Summarizing Participatory Economics

The following piece titled Summarizing Participatory Economics is an initial entry for a debate/exploration conducted with Christian Siefkes, whose first piece is on Peercommony: A World Free of Money and Coercion. Christian will comment in a followup article on the piece immediately below, and Michael on Christian's – then there will be replies, and so on, until concluding comments. All the content, as it becomes available, will display at Albert/Siefkes Discussion 


Blueprinting future institutions is beyond anyone’s capacity. It is also senseless since there will be bountiful variations in future economies. Most important, it is beyond our warranted mandate. People now fighting economic injustice have no right to decide how future people should live. Our responsibility is to provide an institutional setting that facilitates future people deciding their own conditions. 

Participatory economics, or parecon, describes core institutions for an economy to generate solidarity, equity, self management, and an ecologically sound and classless economy. It recognizes that what seek needs to be worthy and viable.

In tune with a long history of anti capitalist activism, parecon advocates self managing workers and consumers councils federated by industry and region, as society’s primary venues of economic decision making. 

“Self managing” means people and groups have decision making influence in proportion as they are affected by the decision in question. It is not one person one vote majority rules, three quarters, consensus, or one person decides. Each of these approaches makes sense in some situations, but not in others. Self management is the overarching aim, including having different approaches for different situations. 

A self managing council makes decisions using deliberation procedures and rules for tallying preferences that convey proportionate say. Issues affecting overwhelmingly only one person, that person decides, albeit in context of broader guidelines like the length of the workday or definition of job responsibilities, decided more widely. Issues affecting overwhelmingly a work team, the work team decides, again, typically abiding broader guidelines, for example, the duration of the workday and the plan for inputs and outputs. 

Sometimes the best way to get self managing say for all involved is to seek consensus. Other times one person one vote majority rule is best, and still other times, other methods make sense. For real self management those involved must not only have appropriate say, but also circumstances and information suitable to their developing relevant opinions, engaging in relevant discussions, and setting agendas. If participation is formally inclusive, but people lack means to do what formal rules permit – that is not self management.

The second feature parecon offers is the idea that remuneration should not be for power – you get what you can take. Nor should remuneration be for property – you get in proportion to what the property that you are welcomed to own adds to output. Nor should it be for your personal output – you get in proportion to what you yourself produce, with various tools, by your own labors. 

Instead, parecon urges that your share of the social product should in part reflect your special needs so that those who cannot work get average income by right and all who have medical needs have those addressed, again by right. And beyond that, remuneration should reflect how long you work, how hard you work, and the onerousness of the conditions under which you work, at socially useful labor. 

Pareconish equity therefore means you get more income, entitling you to a larger share of social product, for working harder, longer, or under worse conditions, as long as you are producing socially valued output.

If we look at any economic actor, the benefits and costs they face should be like those that others face, because we are all people and all entitled to comparable conditions of life. This doesn’t mean, we should all get the same income even if we do different work. Rather, think of the implications of our labor and of our share of social product for our “conditions of life” and seek that the sum of benefits minus associated debits equalize from person to person. That is pareconish equity. 

Imagine two people who do the same job, for the same duration, at the same intensity, under the same conditions, and so have the same income. Now, suppose the former person wants more income to consume more. Parecon says, that shouldn’t be forbidden. It is perfectly predictable and reasonable that people should vary in their tastes for consumption goods and services. But, says parecon, it wouldn’t be fair if it was done by fiat. What would make it fair is if the person wanting more income arranges to work longer, or harder, or happens to work under worse conditions. 

Vice versa, suppose, instead, another person doesn’t care nearly so much about consumption goods and services, but wants more free time. Parecon says, again, that that shouldn’t be forbidden, but neither is it fair if it is done by fiat. What would make it fair is if the person can arrange to work less hours, and then, in accord, takes a smaller share of the social product. 

In each case, the overall impact of work and consumption taken together on “conditions of life” for the two people remains equitable. This is pareconish ethics. One may or may not like it. Similarly, one may or may not like parecon erasing the idea of people getting income for property, for power, for having better tools, for happening to produce something of higher value, for having been lucky enough to be genetically endowed with  particularly productive attributes.

The second logical underpinning of pareconish equitable remuneration has to do with the idea that a vision has to be able to work with real people in real settings. Most people think the issue now at stake will be incentives, but parecon’s view of incentives is nearly upside down from most people’s intuitions. And there is another issue, having to do with information and people’s judgements. 

