Economic democracy

Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate managers and corporate shareholders to a larger group of public stakeholders that includes workers, customers, suppliers, neighbors, and the broader public. It is a form of democracy applied to the economic sphere, aiming to create a more equitable distribution of wealth and power.

Overview

Economic democracy seeks to address the imbalances of power and wealth inherent in traditional capitalist systems. It argues that economic decision-making should be more inclusive and participatory, allowing those affected by economic policies to have a say in their formulation and implementation.

Key Principles

Economic democracy is based on several key principles:

• **Worker Participation**: Workers should have a voice in the management and decision-making processes of the companies they work for. This can be achieved through worker cooperatives or other forms of participatory management.

• **Public Ownership**: Certain key industries and resources should be owned and managed by the public to ensure that they serve the common good rather than private interests.

• **Fair Distribution of Wealth**: Economic democracy advocates for policies that ensure a fair distribution of wealth and income, reducing inequality and poverty.

• **Sustainability**: Economic activities should be conducted in a way that is environmentally sustainable and socially responsible.

Historical Context

The concept of economic democracy has roots in various social and political movements throughout history. It draws from the ideas of socialism, anarchism, and cooperative movements, and has been influenced by thinkers such as Karl Marx, John Stuart Mill, and Robert Owen.

Modern Proponents

Modern proponents of economic democracy include:

• **David Schweickart**: An advocate for a model of economic democracy that combines worker self-management with market mechanisms.
• **Richard Wolff**: An economist who promotes worker cooperatives as a means to achieve economic democracy.
• **Gar Alperovitz**: A political economist who has written extensively on the need for systemic change towards economic democracy.

Criticism

Critics of economic democracy argue that it may lead to inefficiencies and a lack of competitiveness. They claim that without the profit motive, innovation and productivity could suffer. Additionally, some argue that the transition to economic democracy could be disruptive and difficult to implement.

Examples

Examples of economic democracy in practice include:

• **Mondragon Corporation**: A federation of worker cooperatives based in the Basque Country, Spain, which operates under principles of worker self-management and democratic governance.

• **Participatory Budgeting**: A process in which citizens have a direct say in how public funds are allocated, used in various cities around the world.

See Also

• Cooperative economics
• Participatory economics
• Social democracy
• Democratic socialism

References

• Schweickart, David. After Capitalism. Rowman & Littlefield Publishers.
• Wolff, Richard D. Democracy at Work: A Cure for Capitalism. Haymarket Books.
• Alperovitz, Gar. What Then Must We Do?: Straight Talk about the Next American Revolution. Chelsea Green Publishing.