It is generally possible to describe the two dominant economic systems in the last century as capitalism and centrally planned socialism. The system of private individuals owning productive property, laborers selling their labor for a salary, and price negotiation between sellers and buyers through a market system assessing the flow of goods and services is the basis of capitalist systems. While capitalism has never existed in its purest form because it depends on a political state to regulate and prevent it from collapsing, over the last century, in most countries around the world, different forms of state capitalism have been the dominant system (1).
In summary, social ownership of productive property, self-managed workplaces, and neighborhood councils are involved in a participatory economy. Decisions are made democratically within workplaces. Every employee has one vote; jobs are balanced. No one is left with only rote and disempowering work, and payment is made according to their effort or personal sacrifice. Citizens in communities belong to neighborhood councils to participate in consumption and local public goods decisions. Workers and consumer councils are connected through a democratic federal structure made up of larger geographical units. A de-centralized democratic planning procedure is used to create the plan for a growing economy.
Participatory economics stems from the last two centuries of thought and experimentation around the idea that people should be free to democratically, cooperatively, and fairly manage their own lives with others, without being ordered from above or driven to compete against each other by greed and fear. The roots are rooted in the vision of an economy shared by many who have fought for greater economic justice and democracy but have developed into a coherent formal model that explains how, in practice, such a system could work for millions of people in modern society. The model was first presented formally by economists Michael Albert and Robin Hahnel and had been growing since then (2).
Robin feels quite convinced that a complicated, huge, well-functioning economic system, including a world economy, in theory, could exist in which participatory planning has largely replaced economies. While acknowledging that, through experimentation and democratic consideration, the overall structure of economic systems in a post-capitalist participative economy will develop, he nonetheless argues that perhaps the goal ought to be the total removal of markets. His theory is that such an economy would perform in ways that would be strongly viable. Trade-offs over the various values that a participative economy hopes to realize will inevitably occur (3).
What is a Participatory economy?
It is essential to be clear from the beginning about one’s goals; what kind of human beings do we want to be? And what principles and values we want our economy to be based on when thinking about a desirable economy. Only then can we begin to shape economic institutions and decision-making processes and evaluate the extent to which our objectives are being achieved and why they are likely to be better than possible alternatives. An economy that reached out for democracy, justice, solidarity, diversity, efficiency, and environmental sustainability is a participatory economy (4).
Usually, when we look at the decision-making standards in most workplaces today, a minority at the top, made up of management, make important decisions. At the same time, the orders are carried out by workers lower down in the hierarchy. Many employees have very little say over the workforce’s running or significant control over their working lives. In most parts of the world, hierarchical decision-making structures are no longer tolerated in the political system, labeled authoritarianism or dictatorships. So, suppose we reject the idea that a political elite dictates our lives and we value democracy. In that case, it should apply to all areas of social life, including the economy (5).
Majority rule is another notion of economic democracy. The first issue with this norm is that a specific decision tells us nothing about who should vote. The other problem with the majority rule is that some people are more affected by many decisions than others, which means that those more affected by a decision can be overruled or not affected by those who are less affected. Thus, while the concept of majority rule may work well if decisions affect us all equally, the overwhelming number of decisions that affect some more than others do not work well.
Incurring burdens and receiving benefits are involved in entering into economic cooperation with others. We have seen a tremendous rise in income and wealth inequality in today’s societies, where the vast majority of economic activity benefits go to a small minority of individuals. In many countries, a significant proportion of the country’s total wealth is owned by the richest one percent of the population. There is increasing research showing a strong correlation between inequality and social problems, including crime levels and detrimental effects on human mental and physical health and well-being (6).
One concept is that individuals should get what they and their productive possessions contribute to the economy out of an economy. The productive property includes land, buildings, machinery, or corporate ownership of stocks, which is the same thing. Only one thing a person has power over is how much effort they choose to invest. Individuals can not choose to be tall or smart or influence external factors they have no control over. Punishing someone for something they can not affect is commonly considered unjust. Since each participant bears burdens and enjoys benefits, it is equalizing net benefits, meaning benefits enjoyed minus burdens borne, making the economic cooperation fair (7).
