Participatory economics, often abbreviated Parecon, is an economic system based on participatory decision making as the primary economic mechanism for allocation in society. In the system, the say in decision-making is proportional to the impact on a person or group of people. Participatory economics is a form of socialist decentralized planned economy involving the collective ownership of the means of production. It is a proposed alternative to contemporary capitalism and centralized planning. This economic model is primarily associated with political theorist Michael Albert and economist Robin Hahnel, who describes participatory economics as an anarchist economic vision.
The underlying values that parecon seeks to implement are equity, solidarity, diversity, workers' self-management, efficiency (defined as accomplishing goals without wasting valued assets) and sustainability. The institutions of parecon include workers' and consumers' councils utilising self-managerial methods for decision-making, balanced job complexes, remuneration based on individual effort, and wide decentralized planning.
Decision-making principle
A primary proposition of parecon is that everyone should have a say in decisions proportionate to the degree to which they are affected by them. In parecon, self-management constitutes a replacement for the mainstream conception of economic freedom, which Albert and Hahnel argue by its very vagueness has allowed it to be abused by capitalist ideologues. In their councils, workers deliberate over plans regarding the productive enterprise and employ whichever voting scheme best instantiates the principle that each worker's decision-making power ought to be in proportion to the impact upon them of the particular decision being voted on. Generally, a workers' council is not constrained to adopt a single threshold (i.e. 50%+1) to pass their resolutions, but can tailor their voting procedures to reflect the variation in impact of the enterprise's decisions.
Work and distribution
Balanced job complexes
A balanced job complex is a collection of tasks within a given workplace that is balanced for its equity and empowerment implications against all other job complexes in that workplace.
Balanced job complexes are central to the theory of participatory economics which emerged from the work of radical theorist Michael Albert and that of radical economist Robin Hahnel.
Compensation for effort and sacrifice (principle for distribution)
Albert and Hahnel argue that it is inequitable and ineffective to compensate people on the basis of luck (e.g. skills or talents that owe to their birth or heredity), or by virtue of workers' productivity (as measured by the value of the goods they produce). Therefore, the primary principle of participatory economics is to reward workers for their effort and sacrifice. For example, mining work—which is dangerous and uncomfortable—would be more highly paid than office work for the same amount of time, thus allowing the miner to work fewer hours for the same pay, and the burden of highly dangerous and strenuous jobs to be shared among the populace.
Additionally, participatory economics would provide exemptions from the compensation for effort principle. People with disabilities who are unable to work, children, the elderly, the infirm and workers who are legitimately in transitional circumstances, can be remunerated according to need. However, every able adult has the obligation to perform some socially useful work as a requirement for receiving reward. However, everyone would be entitled to free health care, education, skills training, and the freedom to choose between various democratically structured workplaces with balanced jobs balanced for desirability and empowerment.
The starting point for the income of all workers in a participatory economy is an equal share of the social product. From this point, incomes for personal expenditures and consumption rights for public goods can be expected to diverge by small degrees, reflecting the choices that individuals make in between work and leisure time, and the level of danger and difficulty of a job as judged by their immediate workplace peers.