“Those who really desire a new relation between capital and labor can readily find a way to bring it about. . . . The object of all reform in this essential matter must be the genuine democratization of industry based upon a full recognition of those who work, in whatever rank, to participate in some organic way in every decision which affects their welfare.”
— President Woodrow Wilson
Economic democracy is a form of worker empowerment emphasizing the participation by workers and their organizations in problem-solving, policy setting, and other decision-making matters. This includes the process by which economic decisions are reached, as well as their implementation—governance, administration, and management of economic matters. While ESOPs, co-ops, and industrial democracy each has to do with enterprise-level power and decisions, economic democracy goes beyond the firm to the larger society.
Thus, it moves outside a company’s walls to community power and well-being. It emphasizes the production and distribution of wealth, not just one’s corporate wages but social capital as well—benefits, health, and education. In some aspects, its underlying objective is to democratize capitalism, making it more beneficial to the common person. Long advocated by philosophers, trade unions and leftists, it is increasingly advocated by political leaders and visionary managers as a strategy for reducing inequality and the social costs of poverty.
Economic democracy is sometimes referred to as “workers’ self-management” or “workers’ control.” But, again, such terms must go beyond productivity at the firm level to the wider political and social context. True societal economic democracy must address who gets what and include race and gender issues, ecology, unethical and illegal management practices, and the problems of organizing society as a whole. It favors making corporations democratically accountable and transparent. It seeks to reverse the accelerating concentration of wealth in the hands of a few people. It favors support for families and households regarding a livable wage, child care, health insurance for all, and other tools to strengthen family well-being and enhance self-reliance.
Finally, economic democracy rejects exploitative capitalism and “law of the jungle” competition. Instead, it favors cooperation and community building. It also rejects state command economics and the centralization of bureaucratic power in the hands of a few elites. Instead, democratizing the economy means putting human needs before corporate profits, the building of smaller, human-scale economic alternatives rather than today’s monopolistic transnational corporations that are not beholden to society.
“Democracy is based upon the conviction that there are extraordinary possibilities in ordinary people.”
— Harry Emerson Fosdick, American Clergyman
“Global Ethics Today: The Need for Economic Justice, Worker Ownership & Corporate Democracy,” International Conference on Empirical Economics & Social Science, Istanbul, Turkey, July 3-4, 2021.
“Economic Democracy and Mormon Workers,” The Mormon Worker, vol. 2, pp. 1-4, 2007.
“The Next Stage of Mondragon: Innovations in Ownership by Workers,” Global Human Resources, ICFAI University Press, 2006.
Worker Cooperatives From the 20th Century to the New Millennium: The Rise of Social Enterprises. Toronto: Canadian Cooperative Center, 2005, 231 pp.
Economic Democracy: Essays and Research on Workers’ Empowerment. (ed.) Sledgehammer Press: Pittsburgh, PA, 2002 (Book, pp. 147).
“Industrial Democracy at Sea”. Work and Occupations, Vol. 13, No. 2, May 1986.
“Worker Takeover of a General Motors Plant: Toward a Robin Hood Theory of Change,” International Association for the Economics of Self-Management Proceedings, Mexico City, August 23-25, 1982, 32 pp.
“Tearing Down the Pyramids”. Contemporary Sociology, Vol. 11, No. 2, March 1982, pp. 173-175.
“Transition to Workers’ Self Management”. British Journal of Industrial Relations, (London School of Economics), Vol. 29, No. 1, 1981, pp. 127-128.
“Hard Hats in the Boardroom: New Trends in Worker Participation,” Book Chapter Ritchie and Thompson’s Organization & People.
Economic Democracy Links
Pope John Paul II: His Call for Economic Democracy
Workplace democracy will not only increase the productivity of an enterprise but lead to a “moral transformation” of industrial workers “in the pursuit of a good common to all; the elevation of the dignity of labour.”
— John Stuart Mill