, since it could be the case, in some economy. But having agreed on that, then we need to see whether in any particular economy this thing you are concerned about exists in practice.
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For example, if you were a central planner, in a centrally planned economy, able to bend and influence economic outcomes to serve your class, the coordinator class, which has its own separate and elite position in the economy, by further enlarging the advantages it enjoys due to promoting investment patterns that enhance information centralization and thus the further aggrandizement of intellectual workers or coordinator class membersyour claim would be quite right. But, this doesnt exist in parecon.
Yes, there would be bureaus in parecon that disseminate and even summarize information, but there would be no way for anyone working in one of these institutions to benefit themselves or some group by doing anything other than what is also in everyone elses interest, that is, doing the work as well as they can. For one thing any deviation would be obvious. But, even more important, aside from trivia, no deviation could be self-serving. It is precisely this kind of attribute that is rather striking about parecon, in fact.
It is ultimately quite simpleto improve ones economic lot one needs more income or better circumstances (more power does it too, by allowing the other two aims to be met). But, in parecon, everyone would get a share of income based on the effort and sacrifice they expend in work (and on need if they cant work) which means there would be no way to aggrandize oneself or a group without, in fact, benefitting everyone. For me to get ahead, the total product must grow or I have to expend more effort and sacrifice, which is fair enough. I cant get ahead at the expense of others.
Similarly, since we all would have balanced job complexes, my work situation would only improve if the societys average job complex improved, if everyones situation at work benefitted. Groups dont compete for economic power or income.
I suppose you could make some kind of case for a sector of fakers who make believe they cant work and consume the average bundle anyhow....but it is quite far fetched. And they would not be ruling anyone, and since to get away with it, they would have to show all the signs of a work-preventing ailment, they would likely suffer as much as they would gain.
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A group of enterprising workersnot entrepreneurs as the word is literally definedwould apply to the federation of workers councils in their industry for the federations approval to be a workers council and submit proposals in the participatory planning process, which in turn is how one asks for, and perhaps receives, resources and inputs. The federations would okay the group as having requisite competence and experienceessentially as a serious group that should be allowed to make work proposals. In capitalism, banks asked to lend money to an entrepreneur ask for business plans, credentials, etc. In a parecon it would be the industry federation that would do something similar. And the industry federation would also sometimes try to stimulate or organize groups of workers to start up new enterprisesalways run as parecon workers councils. The difference between the banks and the industry federations is the former are looking for profit possibilities, and the latter are looking for social desirability.
A workers council fails if it cannot get a work proposal approved during the participatory planning processor if it fails to deliver promised outputs and those who were supposed to get deliveries convince the industry federation that this is a chronic and irredeemable problem. This would usually only happen after the industry federation had already arranged for some key workers from a successful workers council to visit and work temporarily at the failing enterprise, and/or workers at the failing enterprise had been sent to work at successful onesin an attempt to get the failing enterprise up to snuff. Since the best techniques are available and free for all to use, there is no reason one council could not duplicate the efforts of others. But....if the enterprise does fail, then the workers look for jobs elsewhereaided by a robust and humane version of training, retraining, and job search, with average income in place. In other words, suffering is minimal.
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Not quite. In calculations product value is taken into account so that the workplace has to utilize its assets well. But people are not paid for their output.
The details of the planning process can get a little technical. If you want to delve into it, I suggest the Princeton book, Political Economy of Participatory Economics. The broad point, sufficient for understanding and assessment, however, is that labor receives pay for effort and sacrifice in balanced job complexes. At the same time, you dont want workplaces having highly productive workforces or other assets putting in proposals to generate output that would take less effort (due to their greater productive human or other resources) than other workplaces are proposing to expend, thus leaving the workers to loaf or otherwise underutilizing assets. Thus, the planning process has to charge workplaces for the productive capabilities of all assets, including workers. This is one of the only difficult aspects of the parecon model and logic. Technically the details are quite important to outcomes, but politically and socially they are uninstructive.
