The capitalist system is currently in crisis. There are inherent contradictions in the system which help to create inequality and environmental degradation. The system encourages the waste of resources either by leaving millions permanently unemployed and underemployed or by encouraging useless economic growth and a "throw away" society.
One of the most common cries from the apologists of the capitialist system is that "there is NO alternative". Of course, as many people who study economic issues and take part in discussions such as this one here know that assertion is untrue. Around the time of the fall of the Soviet Union in 1991 two radical economists/political theorists, Michael Albertand Robin Hahnel, published The Political Economy of Participatory Economics (called Parecon for short). In it they establish their vision of a more humane, sustainable, and cooperative society and over the years, working both collaboratively and separately, Albert and Hanel have honed their theory. An updated vision of Parecon is mentioned in the title of this diary (and the specific book I read recently that forms my understanding of Parecon): Parecon: Life After Capitalism which was written by Albert in 2003. Although he wrote this particular book alone, many of the ideas he has expressed are both his and Hahnel's. I read it off the internet for free here: Parecon: Life After Capitalism
So what exactly does parecon entail? Albert offers a good brief summary as follows:
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. (emphasis added)
The book does a great job in comparing and contrasting parecon to capitalism, market socialism, and central planning, especially how each institutional system performs in the areas of equity, solidarity, diversity, self-management, and ecological balance. I found the comparative analysis to be most helpful and a refresher for someone like me who dropped out of an economics graduate school program over a dozen years ago.
In order to avoid an overly long diary, I am going to assume that the basic flaws and contradictions of capitalism and central planning are well known to readers here and that it is unecessary to reiterate them. Suffice it to say, the whole "raison d'etre" of parecon IS to be a viable alternative not only to capitalism, but also to central planning (which in the minds of most people is what "socialism"/"communism" is).
What, under parecon, would be the mechanism to guide consumption, production, and the allocation of resources if the market mechanism is not used? Well, as the name of the system states, PARTICIPATION is the key. As opposed to centralized planning, participatory planning involves decision-making not a professional bureaucracy, but by the citizens themselves. Since decisions are made by the people that are affected by them, not only are indicative prices (the term "indicative" is used because the monetary system as we know it would be nonexistent) to reflect supply and demand, but they should also reflect environmental and social costs of producing a good. Goods that cause pollution or are dangerous for workers to produce would be priced much higher (and thus accounting for one of the major weaknesses of the market---externalities).
How the "voices" of the citizenry are supposed to be expressed is through various worker's and comsumer's councils at different levels from neighborboods and wards, on up to municipal, state, and national levels. Now this is NOT necessarily as unwieldly as it appears in this day and age of computerization. Citizens submit their plans for their individual consumption and also participate in deciding collective consumption proposals at the various levels society (for example chosing to build a neighborhood recreation center or a state deciding on building a high-speed rail system). At the same time, worker's councils make decisions on what they intend to produce and the resources they intend to use. Individual workers decide how many hours based on their consumption desires they are willing to work. At all levels and on both the consumption and production sides of the equation the plans are refined, changed, negotiated, etc. until a feasible plan is arrived. Again, this process seems very unwieldly on paper, but with computers this unwieldliness can be greatly reduced. Also, I do not believe that the author intends this to be an "etched in stone" idea but to show the validity of the basic PRINCIPLE: the fact that there are INSTITUTIONS that emgerge other than the market (and its discontents) where citizens collectively decide what to produce and how to produce it with the least cost and most benefit to society as a whole.
Now what about the division of labor? This is laid out by Albert in a very intersting way. Briefly speaking, work done in society today can empowering and disempowering, pleasant or unpleasant. Today the "market" divides labor to where those more powerful in the market have the more empowering and pleasant work. Parecon's answer to this conundrum is the concept of "balanced job complexes". Under a system of balanced job complexes tasks are divided and worked by each worker so that every job, with their combined empowering and pleasant tasks mixed with the less empowering and pleasant ones, gives each worker an average amount of empowerment and pleasantness. This means that EVERYBODY who is able to work is required to do a mix of comfortable and uncomfortable work. I know many college-educated people who may balk at this (they would proably even assert that one of the reasons why they went to college was to avoid unpleasant work!), but there is really no reason why a small minority of people have a monopoly on the empowering jobs while the rest of us toil. In my study of worker owned enterprises this concept of balanced job complexes is actually already practiced in varying degrees because there is a tendency by workers collectively deciding to make the work more pleasant, less dangerous, and more rewarding in general. Albert sums it best himself when he states:
Basically, participatory economic job complexes would be organized so that every individual would be regularly involved in both conception and execution tasks, with comparable empowerment and quality of life circumstances for all. The precision of the balance would depend on many factors, and would improve over time. At any rate, no individual would ever permanently occupy positions that would present him or her unusual opportunities to accumulate influence or knowledge. Every individual would be welcomed to occupy positions that guaranteed him or her an appropriate amount of empowering tasks. In essence, the human costs and benefits of work would be equitably distributed. Corporate organization would be relegated to the dustbin of history, with council organization and balanced job complexes taking its place.
Related to balanced job complexes is the idea of compensation. In parecon, compensation is based on effort and sacrifice. Since each balanced job complex is designed to give an average of empowerment and pleassantness, people who choose to consume more in a given period of time would have to do more work and/or more unpleasant work. As Albert puts it:
Greater personal sacrifice made in the production of socially beneficial goods and services is legitimate grounds for greater access to those goods and services.
I was VERY interested in reading this book and my brief summary of a 300+ page book cannot do it justice. This book goes into much greater detail on the points described above. The bottom line for parecon is this:
Given the fact that there are flaws with the so-called "free" market and given the fact that the world's experience with centralized, bureaucratic planning has proven unsatisfactory, what is a viable alternative that promotes the values of equity and solidarity and doing so in an efficient fashion. Albert (and Hahnel) should be applauded for coming up with something which will in the very least "get the ball rolling" as far as discussing and debating the issue. I personally feel they go farther than that. They have come up with a viable alternative that can become a workable solution to the inequality, waste, and the mind-numbing, soul-draining toil that MOST human beings experience under the market system. Again, this book should not be taken as a literal blueprint for what a future society should look like, but as a general outline of the insitutions that would arise to make a more equitable society. The basic principles of solidarity; of making workplaces much less vertical and more horizontal; of making work more empowering, pleasant and safer for a greater number of people; of making consumption and production decisions based on the needs, wants, and desires of the greatest number in a fashion more fair and equal than the market can, has, or could ever dream of doing; of rewarding hard work and sacrfice rather than inheritances of money or other fortunate circumstance; of creating an economy that is more environmentally sustainable and one that avoids the externalitites of the market; among many others, are VALID today more than any other time in our history. It is clear that the "free market" is failing us and the historical examples of the USSR and Eatern Europe are no prize either. We need parecon now more than ever.