{"id":82604,"date":"2016-12-05T12:00:10","date_gmt":"2016-12-05T12:00:10","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=82604"},"modified":"2016-11-06T17:28:27","modified_gmt":"2016-11-06T17:28:27","slug":"whats-next-parecon-or-participatory-economics","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2016\/12\/whats-next-parecon-or-participatory-economics\/","title":{"rendered":"What\u2019s Next? Parecon, or Participatory Economics"},"content":{"rendered":"

3 Nov 2016 – This paper is one of many proposals for a systemic alternative<\/a> we have published or will be publishing here at the Next System Project. We have commissioned these papers in order to facilitate an informed and comprehensive discussion of \u201cnew systems,\u201d and as part of this effort we have also created a comparative framework<\/a> which provides a basis for evaluating system proposals according to a common set of criteria.<\/em><\/p>\n

\"parecon-economics-michael-albert\"<\/a><\/p>\n

An Introduction to Participatory Economics <\/strong><\/p>\n

People now fighting economic injustice have no right to decide how future people should\u00a0live. But we do have a responsibility to provide an institutional setting that facilitates future\u00a0people deciding for themselves what their own conditions of life and work should be. To this\u00a0end, participatory economics, or parecon, describes the core institutions required to generate\u00a0solidarity, equity, self-management, and an ecologically sound and classless economy.<\/p>\n

Parecon first advocates self-management by workers\u2019 and consumers\u2019 councils, federated by\u00a0industry and region, as society\u2019s primary venues of economic decision making. \u201cSelf-management\u201d\u00a0means people and groups have decision-making influence in proportion to the extent\u00a0to which they are affected by the decision in question.<\/p>\n

In the case of issues that affect overwhelmingly just one person, that person\u00a0should make the decision\u2014albeit in the context of broader guidelines, such as\u00a0those regarding the length of the workday or defining job responsibilities, already\u00a0in place as a result of collective decision-making processes involving a wider\u00a0range of participants. In the case of issues affecting overwhelmingly a work team,\u00a0that work team should decide\u2014again, typically abiding by broader guidelines\u00a0that, for example, address the duration of the workday and the plan for the flow\u00a0of production.<\/p>\n

Sometimes the best way to get self-management is to seek consensus. At other\u00a0times, a simple \u201cone person, one vote\u201d majority rule may be best. On still other\u00a0occasions, other methods may make sense. A key insight is that those involved\u00a0must not only have appropriate say, but also understand the circumstances and\u00a0information suitable for developing relevant opinions, engaging in relevant discussions,\u00a0and setting workable agendas.<\/p>\n

Parecon-ish equity therefore means you get more income for working harder, longer,\u00a0or under worse conditions, as long as you are producing things people want.<\/p>\n

The benefits and costs any economic actor faces should be the same as those\u00a0faced by everyone else because we are all people and all entitled to comparable conditions of life.<\/p>\n

Imagine two people who do the same job, for the same duration, at the same\u00a0 intensity, under the same conditions, and so have the same income. Now, suppose\u00a0the former person wants more income to consume more. Parecon recognizes\u00a0that it is perfectly predictable and reasonable that people should vary in their\u00a0tastes for consumption goods and services. But, says parecon, it wouldn\u2019t be fair\u00a0if income changes were implemented by fiat. What makes the accumulation of\u00a0more income fair is if the person wanting more income arranges to work longer\u00a0or harder or under worse conditions.<\/p>\n

The benefits and costs any economic actor faces should be the same as those\u00a0faced by everyone else because we are all people and all entitled to comparable\u00a0conditions of life.<\/em><\/strong><\/p>\n

On the other hand, suppose, instead, someone doesn\u2019t care nearly so much about\u00a0consumption of goods and services as the average person, but wants more free\u00a0time. Parecon says, that fair compensation practices allow, if possible, that the\u00a0person can arrange to work fewer hours and take a smaller share of the social\u00a0product. The idea is that the overall impact of work and consumption taken\u00a0together on \u201cconditions of life\u201d for the two people remains equitable.<\/p>\n

