Participatory Economics: a viable model for communism? – statickinetics – April 11

First, consider the first 5 minutes of this part of a talk by David Harvey ( )

It seems to me that any real movement towards an anti-capitalist alternative needs to put in consideration:

(1) Relations between people
(2) Relations between nature and society (Ecological balance, environmental sustainability, biodiversity, etc.)
(3) Technology (Rate of innovation, technology’s role as a social force, etc.)
(4) Mental conceptions (Ideas as a material force)
(5) Daily life (How is the average person’s life different in our alternative- is it empowering or submissive? Actively participatory or passively accepting?)

These were some of the points used by Marx to outline the transition from feudalism to capitalism and can also be applied to whatever transition will occur from capitalism to X. A theory and a movement towards an alternative needs to consider these points as dynamic and interrelated. For example, we can put all of our energy into harnessing technology as a tool for social or economic organization but if we neglect its effect on daily life or nature, we may end up undoing any progress made.

Further, our goals and the methods we use to achieve them should be clear, honest and straightforward for both practical and theoretical purposes. It’s no longer satisfactory to say to people that you want a classless society. What kind of economic mechanisms and institutions will ensure this goal is met and maintained? How do we not fall into the problems posed by centrally planned economies, market socialism or capitalism?

Participatory Economics (shortened as “Parecon”) might offer a workable model that addresses the 5 points of social change and also gives people a vision for what an alternative would look like. I’m not totally convinced, but nonetheless I want to hear what LF has to say about it.

What the fuck is it
The model was first developed at length by Michael Albert and Robin Hahnel. Here is the wikipedia entry that does a pretty good job covering the major points, if you don’t want to read my long boring post you might enjoy this:


Here is a summary written by Albert taken from here:


Summarizing Participatory Economics

Capitalism revolves around private ownership of the means of production, market allocation, and corporate divisions of labor. It remunerates property, power, and, to a limited extent, contribution to output, resulting in huge differences in wealth and income. Class divisions arise from differences in property ownership and differential access to empowered versus subservient work. Class divisions induce huge differences in decision-making influence and quality of life. Buyers and sellers fleece one another and the public suffers anti-social investment, toxic individualism, and ecological decay.

To transcend capitalism, parecon-oriented anti-globalization activists would offer an institutional vision derived from the same values we listed earlier for shaping alternative global aims: equity, solidarity, diversity, self-management, and ecological balance.

Such activists would urge that each workplace be owned in equal part by all citizens so that ownership conveys no special rights or income advantages. Bill Gates wouldn’t own a massive proportion of the means by which software is produced. We all would own it equally, so that ownership would have no bearing on the dis- tribution of income, wealth, or power. In this way the ills of garnering wealth through profits would disappear.

Next, argues the internationalist advocate, workers and consumers would develop and express their desires via democratic councils with the norm for decisions being that methods of dispersing information and for arriving at and tallying preferences into decisions should convey to each party involved, to the extent possible, influence over decisions in proportion to the degree he or she will be affected by them. Councils would be the vehicle of decision-making power and would exist at many levels, including smaller work groups, teams, and individuals, and broader workplaces and whole industries, as well as individual consumers, neighborhoods, counties, and larger. Votes could be majority rule, three-quarters, two-thirds, consensus, etc. and would be taken at different levels and with fewer or more participants and voting rules depending on the particular implications of the decisions in question. Sometimes a team or individual would make a decision. Sometimes a whole workplace, an industry, a neighborhood, or a county would decide. Different decisions would employ different voting and tallying methods. There would be no a priori correct, detailed option, but there would be a right norm to implement: decision-making input in proportion as one is affected by decisions.

Next comes the organization of work. Who does what tasks in what combinations?

Each actor does a job, and each job of course includes a variety of tasks. In rejecting current corporate divisions of labor, we decide to balance for their empowerment and quality of life implications the tasks each actor does. Every person participating in creating new products is a worker, and each worker has a balanced job complex, meaning the combination of tasks and responsibilities each worker has would accord them the same empowerment and quality of life benefits as the combination every other worker has. Unlike the current system, we would not have a division between those who overwhelmingly monopolize empowering, fulfilling, and engaging tasks and those who are overwhelmingly saddled with rote, obedient, and dangerous tasks. For reasons of equity and especially to create the conditions of democratic participation and self- management, balanced job complexes would ensure that when we each participate in our workplace and industry decision-making, we have been comparably prepared by our work with confidence, skills, and knowledge to do so. The contrary situation now is that some people have great confidence, decision-making skills, and relevant knowledge obtained through their daily work, while other people are only tired, de-skilled, and lacking relevant knowledge as a result of theirs. Balanced job complexes do away with this division. They complete the task of removing class divisions that is begun by eliminating private ownership of capital. They eliminate, that is, not only the role of capitalist with its disproportionate power and wealth, but also the role of decision monopolizing producer who is accorded status over and above all others. Balanced job complexes retain needed conceptual and coordinative tasks and expertise, but apportion these to produce true democracy and classlessness.

