Interview: Anders Sandström on Adding Realism to Democratic Planning

Anders Sandström is a Swedish accounting expert, who has contributed to several books focusing on questions of economic democracy from an accounting perspective. His latest book, The Participatory Economy: Adding Realism to Democratic Planning releases on October 23 as part of the Routledge Frontiers of Political Economy series. Moving beyond the mathematical formulas and high-level generalizations common in economics literature, Sandström examines the operational mechanics of democratic planning from an accounting perspective. In this interview with Antti Jauhiainen, Sandström discusses how real-world bookkeeping, product catalogues, and continuous plan adjustments can bridge the gap between abstract theory and economic reality.

Antti Jauhiainen: You have a new book coming out titled The Participatory Economy: Adding Realism to Democratic Planning. You have worked with the Participatory Economy Project and previously authored Anarchist Accounting. Knowing that accounting is a central part of the real economy, whereas discussions on post-capitalism usually stem from academic economics or political theory, what made you write this book? When did you feel that the participatory model needed more realism?

Anders Sandström: When I started looking into alternatives to capitalism, I quickly became attracted to the participatory economy model. It answered many of my questions, but coming from an accounting background, it also opened a Pandora’s box of new ones. Economists often work with high-level abstractions, generalisations, and mathematical equations, whereas accountants must focus on operational details. From the very start, I felt a strong need to understand how these models translate into the real world, so it was an ongoing interest rather than a single turning point.

Antti Jauhiainen: For someone who has never heard of the participatory economy model but wants a more democratic economy, how would you describe what this specific model for a democratic economy is about in a minute or so?

Anders Sandström: It is, in my mind, the best alternative economic model presented so far, that avoids both authoritarian central planning and market mechanisms. It outlines a way to organise production and consumption with the highest possible degree of self-determination and self-management. My book assumes the reader already has an interest in alternative economic models. It is written for people who question the current capitalist system, but who remain sceptical of alternatives due to twentieth-century history, such as the Soviet experience. To convince people, we have to show how such a model could actually operate in practice.

Antti Jauhiainen: It is clear this is not a straightforward propaganda book, but one that approaches the problems with genuine curiosity. Why do you feel that ground-level realism in economic models is especially important in public discussions right now?

Anders Sandström: People have every right to be sceptical about alternatives based on history. Many economists have a fascination or even an obsession with mathematics, assuming that once an economy is expressed in a few neat equations, they can lean back and relax. If we want non-capitalist proposals to appear credible to a general audience, we have to tackle difficult, concrete questions rather than glossing over them.

Antti Jauhiainen: Standard economics discusses pricing and market fluctuations in general terms, and the participatory economy also has its own iteration process to balance supply and demand. In your book, you bring up concrete examples like toothpaste, a bus, electricity, or an entire building. What is the problem with a uniform pricing approach? 

Anders Sandström: Standard presentations often assume a single template for price formation fits every kind of good and service, which is a major abstraction: For instance, a tube of toothpaste is consumed within a short time period after a purchase and is then gone. The creation of a public transport system in a city and other forms of collective consumption, on the other hand, involve major time-consuming deliberations. Furthermore, the completion of a production plant or a building may take months or years to plan, require a long construction phase, and last for decades. Because preparation, durability, consumption patterns, and production timelines vary drastically, you cannot treat them under one generic pricing formula. The planning and accounting mechanisms must explicitly reflect those physical and temporal differences.

Antti Jauhiainen: That long timescale is a massive challenge in capitalism as well, such as when constructing a shopping mall where investments take decades to recoup amidst future uncertainty. Another central theme in your work is an economy-wide product catalogue. Why is something as mundane yet gargantuan as a catalogue so crucial for democratic planning?

Anders Sandström: A modern economy produces and consumes millions of distinct items, and councils cannot debate every specific variation during an annual planning procedure. The catalogue establishes structured product categories so that prices, reflecting true social costs, can be derived, even if the planning iterations handle coarser categories rather than individual variants. It also structures goods into categories that humans can realistically review and relate to, ensuring consumers and producers are not overwhelmed by infinite, granular choices.

Antti Jauhiainen: You describe economic planning more as a continuous conversation that needs regular updating, rather than a single event. How do you explain that to someone who pictures rigid, Soviet-style five-year plans?

Anders Sandström: An annual plan cannot be treated as if it were written in stone. The moment a plan is finalised, and the year begins, conditions and circumstances start to change: consumer preferences shift, weather events damage agricultural yields, and supply bottlenecks occur. The economy must be flexible enough to make plan adjustments, rather than treating planning as a static, once-a-year event.

Antti Jauhiainen: Different items require different time horizons, from goods consumed immediately to housing, where planning takes longer to get right. Capital goods, like machinery that suffers wear and tear, seem particularly difficult. What kind of concrete accounting solutions do you propose for them?

Anders Sandström: Capital goods are difficult because their productive efficiency declines over time with wear and tear. Unique, long-term facilities do not fit neatly into an annual iterative exchange. To account for this, I argue that we have to rely on second-best accounting solutions, borrowing proven methods such as tracking historical acquisition values and applying systematic depreciation over time. It may sound dry and technical, but an alternative economy will rely on workable capital accounting just like our present economy.

Antti Jauhiainen: A classical critique of democratic planning is that planners simply become the new bosses. You suggest specialized support units, but as we see in current economies, control over information can accumulate power much like wealth does. How do we prevent these support units from becoming a new administrative elite?

Anders Sandström: That risk is genuine. Support units exist to gather, process, and distribute information so councils and federations can make informed choices. Because control over information easily converts into administrative power, clear institutional safeguards are necessary. Support staff should have autonomy over their internal work processes, but no decision-making authority over the policies and allocations they assist with. Furthermore, workers in support units should be subject to time limits on their service, and councils and federations should hold the right to recall any support unit worker or delegate at any point.

Antti Jauhiainen: Heterodox economics is about broadening our view beyond traditional blind spots, looking not just at economic justice or political theory, but also at the practical weeds. For researchers working on post-capitalist or non-market economies, what should they pick up from your book?

Anders Sandström: Do not shy away from the weeds. Both academic theorists and political activists tend to avoid operational complexity because details are messy. Of course, we should avoid dogma and always maintain an open dialogue, but we will never convince the general public until we show that our models hold up under complex, real-world conditions.

Antti Jauhiainen: If a listener or reader wants to take away just one core idea from your book into their next conversation about the economy, what should it be?

Anders Sandström: Acknowledge the immense complexity of a modern economy. Replacing market mechanisms with democratic coordination is an extraordinarily ambitious project. It will not be simple or automatic, and pretending otherwise does not help our case. We must take the structural and operational difficulties seriously if we want to solve them.