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Evaluating Parecon 

Works are of value only if they give rise to better ones.
— William Von Humboldt 


In part I, we offered as guiding values equity, solidarity, diversity, self-management, fulfillment and development, and classlessness. We evaluated centrally important economic institutions and then also capitalism, market and centrally planned socialism/coordinatorism), and bioregionalism, and we rejected all these models as obstructing our preferred values. 

Having now presented participatory economics, it is appropriate to briefly assess it as well. How does participatory economics fare vis-à-vis equity, solidarity, diversity, self-management, fulfillment and development, and classlessness? Of course, having conceived parecon with these values as our guides, it won’t be that surprising that in our view it meets them with flying colors. The daunting question will be whether it has other failings that compromise these merits. That will be the subject of part IV, where we will take up the diverse criticisms people have expressed about parecon, and reply as best we are able. 



What is equity, after all? As good a definition as any is that equity is a condition in which each person gets what they deserve for what they have done, and no one gets more (or less) than that. Of course, this begs the question of the meaning of “deserve.” 

We have already dealt with “deservedness” at such great length that almost anything said here would be severely redundant. Parecon rewards effort and sacrifice. If one thinks that doing that is just, one will favor parecon on this score. If one thinks instead that rewarding a deed to property is just, one certainly won’t favor parecon as equitable. Likewise, if one thinks that rewarding output—or luck, talent, or training insofar as they contribute to output—is just, as compared to rewarding only effort/sacrifice or even in addition to rewarding effort/sacrifice, again one will not favor parecon. If one thinks rewarding power is just, of course, one won’t favor parecon. 

Similarly, parecon equilibrates conditions of work so that all people have equally fulfilling work lives, or, failing that, parecon compensates those with less than average conditions by rewarding them proportionately more. Again, if one favors equity as we have defined it—that people’s economic income and circumstances should together be comparably desirable—and if one believes that the right index for detailed equilibration is effort/sacrifice, one will favor the parecon model. 

In parecon there is no mechanism to accrue property or bargaining power and no means to use either to increase income. There is no way to translate luck of genetic endowment or of relative position into greater income. There is no way to have better circumstances and not have income reduced, or, if one has worse circumstances, to not have income enlarged. The economy only materially rewards effort and sacrifice. 

It follows that if we adhere to the same equity standard with which we rejected various other economic systems earlier, parecon succeeds admirably. In a participatory economy not every person will get precisely his or her due all the time, but deviations will not be systemic, will not enrich any one sector at another sector’s expense, and will occur due to errors of judgment sometimes idiosyncratic spite, but not due to system-induced differentials. 



Solidarity implies that individuals in an economy respect one another’s circumstances and well-being as part of economic life. It means that economic activity promotes social ties and empathy rather than having an antisocial effect. Participatory planning is designed to attain solidarity. Each person gains increased income only by exerting more effort than they did before or by everyone’s base income increasing at once. No one can increase their income by taking a share that would otherwise go to someone else. We do not increase our income by diminishing that of others, but only in concert with others. And similarly, we improve our conditions of work if our balanced job complex improves and not otherwise. But if my average job complex improves, by definition everyone else’s average improves as well. When one person gains, everyone gains. 

These attributes are already so singularly different from typical capitalist dynamics as to provide an overwhelming argument for parecon. But if we look deeper, will the gloss fade? Consider trying to make a choice among various investment proposals in your workplace or in the economy as a whole. What criteria do you use to judge whether one innovation is better than another? Let’s suppose you are a greedy individual with no concern for others. In that case, the answer will be that you will consider solely the impact of the innovation on your own job and income. But in a participatory economy an innovation will affect your income only via its impact on the overall social product and the average social product per person. Even to cast a greedy ballot, you have to assess the social good. People may disagree about which choice will have a better social impact, and mistakes will certainly be made, but in a parecon the mode by which we all advance is inexorably social, not antisocial. 

What about job circumstances? The logic is identical. An innovation in your own workplace is not more valuable to you than an innovation elsewhere if the distant one has a better impact on average job complexes than the near one. We each gain when the overall average improves, so to seek gain we must each pay attention to the average. 

The bottom line is simple and striking: in market systems if compassionate people wish to get ahead they are compelled to do antisocial things. In a parecon, even antisocial people, if they want to get ahead, must do socially positive things. The market system breeds instrumentalist, competitive attitudes that destroy solidarity even among those personally inclined to be empathetic. The participatory economic system fosters solidarity and empathy even among otherwise egocentric and antisocial people. Of course, this was a central criterion in constructing participatory economics. The final proof of parecon’s worthiness will be whether parecon scores as well when we address issues that weren’t firmly in mind during its conception, our focus in part IV of this book. 



