Participatory economics, or parecon, an economics system proposed as an alternative to other systems such as capitalism and coordinatorism, emerged from the work of the radical theorist Michael Albert and of the radical economist Robin Hahnel, beginning in the 1980s and 1990s. It has four key ingredients:
- all producers and consumers - not just their "leaders" - can democratically participate in producers' and consumers' associations, called councils;
- in order that everybody gets both some coordinating experience but also shares some of the "boring" or menial work, there should be balanced job complexes;
- rewards (e.g. wages) should be distributed according to sacrifice, without regard to skill or pre-existing power relationships. For example, if cleaning streets seems a less desirable occupation than programming computers, then street-cleaners would receive higher rewards than programmers.
- the allocation between consumers' and producers' councils should be done by an independent iteration board which iterates between consumers' and producers' councils' offers, sending proposals back to both each time the offers disagree, until convergence (or approximate convergence) is reached.
Although a participative economy probably falls under the left-wing political tradition (and also under the anarchist political tradition), it is specifically designed to avoid the creation of powerful intellectual elites ("coordinatorism"), the trap into which the economies of the communist countries of the 20th century fell. It is not intended to provide a general political system, though clearly its practical implementation (experimentation) would depend on the accompanying political system.
While many types of production and consumption might become more localised under participatory economics, the model does not exclude economies of scale.
A few workplaces have been established based on parecon-ish principles:
- South End Press, a book publisher in Boston, Massachusetts.
- ZMag, a progressive/radical magazine.
- Mondragon Cafe, a bookstore and restaurant in Winnipeg, Manitoba.