Why Participatory Economics?

Markets subjugate ecology, abominate personality, breed poverty, and require gross inequality. War, what is it good for? Not people. Capitalism? It makes accumulation the goal of life and caring a token of failure. But, another world is possible nearly everyone replies. Really, what is it? We want the world and we want it now. Yes, but kind of world do you prefer?

Well, when I am asked that question about economics—and it is a good question about culture and kinship, and polity too—I answer, what I want is the fourth of four currently available options.

The first, capitalism, combines private ownership, remuneration for property, power, and, to a degree, output, corporate divisions of labor, and markets in ways primarily benefiting the capitalist class.

The second and the third, centrally planned and market (20th century) socialism combine markets or central planning with public or state ownership, remuneration for power, and, to a degree, for output, and corporate divisions of labor which primarily benefit a coordinator class of planners, managers, and others similarly empowered in the economy.

The fourth, participatory economics (parecon for short) combines social ownership, self-managing workers and consumers councils, remuneration for duration, intensity, and onerousness of work, balanced job complexes (that apportion labor so each job has roughly the same empowerment effects as all other jobs), and participatory planning where workers and consumers cooperatively negotiate economic outcomes with no class divisions.

I advocate participatory economics because it transcends capitalism and also market and centrally planned socialism by establishing core institutions that promote solidarity, equity of circumstance and income, diversity, participatory self management, classlessness, and efficiency in meeting human needs and developing human potentials. Here are more detailed reasons.

Reason 1: Parecon solves the problem of class

The usual approach to class has been that economic classes were a product of ownership relations. The main division was between capitalists owning the means of production and workers owning only their ability to do work. There were other classes such as peasants, but they were deemed less important. One could also distinguish between little or big owners, skilled or unskilled workers, and so on, but this was also secondary. The big issue was capital versus labor.

When some folks examined this time-honored left wisdom, we asked, what about managers, doctors, lawyers, engineers? Critics of the received left wisdom weren’t satisfied with lumping these highly empowered workers in with either rote workers below or even more powerful owners above. We felt that the in-between group was different based on their economic position, yet not ownership.

What made a class, in this view, went beyond conditions of ownership to something more general—position in the economy—which gave classes interests collectively different and contrary to other classes, a different methodology for personal advancement, a different self image and image of others, and a potential to rule economic life.

Participatory economics extends the insights of anarchists like Bakunin and libertarian socialists like Barbara Ehrenreich that what was called socialism in the past had core institutions that didn’t elevate workers while eliminating owners, but that elevated coordinators while eliminating owners. In the so-called socialist economies, we realized workers didn’t decide economic outcomes and equitably share society’s output. Instead, it was coordinators who dominantly decided economic outcomes and who aggrandized themselves from society’s output.

So parecon’s class insight was that beyond capitalism there is classlessness as one option, but there is also coordinatorism, as another option, where coordinatorism is an economic system that retains the class division between those who monopolize empowering circumstances in their work—the managers, lawyers, engineers, doctors, etc.—and those who mainly follow orders and suffer tedious conditions, the workers. In response, participatory economics, proposes a system that eliminates the familiar corporate divisions of labor through what it calls balanced job complexes. Each worker does a fair mix of tasks such that everyone’s job is essentially equivalent in its total empowerment effects.

Participatory economics solves the class problem by (a) identifying the key classes; and (b) accomplishing economic functions without incurring class division and class rule. The features of Parecon that are most central to its solving the class problem are:

  • seeing that economies produce people and social relations, not simply outputs
  • understanding that not only ownership relations, but also the conditions under which people work and the things they do impact both their collective motives and their operational means
  • realizing that corporate divisions of labor and market allocation produce the coordinators as a separate and dominating class
  • committing to balanced job complexes and participatory planning in their place

Reason 2: Parecon solves the problem of economic self management

Many in my generation became radicalized in the mid-1960s. Controlling our own lives was a key theme of our new leftist commitments. It was quite natural, then, to like the idea of self management which came to mean that we each should have a say over decisions that affect us proportionate to the extent of their effect on us. Sometimes 50 percent rule was the best approximation to everyone having that level of influence. Other times consensus was the best way to achieve it. Sometimes requiring two-thirds for a decision was best or sometimes one person alone deciding, as in how to arrange his/her desk. Sometimes extensive discussion, debate, and refinement of proposals made sense. Other times, when less was at stake, quicker procedures were better. It didn’t take long to realize that if we should all have a say in decisions in proportion as they affect us—to the point where trying for further precision would cost us more in time and hassle than it would gain in desirable decision making and process—the implications for economics were pretty extreme.

