A brief sketch of three models of democratic economic planning

Abstract

Between 1988 and 1993 three models of democratic economic planning were designed by Pat Devine (joined later by Fikret Adaman), Michael Albert & Robin Hahnel and Paul Cockshott & Allin Cottrell. These three models are called negotiated coordination, participatory economics and computerized central planning. They are still at the center of the discussion about what a postcapitalist economy should look like. The goal of this research note is to give a short but clear presentation of their main institution and their functioning. A diagram of each model’s annual planning and a detailed glossary
divided by model accompanies the presentation to make the argument clearer. We abstained to relay or formulate any criticism of the models and only tried to present them as clearly as possible. To our knowledge, this is the first publication presenting the three models’ side by side.

Full text

CRITS : TITRE DE LA RECHERCHE
ISSUE 2
A brief sketch of three models
of democratic economic
planning
ISSUE 2
Frédéric Legault
Simon Tremblay-Pepin
Élisabeth-Bruyère School of Social Innovation
Saint Paul University
lanyiens
NUMÉRO 1
RESEARCH CENTER ON SOCIAL INNOVATION AND
TRANSFORMATION
CENTRE DE RECHERCHE SUR LES INNOVATIONS ET
LES TRANSFORMATIONS SOCIALES (CRITS)
Soumis en septembre 2019CENTRE DE RECHERCHE SUR LES
INNOVATIONS ET LES TRANSFORMATIONS SOCIALES
(CRITS)
Submitted in March 2021
Published in April 2021

CRITS : A brief sketch of three models of democratic economic planning
2
This Research note is based on a research project funded by the Social Sciences and
Humanities Research Council (SSHRH).
Soumis en septembre 2019
ISSUE 2
A brief sketch of three
models of democratic
economic planning
Abstract
Between 1988 and 1993 three models of democratic economic planning were designed by Pat Devine
(joined later by Fikret Adaman), Michael Albert & Robin Hahnel and Paul Cockshott & Allin Cottrell.
These three models are called negotiated coordination, participatory economics and computerized
central planning. They are still at the center of the discussion about what a postcapitalist economy
should look like. The goal of this research note is to give a short but clear presentation of their main
institution and their functioning. A diagram of each model’s annual planning and a detailed glossary
divided by model accompanies the presentation to make the argument clearer. We abstained to relay
or formulate any criticism of the models and only tried to present them as clearly as possible. To our
knowledge, this is the first publication presenting the three models’ side by side.
Keywords: democratic economic planning, postcapitalism, negotiated coordination, participatory
economics, computerized central planning, Pat Devine, Fikret Adaman, Michael Albert, Robin Hahnel,
Paul Cockshott, Allin Cottrell.
Frédéric Legault
Simon Tremblay-Pepin
Submitted in March 2021
Published in April 2021

CRITS : A brief sketch of three models of democratic economic planning
3
Authors
Frédéric Legault teaches sociology at Collège
Ahuntsic. He is completing a thesis on post-
capitalist economics, and he is involved in
Quebec ecological movement.
Simon Tremblay-Pepin is a professor at
Élisabeth-Bruyère School of Social Innovation,
Saint Paul University. For more than fifteen
years, one of his main research interests was
postcapitalist economics, which is the subject
of a variety of his publications and conferences.
Getting out of capitalism implies finding
desirable and functional alternatives to replace
it. Although this might look like an obvious
statement, only few proposals are put forth on
how a postcapitalist society could work.
Amongst those proposals, democratic economic
planning stands out in its attempts to reconcile
the need for broad coordination and the
preservation of local autonomy and self-
determination.Our goal in this text is to lay out
what we consider the three main models'
functioning in order to give a quick overview of
them to a broader public. Laying out these three
models of democratic planning in a concise and
structured manner would too allow us to discuss
and criticize them in further writings.
It is no coincidence that these three models
were published at the turn of the 1990s. The era
was marked by the collapse of the Soviet regime
and the end of the Cold War. The ideological
victory of capitalism took with it a large part of
the legitimacy of the socialist option in the
countries of the West. These models are thus to
be understood as a response to the failure of
both central planning under "really existing
socialisms" and monopolistic market
coordination under capitalism.
Let’s have a quick look at them.
1. Devine & Adaman’s
coordinated negotiation
In 1988, the English economist Pat Devine
published Democracy and Economic Planning he
dubbed his model “negotiated coordination.”
Later on, he improved and discussed his project
in articles written with the Turkish economist
Fikret Adaman, his student that became his
main cowriter on this matter. Two fundamental
principles are institutionally embodied in
negotiated coordination. First, it strives to
maximize participation on the part of everybody
affected by a given economic process. Second, it
supports a division between market exchanges
and market forces.
Participation through representation
Negotiated coordination makes participation
possible at various levels of society, and major
economic decisions should be taken according
to the subsidiarity principle. Subsidiarity enables
all the social owners’ knowledge to be used so
that those who are proportionately affected by
decisions take them according to their
preferences and interests (Devine 2019, 58).
Devine tells us that this principle will promote
locally-based economic activity and shorter
production circuits, thereby reducing ecological
damage (Devine 2017, 43).
Devine keeps the idea of a representative
government elected by the people and law-
making within a Representative Assembly, but
with genuinely participatory political parties and
a much more democratic electoral system
(Devine 1988, 189-90, 212-13). The equivalent
of enterprises, what he calls production units,
are owned collectively. Representatives from
four sectors sit on the decision-making body of

