Please find below a glossary of key terms that are included in presentations of the Participatory Economics model.
Allocation system = A system to coordinate the interrelated activities of different workplaces and consumers, i.e. a procedure to decide who will produce what and where it will be used and consumed.
Balanced Job = A set of tasks that are combined together that have a comparable level of empowerment to others in the workplace.
Compensation based on effort = Income according to one’s effort or personal sacrifice for performing socially useful labour as judged by fellow workmates. Effort can take different forms: longer working hours, at a higher intensity, or by performing more dangerous, unhealthy, less gratifying, or unpleasant work.
Consumer Council = The decision making body where “households” put in requests about what goods and services they wish to consume. Every individual, family, or living unit belongs to a neighbourhood consumer council.
Externality = The cost or benefit that affects third parties in a transaction beside the direct buyer and seller.
Federation = Councils composed of elected representatives from lower levels of councils, nested in several layers from the local level up to the national level. Representatives in federations are subjected to rotation, recall and instruction by lower level council members.
Indicative prices = Current estimates of the opportunity costs of natural resources, categories of labour, and capital stocks, the social costs of producing different goods and services, and the damage caused by different pollutants. These estimations signify estimates of what it costs society when we use different resources, emit different pollutants and produce different goods and services.
Iteration Facilitation Board (IFB) = A group of workers whose role it is to facilitate the flow of information during the planning process. IFB workers update prices (estimates of opportunity and social costs) of all inputs and outputs from round to round based on an agreed set of rules designed to reach convergence of a coherent plan. The IFB do not have any discretionary powers.
Opportunity cost = The loss of potential gain from other alternatives when one alternative is chosen. The term is typically referred to when considering the cost of using productive assets and resources.
Participatory Planning = A decentralised process, whereby councils and federations of workers and consumers make and revise their own activity proposals, over a series of rounds, leading to the creation of a feasible, efficient and fair plan.
Pollutant = a substance or energy introduced into the environment that has undesired effects, or adversely affects the usefulness of a resource. A pollutant may cause long- or short-term damage by changing the growth rate of plant or animal species, or by interfering with human amenities, comfort and health.
Self-Management = A say in decision making in proportion to the degree one is affected by the outcome of a decision.
Social benefit to cost ratio = A ratio that is used to assess whether a workers council’s production proposal is effective and beneficial to society, where the estimated social benefits of its outputs is compared to the estimated social costs of its inputs.
Social costs = The cost to society, including externalities, of an economic activity. The term is typically referred to when considering the cost of producing goods and services for consumption.
Worker Council = The decision making body in the workplace where each worker has an equal say about how the workplace is organised and run.