Comparing Prout with Participatory Economics

Michael Albert, founder of Participatory Economics
One of the very few other alternatives to capitalist market economies and to centrally planned socialism is called Participatory Economics. Activist Michael Albert wrote the definitive work introducing it called Participatory Economics: Life After Capitalism.[1] Abbreviated as “parecon”, it uses participatory decision-making to guide the production, consumption and allocation of resources in a given society. The author describes parecon as “an anarchistic economic vision” and a form of socialism.

Parecon has a number of similarities with PROUT it strives for decentralized economic democracy, cooperative enterprises, and public management of important resources. It also shares many key values: equity, self-management, diversity and community. Parecon, however, does not have a spiritual perspective–economic justice is the sole aim.

"Higher income should be given in recognition of people’s merit and accomplishments, and to provide them with greater opportunities to serve society." – PROUT

Parecon also differs from PROUT in its idea of remuneration. The author states, “Remunerate according to each person’s effort or personal sacrifice.” Thus he considers it unfair to pay a worker more than everyone else unless their labor includes “longer hours, less pleasant work, or more intense, dangerous, or unhealthy work.”[2] The author insists that medical doctors should not receive a higher salary than other workers just because of their long training, during which they would be paid the same salary.

PROUT disagrees. Higher income should be given in recognition of people’s merit and accomplishments, and to provide them with greater opportunities to serve society. Hence, a certain degree of economic inequality is needed to provide incentives. This will encourage the high volume and quality of human effort needed to produce a level of material abundance consistent with a high standard of human welfare. With the economic model outlined in the previous section, it is possible to determine the exact amount of additional income that could be offered to meritorious individuals to maximize their productivity for the benefit of the world without permitting the over-accumulation of wealth or resources.

Parecon emphasizes a balanced job complex – a way of organizing a workplace or group that is both directly democratic and also creates relative equal empowerment among all people involved. Each worker must do a share of rote tasks (unskilled work) for some time each work day or each week. All workers would also share the more rewarding and empowering tasks in the workplace so it is coordinated with everyone’s involvement. It was developed as an alternative to the corporate divi- sion of labor.

PROUT appreciates this spirit and commends efforts in this direction. All workers should be encouraged to take further training (a general principle of cooperatives), because this is an empowering process. If the strict divisions between manual laborers and intellectuals are downplayed, mutual respect increases and class consciousness shrinks. However, tasks that are more “rewarding and empowering” are not the same for everyone, due to differences in talents, abilities, personality, and individual preferences.

The fourth principle of PROUT explained above, states, “There should be a proper adjustment among these physical, metaphysical, mundane, supramundane and spiritual utilizations.” Those with special skills that benefit society should be encouraged to use them, and individuals who have developed spiritually should be allowed to focus their time teaching others.

Another difference is regarding leadership. Parecon is based on self-management, the idea that in each enterprise all persons should have a say in each decision proportionate to the degree to which they are affected by it. Whereas PROUT agrees with this principle in cooperative management and economic democracy, PROUT also gives importance to the moral leadership of society. Ideal leaders are people valued for their wisdom and experience, often elders, who accordingly provide counsel and hold positions of collective responsibility for the general welfare.

Whereas PROUT’s guarantee of the minimum necessities of life to all is shared by parecon, Marxists and other socialists, the following chapter will further outline its unique economic proposals.


1 Michael Albert, Parecon: Life After Capitalism (New York: Verso Books, 2003).
2 Ibid.

Excerpted from After Capitalism: Economic Democracy in Action by Dada Maheshvarananda (Puerto Rico: Innerworld Publications, 2012):

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