Parecon--Page 5

4. Consumption Shares Based on Work Effort or Sacrifice

There is one further question that any viable economy must have an answer to:

How is each person to gain access to their share of consumption? What is the principle governing distribution? How does a person become authorized to consume at a given level?

The most controversial part of Participatory Economics is the answer it gives to this question.

One traditional principle about consumption that some Marxists and anarchists have put forward is the communist principle,

From each according to ability, to each according to work.

The “from each according to ability” part has been interpreted by anarchists like Makhno 5 and Isaac Puente and the Spanish anarchists of the '30s to mean there is a requirement for able-bodied adults to work. This is basically the idea that we won’t allow there to be social parasites.

As to the “to each according to need” part, I think this does make sense in a lot of cases. If someone is injured in an accident, it’s an impulse of simple human solidarity to say they should be taken care of, irrespective of whatever they may have done to contribute to social production.

And Participatory Economics accepts this idea, and says that how far it is to have application is really up to particular communities to decide, and may differ in different areas of the world, depending on their particular political history or culture.

Nonetheless, what we do also say is that it isn’t feasible to run an entire, complex, industrial economy, with millions of people and tens of thousands of products, on the basis of the “to each according to need” principle, if this is interpreted as saying that the output of production is simply an open-access resource for people to take whatever they want.

For one thing, isn’t this just an encouragement to the most greedy and aggressive to consume more, and leaving less for those who are not as self-assertive of their “need” or who have more scruples? And is that the sort of result we want to encourage? And don’t we want to limit the amount of time we all have to spend working? And how can we do that if there is no limit to what people consume?

To avoid wanton waste, we need to be able to measure what economists call the social opportunity cost of the inputs and outputs of the production process. If I spend my work time making shoes, I can’t also spend that same time building houses or writing books or whatever. That follows from the laws of physics – I can’t be in two places at the same time. So, if my work time is committed to making shoes, there are a lot of other things that I could have done that I won’t be able to do. All those things that won’t get done are the “social opportunity cost” of me spending my time making shoes.

Or if we use a piece of land to grow pinto beans, we can’t also use that same land to grow canteloupes or to build houses on or use for a soccer stadium. So, if we commit a piece of land to growing of pinto beans, all the other things that we now can’t do with that land are the social opportunity cost of using that land to grow pinto beans.

To ensure that our economic activity isn’t wantonly wasteful, we need some way to measure how much we value the inputs and outputs to production. This is in fact the role that prices play in Participatory Economics; prices do not require the existence of money as cash or capital.

But in order to measure the value to us of the inputs and outputs to production, this requires a social communication process in which people register what their preferences are for the possible things we could produce using the various resources available to us for production. But if people do not have any limits on what they are permitted to demand for their consumption, we can’t have any meaningful way of measuring how much they prefer various productive outcomes.

Some people would respond to this by pointing to the community and workplace asssemblies, as the means of input for preferences. However, if decisions about allocation and consumption were made in a purely collective fashion by neighborhood or work assemblies, this leaves no room for individual or sub-cultural diversity in preferences for production to be reflected appropriately in what is produced.

Having decisions about what styles of shirts are to be produced made collectively by assemblies denies to each person the personal self-management of their own consumption decision about shirts. It violates the principle of self-management.

Participatory Economics thus proposes an alternative consumption principle, for those who are able to work:

To each according to their work effort or sacrifice.

The idea here is that your effort or sacrifice is really the only thing that is under the voluntary control of each person, and so it is thus the only equitable way to determine consumption shares.

Once jobs are “balanced,” as proposed by Participatory Economics, the level of sacrifice or effort required by jobs will tend to be similar, so size of consumption shares, based on work, would tend to be equalized, and consumption differences would be mainly determined by how much each person chose to work, and perhaps modified by considerations of need as determined by the particular community.