Below are brief answers to some of the most common questions about Participatory Economics. You can also find more articles that go further in-depth about the model on the links page.


  1. Is Participatory Economics a blue print?
  2. Isn’t there more to life than Economics?
  3. What about human nature?
  4. Is personal freedom sacrificed in a participatory economy?
  5. Won’t there be too many meetings?
  6. Do individuals have an incentive to search for innovations, and do workers councils have an incentive to implement productive ones once they’re found?
  7. What are the incentives to work?
  8. Since there will not be large differences in income in a participatory economy, will there be sufficient incentives for people to train themselves in the ways they can be most socially useful?
  9. Can rewarding effort instead of the value of contribution really be efficient?
  10. Will balanced jobs really be efficient? Won’t they exclude specialisation and waste scarce talents? And what about the need for experts?
  11. Isn’t it difficult or even impossible to measure effort?
  12. Will people need to know what to consume one year ahead?
  13. Is there money in a Participatory Economy?
  14. Can I borrow and save in a Participatory Economy?
  15. Are there classes in a Participatory Economy?
  16. Are there any examples of Participatory Economics in practice?
  17. How do we get from here to winning a Participatory Economy and society?

Is Participatory Economics a blueprint?

No, Participatory economics is offered as a flexible and non-dogmatic vision to inform efforts and experiments towards winning a better economy. It is certainly not meant as a blueprint. It lists a number of goals or values that an economy should aim for, and a minimal set of institutions that are essential for the economy’s’ ability to achieve those goals. It emphasises that in different places and times, and even in different industries and communities, the implementation of the central features and institutions will involve different detailed patterns. Such details are a matter for future generations, depending on people’s preferences and lessons learned between now and the future. Just like any other model, participatory economics is testable, refutable and revisable. This means it should be evaluated based on whether it achieves its goals, experimented with and refined.

Isn’t there more to life than Economics?

Yes, human social life is more than just about economics. Human beings are a social species and throughout history people have created social institutions in order to help meet their needs and desires. To be stable and effective a society must accomplish several functions. In addition to creating economic institutions to meet material needs and desires, people have organised community institutions for addressing our cultural and spiritual needs, gender or kinship systems for satisfying our sexual needs, family relations and organising our parental functions, and political systems for mediating conflicts and creating laws.

It is important to note that the economy forms only one aspect of society, and that privileged and disadvantaged groups and hierarchies can emerge from any area of social activity whenever the burdens and benefits of social cooperation are not distributed equitably.

What about human nature?

The participatory economy model is based on the assumption that people are homo economicus, i.e. that they act out of self-interest. It most certainly does not assume that individuals are “revolutionary saints” who act to promote the social interest (i.e. social efficiency and equity), and then tautologically proclaim that the social interest would, indeed, be served!

In brief, the principle mechanism that compels worker councils pursuing their own self-interest to behave in a socially responsible way is that these councils must demonstrate to other worker and consumer councils that their proposals generate an acceptable excess of social benefits over social costs. For their part, consumer councils must demonstrate that the social cost of the goods they request is consistent with the average work effort ratings of their members. The principle mechanism that compels individually responsible behaviour are effort ratings by one’s work mates and consumption allocations based on effort ratings. The logic is to organise the economy in a way that ensures that the behaviour of homo economicus will be indistinguishable from the behaviour of homo socialis, or put differently, to reward socially responsible behaviour and discourage socially irresponsible behaviour.

While the model assumes that people are homo economicus and is based on institutions that lead people to behave in socially responsible ways out of self-interest, it is not so farfetched to hope that many years of practicing social responsibility, and observing that others have practiced social responsibility as well, will move people closer to homo socialis in their economic relations. There is plenty of evidence that people do behave as homo socialis today — toward family members, friends, and various communities where members feel solidarity for one another. So this is not behaviour foreign to the human species when we have good reason to trust rather mistrust each other.

Is personal freedom sacrificed in a participatory economy?

Participatory economics is designed to allow people to control their own economic lives in a context of equitable cooperation with others. Freedom of choice of consumption, employment, career, and residence, as well as personal privacy are fully guaranteed in a participatory economy.

People in a participatory economy are free to consume whatever goods and services they wish, and consumer preferences determine what will be produced. Of course an individual’s overall consumption is constrained in a participatory economy, by her effort or sacrifice, just as an individual’s overall consumption is constrained in a market economy, by her income. People in a participatory economy are also free to choose more consumption and less leisure, or vice versa, by working more or fewer hours, and are free to distribute their effort and consumption over their lives as they wish.

