The institutions of parecon include workers' and consumers' councils utilising self-managerial methods for decision-making, balanced job complexes, remuneration based on individual effort, and wide decentralized planning.
In parecon, self-management constitutes a replacement for the mainstream conception of economic freedom, which Albert and Hahnel argue by its very vagueness has allowed it to be abused by capitalist ideologues.
[4] Albert and Hahnel argue that it is inequitable and ineffective to compensate people on the basis of luck (e.g. skills or talents that owe to their birth or heredity), or by virtue of workers' productivity (as measured by the value of the goods they produce).
From this point, incomes for personal expenditures and consumption rights for public goods can be expected to diverge by small degrees, reflecting the choices that individuals make in between work and leisure time, and the level of danger and difficulty of a job as judged by their immediate workplace peers.
[5] Albert and Hahnel argue that decentralized planning can achieve Pareto optimum, and does so under less restrictive assumptions than free market models (see: the first fundamental theorem of welfare economics).
Hahnel claims "the truth is capitalism aggravates prejudice, is the most inequitable economy ever devised, is grossly inefficient—even if highly energetic—and is incompatible with both economic and political democracy.
[15] Ultimately, Hahnel argues that Pigovian taxes, along with associated corrective measures advanced by market economists, fall far short of adequately or fairly addressing externalities.
[16]Although parecon falls under left-wing political tradition, it is designed to avoid the creation of powerful intellectual elites or the rule of a bureaucracy, which is perceived as the major problem of the economies of the communist states of the 20th century.
The coordinator class, emphasized in parecon, refers to those who have a monopoly on empowering skills and knowledge, and corresponds to the doctors, lawyers, managers, engineers, and other professionals in present economies.
[19] In capitalism, patent laws, intellectual property rights and barriers to market entry are institutional features that reward individual innovators while limiting the use of new technologies.
[20] The market socialist David Schweickart suggests participatory economics would be undesirable even if it was possible: It is a system obsessed with comparison (Is your job complex more empowering than mine?
[28] However, Takis Fotopoulos argues that "no kind of economic organisation based on planning alone, however democratic and decentralized it is, can secure real self-management and freedom of choice.