Regarding diversity, there should be diverse economic options for us to choose among to enrich our lives. Additionally, we shouldn’t have our choices among diverse options narrowed by some pressure independent of our own inclinations. So there should be great diversity not only in options available, but also in what different people consume or in the jobs they opt for from among available options. We should have a diversity in outcomes reflecting our diversity in preferences. Each person has many options and remains a unique individual in selecting them, making his or her own choices that reflect his or her own unique dispositions, talents, and inclinations, and not some conforming pressure from without. 

For example, in a society fostering diversity, we anticipate there would be no homogenizing pressures causing large numbers of people to settle on just a few options among many, attaining similar situations not because they all have similar personal preferences, but because they all caved in to similar overriding pressures. We all drink water and that is certainly not a sign of conforming to pressure. It reveals, instead, a fundamental similarity that derives from our natures. We all wear clothes, and that too is not a mark of onerous homogenization but of benign common history and conditions. But if many of us wear a uniform not out of unbiased agreement on its aesthetic or practical appeal, but to indicate that we are like others wearing it—because to do otherwise would be to suffer a loss—there is a loss of diversity due to a homogenizing pressure. Or, if out of all possible genres of music the population divides into those who like country, those who like classical, those who like rap, and those who like rock, and if what a person likes can be predicted by attributes that have nothing to do with their actual freely developed musical tastes, but instead reflect only the impact of structurally imposed identities having literally nothing to do with music, then we can reasonably deduce that a homogenizing effect has diminished diversity and limited individual choices. Diversity is a subtle matter, but not entirely impossible to assess. 

Another dimension of diversity is that in decision-making attention should be paid to the possibility for error and therefore diverse alternatives should be explored alongside preferred choices, even after a preferred option is chosen, or should at least be kept open for future exploration. This is done to preclude all actors from becoming embedded in an irreversible trajectory of choice that limits future possibilities or diminishes the quality of future outcomes. Put colloquially, we should rarely put all our eggs in one basket. So how does a parecon score in terms of diversity? 

Relative to other economies, some causes of difference are removed, which could be seen by some as reducing options and therefore reducing diversity. A parecon does not have capitalists and coordinators and workers, but only economic actors. Class differentiation therefore disappears. Likewise, in a parecon, you cannot choose to hire wage slaves nor to sell yourself as a wage slave. These options too are gone. In a parecon you cannot parlay productive genetic attributes into greater income or power, another lost option. And there is a sense in which these changes may seem to some to reduce diversity since we have gone from having three classes to having none. But in our view this is like the sense in which instances of capitalism reduced diversity by removing the option to own a slave or be a king—not exactly great failings. Looking deeper, in the parecon case, it is not only a matter of removing bad options, there is also an offsetting increase in diversity. That is, if a society has classes, each actor is part of a group that has interests contrary to those in other groups. This collective confrontation, and the commonality of internal class conditions together lead to homogenization within classes even as they force competition among them. If we hold up babies in the hospital and report about them merely what class their parents are in and we then ask people to predict what tastes and preferences the baby will have later in life, under capitalism we will guess right in a remarkable proportion of cases about a remarkable number of life choices. This means that being in a class narrows the range of choice that a person winds up with. It makes some outcomes highly probable regardless of all other attributes of each baby—whether innate attributes or due to unfolding (unbiased) life experiences. In parecon, with no classes, the homogenizing effects of class membership are gone. 

The scorecard for how diversity is upheld in a parecon is positive on other counts as well. Not only are class homogenization effects eliminated, but parecon self-consciously favors respect for minority positions and gives defeated views of minorities every opportunity to persist to insure against majorities making mistakes. This is built into participatory planning, by preserving past data and by the checks on indicative prices that qualitative information and the initial phases of each new round of planning provide.  

In contrast, a central but rarely discussed failure of markets is that because they ignore the fact that people’s preferences are affected by economic circumstances, if a population is confronted by offerings for which some prices set too high and some set too low relative to actual social costs and benefits—then in a market system preferences will bend toward the latter and away from the former. This inaccurate bending of people’s true desires will in turn further propel the incorrect prices in the wrong direction, and so on, in a snowball effect. The key point is that this market phenomenon is not random. There is always a systematic mis-pricing of goods with positive or negative external effects. People in the system become increasingly individualistic due to increasingly favoring private consumption over consumption of goods with public benefits beyond what a true comparison of personal and collective benefit would warrant had there been proper initial pricing. Because market systems promote pursuit of profit, not of social well-being, there is no pressure for anyone to notice and curtail such developments. Capitalists see profits to be had producing mis-priced goods and follow that path mercilessly. People’s consumption preferences become skewed in accord. 