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People, except for unusual instances, cant say this year I want such and such health care. It is not something planned on the basis of preferences espoused by individuals in the way that bicycles or peanuts are. Rather, the demand side is essentially a calculation for society. We know, from past history and trends, roughly how much health a given level of spending will achieve, how much prevention and treatment in a coming year. So depending on our estimates of sickness and what we want to achieve in preventing and treating it, weighed against the cost in resources and effort, we settle on a societal health care plan. While health care goes to individuals, it is, nonetheless, a social and completely public good re the demand side. It is paid for by everyone via a reduction of total available goods equal to what is allotted to health care. Health care goes to those who need it, however.
So I dont think health raises any insurmountable problems for parecon. Health producers propose supply, citizens organized at the societal level request what they wantthese come into balance, as with other products and industries. Providers work in balanced job complexes, like everyone.
Black Markets and Re-emerging Capitalism
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Could one person trade items to another outside the participatory planning process? Sure, in principle. But when benign, that is just bartering, not production and sale, and presumably it would be equitable and inconsequential.
But to follow your concerns further, suppose we have the equivalent of Mozart in our community. Can she sit in her abode and write music and then go outside and auction it off to the highest bidder?
No. And the same holds if we had a Picasso. He cant make paintings and then sell them off privately, becoming fantastically wealthy. This is not permitted.
These individuals get the benefit of societys roads, infrastructure, and so on and so forth. They abide its role offerings like all other folks. They work and get income like others, for effort and sacrifice, not the value of their output.
Remuneration is not according to the social value of ones product/contribution (in which case this contemporary Picasso or Mozart would grow rich), but according to the effort and sacrifice expended in producing valued product. And folks must also work at balanced job complexes (so even the contemporary art or other genius has to do their fair share of different tasks in their job complex), because balanced jobs are the only ones that exist within the economy.
This is a black market and one can imagine lots of different approaches to the issue in different parecons. At the extremes one society might decide, this is such a minuscule problem we will simply ignore it institutionally, letting normal operations reduce it to a trivial annoyance, but taking no special steps. Another society might make non-planning transfers illegal beyond some low amount (effectively allowing barter of goods among actors, but not business).
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For you to think about which you would favor of these polar positions or anything in between...you might want to take into account a few things.
(1) The second part of the problem, hiring wage slaves with lucre gained from black marketeering, is simply not an option in parecon. At an absolute minimum, the economy will not allot resources to a production unit assembled in such a fashionnot to mention, why would anyone work there?
Make the problem more real. A country goes parecon, another hasnt. A rich person from the latter comes into the parecon and advertises for wage slaves to work in a factory of his, that he wants to build in the parecon country, at a high pay rate, lets say. Why cant this happen? On the one hand, if you believe in parecon you think most folks will look at this guy like the devil and want nothing to do with him. On the other hand, what if some folks, for whatever reasons, want to give up balanced job complexes and remuneration according to effort and sacrifice and having impact on decisions and council democracy, and so on, for better wages (and you might think through whether this guy can possibly make big profits paying wages sufficient to attract people away from parecon firms)? Well, society just doesnt allow it. It wont provide the firm with inputs, it wont accept its outputs, again, at a minimum.
(2) But what about the first part of the problem you raisefor example I have these wonderful trinkets that I make in my spare time from (it cant be inputs that Id have to get from the economy) road kill or stuff I go dig up or find in the trash, or whatever...or, to make it more real...I am a mind bogglingly good tennis player or pianist and I sell lessons or games on the sly. It is technically possible, but very hard in practice. You cant transfer incomeactual moneybecause (a) it isnt an option and (b) the black marketeer couldnt enter the planning process to consume with it without revealing, by its magnitude, that he/she was cheating. So the black marketeer has to be paid in kindin goods, that is just as if he traded his sweater for his neighbors shoes, but in this case trading a service, like tennis lessons. Its very clumsy, to say the least, thus putting an upper lid on the problem even without taking into account the social onus. But in fact, how does the black marketeer explain his/her abundance (if he/she manages to get people to provide it)? The social ostracism that would accompany any cheating revealed by ostentatious consumption would be a very high price to pay for marginal income above and beyond an already quite comfortable and socially rich existence. And this price isnt only social and moral in a parecon. Much consumption is collective, and that would be lost as well.
