Do we really need money in Parecon?

If the annual planning procedure is allowed to request an all-inclusive neighborhood, which is similar to an all-inclusive resort, then it includes minimal consumers’ baskets, lodging, three meals daily, soft drinks, public transportation, and other minimal services in the price, and most people will have a similar level of wages, then what is the function of money here?

As for the supply chain accounting, we may use sectoral natural barter units:
In the service sector - Labor-hours (Trudoden - Wikipedia)
In the transport sector - Kilometrons
In the energy sector - Energons
In ownership and accumulation - Ingots
In the virtual space - Virtual currencies

It is likely that the barter units will streamline calculations due to their equivalent linkage to the respective categories of goods and services.

I mean that all consumers and producers would know that, for example, Labor Hour corresponds to the payment for one hour of work by most service workers who perform work of the same level of effort, as well as to the cost of services of which the cost of labor is the main cost.

Kilometertron usually corresponds to one kilometer of a trip in any kind of transport and, accordingly, any excess of natural equivalents above the natural one could be more prudent, conscious, and justified.

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Dear Yuri,

I’m afraid I have to respectfully disagree with your thinking on money and prices for that matter.

You… like many others on the left… are attracted to the idea that we don’t need money, and also that we can measure the relative value of different goods and services in some sort of natural units like labor hours or units of some environmental input. In your case you are trying to use different units for different kinds of goods and services.

In short, there are two problems with this:

1: It would become a much bigger problem to generate these different measures for different things than you think it would. There was some fictional character named Rube Goldberg I believe, who was forever inventing complicated machines, and the joke was they were always way too complicated to be practical. Your line of thinkin on money and prices suffers from a similar problem to Rube’s inventions.

  1. Unfortunately, just because making choices generate different kinds of social costs for society does not change the fact that what we need to estimate… as best we can… is the overall social cost of producing a unit of this or that in order to be able to make a sensible decision about whether or not we want to. We have now proposed a way to do that during the annual participatory planning procedure, which I recommend to you.

  2. Money! So many are thinking so much about “money” these days. Just as we need an overall estimate of the overall social cost to society of producing different things, we need some units to measure and compare these social costs. And that is why we need “money” in an economy if people are to be able to make informed choices about different options. Now that “money” is what economists have long called “fiat money.” It is a unit of currency that allows us to say that a pound of potatoes is worth $1.20 while a pound of bananas is worth $2.13. We could call the “money” dollars or pounds or pesos. That doesn’t really matter. But we need a currency that allows us to express the relative values of different things to society.

Hi Robin!

I agree with the first point that we don’t need to complicate things, and with the second and third points that we need an overall estimate of the total costs.

But having several natural units of measurement for main sectors of the economy universal for all countries is what simplifies calculations compared to hundreds of national currencies existing today.

As for the overall estimation of total costs during the annual participatory planning procedure. “The sectoral natural units” assume a unified estimate of total income (one unit of income for each of the primary sectors of the economy) and then the single unit of income is used for the overall estimation of various expenditures. But further, at the point time of the payment transaction between agents from different sectors, the natural unit is converted at the exchange rate, just as fiat money is supposed to be converted when making payments between countries. Only instead of hundreds of national currencies, we will have several sectoral natural units.