Regarding incentives, the usual formulation goes something like this: Consider the surgeon who has to go to college, medical school, be an intern, and only then be a practicing surgeon earning full surgeon pay. The pay needs to be very high or he or she won’t follow the path. Absent high incentives for being a surgeon, people won’t do it. And now you can fill in for surgeon: doctor, lawyer, accountant, professor, high level designer, scientist, and so on. Thus, lacking high incentives for these jobs, we will die for want of essential social services. 

Of course, so put, this is complete nonsense. To test the claim, think of telling a student leaving high school and hoping to be a surgeon that a big change in society has made it the case that surgeon’s salaries, instead of being, $600,000 a year, are henceforth going to be $80,000 a year. Will the student, as a result, dispense the idea of going to college, medical school, being an intern, and then being a surgeon – because he or she would rather go directly into a coal mine starting tomorrow, for the next forty five years, even supposing coal mining pays $90,000 a year? Try asking some students. None will say they will switch – not one. Incentives are needed when one is being asked to do something more onerous, or time consuming, or intense – but you don’t need more incentives to get less duration, less intensity and less onerousness. 

People do many things, very often for their intrinsic reward or for their direct benefit to others one relates to, including playing, studying things of interest, helping folks, etc. These activities compete for people’s time, and also do not exhaust all the things that need doing. Some time, even in a worthy economy, has to go to work that isn’t as intrinsically rewarding as playing, or studying, or just resting, or being with family, and that is time that is unavailable for more pleasant and fulfilling endeavors. Some time also has to go to onerous work that is intrinsically unpleasant and unfulfilling, itself, even when we understand and are motived by the benefits it bestows. So, in the choice we make between how to spend our time, incentives make a difference.  

The additional information issue is this. Someone might reply to the above, “no, we don’t need to correlate income and work. We just need people to understand the importance of each and what is the responsible and moral choice to make, and they will act on that understanding.” Suppose, the same person says, “parecon has great incentives which will yield a great allotment of people’s energies and of the social output that is just, fair, and rewarding for all. Even if that is true, I believe we can get that same allotment without bribing folks with payment for labor. So why shouldn’t we?” 

A first answer is that thinking of income rights as bribery is a bit odd – unless we are talking about income as it is in vile economies – but set that aside. In fact, if we disconnect work and income and have people work as they choose, however much, and at whatever they want – and have people consume as they choose – however much and whatever they want – and we don’t require a connection between the two decisions, we won’t get as good an allotment as with parecon’s approach. People will typically choose to work too little for the social good to be optimally met, and people will choose to take too much for the system to even work because the available output will fall well short of available demands for income. 

I see this first answer is accurate, not because people are either greedy, lazy, or irresponsible, but because people have no way to know what is responsible and moral and should not and will not ignorantly police themselves into working too much or having too little income.  

Good people in a good economy should in fact prefer to work less hours, less intensely, and less onerously for a given income. And the same people should want to receive more income, for a given number of work hours, intensity, and onerousness. And indicating that they want less work and more income is critically important, actually, to the economy innovating to make it happen, to the extent it is possible and desirable taking into account social and ecological implications. 

No one can know – in the abstract – what is a fair amount to offer to work, or what is a fair amount to ask to consume. What is fair depends hugely on available tools, resources, knowledge, needs, desires, and so on. It is not given but has to emerge from a discussion, if you will, of what people, as consumers, want as income, and what the same people, as workers, want as their work conditions and duration. By disconnecting these two aspects of economy, we lose the means to know what is responsible and people are then left to curb their own appetites and desires, rather than express them. It probably shouldn’t need saying, but for completeness, people being able to work at anything they want is also hugely problematic. I would like to play professional tennis at Wimbeldon – but it has no social value – it should not be remunerated.

The flip side of the above “incentive issue,” that has already largely morphed into an information issue, the second answer to the concern raised earlier that we can get results without connecting work and income, is that without indications not just of people wanting x – where x is some product, or some leisure, or some types of work, or clean air, and so on – but of how much they want x relative to their other preferences, there is no way for producers to know how much x is appropriate to produce, or where to invest. There is much more to say – in discussion – but for now we need to move on. 

Self managing councils and equitable remuneration are very often pretty closely adopted in real circumstances by at least some real workplaces. Workers coops that have no owner, don’t reward property, power, or output, and do have a council for decisions, are an obvious and frequent example. So are occupied factories, not long ago in hundreds of instances in Argentina, and currently in Venezuela. In such cases the owner either leaves or is ejected or didn’t exist from the outset. Salaries are equalized but then typically vary for duration. Councils function democratically and often even with teams deciding their own circumstances and using different tallying for different situations.