Participatory planning, in contrast, impedes such phenomena in the two ways mentioned earlier. First, it properly values items by taking into account all social and individual factors. Deviations from proper pricing derive from honest mistakes and not systematic biases built into the allocation system. Second, participatory planning re-calibrates valuations and behavior with every new planning period precisely to guard against prices snowballing away from what they should be due to past errors persisting into future periods. It synchronizes tastes and behavior consistent with independently presented preferences. The goal is social well-being and not private profits.  

A participatory economy cannot, of course, guarantee perfect adherence to diversity. For one thing, it is critical that other sectors of society also promote diversity, especially a society’s cultural institutions. For another thing, no system precludes all biases, much less all errors. But what we can say about parecon is that the most egregious contemporary economic pressures for conformity are removed. No more class conformity, prices snowballing away from true representation of preferences, or profit-seeking that takes advantage of any opportunity, however socially counter productive. In their place parecon elevates diversity to a central value, employs decision-making that permits and even welcomes attention to minority views, properly values economic products, recognizes economic impact on consumer and producer preferences, and self-consciously avoids irrational pricing trajectories.  

It might be that affirmative action will be deemed necessary even in a parecon in order to eradicate lingering manifestations or continuing effects of racism or sexism. Parecon doesn’t prejudge this, but parecon is not inconsistent with such programs, and could indeed facilitate them. Because jobs won’t vary by income or empowerment, economically there won’t even be a lowest-paying or least-rewarding employment for one race or gender to be consigned to. Because parecon freely disseminates qualitative economic information, racial and gender equity can be made as important a goal as society wishes. 



How does parecon fare regarding people’s degree of influence over the decisions that affect them? 

Parecon decisions are made by whatever method best allows each person to affect each decision in proportion to how much the outcome of the decision affects them. Can this be done perfectly all the time? Of course not. But does parecon provide context, information, and motivations in accord with this aim? Yes, it is a defining feature. 

Within a workplace there are two broad kinds of decisions. The first involves establishing plans for the unit. Should we invest in improving our workplace? How much output, produced by how many people, should be our goal? The second kind of decision involves how we accomplish each month, week, and day what we have set out to do. 

Consumption decisions are similarly broad: what do I want collectively for the groups I am part of, and what do I want for myself, individually? And having received what I wanted, now what do I do with it? 

Allocation, decisions are broadly about what level of work and output should be enacted, what exchange rates should exist among items, and therefore what relative amounts should be produced, who should get what income, and various choices of implementation such as those concerning facilitation boards. 

So at risk of some repetition, let’s briefly consider each domain in terms of its rating vis-à-vis self-management. 



In the workplace we have councils that vary in size from work teams to industries. This facilitates people’s interactions at each level of autonomous or collective involvement. If a plant decides together on some action that delimits aims for a specific work team, decisions for how that team then accomplishes those aims may be over- whelmingly its own affair. If so, the team’s council will make decisions internally adhering to the norms that guide the whole workplace. But within a whole workplace, division, or team, how does each participant make such decisions? 

There is no single answer for all workplaces or even universally within each given workplace. Decisions have different spectrums of impact. For one thing, most of our work decisions affect not only our workplace and those in it, but everyone who will consume our products. Our production utilizes inputs that could have been used to produce other things that might meet other needs, so consumers need a degree of say in what goes on in production, just as producers have an impact, of course, on what consumers can opt for. Should consumers of VCRs have some degree of say even over what a peanut factory produces? Yes, because if the peanut factory makes soy nuts, chicken farmers have less soy feed, which increases beef output, which affects leather production, which reduces some plastic production, which reduces economies of scale in plastic production, which raises the price of VCRs. Mediating this complicated interrelationship of production and consumption is allocation—in our case participatory planning—and we will assess the self-management implications of such planning below. For now, assuming consumers and workers elsewhere have appropriate input into decisions in a specific workplace, what about workers in that workplace themselves? 

Some decisions overwhelmingly affect only me. Some affect only you. Some affect only a specific work team and each member equally; some affect that team, but each member unequally. And there are the same variations for projects, divisions, the whole workplace, or even the whole industry. The point is, there is no single decision-making process that can universally deliver influence in proportion to impact for every person, every time. What is needed is instead what parecon delivers: 

All in all, we can’t say that a parecon will perfectly succeed in properly allotting influence over every production decision. What we can say, however, is that there is no structural impediment to doing so and there is every possible admonition and structural pressure on behalf of doing so. For example, a parecon does not have corporate hierarchies that essentially subordinate typically 80 percent of the population to having little or no say over their work, giving about 19 percent considerable say over everyone’s work, though ultimately subordinate to an all powerful top 1 percent. Parecon in contrast facilitates proportionate say, allows the redress of mistakes, and balances empowerment and income properly. It is hard to see how a system without workplace councils, balanced job complexes, and remuneration for effort and sacrifice could do better in providing participatory self-management to its workers— assuming that the workers not only have this flexible array of conditions in their own workplaces, but also have proper input into allocation decisions, which we assess below. But first, what about consumption? 