But what about remuneration? We work. This of course entitles us to a share of the product of work. But how much?

The pareconist internationalist says that we ought to receive for our labors remuneration in tune with how hard we have worked, how long we have worked, and how great a sacrifice we have made in our work. We shouldn’t get more because we use more productive tools, have more skills, or have greater inborn talent, much less should we get more because we have more power or own more property. We should get more only by virtue of how much effort we have expended or how much sacrifice we have endured in our useful work. This is morally appropriate, and it also provides proper incentives by rewarding only what we can affect and not what is beyond our control.

With balanced job complexes, if Emma and Edward each work for eight hours at the same pace, they will receive the same income. This is so no matter what their particular job may be, no matter what workplaces they are in and how different their mix of tasks is, and no matter how talented they are, because if they work at a balanced job complex their total workload will be similar in its quality of life implications and empowerment effects. The only difference to reward people doing balanced jobs for will be length and intensity of work done. If these too are equal, the share of output earned will be equal. If length of time working or intensity of work differ somewhat, so will the share of output one earns.

And who makes decisions about the definition of job complexes and who evaluates the rates and intensities of people’s work? Workers do, of course, in their councils, using information culled by methods consistent with the philosophy of balanced job complexes and just remuneration, and in a context appropriately influenced by the wills and desires of consumers.

There is one very large step left to the pareconist internationalist proposal for an alternative to capitalism. How are the actions of workers and consumers connected? How do we get the total pro- duced by workplaces to match the total consumed collectively by neighborhoods and other groups as well as privately by individuals? For that matter, what determines the relative valuation of different products and choices? How do we decide how many workers will be in which industry producing how much? What influences whether some product should be made or not? What guides investments in new technologies in turn influencing what projects should be undertaken and which others delayed or rejected? These questions and others too numerous to mention in this introduction (but dealt with later in this book) are all matters of allocation.

Existing options for allocation are central planning as used in the old Soviet Union and competitive markets as used in all capitalist economies. In central planning a bureaucracy culls information, formulates instructions, sends these instructions to workers and consumers, gets feedback, refines the instructions a bit, sends them again, and receives back obedience. In a market each actor competitively buys and sells products, resources, and the ability to perform labor at prices determined by competitive bidding. Each actor seeks to gain more than those they exchange with.

The problem with each of these modes of connecting actors is that they impose on the economy pressures that subvert solidarity, equity, diversity, and self-management.

For example, even without capital ownership, markets favor private over public benefits and channel personalities in anti-social directions that diminish and even destroy solidarity. They reward output and power, not effort and sacrifice. They produce a disempowered class saddled with rote, obedient labor and an empowered class that accrues most income and determines economic outcomes. They force decision-makers to competitively ignore the wider ecological implications of their choices. Central planning, in contrast, denies self-management and produces the same class division and hierarchy as markets but instead built around the distinction between planners and those who implement their plans, extending from that foundation outward to incorporate empowered and disempowered workers more generally.

In short, both these allocation systems subvert instead of propel the values we hold dear. So what is our alternative to markets and central planning?

Suppose in place of top-down central planning and competitive market exchange, we opt for cooperative, informed decision-making via structures that ensure actors a say in decisions in proportion as outcomes affect them and that provide access to accurate valuations as well as appropriate training and confidence to develop and communicate preferences—that is, we opt for allocation that fosters council-centered participatory self-management, remuneration for effort and sacrifice, balanced job complexes, proper valuations of collective and ecological impacts, and classlessness.

To these ends, therefore, we advocate participatory planning—a system in which worker and consumer councils propose their work activities and consumer preferences in light of true valuations of the full social benefits and costs of their choices.

The system utilizes cooperative communication of mutually informed preferences via a variety of simple communicative and organizing principles and means including, as we will see in coming chapters, indicative prices, facilitation boards, and rounds of accommodation to new information—all permitting actors to express their desires and to mediate and refine them in light of feedback to arrive at choices consistent with their values.

The internationalist pareconist is in a position to answer “What do you want?” succinctly and compellingly, in an appetite-whetting presentation as above, or, of course, in more detail, explaining the logic of the claims, enriching the picture of daily life relations, and rebutting possible concerns—as in the rest of this book.

The summary is that workplace and consumer councils, diverse decision-making procedures that implement proportionate say for those affected, balanced job complexes, remuneration for effort and sacrifice, and participatory planning, together constitute core institutional scaffolding of a comprehensive alternative to capi- talism and also to centrally planned or market socialism.

