Democratic Theory and Economic Planning

The participatory economics model (ParEcon) of Michael Albert and Robin Hahnel represents an important contribution to the debate about feasible alternatives to capitalism. What distinguishes the model from other proposals, like market socialism or cybersocialism, is the central role given to the participation of citizens in economic planning. Citizens form workers’ and neighbourhood consumers’ councils which develop production and consumption proposals. These councils form federations responsible for the coordination of planning. An Iteration Facilitation Board plays a mere perfunctory role in the facilitation of the planning process. This way, economic planning is done entirely by the citizens themselves rather than planners at a central planning agency. The ParEcon model is thereby supposed to be more democratic than historical central planning.In this paper, I consider whether three possible justifications for democracy can also be used to support this kind of participatory economy. These justifications can be referred to as (1) the protection of citizens’ interests, (2) the revealing of preferences and (3) liberty. In my paper, I show that these three justifications of democracy do not in fact support democratic participation in concrete economic plans in the way envisaged by Albert and Hahnel. Instead of individual plans, citizens should choose general planning procedures. This prevents citizens from being subjected to the arbitrary power of their co-workers or neighbours. Such an algorithmic planning process also prevents central planners from holding arbitrary power since, much like the Iteration Facilitation Board in the ParEcon model, they simply facilitate the prescribed planning process without retaining significant discretion. As I elaborate in the case of consumption planning, citizens can still participate in planning, however they do so through their individual choices rather than a democratic vote. Individual citizens should not require the approval of their neighbours for their personal consumption.