Consumption is an economic activity that has inputs and outputs and that is, in this respect, abstractly the same as production. And the decision dynamics of consumption are similar to those of production as well. Again, we have layers of councils designed to group people with shared decision-making affinity such as individuals, families, neighborhoods, and counties. Again, decisions are apportioned to these councils and within them in accord with impact on the group or individuals involved. As with production, consumers collectively establish appropriate processes for different types of decisions within the appropriate level of consumer council, having only the norm of self-management in common. The system is not perfect, but there is no systematic obstacle to everyone involved having proportionate say, and as in the production case, consumers have every incentive to seek proportionate say up to not spending too much time trying to add the last dimple of accuracy to every accounting, as against getting on with life. 

In a parecon, each individual largely determines his or her own personal consumption, and the impact of each person’s preferences registers in the indicative prices that contextualize all choices. Each collective has nearly sole say over what they propose to collectively consume, though if there are effects in wider constituencies, the proposal will have to be reviewed at that level as well. 

There are two ways in which personal or group choices can affect others, and why, therefore, others should be able to influence the final decision. On the one hand, there is the obvious implication that if I am going to consume a bicycle, someone must produce it. My choice is not without implications for those who do the work of producing it. Likewise, if I consume it, then the inputs needed to produce it aren’t available for producing some other product that someone else may have wanted. 

If we assume, for the moment, that allocation proportionately accounts for the mutual impact of different production and consumption decisions, and that consumption councils likewise accurately apportion influence over the consumers’ share of each such decision, what about the fact that once I get my consumption items and decide how to consume them, there could be effects on others from that as well, so that perhaps others should have had a say in whether, indeed, I got them in the first place. 

Suppose I ask for not much milk or juice, but so much brandy and vodka that quite obviously I am or will become an alcoholic (or a dispensary), but even so the total volume of brandy and vodka sought by our council is fine in the view of producers. This is not a problem for producers, but my choice will likely adversely impact my family, my neighbors, and my community. The same would hold if I was about to purchase lots of firearms, say … or an outdoor sound system appropriate for a stadium but not for my backyard that abuts many other backyards. It is good that the prices of these items reflect their broader social implications, but perhaps not good enough. These choices could all be okay from the broad standpoint of allocation writ large, yet not okay viewed more locally. 

The point is, consumption has diverse external effects and those effects can be globally small and fine, yet simultaneously locally large and adverse. Some of these effects are broad and general and accommodated by the participatory planning system most broadly. The overall price of alcohol reflects its average social and health impacts, as does the overall price of products that pollute. But with some products even with proper valuation in the large, specific apportionments can still be horribly adverse due to contingent local effects. So parecon includes the provision that consumption council members can collectively assess individual consumption orders, indicating their displeasure with specific ones that have harsh negative external implications, seeking remedies that may require additional expenses, and in the extreme case even collectively precluding such options from being met, when appropriate. 

In other words, a neighborhood could see a private order for huge quantities of alcohol, or guns, or for a raucous outdoor sound system, and, even though the neighborhood’s citizens are not over consuming in total, and even though producers are ready to supply the products in the quantity requested, and even though the people making the orders are within their budgets, nonetheless the neighborhood could intervene and first ask for an explanation (maybe the alcohol is medicinal or for household chemistry experiments, or maybe the guns are for an abstract art display, or maybe the sound system is for parts that are going to be put to an entirely different and benign or very positive purpose), and then, if the explanations are found wanting, literally forbid these types of purchases within these collective units. This is comparable to contemporary zoning laws saying that you cannot disturb the peace, for example—but in the parecon case it is democratic and without profit-seeking, and the details are organized to reflect the recognition that those impacted by decisions should influence them proportionately. Moreover, the specific individual consumption requests and the dialog about them can be anonymous. 

All in all, therefore, as with production similarly for consumption: Organization into councils facilitates appropriate levels of self- managed oversight and influence. The system urges self-managing decision processes and it provides means to continually reassess and improve them. But what about allocation? Does allocation matter to self-management? If so, why and how?  