CRITS : A brief sketch of three models of democratic economic planning
4
each production unit: the general interest
(national, regional and local Planning
Commissions and Negotiated Coordination
Bodies); the interest of consumers, users and
suppliers (consumer associations, government
and public services, production units that buy
from or sell to the production unit and other
Negotiated Coordination Bodies related to the
production unit); the interest of workers
(workers of the production unit itself and their
unions); and the interest of the community
(interest groups and activist groups) (Devine
1988, 226). These representatives then agree on
the most appropriate use of productive
capacities through negotiation, considering each
other's interests. These governing bodies decide
on the general administrative orientation of the
production unit, while workers organize the day-
to-day operations through self-management
(Devine 1988, 227-28).
On economic issues, the Representative
Assembly receives a series of national plans
designed by a Planning Commission. These
national plans establish national investment
priorities, the resources (including money,
goods, and services) offered for free to those
who are not working (the young, the sick, the
elderly), “primary input prices” (wages, energy,
natural resources), means and levels of
“taxation” and the public services offered by the
“social bodies” of the government directly to
households (Devine 1988: 193).
A Chamber of Interests – a group of people
representing different sections, causes, and
interests of society – first reviews these plans
and presents a report to the Representative
Assembly on what elements civil society agrees
or disagrees with. After extensive public debate,
the Representative Assembly selects a single
plan and adopts it. Production units offer their
goods and services on the market at a price that
equals the production cost, which is the sum of
the primary and intermediate inputs (supply,
infrastructure, parts, repairs, etc.) (Devine 1988,
197-203). This price does not vary directly
according to demand, but only indirectly “when
returns to scale are variable rather than
constant” (Devine 1988, 243).
Through self-management, workers will have,
during their work life, the opportunity to do a
variety of tasks that are unskilled and repetitive,
skilled, nurturing, creative and are related to
organizational planning and management.
According to Devine, this repartition will
significantly reduce inequality in the social
division of labour (Devine 1988, 174-79). A
central aspect of democratic economic planning
is that workers control their own activity and
society's general direction. In other words,
formalizing a task rotation involves a
redistribution of decision-making power to the
workers, something that was previously
captured by the economic and political elite in
previous systems, whether capitalist or central
planning.
Market exchanges and market forces
Although production units are self-managed,
their decisional power is limited to the capacity
of their existing infrastructures. They cannot
choose to invest in new assets or close facilities
by themselves. Here lies the difference between
market exchanges and market forces, a central
element to the negotiated coordination process.
Market exchange gives consumers and
entrepreneurs a means of transmitting valuable
information (i.e. preferences) through selling
and buying at given prices. Negotiated
coordination includes market exchange and day-
to-day production can therefore adapt to
market signals. However, negotiated

CRITS : A brief sketch of three models of democratic economic planning
5
coordination rejects what Devine calls market
forces – making investment choices that follow
the logic of value accumulation. In negotiated
coordination, it is not the capitalist who makes
investment decisions through an atomistic, ex-
post coordinated process that aims for profit
maximization. Instead, it is the social owners (all
the affected parties) that take investment
decisions through an ex-ante negotiated
coordination process aiming to fulfill collectively
decided social objectives (Devine 1988, 236).
Indeed, when collectively owned self-managed
production units want to make changes to their
productive capacity (like building a new facility
or investing in new technology development), a
demand must be made for the next planning
cycle. In the next plan allocation process, the
Negotiated Coordination Body will review and
approve them in light of what other production
units are doing. Everyone affected by the sector
sends a representative to the Negotiated
Coordination Body: production units of the
sector, obviously, but also suppliers, consumers,
government, and interest groups from civil
society. Based on the National Planning
Commission projections and the Representative
Assembly's national priorities, the Negotiated
Coordination Body tries to establish the best
investments for its sector after considering the
demands of the various production units
(Devine 1988, 237-38).
The way negotiated coordination uses
knowledge seeks to involve workers and every
other part of society affected by the planning
1
The debate was about the technical possibility of
planning a complex modern economy. The debate was
between two camps. The first, composed of
economists from the Austrian school (mainly Friedrich
Hayek and Ludwig von Mises), rejected the possibility
process is essential for Devine and Adaman. It
allows them to answer the Austrian argument
about tacit knowledge in the socialist calculation
debate
1
. Tacit knowledge is a form of knowledge
that is practical, local and not transmissible as
quantitative information. Simply put, tacit
knowledge comes from the fact that “we can
know more than we can tell” (Polanyi 2009, 4).
The Austrian argument (Hayek 1945) says that
those who hold that local knowledge should
take the economic decision and that central
planning cannot access this knowledge and,
therefore, will always be inefficient. For Devine
and Adaman (1996), putting representatives of
those affected by the economic choice in the
investment (Negotiated Coordination Body) and
the day-to-day (Governing Bodies) decision
process puts their tacit knowledge back in the
decision process without needing to transform it
into quantitative information that is sent to a
Central Planning Bureau.
As mentioned earlier, in the negotiated
coordination model, the means of production
are owned collectively, except for very small-
scale initiatives that are co-ops owned by their
members or are self-employed initiatives.
However, Devine proposes to collectivize them
as soon as they grow (Devine 1988, 129-30).
Society, as a whole, therefore, owns the means
of production and lends them to production
units. The latter must make effective use of
those means. Therefore, the Representative
Assembly, helped by the Planning Commission,
sets a rate of return that infrastructure use
should generate and transfer to the
of rationally calculating economic activity through
central planning. The second camp, composed of
socialist economists, defended this possibility. See
Devine and Adaman (1996) for further readings.

