This introduction to the term “economic democracy” came my way via Tom on Facebook today. I republish it in full below:
Economic democracy is a socioeconomic philosophy that suggests a shift in decision-making power from a small minority of corporate shareholders to a larger majority of public stakeholders. There is no single definition or approach for economic democracy, but most theories and real-world examples challenge the demonstrated tendencies of modern property relations to externalize costs, subordinate the general well-being to private profit, and deny the populace majority a democratic voice in economic policy decisions.
It’s the next bits which I really like, though (the bold is mine):
Classical liberals argue that the power to dispose of the means of production belongs to entrepreneurs and capitalists, and can only be acquired by means of the consumers’ ballot, held daily in the marketplace. “The capitalistic social order”, they claim, therefore, “is an economic democracy in the strictest sense of the word.” Critics of this claim point out that consumers only vote on the value of the product when they make a purchase; they are not voting on who should own the means of production, on who can keep its profits or on the resulting income redistribution. Proponents of economic democracy generally agree, therefore, that modern capitalism tends to hinder or prevent society from earning enough income to purchase its output production. Centralized corporate monopoly of common resources typically forces conditions of artificial scarcity upon the greater majority, resulting in socio-economic imbalances that restrict workers from access to economic opportunity and diminish consumer purchasing power.
Economic democracy has been proposed as a component of larger socioeconomic ideologies, as a stand-alone theory, and as a variety of reform agendas. In most cases, economic democracy promotes universal access to “common resources” that are typically privatized by corporate capitalism or centralized by state socialism. Assuming full political rights cannot be won without full economic rights, economic democracy is a proposed solution for the problems of economic instability and deficiency of effective demand. As an alternative model, both market and non-market theories of economic democracy have been proposed. As a reform agenda, supporting theories and real-world examples range from decentralization and economic liberalization to democratic cooperatives, fair trade, and the regionalization of food production and currency.
It seems to me that in this concept we might have the seeds of a properly renewed Labour Party – even if some significant proportion of a decade down the line. Rather than focussing on the “how” – the policy-making details so beloved of professional politicos but of so little immediate interest to the wider voting public – surely what at least Labour needs far more urgently is a “what” everyone, voters and supporters, can agree on.
“Responsible capitalism” is certainly a nicely turned phrase for policy wonks – but at least fifty percent tainted by many people’s current experiences. Meanwhile, applauding the ability to learn from one’s enemies obviates the need to admit that choosing one’s friends is a far more significant leap in political activity.
Far better surely, then, than the triangulation of the latter – or, even, the uncertain timbre of the former – is precisely the concept under discussion in this post which Tom has brought to our attention: bringing democracy to economic activity.
But as an overarching and shared meme to capture people’s imaginations. Neither workers’ cooperatives nor mutual business structures; neither stakeholder consultations nor a popular capitalism. No detailed instructions which would allow the enemy to pick away, perhaps quite rightly in the event, at the gorgeous potential of such an idea.
Rather, we should argue that where we really place the source of our deficit in modern societies is not in our voting system; not in our media; not in big or small business behaviours; not, even, in our politics. Instead, it is entirely to do with how imperious that “consumers’ ballot” isn’t: a ballot, right now, which covers only a discrete set of purchasing decisions and ignores almost everything else of importance in the processes that run our economies.
An “everything else” which – to be honest – has clearly failed us of late. Perhaps precisely because economic democracy in Western societies is such a limited, empty and anti-democratic practice.