Consider having workers’ and consumers’ councils plus all parecon’s admonitions about attaining self-management, but on top of that employing markets for allocation. Markets would not provide proper valuations or qualitative information that would enable workers or consumers to develop and decide on agendas. Markets would compel workers and consumers to make competitive choices regardless of or even against others’ interests and even their own inclinations. Markets would require firms to win market share and thereby maintain or increase their workers’ incomes even at the expense of their own quality of work life. Markets would apportion influence over decisions in accordance with income levels, and income levels would deviate from a just distribution due to luck, circumstance, tools, genetic endowment, and bargaining power, and while none of these factors have much to do with how much someone is affected by a decision, yet they determine how much say each person gets. Markets only consider the impact of a decision to buy or sell on the buyer or seller (in proportion to their relative bargaining power) ignoring the impact the decision would also have on others due to production or consumption externalities. For these reasons, markets would psychologically, behaviorally, and materially subvert self-managing tendencies even of council organization. 

But what about participatory planning? What level of influence does participatory planning afford each actor in each decision? 

First we should note that participatory planning reverses each of the above-mentioned failings of markets. Participatory planning provides accurate valuations by properly accounting full personal and social costs and benefits and providing appropriate qualitative information for regularly re-calibrating indicative prices with qualitative data. It ensures that workers and consumers pay attention to one another’s conditions and allow each to advance only in accord with the others advancing, by making sure incomes and conditions correspond to social averages. It permits workers to assess their own conditions and pay attention to these in their decision-making by having workers input their preferences via their councils and with no need to maximize anything but their own and other’s well being rather than having to subvert their own interests and those of others to stay in business. It apportions income in accord with effort, and, in any event, does not force or even permit people to try to maximize profits, surplus, or even revenues. It incorporates attention to all social costs and benefits of transactions, including externalities, by means of the planning procedures, accounting modes, iteration boards, and levels of council structure. 

Still, while it is good to remove these various critical impediments to sensible allocation-related decision-making, this is not the same as having positively accomplished truly democratic decision- making. Does participatory planning give producers and consumers proportionate say over each type of decision as well as possible? 

There are two main issues. First, does participatory planning create a context that is consistent with or that propels people to have appropriate impact in non-allocation decision-making? Or does it differentiate among individuals such that even beyond allocation their differences adversely affect their impacts? Second, specifically regarding allocation, does each participant have input in proportion to how they are affected? 

For the first point, participatory planning requires of buyers and sellers attention to decision-making in general, instills expectations that each will influence decisions and not be subordinate or domineering, draws out the personal traits commensurate to involvement, and introduces no advantages or disadvantages to any group of people that would interfere with their proper participation in non-allocation interactions. 

For the second point, regarding allocation decisions, each person participates at every level—personal, group or team, unit, industry, neighborhood, county, etc.—by means of council structures that have appropriate influence at that level. Each person manifests his or her individual or collective preferences in ways identical to everyone else. Each registers desire or not—to do some production or undertake some consumption, thus affecting that production or that consumption—and does so in accordance with their own desires and without inappropriate power due to inappropriate income or workplace authority. Consider the level of production of bicycles. Each consumer influences this in accord with their desire for bicycles (how much they are affected by them) as does every other. So does each bicycle worker impact this decision in accord with how they assess their involvement, and the workers have effectively the same overall impact in the outcome as the consumers, each group in essence negotiating with the other. But what about those consuming other goods that are affected by the number of bicycles to be produced, or producing other goods needed for bicycles or replaced by them? As you can see, this is a generalized problem of intersecting implications and impacts. It is one of those cases where a mathematician can provide a very subtle and detailed analysis, requiring pages upon pages of arcane formulae demonstrating the result—or where we can arrive at it more quickly and intuitively. Which factors cause/facilitate impact? Only factors equally possessed by every actor, and which each actor will manifest up to the socially designated influence of their decision-making unit and their preferences, each with the same rights and opportunities that others have. It will not always occur perfectly, of course. But it is hard to see how one could attain the desired goal more closely, overall, and on average.


Parecon eliminates class division by removing economic differences that empower some actors and weaken others, that enrich some and impoverish others, or that pit some systematically against any others. The class-related innovations of parecon are that: 

In parecon there is no class of owners that occupies a level above others—no capitalists. There is no commanding class above others —no coordinators. There is no obedient class beneath others—no working class. This is the case because there is no privately held capital, no monopolization of empowering circumstances, and no group that occupies a position subordinate to others in the economy. In participatory economics, there are only people who contribute to economic output and who by virtue of doing so have a just claim on it (or who physically cannot participate but have that claim by virtue of being human), who all have the same ownership condition in the economy, who all toil at balanced job complexes, and who all therefore are economic producers and consumers, without class differentiations.