CRITS : A brief sketch of three models of democratic economic planning
6
government. Production units should reach the
set rate of return or otherwise provide a
justification that they should be “subsidized” by
the rest of the economy. To prioritize the best
use of resources, the rate of return also guides
the Negotiated Coordination Bodies when
deciding which production unit to invest in. The
rate of return can differ from one production
unit to another for three reasons: (1) reasons
within the control of the production unit (like
wage, prices, working conditions and work
organization), (2) reasons beyond the control of
the production unit (like location and fashion) or
(3) reasons related to the macroeconomic
situation that concerns a whole branch of
production (like the fall or rise of demand for
this type product, significant technological or
social changes) (Devine 1988, 245-48).
It is by no means certain that the negotiation
process that lies at the center of the model will
reach a successful conclusion every time. Pat
Devine keeps insisting on this very point: in
time, people will learn to make sound economic
decisions because failure will have
consequences on their lives. The repercussions
might include inflation, a production unit having
to shut down, or the exhaustion of specific
resources at the local level (Devine 1988, 201,
270-72). These dire consequences are similar to
those encountered in capitalism. However,
negotiated coordination would ensure that all
individuals would become aware of the
consequences of their economic decisions and
take responsibility for them. Devine claims that
people would, in the longer-term, change the
way they operate accordingly.
Recent work from proponents of negotiated
coordination focuses on how the model would
take care of ecological considerations (Adaman
et Al. 2003; Adaman and Devine 2017; Devine
2017). For the authors, the institutions of
negotiated coordination are re-embedding the
economy into society and nature and are
making the economic process more self-
conscious and subject to a variety of points of
view, including those defending the
environment (Adaman et Al. 2003, 270-71;
Devine 2017, 45-7). Collective ex-ante
coordination of major investments would then
tie economic activity to human needs instead of
profits. From an ecological perspective, here lies
the main advantage of a democratically planned
economy over capitalism. Since significant
investments will be democratically planned,
competition and growth incentives will
presumably be inoperative; hence the pressure
on workers and ecosystems would be
significantly lightened. Therefore, according to
Devine and Adaman, negotiated coordination is
well suited to respond to today’s ecological
concerns without needing critical institutional
changes.
“It is by no means certain
that the negotiation
process that lies at the
center of the model will
reach a successful
conclusion every time. Pat
Devine keeps insisting on
this very point: in time,
people will learn to make
sound economic decisions
because failure will have
consequences on their
lives”.

CRITS : A brief sketch of three models of democratic economic planning
7
Figure 1. Devine & Adaman’s negotiated
coordination annual planning diagram
plan
adoption
production
units
1
planning steps in devine &
Adaman's model
Transfer of economic
information
transfer of plan
alternatives
transfer of a report on
agreement and
disagreements about plan
alternatives
plan adoption
disaggregation and
investment by Negotiated
coordination bodies and
Governments
production
market exchange
1.
2.
3.
4.
5.
6.
7.
4
3
Economic
Information
negotiated
coordination
body
planning
commission
Economic
Information
chamber of
interest
Report on agreement and disagreements
Representative
assembly
Disaggregation and
investment
Allocation
Households
Wages
Purchases
2
6
7
1
5
Taxes
Government's
social bodies
Functional services
5
Plans alternatives

CRITS : A brief sketch of three models of democratic economic planning
8
2. Albert & Hahnel’s
participatory economics
Three years after the publication of Pat Devine’s
book on negotiated coordination, in the United
States, activist Michael Albert and economist
Robin Hahnel published two books laying out
the basic concepts of participatory economics:
one for academics (1991a) and another for a
wider audience (1991b). While participation
through representation is at the center of
Devine and Adaman’s model, Albert and
Hahnel’s focus is on a more directly democratic
form of economic participation.
Iterative planning process
In participatory economics, all workplaces are
managed by Workers’ Councils. Contrary to
what negotiated coordination proposes, only
workers have the right to vote in these Councils,
but all do so directly at the local level, not
through representatives (Albert and Hahnel
1991a, 23-4). Though the basic production unit
in participatory economics is the workplace,
other democratic spaces form concentric circles
around and inside it. All offices or workshops
assemble in a workplace; each workplace is part
of a federation that groups workplaces
according to what they produce (Albert and
Hahnel 1991b, 21). Each of these levels is
organized through council-based direct
democracy.
Participatory economics is also based on
Consumers’ Councils, similarly organized into
concentric circles that range from households to
large entities such as a country. Peers from
other councils review each other’s demands and
decides if the lower body is making consumer
decisions that affect other councils and, thus,
should be treated at a higher level: “The colour
of my underwear concerns only me and my
most intimate acquaintances. The shrubbery on
my block concerns all who live on the block…
The frequency and punctuality of buses and
subways affect all in a city. The disposition of
waste affects all States in a major
watershed” (Albert and Hahnel 1991a, 40-1).
The idea is simple: those who are affected by a
democratic decision should take part in it.
These two sets of councils (workers’ and
consumers’) are at the center of the planning
process that Albert and Hahnel call
“participatory planning” (Albert and Hahnel
1991a, 57-71; 1992; Albert 2003, 219-27; Hahnel
2005: 193-94; Hahnel 2012, 89-104). Iteration
Facilitation Boards (IFB) support the councils’
work. These boards are workplaces in charge of
producing economic analyses and indicative
prices based on workers' and consumers'
desires, previous years’ results, and the
enormous amount of data shared during the
planning process. After receiving prices and
information from the IFB, each council writes a
proposal for consumption or production. Each
actor modifies its proposal through iterations
before they all reach a final proposal without
any goods or services in excess demand or
supply.
Let us dig deeper into this iterative process.
Iteration Facilitation Boards start the process by
releasing information: last year’s productions
statistics coupled with the current social cost of
all goods and services (“indicative prices” are
similar to the production costs in Devine’s
model but directly influenced by supply and
demand), labour costs, and qualitative
information on goods and services. All actors
have access to this information.
The Facilitation Boards then send in their
demographic, technological, and economic