Some people worry that neighbours’ opinions will prove intrusive but neighbours can only offer suggestions. They are not permitted to reject consumption requests on grounds of content — only if social cost exceeds effort. And if anyone does not wish to hear her neighbours’ opinions, she can submit an anonymous consumption request to a consumption council composed of anonymous members who are not her neighbours.

People in a participatory economy are free to apply to work wherever they want, free to bid on any job at their work place they want, free to organise a new enterprise to produce whatever they want, by any means they want, in cooperation with whomever else they want. Of course, workers councils are also free to hire whomever they want from those who apply; fellow qualified workers are also free to bid on any job they want; and new workers councils must be certified by their industry federation as “competent” to deliver what they promise in the planning procedure.

Students are free to apply to any educational institution and degree program they want, and if accepted, pay no tuition and receive a living stipend appropriate to their age and needs. Workers are free to bid on any training program offered outside or inside their workplace all of which are free of charge.

People are free to live wherever they choose. Neighbourhoods will probably be more important to people in a participatory economy because the neighbourhood consumption council is an important institution where preferences regarding individual and collective consumption are expressed and debated.

In a participatory economy only people affected by decisions have influence over those decisions, and only to the degree they are affected. Those who enjoy disproportionate power in market systems are used to being “free” from the opinions and influence of others, and will object to a system that would no longer permit them to be so. Socialists of all varieties once believed that I should not be free to employ you because my freedom of enterprise, or property right, robs you of a more fundamental human right to manage your own labouring capacities. Most socialists and some liberals once believed I should not be free to bequeath substantial inheritance to my children because that robs the children of less wealthy parents of their more fundamental right to an equal economic opportunity in life. We can thus formulate a general principle: Restrictions on the right of some individuals are justified when they are necessary to protect more fundamental rights of others, and since such restrictions do not reduce, but increase individual freedom, they are fully consistent with libertarian values.

In sum, people in a participatory economy are free to do what they want. But this does not mean they are free to exploit others. That is why the freedom to pursue education and employment according to one’s preferences is protected in a participatory economy, but the freedom to exploit morally arbitrary advantages in human capital by consuming more than others who made equal sacrifices is not. Advocates of participatory economics think everyone should have opportunity to participate in making economic decisions in proportion to the degree they are affected by those decisions. We think self-management, in this sense, is a fundamental right of people who engage in economic cooperation with others. So when people are free to do what they want, this does not mean they should be free to infringe on the self-management rights of others.

Won’t there be too many meetings?

It is important to first note that meeting time is far from zero in our existing economies. In a participatory economy there will be meeting time in workers’ councils, consumers’ councils, federations, and participatory planning.

Conception, coordination, and decision-making are part of the organisation of production under any system. Under hierarchical organisations of production relatively few employees spend most of their time thinking and meeting, and most of the rest of the employees simply do as they’re told (or try not to do as they are told). So it is true, most people would spend more time in workplace meetings in a participatory economy than in a hierarchical economy. This is because most people are excluded from workplace decision-making under capitalism and authoritarian planning. It does not necessarily mean the total amount of time spent on thinking and meeting rather than on working would be greater in a participatory workplace. It is important to remember that in a participatory economy decisions are taken at appropriate levels of organisation. The whole workplace doesn’t meet to decide everything. Rather some things are decided widely, others more narrowly. And while it might be that democratic decision-making requires somewhat more overall meeting time than autocratic decision-making, it should also be the case that a lot less time is required to enforce democratic decisions than autocratic ones. In addition, decisions made through democratic procedures are more likely to have better outcomes and are less likely to have to be changed in the future. Also, workplace meeting time is part of the normal workday in a participatory economy, not an incursion on people’s leisure.

Decisions regarding the organisation of consumption in a participatory economy will demand more social interaction than in market economies. One of the great failures of market systems is that they do not provide a suitable vehicle through which people can express and coordinate their consumption desires to everyone’s greater good. A layered network of consumer federations will resolve the alienation in public choice and the isolated expression of individual choice that characterise market systems. Presently economic and political elites dominate local, state, and national public choice. For the most part they operate free from restraint by the majority, with periodic time-consuming campaigns mounted by popular organisations to rectify matters that get grossly out of hand. In a participatory economy people would vote directly on collective consumption issues. But this would not require a great deal of time or mean attending endless meetings. Expert testimony and differing opinions would be aired through democratic media. People would become empowered through participation, and meetings would have concrete outcomes so most people would want to participate. But people would be free to pay as much or as little attention as they wished.