Consider the surgeon who has to undertake a college education, medical school,\u00a0and an internship prior to becoming a practicing surgeon earning a surgeon\u2019s\u00a0pay. The surgeon\u2019s pay needs to be very high, claims the professional economist,\u00a0journalist, teacher, and so on, or the prospective surgeon won\u2019t follow the path.\u00a0Absent high incentives for being a surgeon, people won\u2019t do it. The same is true\u00a0for being a doctor, lawyer, accountant, professor, high-level designer, scientist, and\u00a0so on. Lacking high incentives to attract new members, says the pundit, these\u00a0professions will die for want of people doing them.<\/p>\n

Incentives are\u00a0needed precisely when one is being asked to do something more onerous, or more\u00a0time consuming, or more intense. But you don\u2019t need an incentive to work shorter\u00a0hours, at lower intensity, or under less onerous conditions.<\/em><\/strong><\/p>\n

But suppose that instead of simply accepting this familiar claim, we test it. Think of\u00a0telling a student leaving high school and hoping to be a surgeon that a big change\u00a0in society has made it the case that surgeon\u2019s salaries, instead of being $600,000 a\u00a0year, are henceforth going to be $80,000 a year. Will the student, as a result, reject\u00a0the idea of going to college, attending medical school, and being an intern before\u00a0becoming a surgeon because he or she could immediately begin a life-long career\u00a0working in a coal mine, even supposing that coal mining pays $90,000 a year?\u00a0Try asking some students. None will say they will switch\u2014not one. Incentives are\u00a0needed precisely when one is being asked to do something more onerous, or more\u00a0time consuming, or more intense. But you don\u2019t need an incentive to work shorter\u00a0hours, at lower intensity, or under less onerous conditions.<\/p>\n

Because some time, even in a worthy economy, has to go to work that isn\u2019t as\u00a0intrinsically rewarding as playing, studying, resting, or being with family. And\u00a0some time even has to go to downright onerous work that is intrinsically unpleasant\u00a0and unfulfilling, even when we understand and are motived by the benefits it\u00a0bestows on society. Incentives matter. Parecon provides them.\u00a0The additional information issue, often overlooked, is this: Someone might reply\u00a0to the above, \u201cNo, we don\u2019t need to correlate income and work. We just need\u00a0people to understand the importance of each role and what the responsible, moral\u00a0choice to make is, and they will act on that understanding.\u201d The person adds, \u201cI\u00a0get that parecon has incentives which will yield a wonderful allotment of people\u2019s\u00a0energies and a distribution of the social output that is just, fair, and rewarding for\u00a0all. But even so, I believe we can get that same allotment without bribing folks\u00a0with payment for labor. That is demeaning, so why should we have payments?\u201d<\/p>\n

A first answer is that thinking of income rights as bribery is a bit odd, unless we\u00a0are talking about income as it is in vile economies. But let\u2019s set that aside.<\/p>\n

If we disconnect work from income by having people work however much and at\u00a0whatever they want while also having them consume however much and whatever\u00a0they want without requiring a connection between the two decisions, we\u00a0won\u2019t get as good an allotment as with parecon\u2019s approach. People will typically\u00a0choose to work too little for the social good to be optimally met and will likewise\u00a0choose to take too much from the system, which will fail to deliver because the\u00a0available output will fall well short of available demands for income.<\/p>\n

This shortfall of work and excess of demand will not occur because people are\u00a0greedy, lazy, or irresponsible, but because in this setting people will have no way\u00a0to know what is responsible and moral, and they will not and should not wish to\u00a0mistakenly police themselves into working too much or having too little income.<\/p>\n

Moreover, good people in a good economy should in fact prefer to work fewer\u00a0 hours, less intensely, and under less onerous conditions for a given income. And\u00a0the same people should want to receive more income, for a given number of work\u00a0hours, intensity, and onerousness. Indicating that they want less work and more\u00a0income is critically important to the economy innovating to make that happen,\u00a0to the extent that (i) it is possible and desirable to do so and (ii) consistent with\u00a0acceptable social and ecological implications.<\/p>\n

