Participatory Economics from Capitalism

Michael Albert

In the words of the great British economist John Maynard Keynes: '[Capitalism] is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous – and it doesn't deliver the goods. In short, we dislike it, and we are beginning to despise it. But when we wonder what to put in its place, we are extremely perplexed.' Let's see if we can undo some of the perplexity. First, what's the real problem with capitalism? ...

Capitalism is theft. The harsh and subservient labours of most citizens fantastically enrich an elite who, if they so choose, don't have to labour at all. On the upper West Side of New York City, within a mile of one another, there exist neighbourhoods in which the average disposable income is, on the poorer side, about $5,000 per year, and, on the richer side, about $500,000 per year. The richest people in the US have wealth unparalleled in history. The poorest people in the US live under bridges inside threadbare cardboard shelters, or they stop living at all. This gap is not explained by a difference in industriousness, in talent, etc. It is a social product, a theft, and the gap between rich and poor nations, as we all know, is even more dramatic.

Capitalism is alienation and anti-sociality. Within capitalism the motives guiding decisions are pecuniary not personal, selfish not social. We each seek individual advance at the expense of others. The result, unsurprisingly, is an anti-social environment in which nice guys finish last. Benefits for the weak arise only as a by-product, not as intended, and often not at all. As but one example, in American hospitals a few hundred thousand people a year die of diseases they did not have when they entered. This is in considerable part a matter of hygiene and other correctable problems. There is no massive campaign to save those lives. It would not be profitable. What health we attain, we attain because someone was seeking not health, but profit. Health, humanity, is impoverished even as profits soar.

Capitalism is authoritarian. Within its workplaces those who labour at rote and tedious jobs have virtually zero say over the conditions, output, and purpose of their efforts. Those who own or who monopolise empowering positions have the preponderant say, in some cases more so even than dictators. Corporations bear as much resemblance to democracy as killing fields do to peace.

Capitalism is inefficient. Market profit-seeking squanders the productive capacities of about 80 per cent of the population by training them primarily to endure boredom and to take orders, not to fulfil their greatest potentials. It wastes inordinate resources on producing sales that aren't beneficial, and on enforcing work assignments that are coerced and therefore resisted.

Capitalism is racist and sexist. This is not intrinsic to the relations of production, but occurs because under the pressure of market competition owners will inevitably exploit racial and gender hierarchies produced in other parts of society. If extra-economic factors reduce the bargaining power of some actors while raising that of others and impact expectations about who should rule and who should obey, capitalists will take note.

Capitalism is violent. The race for capitalist market domination produces nations at odds with other nations until those who accrue sufficient offensive might exploit the resources and populations of those lacking defensive means, including unleashing unholy war.

Capitalism is unsustainable. The money grabbers accumulate and accumulate, regardless of human need and desire, and ignoring or wilfully obscuring the impact not only on workers and consumers, but also on today's environment and tomorrow's resources.

The market propels short-term calculations and makes dumping waste on others to avoid costs an easy and unavoidable avenue to gain. The results are visible in sky and soil, mitigated, as with other capitalist induced suffering, only by social movements that force wiser behaviour.

For at least a decade, only a relatively few people have been made so immoral by their advantages, or so profoundly ignorant by their advanced educations, or so manipulated by media and their own naivete, that they fail to see that capitalism is a gigantic holocaust of injustice and suffering, and that, as Keynes says, is neither intelligent, nor beautiful, nor just, nor virtuous – and is not even delivering the goods.

So what do we want instead?

Participatory Economics (parecon), the replacement for capitalism that I advocate, is built on four institutional commitments.

First, the broad structures by which people participate in economic life and decision-making are nested workers' and consumers' councils of the sort we have seen arise throughout history. The added feature of parecon's councils is a commitment to self-management as the logic of decision-making. People should influence decisions relative to how they are in turn affected by them.

Sometimes self-management could require one-person one-vote and majority rule. Sometimes it could require that a different tally is needed, or that only some segment of the whole populace votes, or that for those who are deciding consensus is needed. All such options are tactics to attain the appropriate degree of self-management for all involved actors.

Second, remuneration in a parecon is in accord with effort and sacrifice, not with the output either of one's property or of one's labours,...