The participatory planning process is not the usual form of democratic planning in which people or their elected representatives, meet face-to-face to endlessly discuss and negotiate how to coordinate all their activities. Instead it is a procedure in which individuals and councils submit proposals for their own activities, receive new information including new indicative prices, and submit revised proposals until they reach a point of agreement. After a number of iterations when the major contours of the overall plan appears, the staffs of iteration facilitation boards would (mechanically) define a few feasible plans within those contours for constituents to vote on without having to meet and debate these at all.

However, informed, democratic decision-making is different from autocratic decision-making. And conscious, equitable coordination of the social division of labor is different from the impersonal law of supply and demand. And this requires, almost by definition, increases in meaningful social interaction.

Do individuals have an incentive to search for innovations, and do workers councils have an incentive to implement productive ones once they’re found?

A participatory economy does not reward those who succeed in discovering productive innovations with vastly greater consumption rights than others who make equivalent personal sacrifices in work. Instead it emphasises direct social recognition of outstanding achievements for a variety of reasons. First, successful innovation is often the outcome of cumulative human creativity for which a single individual is rarely responsible. Furthermore, an individual’s contribution is often the product of genius and luck as much as personal sacrifice, all of which implies that recognising innovation through social esteem rather than material reward is superior on ethical grounds. Second, social incentives may very well be as powerful as material ones. No economy has ever paid, or could pay innovators the full social value of their innovations. If it did, there would be little left to pay those who apply them over long periods of time. This means if material compensation is the only reward, innovation will be under stimulated in any case. Moreover, often material reward is merely an imperfect substitute for what is truly desired — social esteem.

Sometimes it is presumed that innovating capitalist enterprises capture the full benefits of their successes, while it is also assumed that innovations spread instantaneously to all enterprises in an industry. When made explicit it is obvious these assumptions are contradictory. Yet only if both assumptions hold can one conclude that capitalism provides maximum material stimulus to innovation and achieves technological efficiency throughout the economy. In reality innovative capitalist enterprises temporarily capture “super profits” which are competed away more or less rapidly depending on a host of circumstances including patent laws and the efficacy of enforcement of intellectual property rights. Which means that in reality there is a trade-off in capitalist economies between stimulus to innovation and the rapid spread of innovations. In market economies, much of research and development is deemed too risky and long-term for private enterprises, and research and innovation is largely funded by governments instead. Therefore the risks are socialised by taxpayers while the benefits are realised by private corporations. For example, the internet, lasers, computers and many more technologies were developed through the dynamic state sector.

In a participatory economy workers do have a material incentive to implement socially useful innovations. Any change that increases the social benefits of the outputs they produce, or reduces the social costs of the inputs they use will increase the workers council’s social benefit to social cost ratio. This makes it easier for the council to get its proposals accepted in the participatory planning process, can allow workers to reduce their effort, can permit them to improve the quality of their work life, or can raise the average effort rating the council can award its members. As in capitalism, adjustments will render any advantage they achieve temporary. As the innovation spreads to other enterprises and as indicative prices change, the full social benefits of their innovation will be both realised and spread to all workers and consumers.

The faster the adjustments are made, the more efficient and equitable the outcome. On the other hand, the more rapid the adjustments, the less the “material incentive” to innovate and the greater the incentive to “ride for free” on the innovations of others. But a participatory economy enjoys advantages in managing this trade off compared to capitalism. Most importantly, direct recognition of “social serviceability” is a more powerful incentive to innovation in a participatory economy, which reduces the magnitude of the trade off since more innovation will occur in a participatory economy than in capitalism for the same speed of adjustments. Secondly, a participatory economy is better suited to allocating resources efficiently to research and development because R&D is largely a public good which is predictably under supplied in market economies but would not be in a participatory economy. Third, the only effective mechanism for providing material incentives for innovating enterprises in capitalism is to slow their spread, at the expense of efficiency. This is true because the transaction costs of registering patents and negotiating licenses from patent holders are very high. There are no inappropriate obstacles in a participatory economy to introduce temporary additional material incentives should its members decide they are warranted. For example, the transaction costs of granting extra consumption allowances for a period of time would be negligible in a participatory economy.

