A Tension Between Rewarding Workers and Rewarding Goods

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In a participatory economy, we uphold a core ethical principle: people should be rewarded not for output or contribution, but for effort and sacrifice. This ensures fairness and protects against inequality rooted in natural differences in talent or ability.

However, a subtle contradiction emerges. The very goods produced by these workers are not evaluated based on the effort that went into making them, but rather on their social utility — how well they align with the values and needs of society as defined through the participatory planning process. In other words, the worker is rewarded for effort, but the product is rewarded for contribution.

Moreover, production proposals from worker councils are approved based on the projected value of their output — not the effort of those producing it. Only after approval is the income internally distributed in proportion to individual effort.

Is there not a structural contradiction here? Labor is rewarded by one principle, while the fruits of that labor are judged by another. Could this reflect a deeper tension between the ethical foundation of the model and its functional requirements?

I’d like to open a discussion — perhaps this isn’t a flaw, but a conscious compromise that deserves to be acknowledged more explicitly.

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Perhaps this is needs further discussion. But “we” have been very forthright about this. We have pointed out what we are doing. And we have explained why we are doing it as we do. In brief, our argument is this:

  1. The “indicative” price of a good or and service should be (roughly) equal to what it costs society to make them. Where “social cost” means the cost of using different scarce productive resources, including different categories of labor needed to make them, and the cost of any damage to the environment of either producing or consuming the good or service.

  2. People should be paid according to the efforts and sacrifices they make while working.

#1 is necessary for the economy to be efficient. #2 is necessary for the economy to be fair.

What this means is that how much any worker will be rewarded may well be different than the social cost to society of using their labor. We are aware of this. We have told readers as much. And we are proud of it!.. Because only in this way will labor BOTH be allocated and used efficiently, AND also be rewarded fairly.

In other words, we claim as a VIRTUE of our proposal that we can both “have our cake and eat it too” so to speak in this regard if one carries on annual participatory planning as we have proposed it be done, and if workers in a council distribute income among themselves according to their efforts and sacrifices.

We have also argued that all models of market socialism are incapable of doing what our proposal does. Namely, BOTH reward labor fairly AND allocate scarce productive labor resources efficiently. In a market socialist economy if workers are paid according to their efforts and sacrifices then the prices of different goods and services will fail to be equal to the social cost of producing them, which will generate inefficiency. But in market socialism if labor is paid according to the value of its contribution to producing things, more often than not people will not be rewarded fairly.

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Thank you for your thoughtful and candid response. The fact that you explicitly acknowledge the divergence between a worker’s compensation and the social value of their labor is an example of intellectual honesty:

“How much any worker will be rewarded may well be different than the social cost to society of using their labor. We are aware of this. We have told readers as much. And we are proud of it!”

I fully support the ethical foundation of the model — remuneration based on effort and sacrifice — as a necessary condition for fairness. However, I would like to draw attention to another dimension: the worker’s sense of participation and meaning in a system where products are evaluated based on how well they align with the values embedded in the participatory economy.

In the planning process, goods and services are assessed not through market logic, but through their coherence with collectively defined social aims — such as efficiency, ecological sustainability, and equitable access. This approach is ethically sound on the level of collective choice. Yet, on the level of individual experience, a disconnect may emerge: I help create something valuable from the system’s point of view, but I don’t see how that reflects back on my personal participation.

That’s why I propose exploring the possibility of a two-sided refinement to the reward mechanism:

  1. A small portion (e.g. 10–15%) of individual compensation could be based not only on effort, but also on the individual’s contribution to the values of the participatory economy — the extent to which the product or service they help create provides value to consumers and society as defined in the participatory planning process.

  2. At the collective level, a mirrored approach could apply to worker councils whose proposals are not approved — specifically, not accepted by consumers through the lens of participatory economy values and their expected contribution to society — but where the council nonetheless demonstrated high levels of collective effort. This would function as an ethical recognition of their participation, even in the absence of outcome realization.

This mechanism would not replace the existing foundation, but rather introduce a feedback link between outcomes and a sense of contribution — without violating the core principle of “effort-based remuneration.”

“People should be paid according to the efforts and sacrifices they make while working.”
Intuitively, one wants to add: and to see how those efforts fit into the larger picture — not just through income, but through recognition of the values created.

In addition:
— Such feedback could help sustain long-term motivation and participation, especially in forms of work that are repetitive, prolonged, or less visible, where present-time compensation may not convey a sense of meaningfulness.
— It would also reinforce the value of self-management: a worker who sees the broader impact of their contribution experiences a deeper sense of agency — and responsibility — in shaping what is produced.

With respect and a sincere desire to support the continued evolution of this important model.

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