The Ideology of a participatory economy
The logic of our current economy is such that our interests are pitted against each other. It is often at someone else’s expense for one person to get ahead. On the other hand, a Participatory Economic seeks to create conditions that reveal how our interests are intertwined so that we all advance in the spirit of mutual aid, cooperation, and solidarity for one individual to advance. Solidarity is defined here as concern for others’ well-being and giving others the same consideration as we ask for ourselves in their endeavors. Diversity refers to individuals who have a wide variety of choices to satisfy their needs and desires. The best life for one is not necessarily the best life for another since humans show a wide range of preferences, tastes, potential, and lifestyles. Variety adds to all of our lives’ richness. In favor of flourishing diversity in our lives, a participatory economy rejects conformity, homogenization, and regimentation.
The word efficiency turns off many people who are critical of the current economic system. This is for two reasons: many seem to believe that the term efficiency is the same as maximizing profit, which is not, and secondly, we are often told that the value of free markets is that they are effective, which they are not. For example, an efficient economy would not result in global warming, financial crises, booms and busts, and persistent unemployment. Efficiency means meeting our economic objectives with as little waste as possible resources, time, labor, and energy. To maximize human well-being for all, a participatory economy seeks to be an effective economy (8).
Our other stated principles already contribute implicitly to our understanding of sustainability. For instance, if an economy uses natural resources too quickly, leaving too little for later, it is not efficient; if an economy sacrifices the needs of future generations to fulfill the desires of the present generation, intergenerational justice has been violated; if we destroy our tropical jungles, forests, and ecosystems, diversity has been reduced, not increased. However, supporters of participatory economics see environmental sustainability as more than just following it. And caring about our natural environment in and of itself is an important value. Therefore, a participatory economy is a green economy that seeks to satisfy our economic needs without diminishing future generations’ ability to meet and continue to advance their needs. This means leaving the circumstances of future generations at least as advantageous as those we enjoy today (9).
The means of production are socially-owned in a participatory economy. Capital or productive property has also been called the means of production. It includes our natural capital, such as land, resources, and minerals; produced capital, such as buildings and facilities, the machinery and equipment within them; and human capital, such as various individuals’ abilities. Our accumulated knowledge and technologies used for the production of goods and services are also included.
Bodies that encourage a participatory economy
Production and consumption are mainly organized in our current economy through privately owned corporations using top-down hierarchical decision-making. Instead, democratic worker councils and consumer councils, and their federations, exist in a participatory economy. Councils are bodies where individuals have equal rights and come together to discuss, decide and vote. The worker council is the highest decision-maker in the workforce. It is comparable to a shareholder meeting in our current economy, except that every worker in a works council has one vote in a participatory economy. The idea is that decisions within employee councils follow the self-management norm. Every employee has decision-making that is proportionate to the degree to which the outcome of a decision affects them (10).
Each worker and consumer council will elect representatives to higher council layers, called council federations. Worker councils are federated across industries, and consumer councils geographically federate at the local, city, regional and national levels. Council nesting is necessary because different decisions have a different impact on different sections of the population. Representatives discuss and vote at the national level on the planning and construction of public goods at the national level, including national parks, education, or healthcare.
Balancing work and effort
There are job opportunities in any economic system that identify the tasks workers perform. Most jobs involve relatively disempowering and undesirable tasks in centralized economies, such as capitalism or centrally planned socialism. The minority of jobs entail mostly empowering and desirable tasks. Tasks that largely consist of repetitive or mundane labor include disempowering work. Work empowerment involves tasks consisting of professional, intellectual, managerial, or technical labor. Workers receive benefits in the form of consumption rights for goods and services in return for performing work. Every worker is allocated a slice or share of the social product called income to think of what the economy produces as one big pie. It is crucial for an economy to have a criterion for income distribution, not only to ensure that it is fairly distributed but also for practical reasons. For the allocation system described in participatory planning, quantitative information is necessary to function at all, not least to be efficient (11).
According to their effort or personal sacrifice, a Participatory Economic will also aim to compensate workers for socially beneficial labor performance.
There are workers and consumer councils in Participatory Economics, where decision-making participants say how much they are affected. Productive capital and resources are owned by everyone in society, with an equal stake in everyone and how capital and resources are used. For the following year, workers and consumer councils, and federations make, revise, and approve self-activity proposals through a democratic planning process designed to produce an efficient, fair, and environmentally sustainable plan. Work is distributed as balanced jobs in which employees specialize in sharing work that nobody wants to do (12).