What are the incentives to work?

A participatory economy is designed to maximise the motivating potential of non-material incentives. There is reason to hope jobs designed by workers will be more enjoyable than jobs designed by capitalists. Also, there is reason to believe people will be more willing to carry out tasks they have proposed and agreed to themselves than assignments handed to them by superiors. And finally, there is reason to believe people will be more willing to perform unpleasant duties conscientiously when they know the distribution of those duties as well as the rewards for people’s efforts are equitable.

But this does not mean that there are no material incentives in a participatory economy. People’s efforts will be rated by their peers who have every interest in seeing that their work mates work up to their potentials. And people’s effort ratings in work directly affect their consumption rights. However, differences in peoples’ efforts will certainly not lead to the extreme income differentials characteristic of market economies today.

To assume that only conspicuous consumption can motivate people because under capitalism we have strained to make this so is unwarranted. There is plenty of evidence that people can be moved to great sacrifices for reasons other than a desire for personal wealth. And there is good reason to believe that for non-pathological people, wealth is generally coveted only as a means of attaining other ends such as economic security, comfort, social esteem, respect, status, or power. If economic security is guaranteed, for everyone and for their children, there will be no need to accumulate out of fear for the future. If people participate in making decisions, they will carry out their responsibilities with less recourse to external motivation. If the distribution of burdens and benefits is fair, and seen to be fair, sense of social duty will be a more powerful incentive than it is today.

In sum, if a fair share of effort and personal sacrifice are demanded by work mates who must otherwise pick up the slack, if additional effort is appreciated by one’s companions, recognised by society, and awarded commensurate increases in consumption opportunities, and if people planned and agreed to their tasks themselves, there is no reason to think that incentives will be lacking.

Since there will not be large differences in income in a participatory economy, will there be sufficient incentives for people to train themselves in the ways they can be most socially useful?

A participatory economy does not pay those with more education and training higher wages since it would be inequitable to do so. But that does not mean people would not seek to enhance their productivity. The cost of education and training would be born publicly, not privately. So there are no material disincentives to pursuing education and training. And since a participatory economy is not a society where people are judged by their belongings, but rather a society in which esteem and respect are based on “social serviceability,” there are strong incentives to develop one’s most socially useful potentials through education and training.

Anyone pursuing training in a participatory economy would receive income just like any other worker in the economy. If the training is deemed more onerous compared to the social average, a student receives more income accordingly, or vice versa.

Can rewarding effort instead of the value of contribution really be efficient?

Differences in the value of people’s contributions are due to differences in talent, training, job placement, luck, and effort.  If we include an effort component of training in our definition of effort, the only discretionary factor influencing performance is effort, and therefore the only factor we should reward to enhance performance is effort. By definition, neither talent nor luck can be induced by reward. Rewarding the occupant of a job for the contribution inherent in the job itself does not enhance performance. And provided that training is undertaken at public rather than private expense, no reward is required to induce people to seek training. Not only is rewarding effort consistent with efficiency, but rewarding the combined effects of talent, training incurred at public not private expense, job placement, luck, and effort, is not.

Also, notice that it is one’s work mates that are charged with the task of measuring effort and there is no incentive for one’s work mates to reward “clumsy” or “bungling” effort rather than proficiency. One’s fellow workers have every incentive to reward “effort to improve the success of efforts” since this would rebound to their advantage as well because all workers are collectively responsible for ensuring that the workplace fulfills its commitments they proposed during the planning process.

Will balanced jobs really be efficient? Won’t they exclude specialisation and waste scarce talents? And what about the need for experts?

Balanced jobs are not designed to avoid specialisation. They are designed to avoid disparate empowerment. It is not suggested that everyone perform every task which is impossible and undesirable in any case. Each person will still perform a very small number of tasks in her balanced job (BJ). Some will still specialise in brain surgery, others in electrical engineering, etc. But those who perform these specialised tasks if they are more empowering than average tasks will also perform less empowering tasks as well, and if they are more desirable than average, will also perform some less desirable tasks — unless they wish to work more hours or accept a lower effort rating. In any case, the tasks each performs do not have to be balanced for empowerment or desirability every day, week, or even every month. There is ample leeway in organising work to accommodate technological and psychological considerations while eliminating large, persistent differences in empowerment and desirability. A participatory economy is one that reaps the productivity awards of a very high degree of specialisation but without the undesirable effects of permanent hierarchies.

