Second-hand goods

The procedure for allocating resources, goods and services in a participatory economy– the participatory planning procedure – does not deal explicitly with the exchange of already produced goods, so called second-hand goods. Second hand goods in this context can be defined as goods that already have been asked for, produced and delivered in accordance with earlier years’ plans, which have a value that exceeds a certain sum, and a remaining economic lifespan that exceeds a certain number of years. Examples of such durable goods are cars, washing machines, cameras, stereos, etc.

The benefits of trading second-hand goods

Of course, there are many different reasons why an efficient use of already produced goods, including a flexible and efficient routine for trading used goods, is desirable in any economy. One of the more obvious reasons has to do with the effects on the environment of the production of goods. A participatory economy is an economy where citizens have the opportunity to express their preferences for a clean environment in the planning procedure and one where they can insist on compensation from producers which in the production process release substances that affect the environment negatively. It is reasonable to assume that such an economy also will strive for an efficient utilization of all goods that already have been produced during their whole economic lifespan. 

For example, this might mean that different consumer federations experiment with and support new types of collective living arrangements in order to maximize the utilization of durable goods, or that some neighbourhoods set up different types of community resource parks where certain durable goods are gathered and made available for use by everybody in the neighbourhood. But it also means that the society for this and other reasons presumably will implement smooth routines for consumers to transfer previously obtained goods between themselves, and to do this in a way that is compatible with self-management and economic justice and the other values that together make up the foundation on which the model of a participatory economy is based.

The risks of re-emerging markets

It is important to note the risk of markets re-emerging with detrimental consequences when thinking about how to organize trade of second hand goods. Re-emerging markets and/or rival currencies in a participatory economy could, if they grew big enough, jeopardize every other participatory institution since the inherent logic of markets will in time lead to inequitable differences in income and wealth even if they initially are confined to trade with second hand goods.

How to organise second-hand goods in a Participatory Economy

Since second hand goods are goods that already have been produced and delivered to a customer in accordance to accepted plans for previous years, trade with these goods is primarily an internal question for the national consumer federation and can be organised outside of the annual planning procedure.

The producers/workers councils will obviously be indirectly affected by this trade since the demand for newly produced versions of the goods will be affected by a smooth and well-functioning trade with used goods, but this is an indirect effect. There are a number of alternative ways for the national consumer federation to organise trade of used goods which would be compatible with the values of a participatory economy. What follows is one possibility.

1) The National Federation of Consumer Councils

The formal organisation of trade with second hand goods between present and future users is ultimately a task for the national federation of consumer councils (NFCC). Some people turn in used goods and receive consumption rights in return, while others get used consumer goods delivered and pay with consumption credits through their neighbourhood consumption councils. The distribution of used goods between buyers and sellers living in different geographical areas is organised through the system of consumer federations, which means that in the end the NFCC controls this trade. The second hand stores where people turn in their used goods for consumption credits will have a responsibility to inspect items that are handed in so that they are functional and meet a certain standard. Only approved items would qualify the seller to receive consumption credits, and credit would depend on the condition of any item.

In other words, the NFCC acts both as demander and supplier of used goods. In order to give people a way to assess whether they want to trade in or buy used goods the NFCC would announce provisional amortization schedules for available goods which give people an idea of the credits they can expect to receive when selling and expend when buying different goods. These provisional amortization schedules are adjusted before the start of every planning year in light of excess demands or supplies.

During the year the NFCC would guarantee the provisional prices to both buyers and sellers until the next adjustment, which presumably will result in a gain or loss from trade in used goods for the NFCC which is a gain or loss for all consumers nationally.  Alternatively, the NFCC could adjust the provisional prices continuously during the year in order to bring demand to equal supply for each category of durable good. This would eliminate losses and gains for the NFCC, but it would require an ex post adjustment in credits and debits to the individual sellers and buyers of used goods.

2) Private exchanges for used goods

If people want to set up private exchanges for used goods outside the formal trade mechanisms described above, there is nothing stopping them. But these exchanges would have to be some kind of barter or based on a new, rival currency which would not be viable to use in the formal yearly planning procedure for the purchase of newly produced goods and services. The equivalent to flea markets or yard sales with trade of goods with a marginal value could presumably be arranged in this way. There should be little risk of these private systems growing out of hand as long as the “official” system managed by the NFCC functioned well.

Collectables

One category of used goods that differ from ordinary durable goods are collectables, items that have a value for collectors, which in many cases in our present economy often increase considerably over time. It can be all sorts of things from stamps, old furniture, and other types of antiques etc. In a participatory economy people will not be able to (or need to) “invest” in collectables to support themselves and since the income distribution will be a lot more equal  prices of collectables will most likely be  much lower  than today. 

But it is quite reasonable to assume that some people in a participatory economy will still enjoy collecting different objects. Collectables could be classified based on the degree to which they are deemed to have a collective value for the society. Certain goods may have only a limited collective value to society but a high value to a group of collectors, while other goods have a high value to both collectors and the society, and maybe therefore belong in a museum where everybody can enjoy them.

If society wants to enable a limited type of “trade” with collectables, the NFCC would have to assume an active role. It would have to decide what items belong in a museum due to the collective value to society, and therefore would be excluded from trade. The NFCC would have to be responsible for setting the repurchase price to prevent individuals from profiting in ways that are unfair.

If higher prices were necessary to equate supply with demand windfall gains would accrue to the NFCC and therefore all consumers. And finally, since inheritance is not compatible with economic justice and therefore is not part of a participatory economy, any collectable that commands a substantial price, as distinct from collectables of personal value only, will revert to society at the time of a collector’s death.  Relatives could be offered a first right of refusal to take possession by paying the same amount the NFCC will charge anyone else if relatives decline.