CRITS : A brief sketch of three models of democratic economic planning
9
forecasts. Taking all these factors into account,
each council decides what changes they would
like to make to their previous year’s proposals:
do they want to produce or consume more or
less? Do they want to do it differently? What are
the consequences of those changes on their
inputs and outputs?
They then send their first proposal to the higher
federative level, providing both quantitative and
qualitative information about their choices.
These proposals are broad and do not go into
the details of the choices; they are general
categories (e.g., four clothing pieces rather than
one pair of blue jeans, two sweaters, and one
jacket). Personal preferences, statistically
predictable, are left to the care of the Councils
and Federations helped by the data coming from
Facilitation Boards. It is always a committee of
peers who approves the proposals of those who
make them. Households that make-up a
neighbourhood council approve each other’s
consumption proposal. A neighbourhood council
receives approval from other neighbourhood
councils. It continues like that up to the largest
circles, and the same is true on the production
side. The criteria for approving a consumption
proposal is that it should not exceed the
consumption rights acquired through work.
Following the same logic, production proposals
are approved because the level of social benefits
produced by the proposals' outputs is equal to
or higher than the social costs of the inputs it
will use (Hahnel 2012, 91-6).
Once every proposal is approved, the
Facilitation Boards adjust indicative prices
according to what goods and services are now in
excess supply and excess demand. A new round
2
A Pareto optimum outcome is an economic state
where it is not possible to improve the situation of
starts with this new data: the councils can then
develop new plans to consider these new prices.
The iteration continues until no good or service
in the economy is in excess supply or excess
demand. According to the authors, this process
can be helped and even greatly simplified by
using computers. Albert and Hahnel also
contend that this allocation process can lead to
a Pareto optimum outcome
2
(Albert and Hahnel
1991a: 73-106).
Workers’ compensation
As we saw, the major constraint imposed on
Consumers’ Councils is through workers’
compensation. Consumers can only get the
amount of product equivalent to the effort and
sacrifice they make through work. Participatory
economics offers a decentralized mechanism for
compensation based on the principle that
payment equals effort and sacrifice. If we apply
this “distributive maxim” to today’s world, those
with the most taxing and tiring jobs would be
entitled to higher remuneration. In contrast, the
more exciting and least demanding jobs would
receive lower pay. This remuneration scheme is
the opposite of what many are experiencing
today.
How does this work in participatory economics?
Through what the authors call “balanced job
complexes.” This proposal differs both
significantly and very little from the current
organization of work. It differs a lot because its
starting point is that everyone should have a set
of tasks with the best possible balance between
them. It also differs very little because what we
call a “job” is, in fact, a blend of tasks whose
aggregate is simply the result of other motives
than the balancing of effort and sacrifice. With
one individual without degrading the situation of at
least one other.

CRITS : A brief sketch of three models of democratic economic planning
10
balanced job complexes, the tasks that best
foster the individual's development will be
balanced out by others that promote it less.
Workplaces can distribute tasks as they wish
because they are democratic spaces. However,
Michael Albert provides a relatively simple way
to determine the “sacrifice value” of each task.
Each worker could grade each existing task in
that environment on a scale of 1 to 20. The
council of the workplace would then assemble
all the grades and determine an average for
each task. The tasks would then be distributed
among workers according to their tastes and
skill levels to come as close as possible to the
workplace average (Albert 2003, 105-06).
How is this linked to the planning process? The
entire society sets the average grade of sacrifice
for each industry branch through delegate
committees for each industry. It also sets a
general average for the whole economy. This
general average is the measurement standard
for remuneration: giving less effort than average
means getting paid less and vice versa. If they
are far from the average, workers are
encouraged to work in multiple workplaces to
reach an equilibrium.
Hence, when Workers’ Councils decide on their
production choices, it directly impacts their
compensation and consumption capacity.
Likewise, a rise in prices impacts the capacity of
the Consumption Councils. By “forcing” actors to
find an equilibrium between what they want
and what others want (expressed through price
and compensation averages), “this procedure
‘whittles down’ overly ambitious proposals …
about what they would like to do to a ‘feasible’
plan where everything someone is expecting to
be able to use will effectively be available”
(Hahnel 2012, 94-5).
In recent years, Robin Hahnel has proposed two
evolutions of the model. First, he developed
what he calls “a pollution damage revealing
mechanism,” which gives participatory
economics the possibility to evaluate the
damage pollution is doing to different
communities and integrate this damage in the
indicative prices of goods in the form of a
Pigouvian tax (Hahnel 2005, 198-203; 2012, 123-
32; 2017). He also worked on investment and
development planning to propose how
participatory planning would function in the
longer-term and how these longer-term plans
would interact with the annual planning
procedure (Hahnel 2005, 203-7; 2012, 115-22;
Hahnel and Kerkhoff 2020). He also recently
worked on organizing and rewarding
reproductive labour in a democratically planned
economy (Bohmer, Chowdhury, and Hahnel
2020).
“With balanced job
complexes, the tasks that
best foster the individual's
development will be
balanced out by others that
promote it less.
Workplaces can distribute
tasks as they wish because
they are democratic
spaces.”

CRITS : A brief sketch of three models of democratic economic planning
11
Figure 2. Albert & Hahnel participatory
economics annual planning diagram
Information
iterations
and plan
adoption
Iteration Facilitation
Board (IFB)
1
Planning steps in albert & hahnel's model
Prices and previous year's result transferred to
councils
Work intention and consumption intentions
transferred to IFB
Iteration and plan adoption
Production
Consumption
1.
2.
3.
4.
5.
Federated
producers'
Councils
Federated
consumers'
councils
Information
Consumption intentions
Production capacity
22
4
Consumption credits
3
iterations
and plan
adoption
3
Purchases
5
1
Workplaces Households
Participation and
work intentions
Selfmanagement
and approval
Participation
and consumption
intentions
Approval

