BelovedEconomics.Org suggests Parecon as a starting point for a vision of a hypothetical future economy, to inform an implementation of an alternative economic vision within the constraints of the current economy. Parecon is a proposal for a radically improved economy authored by Michael Albert and Robin Hahnel. Here I explain Parecon, the primary inspiration for Beloved Economics, starting with a list of guiding values, followed by a list of defining institutions. My presentation of Albert and Hahnel’s ideas may differ from Albert and Hahnel’s presentation, but I hope they would agree that its spirit remains faithful. Readers can also check out Albert’s excellent book: Parecon: Life After Capitalism.

Guiding values of Parecon:

• Freedom. Parecon values individual freedom by insisting that everyone should remain free to do whatever they choose BUT only to the extent that exercising one’s freedoms does not impinge on the rights and freedoms of others.
• Equity. Parecon tries to be fair to everyone.
• Solidarity. Parecon pursues “unity through shared interests,” the dictionary definition of “solidarity.” Thus Parecon elevates common interests above special interests, even to the extent of trying to do away with special interests.
• Classlessness. To achieve solidarity, Parecon goes to great pains to eliminate economic classes—meaning groups of people that have economic interests that are at odds with one another.
• Diversity. Parecon celebrates our diversity. Instead of pursuing homogenization, it values differences in preferences, beliefs, lifestyles, religions, philosophies, abilities, ethnicities, races, genders, gender roles, sexual orientations, and kinship and family relations. Basically, differences are encouraged in every respect, except economic interests. Indeed, Parecon encourages and creates conditions where different people can choose very different lifestyles and life paths. For example, Parecon makes it much easier for people to choose to enjoy more leisure than capitalism typically allows most people. It also values diversity in the economic product. Growing up, I remember seeing a television comedy of a fashion show in the Soviet Union: all the models had on the same plain blue dress. Unlike this caricature, Parecon values having many different styles of dresses to choose from. Not just dresses, by pursuing diversity in the economic product, Parecon values choice in all goods and services.
• Efficiency. Parecon asserts that valuable economic resources should not be squandered. For example, in a Parecon, money would not be spent advertising to get people to consume more—unless the product had some benefit that justified the expense of the advertising campaign (e.g. a health benefit). Huge expenditures to advertise fast-food hamburgers would never happen in a Parecon.
• Self-management. Parecon seeks to allow every worker in the economy to manage their own labor, doing away with the role of “supervisor” or “boss” in the workforce. Instead of a boss, workers are accountable to bodies called “producer councils” whose only members are the same workers being supervised. In a producer council, all members remain equal peers. More will be said about this below.

Defining Institutions of Parecon, broken into three categories: consumption, production, and allocation.

Consumption of goods and services:

• No exchangeable money. Money cannot change hands in a Parecon—not even between a consumer and a vendor. As a consequence, begging and bribery are impossible. What is the alternative to money? The economy grants consumption rights (or synonymously, reward, or remuneration) to individuals in exchange for labor. Consumption rights are exchanged for goods and services, but cannot be exchanged between individuals. See below for more details.
• Remuneration according to effort and sacrifice. How much does one person get to consume? Who eats at the five-star restaurants, and who eats at the soup kitchens? According to Parecon, barring extenuating circumstances (specifically: need), the fraction of the collective economic product (think “gross domestic product”) you get to consume equals your fraction of the total effort and sacrifice made to produce this product. Thus if you have sacrificed more than others (e.g. worked longer hours and/or performed more onerous tasks), you get to consume more. Note: effort and sacrifice roughly correlates with number of hours worked, but also takes into account how hard you work, and how pleasant or unpleasant, safe or dangerous, are the tasks you perform.
• Remuneration according to need. If an individual needs goods and services to survive, beyond what reasonable effort and sacrifice would entitle them to (e.g. a patient requires expensive medical treatments), Parecon will provide them.
• No reward for the value of what you produce. Whether you produce something of great value to others, or whether you produce something of litte value to others, Parecon gives reward based on what you sacrificed to create the product, not based on its ultimate value to others. However, as explained below, a Parecon only pays for work that society deems socially-valued.
• No reward for sales. Vendors do not receive consumption rights for selling products. They only receive consumption rights for their effort and sacrifice in creating the goods and services and/or in making their goods and available. Consumption rights are not transfered to vendors—they just disappear when goods and services are consumed.
• No reward for ownership of productive assets. In a Parecon, owning a factory or tools of your trade will not allow you to consume more. Only your own effort and sacrifice will allow you to consume more. Money and possessions can’t work for you.
• No reward for intellectual property. In a Parecon, owning a copyright, trademark, or patent will not allow you to consume more. Only your own effort and sacrifice expended in creating the intellectual property will allow you to consume more.
• No reward for talent, knowledge, skill, intelligence, senority, or level of previous education. You get no economic advantage (in particular, no more consumption rights) for any talent, knowledge, skill, intelligence, senority, or level of previous education. You are only rewarded for your effort and sacrifice. As Albert puts it, for the same level of effort and sacrifice, a Parecon would have paid Mozart the same as his jealous but significantly less gifted rival Salieri. However, as mentioned above and explained more fully below, a Parecon only pays for work that society deems socially-valued.
• Reward for receiving education. Parecon encourages and incentivizes education just like it incentivizes any other economic activity. Rather than charging students up front in exchange for a lifetime of higher earnings, people are rewarded for going to school at the time they go to school, based on their effort and sacrifice made in attending classes, studying, doing homework and taking exams (or whatever other activities they perform as students). For the same level of effort and sacrifice, the economy pays students as much as their teachers and professors.
• No (or limited) inheritance. You can’t get ahead of others based on the wealth of your parents. You can only get ahead of others based on your own effort and sacrifice. That said, it is recognized that there may be some circumstances in which it becomes desirable to allow the transfer of consumption rights among family members, but only in a limited way.
• Consumers plan their consumption. At regular intervals (e.g. once per year) consumers plan what they are going to consume over the next interval. Some consumers may consider it a chore, but it will be no more involved than the current chore of preparing and filing taxes—and no one will file taxes in a Parecon (see below). Planning needs to be done for the purposes of deciding how to allocate resources. For example, consumers will say how much meat they will consume over the coming year, how much fruits and vegetables, how much bread, and how much staples. They will say how many times they will eat in restaurants over the coming year, whether or not they will buy a new television or computer, etc. Individuals plans will be combined into a plan for the whole economy (after accounting for constraints, see below). The plan for the ecomony will typically contain slack to allow consumers to buy on whim, while supplies last. Prices for whimsical purchases could be set by automatic alogrithms to control excess demand.
• Payment by consumer card. Shopping in a Parecon will be similar to shopping under Capitalism, except that advertising will be minimal and no effort will be made to make people over-consume. Payment might be made by a “consumer card” which looks like and is used like a credit card. The accounting of consumption rights is done by computer. Consumers can borrow or save, but without interest.
• Prices reflect true cost. In a Parecon, prices of goods and services will match their true cost to society. Many items will be cheaper, because in a Parecon, consumers will never be gouged to make executives and shareholders rich. On the other hand, Parecon will pay living wages to all laborers, so labor-intensive products currently produced by migrant workers, sweatshops laborers, or wage-slaves, under Capitalism, may cost more under Parecon.
• Prices account for external costs and benefits. In Parecon, prices will also reflect any monetary costs and benefits products might have to society, external to the transaction. For example, to the extent that gym equipment, personal training, and healthful food reduce healthcare costs to society, their prices will be discounted by the amount society saves on doctors and hospitals. This feature goes both ways. Smokers will pay the monetary cost for their future healthcare problems, as they buy cigarettes. Motorists will pay to mitigate the costs of air pollution, when they fill up at the pump. To a certain extent, capitalism achieves these same ends through taxation. But in Capitalism, taxes on goods and services remain grossly inelegant kluges that many powerful people often effectively oppose. No such disincentives to true pricing exist under Parecon.
• Endogenous preferences. Why do some people prefer to drive SUVs and others prefer Smart Cars? Most economic theory assumes that consumers preferences remain fixed and immutable. In the classical theory, the options provided to consumers depend on their preferences but not vice-versa. On the other hand, Albert and Hahnel have advanced the view that people’s preferences depend upon the options provided, just as the options provided depend upon their preferences. For example, when gas is cheap, people prefer to drive large cars like SUVs, whereas when gas is more expensive, more people choose smart cars. Even better: when gas is cheap, and the subway is expensive, people prefer private transportation to public transportation. With regard to public transportation, society constrains consumers choices by building or not building infrastructure (thereby limiting options) based on preferences that result from gas and train prices that do not reflect the true costs and benefits of the different possible modes of transportation to society. Albert and Hahnel argue that endogenous preferences lead economic systems which do not value their products consistent with their true social costs and benefits to deviate widely from optimal.
• Prices set by Participatory Planning. Who decides the true cost of a good or service to society? Under capitalism, the market determines the price of goods and services which calculates costs but ignores costs and benefits external to the transaction. Parecon replaces the market with Participatory Planning in which all consumers and all producers contribute, as described below. Under Parecon there will be facilitators to help Participatory Planning go smoothly, but decision making will remain completely decentralized. As explained below, for Participatory Planning everyone contributes to making all decisions that affect them—with a say in each decision in proportion to the relative degree that they are affected.
• Consumer councils. Every person in a Parecon belongs to a consumer council—the point of contact between the consumer and the rest of the economy. In a Parecon (unlike in what Beloved Economics proposes) your place of residence determines which consumer council you belong to—and you only belong to one consumer council. For example, the residents of an apartment complex, depending on its size, might comprise a consumer council. Most consumer councils would have between 10 and 50 members. Later, I will explain the functions of consumer councils, and their methods of decision making.
• Higher-level consumer councils. Beyond what was explained above for consumer councils, in Parecon, there are also higher-level consumer councils. Technically, I described “first-level councils”. Each first level council sends a delegate to a second-level council. Each second-level council sends a delagate to a third-level council, and so on up to the “consumer high council,” representing all consumers in the whole economy. If the first-level councils represent complexes of apartments or houses, second-level councils might represent wards, third- municipalities, etc, on up. Albert and Hahnel call the whole structure a “nested federation of consumer councils.” Most councils, at all levels, will have between 10-50 members or delegates, with the number of members/delegates optimized to facilitate thoughtful deliberation.

