What is participatory economics?

Participatory economics, or parecon, is a new way to organize economic activity that is different from capitalism and all forms of socialism.  Unlike all those models, parecon is truly classless.  In a parecon:

  1. No one owns any workplaces.
  2. Everyone does a fair mix of work tasks.  No one permanently does rote, debilitating, or dangerous work.  And no one permanently does conceptual, empowering, or pleasant work.
  3. People are compensated only for how hard they work or how much they sacrifice at work — never for talent, training, or output.  There are no disparities in income except for those based on work effort or work sacrifice.
  4. People have a high degree of control over their economic lives.  This occurs through nested council structures for both production and consumption.
  5. Neither markets nor central planning exist in any form.  Markets and central planning are what economists call systems of allocation.  Parecon, however, uses a new method of allocation called participatory planning.  In participatory planning, people jointly coordinate their economic lives in their dual roles as workers and consumers.  

What does it mean to say “parecon is classless?”

In a parecon, everyone is a worker.  There is no one who owns any workplaces, meaning there are no capitalists.  But there is also no small, permanent class of managers who run the workplaces and give orders to the workers whom they outrank.

That is, in capitalism and all forms of socialism, there exists in the economy a class above workers — a class we might usefully refer to as the coordinator class.  In capitalism, coordinators sit above workers but below capitalists.  Capitalists are the ruling class in capitalism.

However, in all forms of socialism, there are no capitalists.  In all socialist economies, coordinators are the ruling class. 

In a parecon, there are neither capitalists nor coordinators.  Everyone is a worker.

Who makes the decisions in a parecon?

The workers themselves make their own decisions. 


Only parecon promotes fair consumption rights and a fair distribution of work tasks (equity).  Only parecon grants workers a say over decisions that affect their lives to the degree those decisions affect their lives (self-management).  Only parecon promotes a variety of outcomes (diversity).  Only parecon promotes common interest and support among people (solidarity).  And only parecon minimizes waste and maximizes productive outcomes (efficiency).