An economy is a general system in which each part, including each choice, sets the context for all other parts and choices. If I consume a pencil, you can’t consume that pencil. More, if we, together, in our society produce 100,000 pencils, we aren’t producing whatever else we could have with the labor and resources that went to the pencils. Doing any one thing foregoes using the component energy, resources, and labor to do some other thing. But this means every decision affects every actor, albeit some actors far more than others. So for an economy to be self managing, workers must have a say in their workplaces about their activities as producers and consumers must have a say about what they get to eat or wear or ride, and also about what is available.

So in a participatory economy, workers councils and consumers councils use self-managed decision-making in their local deliberations and choices. But it is also necessary that the interface between workers in various plants, between consumers in one region and another, and between workers and consumers throughout the economy, is handled in a way that all participants have appropriate influence.

Suppose workers in a plant make their local decisions, but central planners tell them how much they must produce or markets impose output levels on them over which they have little say. Goodbye self management. Likewise, suppose consumers get to choose what they want from among society’s outputs, looking at lists of availabilities and freely choosing among them, but what they choose from is determined without their having an impact. Or suppose those who breathe pollution don’t have a say in car sales, or those who produce bicycles have no say in the availability of rubber or of safe biking conditions. Again, goodbye self management.

Participatory economics solves the self-management problem by understanding and highlighting accomplishing economic functions without giving any one set of participants more than proportionate say. The features of participatory economics most critical to its solution to the self-management problem are understanding that

  • each person’s freedom needs to extend to the point of others having similar freedom but should not extend further than that:
  • not only what we do day-to-day has to be self managed, but also the broad context in which we make those choices
  • familiar corporate divisions of labor and market allocation produce dominating elites with excessive say over outcomes
  • hierarchical decision-making destroys self management
  • self-managed councils, balanced job complexes, and participatory planning need to replace capitalist and coordinatorist options

Reason 3: Parecon promotes equity

Regarding equity, parecon examines remuneration and arrives at a particular norm—that we should each receive for our socially useful contributions to the economy a share of its outputs in proportion to the duration, intensity, and onerousness of our socially valued labor. We should get more income if we work at useful production longer, harder, or while enduring more onerous conditions, as should everyone else, and for no other reason.

Someone might think, instead, that it is equitable for Bill Gates to get income equal to that of whole populations of numerous countries by virtue of owning property. Or that it is equitable for Tiger Woods to get gargantuan income by virtue the value of his fantastic athletic talent to those who like to watch golf tournaments. Or that a thug with great bargaining power such as our corporate centers of industry deserve whatever income they can take. But parecon rejects remunerating property, or remunerating bargaining power, or even remunerating personal output. You get more simply for working longer, or harder, or at worse conditions, as long as you are producing valued output.

You can’t work hard digging holes in your back yard and filling them and expect an income for it. Nor can you work hard at making something useful and desired, but doing the work in a slipshod or incompetent fashion that misuses inputs. In such cases, you are not creating socially desired outputs commensurate to the labor you are expending, which is to say not all the time or effort you are expending is warranted by the desirability of its product and therefore not all of it deserves full remuneration. I can’t be shortstop for the Yankees or quarterback for the Indianapolis Colts in a participatory economy because my efforts would not be appreciated, just as if I were digging holes and filling them.