A problem often arises, however, when workplaces adopt these two pareconish structures. In coops and occupied workplaces, often, over time, initial excitement starts to dissipate. Most workers find themselves eventually skipping council meetings. Few people wind up deciding options. Income differentials enlarge. Alienation ensues. And finally, participants often blame themselves. “This is who we are,” they think. “It must be in our genes to have growing disparities of income, power, and circumstance. There really is no alternative.”  

To address this depressing situation, the third feature parecon offers is called balanced job complexes, wherein all jobs are “balanced” so they each have roughly the same overall empowerment effect. 

All jobs include various tasks. In corporate divisions of labor, about 80% of the workforce does jobs whose component tasks are overwhelmingly disempowering. These jobs tend to fragment workers from one another, separate workers from decisions and from information about decisions, involve workers in rote and repetitive activity, and cause workers skills, confidence, knowledge of workplace relations, and familiarity with making choices, to steadily decline. In contrast, about 20% of the workforce does jobs whose tasks typically enhance ties to others, increase social skills, acclimate decision contexts, enlarge confidence and knowledge of workplace relations, and, in general, better empower people to participate in and impact decisions. 

Parecon’s claim is that the corporate division of labor creates a class division between those who monopolize empowering work and those who are left with overwhelmingly disempowering work. Their position in the economy conveys advantages, up to and including even ruling class status, to what I like to call the coordinator class, in coordinatorism (or, what others have called 20th century socialism). 

When adopted in occupied factories like those in Argentina some years back, or in Venezuela now, or in coops all over the world, the corporate division of labor leads to 20% of the workplace not only setting agendas and choosing actions, but eventually reimposing inequitable incomes, finally leading to ruling class status for themselves. 

The implication of all this is that in addition to self managing councils and equitable remuneration, one needs a new division of labor if one is to have real self management and real classlessness. This is why parecon advocates balanced job complexes to be sure all are equipped to participate effectively, making self management real.

The fourth feature parecon offers has to do with the mechanisms which arrive at workplace and consumer inputs and outputs and their rates of exchange throughout the economy. History offers three main choices for allocation: markets, central planning, and what we might call voluntary self regulation. 

Markets impose anti social motivations and inequitable remunerative norms as well as vast power differentials, and ecological insanity. They violate self management, and even propel the emergence of a coordinator class above workers.

Central planning propels that same class division, and even more obviously violates self management. It also tends to violate ecological sanity and accrues excess wealth for the planners (and whole coordinator class) while promoting obedience and domination, traits that typically also spread to other sides of life. 

Voluntary self regulation is a great idea – but in most formulations avoids important underlying issues. To have people self regulate in accord with worthy values and real possibilities you need a means of people determining what is responsible regarding both work and consumption, and a context that makes people’s well being depend on and enhance the well being of others, as well as a process that apportions self managing say to each. Parecon’s allocation system is built on the idea of viable, collective self regulation.

Our claims about markets and central planning require a long discussion to provide greater descriptive detail plus compelling evidence. In summary, just as the inclusion of corporate divisions of labor subverts the prior attainment of council based self management and equitable remuneration by the intrinsic class implications that division of labor imposes on all actors – so too does the choice of markets or central planning subvert the prior attainment of council based self management plus equitable remuneration plus balanced job complexes, by the psychological and operational behaviors and ensuing class implications those allocation methods impose on all actors.

Thus, parecon needs to propose an allocation alternative to both markets and central planning that can work compatibly with its other three defining features. Good allocation should permit and facilitate wise and informed collective self regulation to arrive at economic inputs and outputs that meet needs and develop potentials while also fostering solidarity, enhancing equity, and enacting self management, all this in light of accurate awareness of the true social and ecological costs and benefits of all choices we address. 

This is a big list of virtues, but it is what parecon claims to achieve. The fourth defining feature of parecon is called participatory planning. Workers and consumers councils present proposals and by continually refining them interactively cooperatively negotiate – self regulate – inputs and outputs consistent with and depending on the norms of remuneration and balanced job complexes, and in ways implementing collective self management. There is no top and bottom. There is no center. It is not a competitive rat race. Solidarity is literally produced, not anti sociality. But it does not assume a population of omniscient and morally saintly people. Rather simple structures enable, facilitate, and make such results the rational self and community serving aim of everyone.

There are many things to address about parecon’s institutions, even without mistakenly trying to turn them into an unknowable, impossible, and inappropriate blueprint. But beyond the parameters of the vision, arguably the most pressing matter is why would an anti capitalist project, movement, or organization be better off if its members were pareconist, regarding goals, then if they were simply anti capitalist but didn’t have any shared conception of defining institutions to replace capitalism, or had an attachment to more familiar 20th century socialist aims?


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