5. Innovation in a Democratic Planned Participatory Socialist System
What kind of innovation performance would be expected under a DPPS system, by
comparison to that of capitalism and state socialism? Three features of DPPS, as laid out in
Devine (1988), are relevant to innovation performance. First, the main features of the overall
economic plan would be determined by a democratic process (Devine, 1988, p. 190).
Second, the planning and coordination of the economy would take place, not through
market forces or top-down central planning, but through a process of “negotiated coordination”
(Devine, 1988, ch. 8-10). This means that resource allocation decisions would be made by boards
– industry boards and local and regional negotiated coordination bodies – that have
representation of all affected constituencies, including workers, consumers, suppliers, the local
community, and even “cause” groups such as environmentalists, job safety activists, feminists,
etc. These bodies would arrive at decisions through compromise among the interests represented
on them. In addition, the basic units of social production, or enterprises, are considered social
property and have governing boards that include representatives of all groups affected by the
activity of the enterprise, including workers, consumers, suppliers, and the local community.
Third, each individual would be expected to spend part of her/his work life in each of the
main types of labor, which Devine defines as planning and managing labor, creative labor,
nurturing labor, skilled labor, and unskilled/repetitive labor (Devine, 1988, 171). This would
eliminate the social division of labor, while preserving the technical division of labor with its
In the absence of competitive pursuit of profits, or a Politburo demanding innovation,
what would be the source of innovation under DPPS? First, the democratic, participatory
institutions of that system would empower the population to demand innovations aimed at its
own benefit. Under such a system, people would stand to benefit from innovation, in the three
roles that people occupy – that of consumer, worker, and community member. Consumers can
benefit from new, better, and cheaper products. Workers can benefit from less arduous toil and a
more satisfying experience at work. Members of the community can benefit from products and
work processes that improve, rather than harm, community life.
DPPS, like every economic system, can also tap a second potential source of innovation.
That is the species trait of human beings of having a propensity to look for ways to change and
improve their methods of doing things, entirely apart from any desire for more goods or less
labor. This drive, present in most people, although not in equal measure in all, represents an
important source of innovative behavior at the stage of invention, if the economic system allows
it to operate freely
How would a DPPS economy translate the potential benefits of innovation into actual
effective innovative activity? How would it encourage, within the economy, the expression of
human beings’ natural tendency to create new things?
If the populace wants innovation, they would have to build into the system significant
incentives for those who are in a position to carry it out. Enterprise managers, along with
everyone else who participates in any of the stages of innovation, should be eligible for rewards
for successful innovation. It is not sufficient to assume that decision-makers will automatically
innovate – it must be communicated to them, via a reward system, that society values
innovation. Such rewards would be needed regardless of the mix of material versus moral
incentives. Pay incentives need not be huge to elicit innovative behavior, as long they are large
enough to bring a noticeable consumption benefit to the innovator.
As the Soviet experience indicates, a planned economy can increase the risk associated
with innovation, deterring innovative activity. However, DPPS should not suffer from the
problems of uncertain supplies and inflexibility that characterized Soviet planning. With
representatives on one another’s decision-making boards and with opportunities to communicate
on negotiated coordination bodies, there should be reliable and flexible relations between
suppliers and customers. It would be necessary to eschew the Soviet policy of taut planning and
operate the economy with sufficient excess productive capacity to accommodate the unforeseen
changes in inputs that innovation requires.