Parecon with Ethical Capital

By: Tim Rodriguez

After researching participatory economics and reading Parecon: Life After Capitalism by Michael Albert I would have to say it is the most comprehensive economic system as an alternative to capitalism. It is a system that has designed structure that is concrete when it comes to conceptualizing a truly democratic economic system. Since a system like this only comes about by discussion and debate by a community of people, I feel it is my duty to critique, and as Michael Albert points out at the end of the book, to add to it and contribute as much as I can to a movement such as this.

One aspect of parecon, which is participatory economics for short, is having decision making influence proportional to how one is affected. I believe that this is a great foundation to work with and begin with. Taking it further, Albert points out that in a parecon decisions can be made in different ways depending on the different situations, which can vary from one organization to another. For instance, when employing a person into the worker council of an organization, one organization may make the decision by a majority rule vote, while another organization may make the decision by consensus. I also believe that this is a great way of setting it up, giving the system a great deal of flexibility as well as self-management. Yet, there is another aspect that I think is not addressed here. A social and author by the name of Giovanni Baldelli coined the term "ethical capital" meaning to promote an ethical society by repaying those that have "lost out" on decisions as to not have it be a slippery slope where a minority or majority rule over one another and so that the individuals within society are not betrayed by society’s structures. It therefore can be said that ethical capital is a critical aspect to any society, and therefore any structure within society, especially when working towards a truly democratic society, as a parecon advocates for.

The theory of ethical capital that Giovanni Baldelli started with the idea of ethics within society. His standpoint on ethics comes from the idea of Natural Law and Natural Ethics that are innate in nature or humanity. He believes that a society cannot be truly ethical when the structures that exist within it are unethical. Many people, including Albert in his book, point out how the current capitalistic state is an unethical structure, and offer parecon as a more ethical structure. Baldelli goes on to say that ethical capital is the amount of ethics a society fosters with its individuals. For example, if we take the current Hurricane Katrina incident where the government looked the other way as the millions of victims remained homeless and in shambles, this would be considered subtracting from the ethical capital of society since the victims were never helped or repaid for their loss. Yet, oroganizations such as Habitat for Humanity that are bringing people down to the area to build homes for people is considered adding to ethical capital since the victims are being helped and repaid for their loss, as well as noticing that the society’s people are generous and have a sense of solidarity. When ethical capital becomes too low (and possibly too high) then there are problems with the structures that make up a society. These problems can be from a lack of equity, diversity, solidarity, and self-management, empowerment, etc. At this point, I believe, that society has an obligation to bring about revolution to change these injustices, as often does inherently in past societies.

In respect to decision making within a parecon, when it is decided how something will be decided, whether it be majority rule or consensus, or any other way, there will always be, to some extent, people who "lose out" on a decision. For example, say an organization made up of 100 people is deciding on building a recreation facility for their workplace and that they are using majority rule to decide on whether to do it. There are 85 people in favor of it, but 15 opposed to it, and those 15 opposed would rather have a computer room built instead. In this example, the 15 people would "lose out" on the decision and the 85 "win" on the decision. When using ethical capital, they would also decide during the decision making process a way to repay the 15 people who did not want the recreation facility to an equal extent as to what they have lost. The ways in doing this can vary greatly, but the important thing is that they arrange this with the participation and acceptance of the 15 who have "lost out." Some critics would say, well they could just use consensus and that would suffice in bringing about the necessary ethical capital. This may be true if all parties involved accept the decision made from a consensus, but once a party or parties feel that they have "lost out" on a decision, then it can become an issue. When taking this example, say they used a style of consensus called compromising and decided to build a smaller recreation facility to incorporate a small computer room, as to satisfy both needs and therefore keeping ethical capital. If both parties are satisfied with this result and no rebuttals are brought up, it can be looked at, from an ethical capital standpoint, as a successful decision. But, say that the 15 people who wanted a computer room are not budging and see no need for a recreation facility, backing it up with some good arguments. If we were to leave the decision as is, then they would be "losing out" on the decision, therefore subtracting from ethical capital. So, an arrangement would have to be made so that there would not be a reduction of ethical capital.

Other critics would say that ethical capital would give incentive for people to disagree for the sake of disagreeing because they would benefit from it. This argument means that they do not understand ethical capital correctly. The most important element in the decision making process for all parties is what they are deciding on. If it is something that is benefitting a party there is no incentive for them to disagree. Disagreement will only come if the party or parties involved are not in favor of a particular decision. Also, ethical capital does not mean excessive repayment for those who have "lost out." For example, it does not mean that since victims of Hurricane Katrina lost their homes that they should now have mansions. Ethical capital is a repayment equal to that of what they have lost. I believe that ethical capital in a society should be at equilibrium or somewhat in the positive. If it is too high, then you may possibly have a problem to what a critic such as this is speaking of, as well as some of the same problems as having it too low because one or another party would be losing out in one way or another. Plus, even if a party disagreed for the sake of disagreeing, they would still need to have good arguments to back up their disagreement or else the other party or parties will call out their bluff. Yet, it is highly unlikely this would happen since there is no incentive to just disagree.

Also, you have the critics that say that ethical capital makes the decision making process too lengthy, and may possibly see parecon’s decision making process lengthy as it is. Although I will not say that it is not lengthy at all or that it is lengthy, it largely depends on how the group of people want to work it out and the different situations. But, I don’t believe there is any evidence to back up the assumption of it being lengthy. When a party disagrees they usually have an alternative that they would prefer. This can quickly be brought to the table and may possibly be the repayment itself. Although ethical capital may seem confusing and therefore seem long, it is even done today at a smaller scale. Without even thinking about it, when in a small group and someone is disatisfied with a decision, we often look for ways to repay them for future decisions. For example, say I am with a group of my friends and we decide to play basketball, yet one of my friends wants to play soccer. We then tell that person that next time we will play soccer or we will do some of both or whatever it is until that person feels satisfied with the decision. It is a quick and thoughtless process in this example. Now, what this article is speaking about is larger issues, but the same principles are applied. Regardless, even if this critic is correct in that the addition of ethical capital to the decision making process is lengthy, then it can hardly be argued that the benefit gained from the idea of ethical capital does not qualify spending more time in a decision when the goal is to foster values of equity, diversity, solidarity, and self-management.

I believe that ethical capital would be a crucial idea to add to the parecon vision since it seems to me that it adds to the idea of its innate values. I also believe that it would help contend critics who wonder if dissenters will get their voices heard enough in a parecon. Ethical capital ensures that dissent is taken seriously and taken into account in decisions. Parecon with ethical capital may be a step further in the creation and contemplation of a more democratic and just society.

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