Production of goods and services:

• Producer councils. Every worker in a Parecon belongs to one or more producer councils. Instead of a supervisor or boss, workers are accountable to their producer councils. More on this topic below. Different producer councils will supervise different kinds of work, so workers may belong to more than one producer councils if their “job complex” (defined below) includes diverse tasks.
• Higher-level producer councils. Producer councils, like consumer councils, exist in higher-levels and have a nested structure. Lower-level producer councils send delegates to the next higher level council. The lowest-level producer councils might be work-groups. Higher-level councils might represent factories or, higher still, industries. Again the numbers of members/delegates in each councils is optimized to facilitate thoughtful deliberation.
• Empowerment. Some tasks are inherently empowering to the worker, in that they impart greater confidence, knowledge, skills, and capacities for useful controlling one’s destiny. Other tasks do not have this effect, and if a worker only performs such unempowering tasks the result can be a loss in the ability of a worker to control their life, especially if one whole class of workers monopolizes the empowering work. Parecon tries to spread the empowering work among all workers. Within that constraint it tries to give workers maximum freedom to decide in what kind of work to engage.
• Desirable work. Some tasks are more desirable than others. Again, Parecon tries to prevent one class of workers from monopolizing the desirable work tasks.
• Balanced job complexes. In a Parecon, instead of performing a “job,” people will perform a “job complex,” which is like a job except that it consists of many possibly very different tasks. In particular, someone may be a brain surgeon on Tuesdays and Wednesdays, doing hospital administration and keeping up with the literature when not in surgery, and then (for something completely different) wait tables at a restaurant on Friday, and have the rest of the week off. Whether a worker chooses to work 20 hours per week, or 60 hours per week, or something in between or beyond, (and be rewarded according to effort and sacrifice), Parecon incentivizes (Albert and Hahnel might say “enforces”) keeping everyone’s average desirablity and average empowerment across their whole “job complex” to be roughly the same as everyone else. More will be said about how this balancing is accomplished in the comments about on Participatory Planning.
• Minorities protected by caucuses. To protect minorities from oppression by the majority, they are allowed and encouraged to organize—and stay organized—in the workplace, as caucuses. Protected minorities can even consider their time spent in caucus meeting as part of their “paid” time at work.

Allocation of resources and other decision making:

• Decisions made by those affected. Parecon operates under the norm that each economic decision is made only by those affected by the decision. Moreover, Parecon holds that each person affected by a decision should have a relative say in the decision in proportion to the relative degree to which they are affected by the decision.
• Flexible decision making strategies. Parecon employs flexible methods of making decisions (e.g. one-person decides, majority rules, consensus, or something in between) to ensure that decisions are made by those affected, with each person having a say in proportion to the degree to which they are affected.
• Judiciary adjudicates disputes. Stephen Shalom proposed a political system compatible with Parecon called ParPolity. The political system, specifically its judiciary, adjudicates disputes, relying primarily on randomly chosen juries. (The consumer councils become the legislature.) More will be added about this on a separate page.
• Participatory planning. Participatory planning is Parecon’s way of making the broad decisions about running the economy, especially allocating resources. In Parecon, making these decisions is done with the intention of allowing each person in the economy to have a say in each decision in proportion to the degree to which they are affected by the decision. The primary features of Participatory planning are proposal and iteration. Workers propose what they want to produce, consumers propose what they want to consume, an accounting is done to see if the plan is feasible. If it is not feasible, information is given to consumers and producers indicating how much they can afford to consume, given what they plan to produce, and how much effort and sacrifice they plan to expend. With this new information, the process is iterated giving participants the chance to revise their proposals, in terms of both production and consumption—bringing what they plan to produce in line with what they plan to consume. Based on Albert and Hahnel’s economic theory, the plan always converges to a feasible one, after several (maybe 6-10) iterations. I deem a full discussion of Participatory Planning too long for this brief list. Instead, I will try to explain Participatory Planning better on a separate page. Suffice to say, I feel Participatory Planning is one of Albert and Hahnel’s most important contributions. Unfortuately, explaining Participatory Planning is a bit like explaining how a complicated computer program works—it is better to just see it, test it, and tinker with it, in action. I believe creating a Beloved Economy, within the current capitalist economy, will help advance Parecon by allowing us to demonstrate, test, and tinker with this brilliant central idea of Parecon: Participatory Planning.
• Iteration facilitation boards. Iteration facilitation boards, at all levels of the economy, work with producer and consumer councils during Participatory Planning to help make the process converge on a feasible plan. The boards have no power to make decisions, and have no particular economic incentive to sway the outcome of the plan. Specifically, regardless of the ultimate plan, members of the boards, like everyone else, are remunerated according to effort and sacrifice, and work balanced job complexes.

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