CRITS : A brief sketch of three models of democratic economic planning
12
3. Cockshott and Cottrell’s
computerized central
planning
In 1993, the economist and computer scientist
Paul Cockshott and the economist Allin Cottrell
published Towards a New Socialism, a book that
summarized previous publications they wrote,
separately and together, about the effect of the
advancement of computer technology on the
arguments presented in the socialist calculation
debate. Instead of opting for a decentralized
form of planning as the two models we just
discussed did, they argue that a centralized but
computerized form of planning was not only
possible, it was a better option than market or
non-market decentralization.
A centralized planning bureau
At the heart of Cockshott and Cottrell’s model
lies one institution: a centralized planning
bureau they often simply call Planning. This
bureau is responsible for producing various
plans of three different sorts: macroeconomic
plans, strategic plans, and detailed plans
(Cockshott & Cottrell 1993, 58-9).
Macroeconomic plans are about balancing
broad economic measures: levels of taxation,
savings, and investments for the whole economy
(Cockshott & Cottrell 1993, 89-102). Strategic
plans say where the economy should go in the
short, medium and long term: what part of the
industrial structure do we want to develop,
which one do we want to leave aside; how do
we want to adapt to a new environmental or,
say, demographic realities; by how much do we
want to see our labour time increase or
decrease (Cockshott & Cottrell 1993, 61-72). The
detailed plans make macroeconomic and
strategic plans a concrete reality in a given year
after considering what resources are available
(Cockshott & Cottrell 1993, 73-88).
Planners use two essential tools to prepare
these plans: first, a network of computers with
at least one station in every workplace where “a
local spreadsheet of its production capabilities
and raw materials requirements” (Cockshott &
Cottrell 2008, 12) is continuously and
automatically updated; second, supercomputers
that integrate this information into an algorithm
designed to allocate raw materials and the
labour force according to a set of desired
outputs for the whole economy (Cockshott
1990; Cockshott and Cottrell 1993, 81-6).
Equipped with these tools, Planning can design a
diversity of macroeconomic, strategic, and
detailed plans with different total output results
and workload inputs. These plans are then
submitted to a political process – to which we
will come back to – for approval or rejection.
The basic unit of these plans is labour time.
Cockshott and Cottrell argue that the labour
theory of value is a solid economic proposition
upon which to base the planning process on
(Cockshott and Cottrell 1989; 1993, 41-52;
1997). The authors offered answers to a series
of classical objections to labour value theory, for
instance: the complexity of taking skilled labour
into account (Cockshott and Cottrell 1993: 34-6),
the integration of the value of time through a
discount rate (67-9) or the inclusion of the value
of natural resources (64-7). So the planning
bureau has access to a value for each good in
terms of labour time. To form a market-clearing
price for each good, it adds a multiplier based
on the ratio between the demand for the good
and its value in labour time (Cockshott and
Cottrell 1997, 347-348).
When adopted, the plans are implemented by
“projects” in which people work to create
planned goods or services. These projects are

CRITS : A brief sketch of three models of democratic economic planning
13
not enterprises in the sense that they would
have the economic right to “own” specific
means of production or resources or to “pay”
workers to do some work. Instead, they are
being allocated a certain amount of work time
from workers and the use of specific
infrastructure and resources by Planning.
This central bureau, owns all the means of
production and every natural resource,
integrates all projects “as […] a capitalist
company [integrates] the individual activities
that it may be carrying out […] projects are
managerial or administrative rather than legal
entities” (Cockshott and Cottrell 1993, 179). The
workers are paid in labour tokens directly by
Planning. These labour tokens are equal to the
amount of labour time a worker has
accomplished in a given period. Workers then
exchange them for consumer goods. As soon as
they do so, the tokens lose their value, like a
theatre ticket (24-25). The trends in token
spending will give the Central Planning Bureau
the necessary information to establish market-
clearing prices.
Innovation could be taken care of through an
“innovation budget” through which individuals
and companies could apply to receive funding
for their ideas and projects (Cockshott and
Cottrel 2008: 90).
Democracy, planning and individual rights
The Cockshott and Cottrell model may, at first
sight, seem not only centralized but also quite
hierarchical, with Planning commanding from
the top and everyone underneath obeying.
While they have not developed the political
aspect of their model as much as the economic
one, in their 1993 book and in a few articles
Cockshott and Cottrell proposed a direct
democracy based on sortition, inspired by the
Athenian classic democracy (Cockshott and
Cottrell 1993, 157-70). Hence, “[t]he various
organs of public authority would be controlled
by citizens’ committees chosen by lot. The
media, the health service, the planning and
marketing agencies, the various industries
would have their juries.” (167). These
committees could act as regulatory bodies –
establishing norms, rules, and regulations– and
economic bodies –being allocated production
mandates and resources by Planning and
ensuring they are fulfilled. They would be
responsible for the day-to-day decision-making
at the top of each organization and institution in
society. It is noteworthy to mention that local
democracy only intervenes ex post in Cockshott
and Cottrell's model, it democratically organizes
the decision taken by the plan, which is written
by the Central Planning Bureau and adopted by
referendum.
“The Cockshott and
Cottrell model may, at first
sight, seem not only
centralized but also quite
hierarchical, with Planning
commanding from the top
and everyone underneath
obeying. While they have
not developed the political
aspect of their model as
much as the economic one,
they proposed a direct
democracy based on
sortition.”
The macroeconomic plan and some aspects of
the strategic plan would be submitted to citizens
through annual referenda using electronic
procedures (Cockshott and Cottrell 2008, 11-2).
The most important aspect of these votes is the

