Comparing Capitalism and Parecon

Comparing Capitalism & ParEcon Productivity

How much does an economy produce? Many variables affect output — including technology, organization, incentives, pressures toward greater output, and desires of different actors. This page compares Capitalism and Parecon regarding productive output.

Next Entry: Comparing Regarding Innovations


“The Persistence of Memory”
by Salvador Dali


“The Birthday”
by Marc Chagall

Introducing Capitalist

In a capitalist economy, productivity is spurred by market competition seeking market share to garner profits. What counts as productivity is output, regardless of its social benefit or debit. To mess up the ecology and then clean it up — the cleaning, trying to get back what was lost, is productivity. The messing isn’t accounted at all. The same holds for countless examples of many sorts. The law firm purchases all manner of rugs and other paraphrenalia of elite showmanship, to wine and dine and thus accumulate and keep clients. All that productiion is productivity. Liposuction operations galore, and ignored health care in parallel for poorer communities — is productivity. Private goods produced a near infinity of times to partially address needs far more easily met by more collective products, is productivity. Endless streams of weapons to kill, and piles of corpses, is productivity. Empty hotel rooms and homeless people under bridges is productivity. A large proportion of people’s capacity directed to advertising jingles and visuals and packaging come ons, is productivity — while education and transport and other needs go unaddressed. Output that aggrandizes a very few at the expense of the physical and mental well being of the many producers who prepare it in unjust circumstances, is productivity — the output counts, the costs are ignored.

Capitalism produces a lot. There is a competitive drive to extend the work day, the work week, and the work year, and to intensify labor, at all times, and even against the overwhelming majority’s preference for more leisure and less output. Capitalism is productive precisely to the degree that we count as productive any output, however redundant, banal, or narrow or even counter productive in its implications.

If we count only socially desirable output as product, and we allow fullutilization of social talents and capabilities with no limits to subordinate the many to the few — then capitalism is horribly unproductive.

Introducing ParEcon

In a parecon, people self-consciously decide the labor/leisure trade off free from compulsion. In each new planning period each person has two priority decisions. 1 How much, overall, do they want to consume? 2 How much, overall, do they want to work?

These two decisions are connected in that the sum total work in an economy creates the sum total output. In turn, the sum total output determines the average consumption per capita. We each consume that average tweaked in accord with our effort/sacrifice rating. To consume more either I must work more or harder than average, or the average amount that everyone consumes must rise.

Output is all socially useful. What hurts society is debited, what benefits it counts positively. Redundancy is avoided, likewise for false sales, over benfitting some at the expense of others, etc.

But while output will be universally worthy, it is also likely true that people will reduce the average time and intensity they work in a participatory economy as compared to that which they endure in a technologically comparable capitalist economy so that total output will drop compared to what it would have been had people worked longer hours or more intensely. That is, in a market system competition demands that each workplace maximize profits (or surplus if there is no private ownership). But profits (or surplus) go up when employees work longer and more intensely. Owners and managers therefore seek to compel, cajole, entice, or otherwise generate longer and more intense work by employees, and endure similar pressures themselves, even if their personal preferences run in the opposite direction. In a parecon, in contrast, there is no such institutional pressure. People work the duration and intensity they choose.

Evaluating Capitalist Productivity

If our aim is solely the pile of outputs so that we account no debits regardless of how that pile is generated and its side effects, and even its primary effects, and if we require as well that most of the population should be denied utilization of its full capacities so as to maintain hierarchies of power and wealth, then, within those constraints and that context, capitalism is fantastically productive.

Evaluating ParEcon Productivity

One of the very few criticisms by mainstream economists of parecon is that it lacks a built-in pressure toward accumulation — with the economists worrying that as a result productivity will be low. The reality of course, is that without the built-in market bias it is possible for output levels to accord with actual human needs and desires for both fulfilling consumption and also desirable work and leisure.

Parecon utilizes all productive assets, including human capacities, to meet needs and develop potentials in accord with self managing decisions. Production is productive of fulfillment and occurs at the level people desire rather than being stoked upwards by a set of institutions that have as their aim maintaining hierarchies of injustice.

Next Entry: Comparing Regarding Innovations  


All the latest from Z, directly to your inbox.

Institute for Social and Cultural Communications, Inc. is a 501(c)3 non-profit.

Our EIN# is #22-2959506. Your donation is tax-deductible to the extent allowable by law.

We do not accept funding from advertising or corporate sponsors.  We rely on donors like you to do our work.

ZNetwork: Left News, Analysis, Vision & Strategy


All the latest from Z, directly to your inbox.