Participatory planning

A diagram of the nested council structure.

Democratic participatory planning is an economic practice used to determine the production, consumption, and allocation of resources, goods, and services in a given economy and recommended as a solution to the problems seen in both statist central planning within state-socialism and privatist markets within capitalism. Facilitation boards are used to guide this process effectively.

Through participatory planning, workers and consumers decide democratically which and how many goods to produce, decide construction plans, determine how vital resources are managed and all other economic issues at various levels through a system of confederated "nested councils" or assemblies with local economic issues being determined at the local level, and administrative issues on a wider level being determined by city, regional, provincial, and country councils with delegates sent successively to each level to communicate the decisions made by the nested council below them.

Local decisions like the construction of a playground might be made in the ward or city council, probably interacting with both city and countrywide councils through rotating delegates. Countrywide decisions, like the construction of a high-speed mass transportation system, would be discussed by the country council, possibly interacting with a city council in the city where the materials are produced, or countrywide or international councils.

Role in economic planning

During an event known as a planning procedure, which could be an annual, bi-annual or quarterly event, facilitation boards first announce a set of indicative prices which workers and consumers use, individually and through their councils at each level, when deciding on their production and consumption proposals. Proposals could be done either collectively through a local consumer council, or individually on a computer; or any combination of the two. When the proposals are all in, the IFBs aggregate all the production and consumption proposals for the different categories of goods and services – inputs into all the production processes as well as consumer goods – to see if proposed supply and demand are equal. If they are not equal for every good and service the IFB revises the set of indicative prices and the process is repeated through successive rounds until a consistent set of production and consumption proposals is arrived at.

The facilitation board would work with the citizen(s) that originated the proposal to work it into a manageable proposition. Around the time of the planning procedure, interested parties within the region affected by the collective consumption proposal would be able to view the collective consumption proposals and vote them up or down. This could be done at large meetings or via computer. At the same time, worker's councils and producers councils would respond with production proposals outlining the outputs they propose to produce and the inputs they believe are required to produce them. Individual workers would indicate their proposed hours of work, and workers will be able to propose upgrades and innovations for their workplace, aided by a facilitation board.

Facilitation boards would then calculate excess proposed supply and demand based on the proposals, adjusting the indicative price for each final good or service according to its impact on society and the environment so that the social opportunity cost is reflected. Using the new indicative prices, consumer and workers' councils would revise and resubmit their proposals, as some goods would be more expensive, and others less expensive. Proposals deemed excessive by other parties would become very expensive, creating a disincentive to pursue them.

Iterations would continue according to some predefined method which is likely to converge within an acceptable time delay. For instance, proposals would only be changeable by a minimum percentage for the second round, and a lesser percentage for the third round, and so on, forcing convergence of a feasible plan.

The facilitation boards then implement these final proposals by setting new prices and organizing production plans. These prices would represent the estimated marginal social opportunity cost for all goods and services. During the planning procedure, not only do the prices reflect proposed supply and demand, but also the social and ecological cost of producing the good. For instance a product that produces pollution in its manufacture, or is especially dangerous for workers to produce, would have its price automatically inflated to discourage excess consumption. Thus

Final retail price = supply and demand + opportunity cost

In the event of unforeseen circumstances occurring in between planning procedures, the IFBs would adjust prices or production quotas accordingly within established guidelines.

The facilitation boards should function according to a maximum level of radical transparency and only have very limited powers of mediation, subject to the discretion of the participating councils. The real decisions regarding the formulation and implementation of the plan are to be made in the consumers' and producers' councils.