Participatory Economics

Participatory economics (sometimes called parecon, for short) is a conception of a postcapitalist economy based on self-management. Participatory economics was developed in the 1970s by two American economists, Michael Albert and Robin Hahnel.

The advocates of participatory economics maintain that human beings have a basic need for self-management. Humans have the capacity to think out in advance and carry out courses of actions to fulfill their own needs and aspirations. Some decisions that affect my life are decisions that will affect mainly just me—what shirt should I wear today? Whose picture should I have on my desk? Self-management of these decisions means I make them. But many decisions affect a number of people. At what time of day should our workplace start work? Will we use a technology that pollutes the air in the surrounding community? Self-management for such decisions requires that the decisions be made collectively. Participatory economics summarizes this idea with the following principle: People should have a say (control) over decisions to the degree that they would be affected by those decisions.

The idea of an economy based on self-management is not new—this has been central to the thinking of the libertarian left (such as anarchists and syndicalists) since the 19th century. Participatory economics builds on this tradition. Since an economy has decisions that affect both workers and consumers, participatory economics proposes that the governance structure of an economy have two basic building blocks: assemblies in workplaces and assemblies of residents in neighborhoods.

Workplace assemblies would be federated throughout the economy to provide an institutional means of worker empowerment. Assemblies of neighborhood residents would be federated in groupings of broader geographic scope—citywide, regional, national. The resident assemblies and federations of them provide the means of community decisions about proposals for the production of public goods.