CRITS : A brief sketch of three models of democratic economic planning
14
level of taxation: the amount of work time that
society should invest in goods and services
available for free to all citizens. When the
quantity of work time necessary for these public
services is adopted democratically, a flat tax
covering this exact amount is deducted from
every working person’s labour token (Cockshott
and Cottrell 1993, 166).
This democratic system also offers rights to
individuals: the rights to earn a living (even if
they are, for some reason, unable to work, in
which case they receive essential goods without
any obligation on their part) and the right to
receive the full value of their labour and to
dispose of this value as they see fit (Cockshott
and Cottrell 1993, 175). “In all cases the people
are the ultimate delegators of power. Either
they vote to tax themselves and entrust a
demarchic council with a budget to produce a
free service, or they choose to purchase goods,
in which case they are voting labour time to the
production of those goods.” (Cockshott and
Cottrell 2008. 16).
Cockshott and Cottrell (2008) updated their
argument in recent years by including the new
technologies that are now available. Their vision
has informed many contemporaries by
demonstrating that democratically planned
economies can take advantage of technological
advances, including the ones used by the largest
capitalist corporations that are deeply involved
in planning massive economic networks (Durand
and Keucheyan 2019; Phillips and Rozworski
2019).
Thus, the authors propose a centralized, fully
computerized and moneyless system that
calculates and expresses all goods' value in
working hours. Their contribution is crucial to
understand that democratic economic planning
is technically feasible.
Conclusion
These proposals are undoubtedly imperfect and
would benefit from an improvement and greater
detail further. Several nuances and distinctions
are absent from this text. Nevertheless, these
imperfections should not prevent us from
starting to reflect now on the possible
configurations of a postcapitalist economy. We
also omitted in these brief sketches the critiques
formulated by previous readers of these models
and the ones that we could have proposed.
Rather, our goal was to lay out simply and
clearly the models' functioning so that we could
discuss and criticize them elsewhere.
Getting out of capitalism implies finding
desirable and functional alternatives to replace
it. It is necessary to continue analyzing and
criticizing the world as it presents itself to us,
and it is just as imperative to question the
nature of the world we want to build. We should
consider these two tasks as two sides of the
same coin.
“Getting out of capitalism
implies finding desirable
and functional alternatives
to replace it. It is necessary
to continue analyzing and
criticizing the world as it
presents itself to us, and it
is just as imperative to
question the nature of the
world we want to build.”

CRITS : A brief sketch of three models of democratic economic planning
15
Figure 3. Cockshott and Cottrell’s
computerized central planning detailed
plan’s diagram
Projects
central planning
bureau
Information
1
2
Allocation
Workers /
Consumers
/ Citizens /
Communes
Labor token
Work time / Consumption
5
6
planning steps in Cockshott & cottrell's model
Continuous transfer of economic information
Plan conception with help of algorithm
Plan adoption by electronic vote
Allocation to the different projects
Selection of the committees that will manage the
projects
Production
Consumption
1.
2.
3.
4.
5.
6.
7.
plan alternatives
Plan
adoption
Vote
4
3
Citizen's
committees
Lot
Manage
7

CRITS : A brief sketch of three models of democratic economic planning
16
Glossary
1. Devine & Adaman’s coordinated negotiation
Chamber of Interests
The Chamber of Interests is a consultative body where interest groups and cause groups are represented.
There are Chambers of Interests at the three levels of Devine’s model (national, regional and local). The
Chamber of Interests brings together all interest groups and cause groups representatives to debate and
ideally agree on the plan's content to be adopted. When they have reached an agreement or have decided
that such an agreement is not attainable, they then send a report to the Representative Assembly
presenting their agreements and disagreements. On the basis of this report, the Assembly will discuss and
adopt the plan (Devine 1988, 194).
Functional Services or Functional Activities
Functional Services or Functional Activities are the terms used by Pat Devine to designate the equivalent of
today’s public services in most advanced capitalist countries: health, education, environmental protection,
etc. These services are tax-funded and offered by Social Bodies (Devine 1988, 213).
Interest groups and Cause groups
Interest groups are self-organized groups of citizens interested in a specific question: professional bodies
and unions, organizers of recreational activities (cultural, sports, etc.). Cause groups can broadly be
understood as social movements. All these groups function through the logic of election and
representation. Their representatives meet in the Chamber of Interest, aiming to defend their respective
groups' interests in elaborating the plan (Devine 1988, 153).
Market exchange
Market exchange consists of an act of sale/purchase between a production unit and another production
unit or between a production unit and an individual as long as the sale does not affect production capacity
significantly and requires major investment. Negotiated coordination keeps market exchanges (Devine
1988, 24).
Market forces
Market forces refer to how changes in production capacity (like major investments) occur. Under capitalism,
big corporations coordinate these investments ex-post in an atomistic way. Under negotiated coordination,
a democratic and negotiated coordination process replaces market forces (Adaman and Devine 1996, 534).

CRITS : A brief sketch of three models of democratic economic planning
17
Negotiated Coordination Bodies
The Negotiated Coordination Bodies are responsible for economic coordination within a production sector.
These bodies make the major investment decisions regarding a sector. This body is comprised of elected
representatives of the same sector's production units, main customers, major suppliers, relevant Planning
Commissions, and interest groups. The main objective of this institution is to coordinate economic activities
in the same sector. Issues relating to the main changes in production capacities, how to achieve targets,
and how to manage production gaps between the same sector’s production units are addressed here
(Devine 1988, 231).
Planning Commissions
The Planning Commissions have two primary purposes. Its first one is to elaborate plans. Based on the
Negotiated Coordination Bodies' economic information, the Planning Commission members elaborate and
submit various plans to the Representative Assembly where one plan will be adopted. Planning
commissions consist of members of the concerned governments, of productions units, of negotiated
coordination bodies and of interest and cause groups. The second purpose of the Planning Commissions is
related to the implementation of the plan. They are responsible for economic coordination between the
different authorities at a geographic scale (national, regional and local). After receiving the version of the
Representative Assembly's plan, Planning Commissions are responsible for allocating the principal
investments to the various production units through the appropriate Negotiated Coordination Body. There
are Planning Commissions at the local, regional and national levels (Devine 1988, 190, 213).
Prices and Wages
Prices are determined by the production units and correspond to the social costs of production. Production
costs are divided into two types: primary inputs and secondary inputs. The cost of primary inputs (natural
resources, energy, and capital) is determined at the national level since they affect all production units. An
income policy is adopted at the national level, but local production units establish wage levels while
respecting the policy's parameters. With this data and adding the depreciation for the equipment and
building, each production unit can set its prices by adding up production costs. (Devine 1988, 197-198).
Production Units
Production units (roughly equivalent to enterprises) produce goods and services and provide them to
consumers. Representatives from four sectors sit on the decision-making body of the production unit: the
general interest (through national, regional and local Planning Commissions and Negotiated Coordination
Body), the interests of consumers, users and suppliers (through consumer associations, government and
public services, production units that buy from or sell to the production unit and other industry
development councils related to the production unit), the interest of workers (in the form of the workers
of the production unit itself and their unions) and the interests of the community (through interest groups
and cause groups). These representatives then agree on the most appropriate use of productive capacities
through negotiation, considering each others interests. They are also responsible for making small local
investments. Within this framework, the production unit is self-managed by its workers.

