Who will decide how much I am compensated?

This article is part of a series of short pieces on the theme of Life in a Participatory Economy. This first collection of articles is about work.

In capitalist economies you are evaluated and your pay is decided by the firm’s owner, or by a personnel office under his control. Of course, if there is a union contract it may specify some procedures which have been agreed to. In a participatory economy you will be evaluated, and your compensation will be decided by your coworkers. But again, what we propose is that each worker council decide for itself what procedures to establish to do this. Moreover, we anticipate that different worker councils would decide to go about this very differently.

Therefore, one of the things anyone applying for work in a participatory economy would surely consider is what procedures a worker council uses to evaluate members: Am I comfortable with evaluation procedures at a workplace I am thinking of applying to and think they are fair? Do I think a worker council is devoting too much, or too little time and energy to evaluating differences in their members’ efforts and sacrifices?

In this regard we refer to an effort rating committee in worker councils and discuss different ways it might function. But again, we propose leaving all this up to each worker council to work out and decide for itself, and we anticipate large differences in what different worker councils choose to do. In any case, in a participatory economy the effort rating you receive from your worker council forms the basis for the income you have from work to spend as a consumer. 

The only restriction we place on how worker councils award effort ratings is that the average effort rating for members cannot exceed the ratio of the estimate of the social benefits of all the outputs the worker council produces divided by the social cost of all the inputs the worker council uses. This constraint eliminates the possibility that members of a worker council might be tempted to award one another higher effort ratings than they truly believe are deserved. In other words, we want to avoid the danger that members of a worker council might succumb to the temptation to engage in “I’ll scratch your back if you scratch mine” during effort rating. The constraint means that if some members’ effort ratings are inflated, then some other members’ effort ratings must be reduced.

What if I disagree with a majority of my workmates?

I know this is an important question because I was often unhappy with how my fellow faculty members evaluated me during our department’s annual review process when making recommendations for salary increases to the Dean of Faculty. I was often in the minority about other decisions about the direction my department was headed as well. What can someone do in a participatory economy when they are unhappy with their workplace for any reason?

The answer is that people are free to leave their current place of work and apply to work in a different worker council any time. Moreover, because a participatory economy is a planned economy, where the annual plan has a job for everyone who is looking for a job, I needn’t fear that if I leave my current place of work, I will be unable to find work elsewhere. During recessions and depressions in market economies disgruntled employees often do not have real exit opportunities, but in economies like a participatory economy where planning maintains full employment this is not the case.