No one can know\u2014in the abstract\u2014what is a fair amount to offer to produce, or\u00a0what is a fair amount to ask to consume, because what is fair depends hugely on\u00a0the available tools, resources, knowledge, needs, desires, and so on. Fairness is not\u00a0prescribed on a tablet but instead has to emerge from a discussion of what people\u00a0want as their income, working conditions, and working hours. By disconnecting\u00a0production and consumption decisions, we would lose the means of knowing\u00a0what is responsible, leaving people to curb their own appetites and desires rather\u00a0than express them. It probably shouldn\u2019t need saying, but for completeness: people\u00a0being able to receive income from merely doing anything they want is also\u00a0hugely problematic. I would like to play professional tennis at Wimbledon, but\u00a0as it would have no social value it should not be remunerated.<\/p>\n

Parecon advocates for self-management by\u00a0workers\u2019 and consumers\u2019 councils as society\u2019s\u00a0primary venues of economic decision making.<\/em><\/strong><\/p>\n

Likewise, without indications not just of people wanting x (where x is some good\u00a0such as a product, some leisure, a type of work, clean air, and so on) but of how\u00a0much they want x relative to their other preferences, there is no way for producers\u00a0to know how much x it is appropriate to produce, or where to invest.<\/p>\n

Something close to self-managing councils and equitable remuneration is very\u00a0 often adopted in real circumstances by at least some real workplaces. Worker\u00a0 cooperatives have no owners and typically don\u2019t reward property, power, or output,\u00a0but they do tend to equalize wages and utilize a workplace council for decisions.\u00a0So do occupied factories, as in hundreds of instances in Argentina not so\u00a0long ago, and as currently in Venezuela. In such cases the owner either leaves, or\u00a0is ejected, or didn\u2019t exist from the outset. Salaries are equalized but then typically\u00a0vary for duration. Councils function democratically and often use the flexible\u00a0means described above, with teams deciding their own circumstances and using\u00a0different tallying for different situations.<\/p>\n

However, a problem often arises. In time, initial excitement starts to dissipate.\u00a0 Workers start to skip council meetings. A few people wind up determining\u00a0options. Income differentials enlarge. Alienation ensues. And, finally, participants\u00a0blame themselves. \u201cThis is who we are,\u201d they think. \u201cIt must be in our genes to\u00a0have growing disparities of income, power, and circumstance. We tried. It didn\u2019t\u00a0work. There really is no alternative.\u201d<\/p>\n

To counter this depressing outcome, parecon balances all jobs so they each have\u00a0 roughly the same overall empowerment effect. The challenge is in staving off\u00a0 corporate divisions of labor.<\/p>\n

In corporate divisions of labor, about 80 percent of the workforce perform jobs\u00a0 whose component tasks are overwhelmingly disempowering. These jobs tend\u00a0to fragment workers from each other, separate workers from information about decisions, involve workers in rote and repetitive activity, and in all these ways\u00a0 cause a steady decline in workers\u2019 skills, confidence, knowledge of workplace
\nrelations, and familiarity with making choices. The other 20 percent of the\u00a0 workforce performs jobs whose tasks typically enhance ties to others, increase social skills, provide access to decision contexts, enlarge confidence and knowledge\u00a0of workplace relations, and, in general, empower people to participate in\u00a0and impact decisions.<\/p>\n

Parecon\u2019s claim is that the corporate division of labor creates a class division between those who monopolize empowering work, the \u201ccoordinator class,\u201d and\u00a0those who are left with overwhelmingly disempowering work, the working class.\u00a0The coordinators\u2019 position in the economy conveys advantages, up to and including\u00a0ruling class status in \u201ccoordinatorism\u201d (often called 20th century socialism).<\/p>\n

In addition to\u00a0self-managing councils and equitable remuneration, we need a new division of\u00a0labor called \u201cbalanced job complexes\u201d if we are to have real self-management\u00a0and real classlessness.<\/em><\/strong><\/p>\n

When adopted in occupied factories like those in Argentina some years back,\u00a0or in Venezuela now, or in cooperatives all over the world, the corporate division\u00a0of labor leads to 20 percent of the workforce not only setting agendas\u00a0and choosing actions, but eventually reimposing inequitable incomes that ultimately\u00a0lead to ruling class status for themselves. For this reason, in addition to self-managing councils and equitable remuneration, we need a new division of\u00a0labor called \u201cbalanced job complexes\u201d if we are to have real self-management\u00a0and real classlessness.<\/p>\n