CRITS : A brief sketch of three models of democratic economic planning
18
Figure 4. Possible composition of a production unit’s governing body (Devine 1988, 226)
Representative Assemblies
Representative Assemblies are political decision-making bodies composed of all the people's
representatives elected by universal suffrage. Political parties assemble different representatives on an
ideological basis. The party whose representatives form the majority constitutes the executive power, while
the legislative power also includes opposition parties. Their primary economic purpose is to adopt the plan.
Based on the Planning Commission's various plans and considering the report from the Chamber of Interest,
the elected members of the Representative Assembly deliberate and adopt the final version of the plan.
This final version will then be sent back to Negotiated Coordination Bodies for implementation. There are
Representative Assemblies at the three levels of the negotiated coordination model: local, regional and
national (Devine 1988, 142, 254).
Small scale activity
Self-employed individuals or small co-ops carry out what the model calls small-scale activities (repairs, art,
personal growth, massage therapy, graphic designers, etc.). Workers in these sectors could be grouped in
“centers”. Like co-working spaces, these centers would provide workspace and resources for these workers.
The centers would be self-managed within guidelines decided by the local Planning Commission. If their
activity level extends outside their initial locality, this activity would have to register as a production unit
and have its own governing body (Devine 1988, 230).

CRITS : A brief sketch of three models of democratic economic planning
19
Social Bodies
Social Bodies are the government’s agencies that provide the Functional Services (the equivalent of public
services in this model): health, education, environmental protection, etc. Social Bodies are decentralized,
are present at the three levels of the model (national, regional and local) and financed by taxation (Devine
1988, 213).
Social ownership
Social property is a dynamic form of ownership of the means of production that is adapted to the needs of
the communities that are concerned by a decision. It is not equivalent to state ownership as it means control
by society as a whole. There are two conditions for social ownership: the people most affected by using
specific means of production should take part in decisions concerning them and these decisions should be
coherently integrated into a broader plan decided by society as a whole.
The adequate governing bodies of the production units, Planning Commissions, and the Negotiated
Coordination Bodies coordinate the implementation of this form of ownership (Devine 1988, 223).
Subsidiarity
The principle of subsidiarity favours decision-making being done in the utmost decentralized way possible.
This principle implies that decisions should be made primarily by those who will be proportionally affected
by it (Devine 2002, 75).
Taxes
The government collects two kinds of taxes: one on production units and one on wages. The tax on
production units is equal to the renting out of resources and the return on assets employed. Depending on
the amount produced by this tax on production units, it could be complemented by a tax on wages. These
taxes are the government’s source of revenue and finance the government’s Social Bodies providing
Functional Services. Local and regional governments would also collect taxes. The level of taxes on
production units would be set at a rate that would leave production units with a surplus for minor
investments (Devine 1988, 216).
2. Albert & Hahnel participatory economics
Balanced Job Complex
In participatory economics, jobs would be divided into tasks and reorganized to create a balanced set of
tasks. This redistribution aims to equalize desirable and undesirable tasks across workers of the same
workplace and workplaces. It involves reviewing the division of labour to balance the content of work
between planning and execution tasks as much as possible. Participatory economics, therefore, does not
seek to “abolish” the division of labour. Instead, it aims to review the division of labour to redistribute
burdensome and empowering tasks equitably. It aims to give decision-making time and power back to
workers while letting them stay in contact with the production sphere (Hahnel 2012, 55-56).

CRITS : A brief sketch of three models of democratic economic planning
20
Complementary Holism
Complementary holism is the general theory underpinning participatory economics, which sees society as
divided into several spheres containing social institutions responding to human needs and desires. These
institutions shape human desires and human needs, just like institutions are shaped in return by those
desires and needs. It aims to describe society by integrating and going beyond four social theories described
as monistic: nationalism, feminism, Marxism and anarchism. These social theories are monistic as they do
not offer a perspective that subtly understands the complexity of society (Albert et Al. 1986, 80).
Consumers’ Councils
Consumers’ Councils are in charge of consumption in the planning process. Like with Workers’ Councils,
consumers’ councils are organized according to the federal principle, but on a geographic basis instead of a
sectoral basis. They are nested in each other from the individual household to the national council (Albert
2003, 93).
Iteration Facilitation Board (IFB)
The primary role of the IFB is to facilitate and coordinate the planning process. This body collects all the
proposals for production and consumption), compares them, and sends alternative suggestions back to the
various councils. Its function is strictly perfunctory. It is a technical workplace like many others, and it does
not hold any extraordinary political power. It is in charge of assisting the workplaces and the households by
integrating the whole participatory planning process through information (Albert and Hahnel 1991a, 62).
Prices
The IFB calculates prices. They are cost-based and influenced by supply and demand. In the iterative
planning process, IFBs emit prices that are then affected by supply and demand as expressed by Workers’
and Consumers’ Councils. A new round starts by taking into account these new prices. Prices provide useful
information about the social costs and the social benefits of goods and services (Hahnel 2012, 91-92).
Remuneration
Workers’ Councils set remuneration according to effort and determine the level of effort for each task. The
objective of linking wages to effort is to ensure that everyone is compensated according to their effort, the
only thing that workers have a clear impact on. Remuneration is distributed through consumption credits
that customers can use to get consumption goods. These credits are not kept by workplaces after the
transaction and they aren’t used in the production process (Albert 2003, 112; Hahnel 2012, 59).
Workers’ Councils
Workers councils are in charge of the self-management of workplaces that are producing goods and
services. Only workers are members of those councils. All workers of a workplace take part in the workers’
council decisions. They do so directly in their local councils. Workers’ Councils are in charge of the day-to-
day management of their local workplace and are federated by sectors and manage the entire productive
economy through this process. They are nested in each other from the small working team to the national

