In Defense of Participatory Economics

Abstract

planning because there was no third alternative. In the aftermath of the collapse of Communism we wanted to demonstrate that democratic planning was, indeed, theoretically possible, by defining a participatory planning procedure and demonstrating that this procedure allocates scarce productive resources efficiently under less restrictive assumptions than required for market systems to do so. We wanted to disprove the claim that all who reject authoritarian planning as well as capitalism have no choice but to embrace market socialism. There have been no challenges to our planning procedure on theoretical grounds in the ten years since it was published. Instead critics have argued that a participatory economy is impractical and/ or undesirable implicitly conceding that it is, indeed, theoretically possible. In this article, after reviewing the major features of a participatory economy, we answer criticisms voiced by advocates of market socialism that a participatory economy has insufficient incentives, is humanly infeasible, or is too unfree.