Collective economics are an alternative economic system to capitalism and communism, popularized by the economist Michael Albert and his group, the Participatory Economics Foundation (Parecon). The central premise of collective economics is that people should be rewarded with income for their time and effort, not for what they own. This concept may resonate with black workers in America because of their history of exploitation based on skin color alone. Collective economics could also help combat poverty, as it would be similar to a universal basic income. In that all citizens would receive money based on need rather than merit.

The Basics of Parecon

Parecon stands for Participatory (or Par) Economic (con)omy. It’s a proposed alternative to capitalism and state socialism, which operates on a very simple principle of from each according to ability, to each according to need. Parecon is also an economic system in which power is equally distributed among individuals who interact as equals in voluntary associations with one another. Furthermore, this economic system utilizes personal rewards rather than monetary payments and prices.

How Parecon Works

Although the debate is ongoing regarding how best to implement parecon, a few key characteristics of parecon are non-negotiable. First, decision-making will be collective and democratic. All individuals who work together in any context for more than a few hours should participate in making all their own decisions about what to do, how to do it, and when to do it. Participation cannot be limited by age, gender, income level or other status. Every person has an equal say in determining what everyone does.

The Theory Behind Parecon

It’s easier to think about how parecon works once you understand how it’s different from capitalism. This understanding helps clarify the pivotal changes proposed by parecon and their potential impact on society. And even if you don’t totally agree with parecon, understanding its implications can deepen your analysis of our current economic system and offer insights into alternative models of organization.

Parecon is established with three basic principles in mind: Economic Self-Management, which empowers individuals to have a say in decisions that affect their work and lives; Remuneration for Effort and Sacrifice, ensuring that compensation reflects not just the quantity of work, but the hard work and dedication put into the tasks; and Broad Consumer Autonomy, which aims to give consumers the freedom to make choices that reflect their needs and desires, thus fostering a more meaningful engagement with the economy. Together, these principles create a framework that challenges the inefficiencies and inequities often evident in capitalist systems.

Some Benefits of Parecon

Participatory economics (parecon) provides a vision of a society based on solidarity, self-management, equity, and diversity, aiming to create a more inclusive and just economic system. By prioritizing democratic decision-making processes, parecon encourages individuals to participate actively in economic planning and resource allocation, ensuring that everyone’s voice is heard and respected.

This framework has important implications for how we view economics in relation to race and racism, as it addresses the systemic inequities that marginalized communities face. By fostering an environment where diverse perspectives are valued, participatory economics seeks to dismantle the structural barriers that perpetuate racial discrimination, promoting not only economic fairness but also social cohesion and mutual respect among all members of society.

Why Should African Americans Care About Parecon?

The new book Parecon: Life After Capitalism, by Michael Albert and Robin Hahnel, shows people how to live well without capitalism. Their answer? An economic system called parecon is short for participatory economics. Unlike traditional economic systems such as socialism or capitalism, parecon aims to create an economy that is planned democratically through councils and balanced through a complex system of accounting. Finally, it might be easy to dismiss the idea of an alternative economic system, such as parecon, based on other non-capitalist economic models (the Soviet Union comes to mind). However, while collective economies may not be suitable in every circumstance (Africa presents a different situation from Europe), we can draw lessons from African Americans’ history in America about how to make collective economies work better. -MM

References:

1. International Labour Organization – Cooperatives
   This page on the ILO website offers comprehensive insights into cooperative enterprises, highlighting how collective economic models operate globally and their role in promoting inclusive growth.
   https://www.ilo.org/global/topics/cooperatives/lang–en/index.htm
2. International Cooperative Alliance (ICA)
   The ICA represents cooperatives worldwide and offers detailed information on cooperative principles, practices, and the impact of collective economic approaches in various sectors.
   https://www.ica.coop
3. Participatory Economics – Wikipedia
   This Wikipedia page provides an overview of participatory economics, an alternative economic model that emphasizes collective decision-making and democratic planning, aligning with the core ideas of collective economics.
   https://en.wikipedia.org/wiki/Participatory_economics
4. The Democracy Collaborative
   Focused on advancing economic democracy, The Democracy Collaborative researches and advocates for collective economic strategies that empower communities and promote inclusive, resilient local economies.
   https://www.democracycollaborative.org/