Economic democracy

Economic democracy (sometimes called a democratic economy^[1]^[2]) is a socioeconomic philosophy that proposes to shift ownership^[3]^[4]^[5] and decision-making power from corporate shareholders and corporate managers (such as a board of directors) to a larger group of public stakeholders that includes workers, consumers, suppliers, communities and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit and deny the polity a democratic voice in economic policy decisions.^[6] In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's inherent effective demand gap.^[7]

For the market's economic democracy, see Free market democracy.

Proponents of economic democracy generally argue that modern capitalism periodically results in economic crises, characterized by deficiency of effective demand; as society is unable to earn enough income to purchase its own production output. Corporate monopoly of common resources typically creates artificial scarcity, resulting in socio-economic imbalances that restrict workers from access to economic opportunity and diminish consumer purchasing power.^[8] Economic democracy has been proposed as a component of larger socioeconomic ideologies, as a stand-alone theory and as a variety of reform agendas. For example, as a means to securing full economic rights, it opens a path to full political rights, defined as including the former.^[6] Both market and non-market theories of economic democracy have been proposed. As a reform agenda, supporting theories and real-world examples can include decentralization, democratic cooperatives, public banking, fair trade and the regionalization of food production and currency.

"The bulk of the are privately owned, either directly by individuals or by corporations that are themselves owned by private individuals.

means of production

"Products are exchanged in a market -- that is to say, goods and services are bought and sold at prices determined for the most part by competition and not by some governmental pricing authority. Individual enterprises compete with one another in providing goods and services to consumers, each enterprise trying to make a profit. This competition is the primary determinant of prices.

"Most of the people who work for pay in this society work for other people, who own the means of production. Most working people are ''".^[9]

wage labourers

Worker self-management: each productive enterprise is controlled democratically by its workers.

Social control of investment: funds for new investment are returned to the economy through a network of public investment banks.

[15]

The market: enterprises interact with one another and with consumers in an environment largely free of governmental price controls. Raw materials, instruments of production and consumer goods are all bought and sold at prices largely determined by the forces of supply and demand.

Critiques[edit]

Ludwig von Mises argued that ownership and control over the means of production belongs to private firms and can only be sustained by means of consumer choice, exercised daily in the marketplace.^[97] "The capitalistic social order", he claimed, therefore "is an economic democracy in the strictest sense of the word".^[98] Critics of Mises claim that consumers only vote on the value of the product when they make a purchase—they are not participating in the management of firms, or voting on how the profits are to be used.

Feldman, Jonathan (2001). "Towards the Post-University: Centers of Higher Learning and Creative Spaces as Economic Development and Social Change Agents". Economic and Industrial Democracy. 22 (1): 99–142. :10.1177/0143831X01221005. S2CID 153379716.

doi

Fotopoulos, Takis (October 2008). . The International Journal of Inclusive Democracy. 4 (4).

"The myths about the economic crisis, the reformist left and economic democracy"

Mattei, Clara E. (2022). "Chapter 3: The Struggle for Economic Democracy". . University of Chicago Press. pp. 74–99. ISBN 978-0226818399.

The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism

E McGaughey, 'Economic democracy: a brief history, and the laws that make it' (2023)

SSRN

E McGaughey, 'Economic Democracy in the 21st Century: The Vote in Labour, Capital and Public Services' (2020)

Journal of Comparative Law

E McGaughey, 'Will Robots Automate Your Job Away? Full Employment, Basic Income, and Economic Democracy' (2018)

SSRN, part 2(3)

DeNies, Ramona (29 January 2003). . The Portland Alliance. Retrieved 29 January 2012.