ECONOMY

First what is an economy?

Well generally there’s:

(1) Production of goods and service
(2) Consumption of goods and services
(3) Allocation of goods and services
(4) Work to produce goods and service
(5) Remuneration* for work
(6) Investment of capital
(7) Ownership* of economic institutions

(I see wealth as being intimately linked to remuneration (5) and ownership (7) and ownership being power. But I’ll get back to the later below)
First, I think we can group the following:
(1) + (4) + (5) (production/work/remuneration)

Second, we must look at interrelations:

Investment (6) confers ownership (7) so there is an interrelation between (6)-(7)

Allocation (3) is the interrelation between production (1) – consumption (2)

Therefore, we can deduct from the above at least the following economic institutions:

(A) Production institutions
(B) Consumption institutions
(C) Investment institutions

There is also mechanisms of allocation and investment (the means by which goods, services and money flow in an economy) so we need:

(I) Means of Allocation
(II) Means of Investment

DEMOCRACY

Now, briefly turning to the “democracy” part of “economic democracy”:
Generally democracy is about power, more specifically it is about people exercising power over the things that affect them. Keeping in mind the postulate that investment confers ownership and that ownership is power then people must get power over investment in order to get ownership over economic institutions (so that they can get power over these institutions).

Another democratic principle is that people must have equal power in a democracy.

INVESTMENT

Therefore, the first thing to do is to create democratic investment institutions that will give people power over production institutions. But which people? Well, firstly those who work in these institutions, secondly those who are economically affected by these institutions because these institutions happen to operate in their communities

Therefore we need:

-Democratic Labour Investment Institutions (labour funds)
-Democratic Community Investment Institutions (Community investment funds)

PRODUCTION

The above will give workers and communities collective ownership over Production Institutions which now can be called:

- Democratic Production Institutions (Worker coops).

Of course, here we must go back to points 4 (work) and 5 (remuneration). Work itself must be democratized and remuneration cannot be based on ownership (shares) since democracy is based on the equality of its participants as mentioned above. That is one worker cannot have more shares than another worker; that turns the former into the latter’s boss. Ownership is what confers power; therefore, ownership must be collective. Hence, there must be work place democracy and the ownership of Production Institutions must be collective therefore the Investment institutions must be collective.
One group of workers should not become the bosses of another group of workers inside the same Production Institution or across Production Institutions (by investments from other labour or community funds).
Hence, Democratic Collective Investment Institutions would have to relate in some federated manner (a network) in order to permit this. The state must also play a regulatory and distributive role as well. This would become more important as the instititions would grow.

INVESTMENT-PRODUCTION

Therefore, the Investment institutions and the Production institutions would have to interrelate. One way to co-ordinate this interrelation would be by Federated Investment institutions and Federated Production Institutions. They would need some link between the two. We shall return to this later. Of course we don't need federations if there aren't many such institutions in a particular region.

CONSUMPTION

One institution is the individual. Of course the individual should have easy acces to other institutions such as consumer protection groups.

Another institution would be a Collective Consumption Institution (Consumer coops).

Well the first problem with such an institution would be that why would consumers of a certain consumption institution be subject to consuming the goods of the majority. They would not get the things they want. So Collective Consumption Institution would have to be institutions that would buy in bulk and the individual consumers would pick and chose the precise article they wanted. (Organic Food Consumer Coops functions this way, for example).

Therefore, the individual can exercise purchasing in 2 main ways:

-individually with or without some form of participation of a consumer protection group as she or he sees fit: or
- through a consumer coop.
ALLOCATION

What are the means of Allocation?

Market:

-The market would be a mechanism by which an individual can purchase a good or service .

-Collective consumption Institution can also buy goods or services on the market.

Democratic planning:

But can there be a non-market relationship between democratic collective production institutions and collective consumption institutions?
ParEcon shows that there can be participatory allocation between the two. That is democratic decentralized and participatory planning. The Mondragon model in Spain also shows that this is possible.
My opinion is that people would come to the conclusion that this is also quite desirable.
Would we need some sort of Democratic Allocation institution? Yes, a non-market allocation mechanism between interested consumer coops and interested producer coops, in order to co-ordinate things and give folks the maximum amount of options maybe Federations of Collective Consumer interrelating with federations of Production Institutions might allow this. We would need a link between the two.

CO-ORDINATED PARTICIPATORY NETWORK BETWEEN INVESTMENT, PRODUCTION, CONSUMPTION & ALLOCATION

Yet, Investment is also an important part of both Production and Consumption. Wouldn’t we want to have a nexus between the three? They are after all integrally related to each other in fact. Souldn,t we creat democratic forms of how they relate?
Hence, we would need some sort of Economic Co-ordination Councils between regional collective institutions of Worker coops, Consumer coops and Collective Investment Funds.
This Council can be used by the interested parties for democratically planning regional economic activity including investment AND even allocation (if the interested parties see fit to do so).

Obviously, as can be ascertained by the above, not every aspect of consumption is through a coop. So in this model has not removed the individual buying things through the market.

Also this proposal has not involved the state in this planning process since this would lead to the failed bureaucratic command economies of the east-bloc.
This proposal gives people a choice to buy their goods on the market or participate in forms ofparticipatory planning. They will choose what best fits their needs.

These institutions involve people at every level so they will grow and function in a manner that the people affected by them will decide. It is important that the government build the framework and incentives. (the real world feasible policies of getting there from here)

SUMMARY

+ We have Labour and Community Funds that own Production/Service institutions

+ Hence, the latter turn into Democratic Worker Coops with significant community participation.

+ Then we have Consumption Coops, as well as individual consumers

+ Then we have a network of Collective Funds, Worker Coops, Consumer Coops through respective federations of the foregoing as well as an Economic Co-ordinating Council on which the three federations meet for participatory democratic planning of investment as well as allocation. Of course federations as above are needed only when there are many such worker coops, Consumer Coops and Collective Funds involved.

+ We still have markets for allocation as well.

A FEW THOUGHTS

We can call this sector of the economy the social sector. Of course this model has not ruled out any state ownership nor is it calling for the full expropriation of the whole private sector. Therefore it is a proposition of a mixed economic system of social, state and private ownership with both markets and with decentalized democratic planning.
I believe it is a democratic system given the amount of input and control people are given at every level. I believe it is efficient given that it is decentralized and can respond to local specific concerns. I believe it is an economy of solidarity given the fact that there is participatory co-ordination between the collective economic institutions. I believe it is feasible because it does not presuppose any “new socialist human” or any such silly notions and that it is based on institutions and schemes that have been experimented with and even models (Solidarity Economics in Latin America, Sweden’s Wage Earner Funds, Coops/credit unions, the Mondragon Model etc.) or at least theories that have been discussed and analysed in detail (ParEcon)
Do we desire this, does solve the problems the left wishes to solve?

This has been put out here not as an all-encompassing vision but as a reference point for debate…

Par Tom Vouloumanos le 2004-12-23 15:55

I forgot to mention that the foregoing is something I posted on babble (see www.rabble.ca) and it converges on many of the ideas on this blog!

Par Tom Vouloumanos le 2004-12-23 15:58

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