Parecon

Parecon = participatory economics.

An approach to economic governance proposed by Michael Albert

Discussion

Parecon vs. Economic Democracy

There has recently been an extensive debate between proponents of Michael Albert's Participatory Economics (Parecon) and David Schweikart's Economic Democracy. LInks about the debate can be found here at http://www.ecodema.org/archives/000171.html

It has a summary of the 2 positions:

Parecon is a proposed economic system that uses participatory decision making as an economic mechanism to guide the allocation of resources and consumption in a given society. Proposed as an alternative to contemporary capitalist market economies and also an alternative to centrally planned "socialism" or coordinatorism. The underlying values that parecon seeks to implement are equity, solidarity, diversity, and participatory self-management.

It proposes to attain these ends mainly through the following principles and institutions:

workers' and consumers' councils utilizing self-managerial methods for decision making, balanced job complexes, remuneration according to effort and sacrifice, and participatory planning.

For a deeper understanding here is the whole online version of the book: Participatory Economics: Life After Capitalism.

Schweickart's EconDemis a proposed form of market socialism that embodies three key ideas:

Democratic management of each productive enterprise by the workers

Democratic management of capital investment by a form of public banking

A (mostrly free) market for goods, raw materials, instruments of production, etc. The firms and factories are owned by society and managed by the workers. These enterprises, so managed, compete in markets to sell their goods. Profit is shared by the workers. Each enterprise is taxed for the capital they employ, and that tax is distributed to public banks, who fund expansion of existing as well as new industries.

For a deeper understanding see the book: After Capitalism by David Schweickart .

This article by the latter, is a devastating critique of the democratically-planned economy as proposed by Parecon.

Markets vs. Egalitarianism

David Schweikart at http://www.zmag.org/content/showarticle.cfm?SectionID=26&ItemID=9795

"Where does this leave us? Must we give up on the dream of a humane future beyond capitalism? I think not--but we must think hard about the viability of the alternatives we propose. We must also pay attention to the ethical foundations of our proposals.

In particular, we should reject the obsessive egalitarianism that underlies the Parecon proposal. This strict egalitarianism is morally problematic. [16] It undercuts the generosity of spirit a socialist ethic should promote. Suppose, for example, that I am happy with my work and with my level of consumption. Then I learn that you got more than I did without working any harder. May I take vicarious pleasure in your good fortune? May I fantasize that I too might one day get lucky? If your greater income is a reward for your greater contribution, may I feel good that you are so honored. May I consider honing my own talents so that I too might be rewarded more? Not if I'm committed to the Parecon principle. If you got more than me without working any harder, I am a victim of injustice. Righteous indignation is the appropriate response, not pleasure or inspiration. I experience your success as my humiliation. This is not an ethic of solidarity.

Strict egalitarianism is the ethic of squabbling siblings. (Gary got a bigger piece of pie than me. That's not fair! Gary gets to stay up later than me. That's not fair! Dad likes Gary better than me. That's not fair!) It is not an ethical principle that should command our allegiance. [17]

If we want to construct an economically viable, ethically desirable, alternative to capitalism, we should distance ourselves not only from Albert's obsessive egalitarianism, but also from his implacable hostility to markets: "Markets aren't a little bad, or even just very bad in some contexts. Instead, in all contexts, markets instill anti-social motivations in buyers and sellers, misprice items that are exchanged, misdirect aims regarding what to produce in what quantities and by what means, mis-remunerates producers, introduces class divisions and class rule, and embody an imperial logic that spreads itself throughout economic life. [18] "

Markets indeed have defects, but they have virtues as well. We need to think dialectically about markets. Markets are democratic (in that they respond to consumer preferences), and they are undemocratic, (since they tend to exacerbate income inequality). Markets enhance the space of individual freedom, (since consumer choices are not subject the approval of others), and they contract the space of individual freedom, (since market choices often have third-party effects). Markets provide incentives for constructive behavior (efficient use of resources, innovation) and for destructive behavior (consumer manipulation, disregard of ecological consequences). Neither market fundamentalism nor market rejectionism is an appropriate response to the reality of economic complexity.

God knows, we do not want to live in a world dominated by rapacious, unaccountable economic institutions that pit worker against worker, drive levels of inequality to almost unimaginable levels, and are in the process of devastating the ecology of the planet. We need a better way. But a life preoccupied with negotiating work complexes, forecasting one's future consumption, revising lists, scrutinizing the consumption lists of one's neighbors, posting notes on the qualitative aspects of desired purchases, voting on national plans vastly more complicated than the Federal Budget is not the answer.

This is not the place to defend an alternative proposal, one that avoids obsessive egalitarianism and allows for a regulated market, but interested readers might want to check out my After Capitalism" (http://www.zmag.org/content/showarticle.cfm?SectionID=26&ItemID=9795)