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The point is, even without legal penalties, on the one side there is great difficulty carrying off the behavior you indicate and accruing much by way of it. On the other side, there is considerable loss in being identified as a social ingrate (which is almost impossible to avoid if you are benefitting significantly).
Now, going back to the original social choice, believing all the above, assuming it makes sense to you, you might figure it isnt worth societys time to bother worrying about this problem. It is easier to just turn the other cheek and if some folks manage a little lucre, so be it. Or you might decide that the dangers are real and substantial and that society ought to police the matter. Or, perhaps, you might move from the latter view to the former view as the system develops, as parecon consciousness and values become commonplace, etc.
Is it right or wrong for a person to not have the option to garner the highest possible income that he/she can garner by trade of his/her talents? Of course if you think folks should be remunerated according to what they can extract (that is, according to bargaining power, which is what markets do) or according to their contribution to output (which is what markets are supposed to do) then you dont want parecon in the first place, because it remunerates according to effort and sacrifice. If you do want a parecon, then you wouldnt think it wrong to preclude black market profiteering.
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As to restrictions per sethere is no such thing as anything goes in any society. It cant be anything goes for you and for me the minute I want to do x which precludes your doing y or vice versa. If you have institutions in a society, and there is no society that doesnt have institutions, then by virtue of the roles they embody and those they dont embody, even without laws, there are restrictions.
We dont allow slave-owning in the U.S. It is not permitted. It doesnt matter if I come to you with a million dollars and say sign here, be my slaveit isnt legal. But in fact, it isnt really an issue. The law is moot. No one wants to be a slave, no one wants slavesthe social opprobrium on both sides is too great, relative to the gains, even for venal, vile folks to attempt it. Now, having wage slaves is another matterthat is acceptable and therefore pursued with vigor and in fact is just taken as a natural given.
In parecon, by contrast, having wage slaves isnt an option. There are no roles in the society for it. You cant be part of the economy as a wage slave or be the employer of a wage slave. Such an actor would not get inputs and your outputs wouldnt be distributed. And if you try and do it on the sly, it is like trying to own a slave in a democratic, post-slavery, moderately enlightened capitalism on the sly. It is unacceptable and unlikely to succeed to any degree.
Parecon does not eliminate by definition or by consciousness-raising every violation of its own morals that someone might entertain. And your question is an apt form of a broader onedoes parecon make violations of the values of parecon so counterproductive as to be not worth pursuing, for the most part, even if you could get away with it, and can it prosecute other violations, when they occur, as successfully as any other model prosecutes violations?
I think the answer is yes, on both countsactually better.
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By the by, if your next question is, well, what about murder, theft, etc.or what about the black market if you decide to prosecute actorsdo these require police, and if so wont that lead right back to old fashioned coercion and hierarchy?
This is a question about polity, not economics, but my intuition is that, no, incorporating a police function is not tantamount to incorporating old fashioned coercion and hierarchy. Others may disagree, but like having allocation via participatory planning is superior to having allocation via markets and not the same old exploitation and alienation, I suspect accomplishing a police function via humane procedures will be different from what we endure now, but that we will need some such function, nonetheless.
Artists and Parecon
Do you think this because artists, like producers of vehicles, get resources to work with (outputs of other peoples efforts) or are allotted income for their work (and a claim on the social product) only insofar as their work, overall, is respected in the economy? I dont see why it leads to your concern.
By (1) elevating diversity and self-management parecon greatly promotes attitudes conducive to each, and (2) by allocating resources and tools and time self-consciously, it removes the impact of power or maldistribution of voting rights on the allocations, reducing the built-in tendency for popularity to outweigh innovation without any real assessment being made of the value of innovation.