The ultimate answer to the claim that “there is no alternative” is to enact an alternative. In the short term, however, the answer is to offer a coherent, consistent, viable, economic vision able to generate hope, provide inspiration, reveal what is possible and valuable, and orient and democratize our strategies so that they might take us where we desire to go rather than running in circles or even heading toward something worse than that which we now endure. But are parecon’s visionary aims rooted in practice undertaken around the world, or only mental constructs? …

In essence, we have

(1) Worker’s councils. Democratic ownership of the workplace where votes are taken and weighted based on the degree to which they affect those involved.

b. Job complexes. In order to prevent the monopoly on empowering work, and in order to prevent people from being stuck as garbage men their entire lives, workers would not just apply for one job- instead they would apply for an entire grouping of tasks. Doctors wouldn’t just care for patients, they would take out the trash, help clean the offices, etc. This distributes more rote and disempowering work across society and prevents the reinstatement of a coordinator class. This also implies the destruction of the traditional corporate division of labor. Consider this quote from Marx:

Marx, German Ideology posted:

In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.

(2) Payment according to length of work, intensity, amount of sacrifice (opportunity cost), and danger. Rather than being paid in traditional currency, non-transferable digital credits will be given to workers in order to prevent the reinstatement of capitalism. These can be spent on goods and services which brings us to:

(3) Consumption councils. Based on scale (household, town, city, county, state, etc.) these councils vote on a consumption plan for a given period (week, month, year, etc.). These councils might be representative or direct, depending on the scale (I imagine some form of representation would be necessary at the state, regional and national level). If I’ve worked 100 credits worth this week, I can submit a private consumption request for the goods and services that I plan on consuming based on my income and past consumption. This can be done from computers in order to provide instant demand feedback to the worker councils. Collective consumption requests (schools, public parks, etc.) would be sent to a facilitation board to work them into manageable proposals for the community to vote on.

(4) Pricing taking into consideration environmental and social costs. What are the costs to society for producing and consuming the product? These are things the market cannot calculate, but a pricing system determined by society can and should. Base prices would be determined by basic supply and demand mechanisms. Goods with a high environmental or social cost would be reflected in the final price determined by a facilitation board.

As you can see, communication is very important in the model. Without turning it into a techno-fetishist utopia, the model will rely to a significant degree on fast, active communication that today’s technology already provides (and wasn’t really available in the USSR).

Things that I like: as close to an elimination of class as possible. Worker control of the means of production obviously eliminates private property, but also job complexes do a good job at eliminating the monopoly over empowering work by a small, intellectual elite. It is also a system that completely eliminates the need for market, money in the traditional sense, and offers a way to plan consumption and production that isn’t subject to the rule of a coordinating class (maybe).

Potential problems: There are a lot of problems that could arise from this radical amount of democracy, but those aside- wouldn’t the “facilitation boards” that help determine prices and final proposals not just turn into a new elite coordinator class (they would have to be kept on a tight leash)? How does this system take into consideration different geographical inequalities (difficulties getting to work/school, access to resources)? How do we objectively rate the level of empowerment a particular task provides? Similarly, how do we objectively rate the difficulty or intensity of someone’s work to ensure fair payment?


One thought on “Participatory Economics: a viable model for communism? – statickinetics – April 11

  1. I think there are a few inherent flaws with this system. The most important being that you force people to take on too many roles. Could you image going into an emergency room and being seen by a doctor who has not only cared for x amount of people before you, but has had to clean the operating room, give someone a sponge bath, make sure everything is properly coded and filed before and after each patient is seen, cleaned a room after a particularly messy situation occurred, etc? Not much to say that he’d have very much time to take care of you, or even the desire to want to help you. Taking out specialization decreases the efficiency of a workplace while increasing the stress on a person.

    Furthermore, how would you ensure hoarding of “credits” does not occur? Is each person required to spend their “credits” each period? If they don’t are they penalized? If they don’t and they’re not penalized, what’s to keep them from holding on to their credits, creating a monetary gap between them and the person below them? If they are penalized, how would that entice them to continue working for the “credits” they feel will be taken away from them anyways?

    Additionally, how does a society where everyone shares every task find time and resources to further innovation? As much as you seem to dislike the intellectual elite, they are the ones who power the innovation fields because they are allowed the time and resources to develop ideas without having to carry out a laundry list of other tasks?

    Also, how does one determine what is a disempowering job and what is an empowering job? Sure you may see being a CEO as being empowering and being a laborer as being disempowering, but there is someone out there who would rather spend all day repairing plumbing, cleaning halls, and taking out the trash than spend an hour stuck in an office and going to board meetings. Specialization is not a bad thing as it allows people to work to their interests. The problem with our current system isn’t specialization, it’s that we tell people what they should find empowering and what they should find disempowering, and often times they find themselves feeling disempowered because 1. they’re not playing to their interests, or 2. they’ve been told to not think highly of the job they’ve been assigned.

    I could continue, but I feel those are the most obvious flaws with this system.

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