Parecon’s combination of methods and structures ensures that each actor who is able to work is afforded a share of the social product of his or her choosing in proportion to the duration, intensity, and onerousness of his or her socially valued work. Parecon is not manic to the tenth decimal place about this, of course. Rather, in different parecon workplaces, workers will adopt methods and norms of measuring that they prefer, always consistent, however, with the overarching guidelines. What parecon contributes regarding equity is, first, clarification as to its meaning and composition and, second, institutions that facilitate attaining it, which are, again, the participatory planning system, balanced job complexes, and self-managed councils.

Reason 4: Parecon can help overcome cynicism

There is no alternative," Margaret Thatcher intoned many years ago, offering the claim as a reason for accepting capitalism. For Thatcher, as well as for most people, leftist entreaties to activism sound like juvenile whining. They believe if it isn’t one war it will be another. If that group over there isn’t homeless or starving, some other group will be. Massive suffering is just the way of the world, so stop whining about it. Their belief in the necessity of the pains all around us ensures social passivity. A person might have great energy for their job or interpersonal relations, or some sport or hobby, but they do not have great energy for social change because social change seems to be a dead end.

To me, this cynicism is an obstacle so centrally important that overcoming it is a precondition for building large and sustained movements. If participatory economics is widely shared and clearly enunciated and if I am right about its merits, it can help people recognize that indeed there is a viable and worthy alternative to capitalism.

Reason 5: Parecon can inform current activist focus in ways essential to success

It is an old anarchist adage, and I think a very correct one, that we need to try to incorporate the seeds of the future in the present. Our movements, in their internal organizational structure, decision-making methods, modes of remuneration, divisions of labor, and relations to other efforts should try as much as possible to reflect the values we’d like in a future society both to learn and to inspire. As such, we should have movements that embody what we seek in race, gender relations, decision making, and class relations.

Parecon can inform how we construct and carry out our projects, organizations, and movements, helping us to incorporate councils, self-managed decision making, equitable remuneration, balanced job complexes, and relations among people that embody the features of participatory planning.

Many people, and ironically it is often precisely those who by their values most desire a self-managed economy, think there is a contradiction between seeking liberty and freedom and espousing an institutional vision. They think advocating specific institutions for a new society forces us into authoritarian, sectarian dynamics, leading to a world we would rather not inhabit.

I am confused by this objection to parecon and to vision more generally. It says that unless the future is brought into being without being thought about, discussed, debated, refined, and widely self consciously sought, it won’t be participatory, classless, and self managing.

But how can a movement win a different future unless, at some point, it is seeking it? How can a movement be participatory and attain a self-managing economy and society, unless it is seeking such a society based on the insights of huge numbers of people? How can a huge number of people be seeking particular institutional changes unless they know what these new institutions look like, why they are valuable, and how they would work? And how can a large number of participants have such knowledge and the confidence to act, unless they have discussed and refined their aims? How can movement activists become advocates of a shared vision which, however, doesn’t exist in the public imagination?

People’s justified fears of sectarianism actually suggest that we should adopt vision flexibly, with an open mind, and welcoming criticism and debate, always ready to make changes. People with concerns about giving time to developing and advocating vision often say that what we want for our future should arise from our experiences. I agree. Of course, it should arise from our experiences. Indeed, where else has participatory economics or any other vision come from other than our assessments of our accumulated experiences over about 200 years of anti-capitalist activism plus a few decades of personal experiences and experiments?

Movements that don’t have shared compelling vision will not have large and powerful memberships that can embody the seeds of the future in the present, orient their actions to desirable goals, and give participants an equal chance to make the aims of the movement their own, understand the aims, adapt the aims, act in light of the aims, correct, refine, or supersede the aims, and finally win them.

What our movement needs is shared classless and self-managing vision offered in the most accessible possible language, welcoming debate and refinement, able to inspire support and action. Yes, vision should be minimalist in the sense of not specifying circumstances that are for future participants to decide. But it should also be maximalist in seeking that which allows future people to self manage classlessly.


Michael Albert is co-founder of South End Press and Z Magazine. He is currently a staff member of ZNet and he is author of numerous books, including Realizing Hope, Remembering Tomorrow, and Parecon: Life After Capitalism.