If you mean to point out that it would be within the purview of society to decree that some type of innovation is unwanted or unlikely to be successful and that resources shouldnt be given over to ityes, that is truefor art as for innovation in, say, how to electrocute people better, or for that matter, how to make better ladders, or whatever. But the assumption that in a parecon the population would not want musical and artistic innovation pursued by those with talents and creativity in their own manner as they evolve their dispositions and talents, seems to me very dubious. I should think the opposite would be true, overwhelmingly.
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What people currently like would be part of the issue in pareconfor sure. But it isnt the whole of it, of course. For one thing, smaller groups can like things a lot, making such endeavors worthwhile even though not widely appreciated. But also, at a moment in time, much of what is pursuednot only in art, but in many dimensions of life, say science, engineering, medical experimentation, etc.is not yet appreciated beyond those who are trying to explore it (maybe not even entirely by them). Art is not special in this respect, in fact. So there is need for exploration and elaboration of art, music, and ideas and information and innovation more generally, all of which moves out beyond where taste currently is. Sure.
But there is nothing about parecon that precludes or even impedes this type exploration relative to any other model I am aware of, much less capitalism...quite the contrary.
Imagine a workplace for musicians. Society respects this workplace and includes it as part of the economy because it values music, including innovation. To work at this institution one has to be hired which likely entails demonstrating certain knowledge, talent, etc. The institutions budget is allocated internally to various activities, by its members, and therefore certainly not only to what a mass audience outside already likes. It really isnt much different in that respect than a workplace investigating new products or ideas, if you think about it.
This notion that an artist is some special unique creature, with special rights, entirely eludes me. This is a claim made by all intellectual workersfolks in or wanting to be in what I call the coordinator classregarding their own particular pursuitsart, math, management, whatever. Each sees their activity as warranting total autonomy from society or themselves, but never sees the claim as equally valid for others. Yet the claim is true for all and for none, in fact, depending on what it means.
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There is a difference, that is, between being controlled publicly, which what the question worries about, and being part of a society and operating by its norms and thus having a say over outcomes in proportion as they affect one, but not more. A big difference.
Suppose I happen to like some kind of weird arrangement of items in my living room, and I like the setup changed daily, and it takes me an hour each day to do it, and it is hard work. Should I be able to earn my living in part doing that? It has no value for anyone else in society whatsoever...lets say.
I think not. I think I shouldnt be forbidden from doing it, of course. But it is my private pursuit and it is more consumption than it is production, and so it isnt worthy of being called part of a job complex. Now this isnt by definition in a pareconwhich could decide otherwise for reasons I dont yet or maybe would never personally agree with. That is, a parecons participants could actually allow and incorporate this type activity as work consistently with the norms of being a parecon, though I doubt one ever would.
Something similar happens for art, music, and also engineering, science, etc. Insofar as society is going to allocate pay (a claim on income) to any activity, it is going to want that activity to count as work, which means that overall, on average, it has socially beneficial outcomes. (There may be lots of misses on the road to some hits, or benefit may have many meanings...but still...)
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So if I want to pursue some science, or engineering, or music, or writing, or math, and I want this activity to be part of my balanced job complex, the activity has to be regarded by the economy as worthy.
But how does the economy decide something is worthy? Most likely, for art as with engineering, by budgeting whole institutions that in turn incorporate people who do this type work, and by then respecting the employees collective view as to the worthiness of pursuits undertaken.
Could it be that some genius will propose to a music workplace or an art workplace or a research center, pursuits that others feel deserve no time, energy, and resources, wrongly? Sure, it could happen. But parecon is far less vulnerable to such problems, having removed profit and power differentials from the motivations of all those involved, than is capitalism, say.
Ignorance may still have an impact leading to misperceptions, or just outright error, of course, in parecon as in any system at all. But, one can even try to account for the likely distribution of ignorance and try to guard against its having ill effectswhich is just what elevating the value diversity to such a prime position in parecon is meant to help achieve (other techniques include things like tenure, etc.)