CRITS : A brief sketch of three models of democratic economic planning
21
council. These councils are where workers express how many hours they wish to work, what they wish to
produce, how they want to organize their workplace, and so on.
(Albert 2003, 92).
3. Cockshott and Cottrell’s computerized central planning
Central Planning Bureau
The Central Planning Bureau is the central institution of Cockshott and Cottrell’s model. It is often simply
called “Planning” by the authors. It is composed of experts (economists, technicians, computer scientists
and engineers). The Central Planning Bureau’s main task is to produce alternative plans. Planning produces
three kinds of plans: macroeconomic plans, strategic plans and detailed plans. Those plans are proposed to
the population by electronic referendum and adopted (Cockshott and Cottrell 1993, 179).
Citizen’s committees
The state would be maintained but not as we know it. It would be an “acephalous state” in that it would
have no legislative power and its role would be limited to implementing the decisions made by its
constitutive committees. These committees would be composed of citizens chosen by lot from among their
users and workers. All public bodies and each industrial sector would be governed in this way (health,
education, water, electricity, transport, etc.) (Cockshott and Cottrell 1993, 167).
Commune
Communes are non-mandatory living spaces that Cockshott and Cottrell think would be more efficient and
more adapted to their model. They should offer one room per individual within a collective habitat and
should consequently be designed with an architecture suited for this new domestic lifestyle. Communes
would collectively realize five types of economic activities: housing, child care, certain leisure activities, and
assistance to the elderly. The pooling of these activities would allow for significant economies of scale
(Cockshott and Cottrell 1993, 150).
Detailed plan
The detailed plan contains the concrete allocation of resources within the framework established by the
macroeconomic and strategic plans. If the strategic plan invests, for example, a certain amount of national
revenue in a specific sector, the detailed plan will specify the concrete amount of resources needed in each
project to meet this goal (Cockshott and Cottrell 1993, 73).
Macroeconomic plan
The macroeconomic plan establishes general parameters that aim to frame economic development in the
long term. It contains investment levels for the economy as a whole, the level of taxation and savings
(Cockshott and Cottrell 1993, 89).

CRITS : A brief sketch of three models of democratic economic planning
22
Prices
The value of goods and services would be expressed in hours of work socially necessary for their production.
However, prices would not necessarily correspond to value. The Central Planning Bureau would make
adjustments according to demand. Thus, if a commodity is in high demand, prices would be adjusted to
meet this demand adequately. Concretely, two numbers would be displayed at the time of purchase: the
“value” (the number of hours of work socially required to produce it) and the price adjusted according to
demand. The labour value would thus serve as a milestone to curb price elasticity (Cockshott and Cottrell
1997, 347-348).
Projects
Projects resemble business in capitalist society and are where production occurs. Projects have no formal
legal existence; they are only administrative units that belong to the community through Planning. The link
between the Central Planning Bureau and projects is similar to the one between different divisions of a
single company and its executive. Projects and the Central Planning Bureau mostly communicate through
digital data. Each project has a computer dedicated to planning connected to an information network
dedicated to this task (2008, 9). Each project is self-managed by its workers (Cockshott and Cottrell 1993,
179).
Strategic plan
The strategic plan concerns the evolution of the economy's structure in the short, medium and long term.
The strategic plan presents which sector to develop and which to compress, the economy's environmental
dimension, and the amount of total working time (Cockshott and Cottrell 1993, 61).
Taxes
Income tax, land rent and consumption tax pay for the services offered to the population free of direct
charge. Since the income distribution would be roughly equal, there would be no reason to introduce a
differentiated tax. The authors propose introducing a “flat tax”, the amount of which would be decided
annually by democratic means. The second source of government revenue is land rent. Land ownership
would be a public monopoly. Land, like natural resources, would be safeguarded by an international
environmental agency. A national organization would serve as an intermediary to facilitate the coordination
of such an agency's activities. Thus, when someone buys a house, she owns the materials but rents the land
through a rent to the state. A consumption tax would be introduced for socially and ecologically undesirable
goods and services. This tax would make it possible to limit the use of these goods and services. For instance,
specific taxes could target products such as oil, tobacco, and alcohol to adjust consumer behaviour
(Cockshott and Cottrell 1993, 70, 99, 211).
Value
The labour theory of value is the foundation of Cockshott and Cottrell’s model. Hours worked are the basic
unit used in the whole model. Hence, wages, prices and plans are all expressed in work hours equivalent
(Cockshott and Cottrell 1993, 41).

CRITS : A brief sketch of three models of democratic economic planning
23
Wages
Wages are differentiated according to productivity and paid in labour tokens. According to the authors,
associating productivity with wages makes it possible to recognize disparities in the effort invested in work
and remunerate workers accordingly to their effort, measured in output. The authors suggest three
productivity levels: A, B, and C; A being highly productive, and C being less productive. This rating would not
be related to the worker’s training or education level but strictly to their productivity. It would be a way of
recognizing each worker's contribution at his or her actual height. When a person contributes more to
society, he or she receives proportionally more, and vice versa. In the case of a labour shortage in a
particular sector, Cockshott and Cottrell consider the possibility of increasing wages as an incentive. The
Central Planning Bureau pays the wages in labour tokens, not the projects. Those tokens can be used only
by the person to whom they were given. When the tokens are used, they are destroyed, just like theatre
tickets (Cockshott and Cottrell 1993, 34).

CRITS : A brief sketch of three models of democratic economic planning
24
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