However, it is true not everyone has the talent to become a brain surgeon, and there are social costs to training brain surgeons. Therefore, there is an efficiency loss whenever a skilled brain surgeon does something other than perform brain surgery. But most people have some socially useful talent whose development entails some social costs. And an efficient economy would identify and develop everyone’s most socially useful talent. If this were done, there would be an opportunity cost no matter who changed bed pans, and the efficiency loss from brain surgeons changing bed pans from time to time would be less than in today’s economies where the talents of many go undeveloped. To give an example, if we think that nearly all doctors eighty years ago were men. This was not because women were not capable of becoming doctors, but because of structural barriers in a society with gender hierarchies. Today, the gender balance of doctors is more or less even. This implies that there are many more people in society who have the capability to perform specialised tasks but who do not have the same opportunities to do so, due to structural barriers in today’s society, which could be based on class, gender, race or other factors.

Moreover, countless studies confirm that participation increases worker productivity. If BJs enhance effective participation as they are intended to do, whatever efficiency loss they entail should be weighed against the productivity gain they bring.

The “expertise” argument against BJs fails to distinguish between the legitimate role of expertise and an unnecessary usurpation of decision making power. In circumstances where the consequences of decisions are complicated and not readily apparent, there is an obvious need for expertise. But economic choice entails both determining and evaluating consequences. Those with expertise in a matter may well predict the consequences of a decision more accurately than non-experts. But those affected know best whether they prefer one outcome to another. So, while efficiency requires an important role for experts in determining complicated consequences, efficiency also requires that those who will be affected determine which consequences they prefer. This means it is just as inefficient to keep those affected by decisions from making them as it is to prevent experts from explaining consequences of complicated choices to those who will be affected. Self-managed decision making, defined as decision making input in proportion to the degree one is affected by the outcome, does not mean there is no role for experts. Instead it means confining experts to their proper role and keeping them from usurping a role that it is neither fair, democratic, nor efficient for them to assume.

In the end, we will have to wait and see through practice and experimentation what the results of balancing jobs will be, and the degree to which it can be done. We think that all who value economic justice and popular participation would hope for net efficiency gains, or at least minimal efficiency losses. Of course it would be up to the workers and consumers in a participatory economy to decide for themselves if job balancing was producing efficiency losses, and to what extent they wanted to slow their pursuit of equity and participation as a result.

Isn’t it difficult or even impossible to measure effort?

It is usually assumed that it is easier to measure an individual’s contribution to outcome that it is to measure an individual’s effort, but correctly assigning responsibility for outcome in group endeavours is not easy. Even in sports teams, which presumably are more suited to such calibration than production teams such assignments are very difficult. For example, in football debates over an individual player’s contribution, the relative importance of defending versus attacking, or the importance of “intangibles” and “team chemistry,” testify to the difficulty of assigning individual responsibility for group outcomes.

And measuring effort is not always as difficult as is assumed. Every teacher who has taught and graded students for long knows there are two different ways to proceed. Teachers can compare students’ performances to each other, or to how well they expected a student to do. Admitting the possibility of grading according to “improvement” is tantamount to recognising that teachers can, if they choose, measure effort. Given a student’s level of preparation when she or he entered the class, given a student’s natural ability, is this an A, B, or C effort, are not questions teachers find impossible to answer.

And remember who is judging worker effort in a participatory economy. Who is in a better position to know if someone is only giving the appearance of trying, or engages in “clumsy effort” than the people working with her on the same task? While teachers don’t see students’ preparation, workers do see work mates’ work. It is not as easy to pull the wool over the eyes of one’s work mates as of one’s supervisors — or teachers.

Will people need to know what to consume one year ahead?

Consumers are not expected to know what they want to consume in detail one year ahead. However, if we want consumers to influence the annual plan we need input from consumers during the planning process. From year to year consumers’ incomes change, and consumers’ desires change. Signaling producers about these changes is what these consumption requests are for and why it is quite useful for producers. Necessary details can be filled in from consumer profiles and actual purchases during the year, and adjustments can be negotiated with the aid of instantaneous inventory supply line prompts at the disposal of worker councils and federations. Just because consumption requests lack detail and people change their minds does not mean the planning process is pointless. If we want consumers to influence what is produced in the economy, and if we are going to decide what is produced in large part through a planning procedure, then we need consumers to provide their best guesses about what they will want. We don’t need them to agonise over their proposals, and we certainly can accommodate them when they change their minds.