The fourth feature parecon offers has to do with arriving at an optimal level of workplace and consumer inputs and outputs and their distribution throughout\u00a0the economy. History offers three main choices for such allocation decisions:\u00a0markets, central planning, and voluntary self-regulation.<\/p>\n

Markets intrinsically impose antisocial motivations and inequitable remunerative\u00a0 norms as well as vast power differentials and ecological suicide. They violate\u00a0self-management, and elevate a coordinator class above workers.<\/p>\n

Central planning intrinsically creates that same class division, and even more obviously\u00a0violates self-management. It also tends to violate ecological preservation and\u00a0accrues excess wealth for the planners (and whole coordinator class) while promoting\u00a0obedience and domination that in turn spread to other areas of life.<\/p>\n

Voluntary self-regulation is a wonderful sentiment, but as a method for resource\u00a0 allocation, it typically assumes away important underlying complexities. For people\u00a0to self-regulate in accord with worthy values and real possibilities requires a means\u00a0for people to determine what qualifies as worthy choices regarding both work and\u00a0consumption; a context that makes people\u2019s well-being depend on and enhance\u00a0the well-being of others; and a process that apportions self-managing say to each.\u00a0In fact, parecon\u2019s allocation system is built on the idea of viable, collective self-regulation.\u00a0That is precisely what it delivers, but without assuming away complexities.<\/p>\n

Parecon\u2019s alternative to market-based resource allocation is called participatory planning, which is built on the idea of viable, collective self-regulation.<\/em><\/strong><\/p>\n

The inclusion of corporate divisions of labor subverts the prior attainment of\u00a0council-based self-management and equitable remuneration by the intrinsic\u00a0class implications the monopolization of empowering work imposes on all actors.\u00a0 Similarly, choosing either markets or central planning subverts the prior attainment\u00a0of council-based self-management, equitable remuneration, and balanced\u00a0job complexes as a result of the psychology, operational behaviors, and ensuing\u00a0class implications these allocation methods impose on all actors.<\/p>\n

Thus, parecon needs to propose a self-regulating allocation alternative to both\u00a0 markets and central planning that is compatible with its other three defining \u00a0features. Good allocation requires wise and informed collective self-regulation\u00a0to arrive at optimal levels of economic inputs and outputs that meet needs and\u00a0 develop potential while fostering solidarity, enhancing equity, and enacting\u00a0self-management. It must do so in light of an accurate awareness of the true\u00a0social and ecological costs and benefits of all of our choices.<\/p>\n

This is a big list of virtues, but it is what parecon claims to achieve. Parecon\u2019s\u00a0 alternative to market-based, centrally planned, or purely voluntary resource allocation\u00a0is called participatory planning, which is built on the idea of viable, collective\u00a0self-regulation. Workers\u2019 and consumers\u2019 councils present proposals, and\u00a0they implement collective self-management by interactively and cooperatively\u00a0 refining them by negotiating levels of inputs and outputs that are consistent with and depend on the norms of remuneration and balanced job complexes. That is,\u00a0 they collectively self-regulate.<\/p>\n

There is no top or bottom. There is no center. It is not a competitive rat race. Solidarity\u00a0is literally produced by the requisites of the process, not antisociality. And yet\u00a0the vision does not assume a population of omniscient and morally saintly people.\u00a0Instead, simple structures enable, facilitate, and make such results the rational, personal,\u00a0and community-serving aim of everyone. That is participatory economics.<\/p>\n

What follows are answers to the specific questions posed by the Next System Project.<\/em><\/p>\n

Core Goals of a Parecon System <\/strong><\/p>\n

Briefly, what are the principal, core goals your model or system seeks to realize?<\/em><\/p>\n

The model called participatory economics, or parecon, is overwhelmingly about\u00a0 economics. It has just a few guiding values, plus a few specific institutional commitments\u00a0intended to fulfill those values while also accomplishing economic\u00a0functions.<\/p>\n

In a nutshell, the values are:<\/p>\n