A Preface to Economic Democracy
Ellerman, David P.
Books: DEMOCRACY-& RENTING HUMANS IN THIS short book, Americans foremost democratic theorist has provided a major statement of the case for economic democracy, the application of democratic...
...Books: DEMOCRACY-& RENTING HUMANS IN THIS short book, Americans foremost democratic theorist has provided a major statement of the case for economic democracy, the application of democratic principles to the governance of economic enterprises...
...The employment contract is the economic nineto-five version of the political pactum subjectionis used by old liberal theorists to ground non-democratic government in contract...
...Capital ownership is important but in an indirect manner...
...He notes that the old liberal arguments for small-scale property as promoting freedom and equality, which might have been applicable in Mill's day, have by a curious metamorphosis been used to support modern corporate capitalism with its obscene inequalities and corrupting influence on the political democratic process...
...As a monarch might rule by virtue of ultimate ownership of the land, so the capitalists or their agents govern production by virtue of their "ownership of economic enterprises...
...While he encourages pragmatism in transitional mechanisms, Dahl's favored goal is a decentralized economy of self-governing cooperative enterprises modeled after the highly successful Mondragon cooperatives...
...The determination of who governs production is determined by the structure of contracts, by whether the owners of capital hire labor or labor hires capital...
...Bui this is not the only way to look at things...
...Property is not abused by being rented...
...Does the lineage run to property or to contract...
...And finally, he comments on several short-term transitional methods such as government assistance to the conversion of bellwether firms in key industries or beefed-up versions of the Scandinavian plans to democratically restructure major firms...
...With the property argument for corporate capitalism rendered a non sequitur in Chapter Two, Dahl presents several normative arguments for economic democracy in the remaining three chapters...
...The empirical evidence is mixed partly because the ownership structures have been so ambiguous (e.g., the plywood co-ops) Moreover, expecting isolated experiments in workplace democracy to quickly alter democratic attitudes in the midst of modem American society is akin to promoting music appreciation by playing Mozart in the middle of a Manhattan traffic jam...
...Dahl properly ridicules those who think it is important to classify selfgoverning enterprises using the traditional dichotomy of "capitalism or socialism...
...Dahl sees a conflict between the right to self-government (in the political and economic spheres) and the right to property, particularly the "ownership of economic enterprises...
...In Chapter Three...
...Chapter Two begins to build the case for self-government in economic enterprises...
...Dahl gives little weight to the argument that workplace democracy will build democratic character and increase political participation...
...The alternative contract-view points out that, by itself, the ownership of corporations is only the indirect ownership of capital...
...The standard property-view short-circuits this fact pattern, it mistakenly imputes the authority to govern production directly to capital ownership, and neglects the employment contract...
...Dahl's view and an alternative viewpoint will be sketched here...
...Robert A. Dahl is often associated with empirical political science and interest group pluralism, but his normative commitment to democratic principles was evident in his wellknown A Preface to Democratic Theory and is echoed in the title and content of this work...
...For economic democracy, as for political democracy, the objection to subjection lies in the Enlightenment natural law doctrine which holds that people are endowed with "certain inalienable rights...
...In capitalist production, the manager's legal authority over workers is based on the contract to hire or rent those workers, the employer-employee contract...
...In the first chapter...
...Serious theory-building in this area is so new that there are major alternative conceptions of capitalism at stake...
...He mentions the problem of democratic leadership in self-governing firms but notes that the problem is clearly shared with political democracy...
...The Fortune 500 are not 500 family farms...
...Moreover, the specific concern with workplace democracy has been an abiding theme throughout his professional life, from his early writings on workers' control and the British Labor Party, through his provocative After the Revolution?, to his Jefferson Lectures delivered in Berkeley, rewritten in this book, aftd published upon his retirement as the Sterling Professor of Political Science at Yale...
...in Latin America) have hardly come from an excess of democratic equality...
...The legal keystone of capitalism is not the alleged property right to govern production, but the contract for the renting of human beings, the employment contract...
...If a corporation's capital assets arc hired out rather than labor being hired in, then in no straightforward way do the owners of the corporation govern the production process using their assets...
...Chapter Four presents the main case, a non-utilitarian, rights-based argument that the right to democratic selfgovernment extends directly to the economic enterprise and overshadows the feeble attempts to extend traditional property arguments to the modem corporation...
...That too is Dahl's conclusion...
...the market power of capital insures that capital hires labor rather than vice-versa...
...Among these rights is the right of democratic self-government, a right unabridged and inalienable by consent or by contract...
...What is the legal basis for the authority of capitalists or their managers over the employees in a capitalist firm...
...Hiring out assets means that the legal authority to govern production derives from contract, not property...
...On the alternative contract-view...
...Chapter Five rounds out the discussion...
...Dahl asks with Tocqueville if equality is dangerous to liberty...
...The question is whether people are thus abused...
...There is an alternative way for democratic theory to conceptually analyze capitalist production which nevertheless arrives at the same conclusions...
...It would be hard to hear the music, but by no fault of Mozart...
...Dahl takes the standard property-view that the capitalists' authority runs to property...
...Dahl's attack on property is misdirected...
...As an empirical political scientist, he marshals facts to show that the transitions from democracy to auA P1EFACE TO ECONOMIC DENOClACY Robert A. Dahl Cayrornla, $14.95, 184 pp...
...Dahl considers several alternative forms of worker ownership: traditional worker co-ops like the plywood co-ops, worker capitalist Common weal: 584 schemes like the conventional ESOPs (Employee Stock Ownership Plans), Yugoslav-type social property firms, and Mondragon-type worker co-ops with cooperative ownership and individual equity accounts...
...Nor should this terrain be unfamiliar to democratic theory...
...David P. Ellerman thoritarianism (e.g...
Vol. 112 • October 1985 • No. 18