Putting numbers next to a list of “coarse categories” is not expected to be burdensome. But even if a person does not fill out and submit a consumption request form, their neighbourhood council can simply use their actual consumption last year as their new consumption request for this year. If their effort rating for this year warrants this level of consumption, their request will be approved and included in the neighbourhood proposal. If not, and if a person continues to fail to respond to requests for a new proposal, the neighbourhood council can reduce every item in their last year consumption by the same percent until the reduced request is covered by their lower effort rating this year. In this way neighbourhood consumption councils, who must submit neighbourhood proposals during the planning procedure, can do what they have to do even if some of their members fail to provide personal consumption proposals.

The important thing is that no matter what people choose to do individually there will be an initial consumption proposal for the entire neighborhood submitted by our consumer council, and there will be revised neighborhood consumption proposals submitted in every subsequent round as well. And that is all that matters as far as how the planning procedure “works.” What will happen when someone discovers during the year that he wants a new pair of shoes he didn’t order but don’t need the electric razor he did order? He will order a pair of shoes that looks suitable online, or pick up a pair at a distribution centre or shopping mall run by a consumer federation, and be charged the indicative price for the item. He will not pick up an electric razor and therefore he will not be charged for one.

It’s important also to be clear about how workers and consumers are credited and charged for what they do. The planning procedure “approves” the behavior agreed to in the plan—for both worker and consumer councils. Consumers, and consumer councils and federations are charged for what they actually consume during the year, not what was approved for them in the plan. Any differences are recorded as increases or decreases in the debt or savings of individual consumers, neighborhood councils, and consumer federations.

We need to distinguish between how to adjust to unforeseen changes as the year proceeds and how to formulate the annual production plan in the first place. These are two different issues in all planned economies. The unique participatory planning procedure has to do with how to formulate the plan in the first place. Beyond that, what has been said about the issue of making adjustments during the year is: (1) Imagine people swiping debit cards at cash registers (or online), and being asked if they want to announce a change in their approved consumption plan when the pace of their actual consumption deviates by say 20% from what they ordered. (2) Remember that computerised inventory management systems linked to cash registers and “real time” supply changes are already features of the global economy. (3) Envision consumer federations as clearing houses for consumption just as regional Federal Reserve Banks clear checks for private banks operating in their region. (4) When changes in consumption among all consumers do not cancel then consumer federations will have to negotiate with industry federations for changes in production during the year.

Is there money in a Participatory Economy?

Money in a participatory economy is different than in a private enterprise market economy. A participatory economy will have money in the form of “accounting units” recorded on individual “credit cards” or accounts for the purpose of keeping track of consumption rights, loans, savings, social costs and alternative costs, but not in the form of cash that can be accumulated etc. by individuals. For instance, individuals will be earning consumption rights, or income, in the form of effort rating credits in their workplaces. The income will be above or below average if the individual is borrowing or lending, or works more or less than average. When an individual or unit proposes to consume some good, it spends “accounting credits” to get it. Every unit and individual can spend up to its income each year, each expenditure being deducted from its account.

Can I borrow and save in a Participatory Economy?

Yes, anyone can save by consuming less than her consumption allowance for the year, deferring the remainder for later use. Borrowing, however, raises the issue of credibility. As long as someone who wishes to consume more this year than her consumption allowance warrants can be trusted to pay society back by consuming less than her allowance warrants in the future, there is no problem. In these cases borrowing is as simple and straightforward as saving. But what if a person borrows year after year, and in amounts that cast doubt on her ability to pay society back? In a participatory economy, monitoring the credibility of personal loan requests is up to neighborhood consumption councils since they are also in charge of aggregating household consumption requests, reviewing special need requests, and handling adjustments to consumption requests throughout the year.

Are there classes in a Participatory Economy?

The goal of a participatory economy is to eliminate 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 a participatory economy are:

  1. There is no private ownership of means of production. All actors have the same ownership relations to economic assets as all others.
  2. There is no longer corporate organisational structure. In its place balanced jobs eliminate systematic differentiations bearing on power or income due to a division of labour. And these are fostered and nurtured by the allocation mechanisms, rather than subverted and replaced by hierarchies of command.
  3. And finally, participatory economics establishes compensation for effort and sacrifice. While some people may exert more in their labours and others less, so that people have different incomes, there is no competition for income, no exploitation of some people by others, and there is a limit, in any case, on how much more effort anyone could possibly exert and therefore earn.

In a participatory economy there is no class of owners that occupies a level above others—no capitalists. There is no commanding managerial class above others —no coordinators. There is no obedient class beneath others—no working class. This is because there is no privately held capital, no monopolisation of empowering circumstances, and no group that occupies a position subordinate to others in the economy. In a 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 jobs and who all therefore are economic producers and consumers, without class differentiations.

Are there any examples of Participatory Economics in practice?

Historically, there have been features of a participatory economy implemented in many different parts of the world, including in South America and during the Spanish and Russian revolutions, where workers formed networks of self-managed councils and federations. In the world today, you can find elements of participatory economics in action, where people are engaging in participatory budgeting, and within the global co-operative movement consisting of many thousands of worker owned and controlled businesses. The participatory economics model seeks to extend the values of worker co-operatives to the whole economy, through linking them via a democratic planning procedure thereby advancing one of the key principles in the cooperative movement of ‘co-operation between co-operatives’.

How do we get from here to winning a Participatory Economy and society?

Winning a new economy will take time, but there are at least five areas in which people who want to see system change should want to see progress in the near future:

(1) Bigger and stronger reform movements in all spheres of social life. The goal has to be to create stronger support for social change in a majority of the population. Old reform movements like the labour, feminist, consumer and environmental movements need to be revitalised. And new movements, led by a new generation of activists with new strategies and tactics, need to grow bigger and stronger.

(2) Experiments with more participatory and equitable cooperation, allowing more people to interact in a ways that “prefigures” the new society. Without clear evidence that participatory, equitable cooperation is not only possible, but works better than competition and greed, it will never be possible to convince people to support fundamental system change. We need to create more workers- and consumer owned cooperatives, we need to launch more campaigns for participatory budgeting where neighbourhood assemblies democratically decide what they want to spend their taxes on.

Initiatives to reform capitalism and initiatives to create experiments in equitable cooperation are both necessary strategies, but neither strategy will be successful on its own. Together they protect us from their respective pitfalls. Reforms on their own cannot achieve equal cooperation since any potential progress will be limited and exposed to a constant risk of defeat and to be rolled back as long as institutions such as private enterprise and markets are allowed to continue to reinforce antisocial behavior based on greed and fear. On the other hand, a one sided focus on the creation of alternative economic institutions within capitalistic economies will also not be successful since it will exclude a lot of people that will not be able to participate in the experiments, and because the market forces constantly will pressure non-capitalistic institutions to sacrifice cooperation in favour of commercial success. Involvement in reform campaigns helps to overcome the risk of isolation that is present in “prefigurative” projects. And a continuing work to increase the understanding of how equitable cooperation could work will help people engaged in reform work not to give up the thought of system change, and not to settle for a slightly improved version of a system based on competition and greed.

(3) Influencing “traditional politics” in order to create a more favorable environment for reforms and experiments in equal cooperation, but also to better reach out with our message to a wider audience. A large portion of the people that we need to mobilise show interest in politics mainly during election campaigns.

(4) Strategies to defend movement victories from anti-democratic forces. The ruling elite will not accept any democratic decisions, or hesitate to crush activist organisations or alternative experiments, if they believe that their ideology or privilege are threatened. The time when revolutionaries could take up arms and expect to win is over. The defense must therefore focus on organising massive resistance and civil disobedience since no elite, no matter how well armed, can decide over the people if they refuse to obey their orders.

(5) Finally, alternatives regarding how to make economic and other decisions in ways that are different than today, have to be presented in a more clear and concrete way. Last century’s attempts to create alternatives to capitalism failed miserably, and people are justified to be skeptical and to demand that anyone who advocates system change is clear about how a new system will be different in organising economic decision making.

All these activities are necessary for success but everybody does not have to participate in every activity, and the most successful mix of activities will be different in different times and places, and political groups with different ideologies will prioritise one activity over another. Since we need to make progress in all of these five areas there is no need to loose time on arguing which are the most important.