IDEAS OF ECONOMIC DEMOCRACY
Graubard, Allen
Even for committed democrats, it has never been obvious how extensive democratic practices should be. What is the appropriate extent of democratic government, and where, other than in the...
...There is a wide range of "publicness" that can be ascribed to enterprises, and the applicability of the democratic argument for control and justification of authority seems to vary in a way that doesn't apply to the political realm...
...these enterprises don't have extensive societal impact...
...To put it another way: simply transferring property rights, control of capital and work relations, to the workers is not the only way or always the right way of extending the principle of democratic legitimacy to the economy...
...We might claim that, beyond a certain size, economic enterprises are "public things," communities whose citizens are the workers of the enterprise...
...In brief, the political argument is that founding a town cannot give the founder a right to deny political sovereignty to the citizens, for these rights are independent of property ownership in the town...
...It appears in The Capitalist Manifesto, a best-seller of the 1950s by Louis Kelso and Mortimer Adler...
...See Stephen Cohen's insightful and relevant study, Modern Capitalist Planning: The French Model (Berkeley: University of California Press, 1977...
...Steel or Exxon or ITT differs importantly from the citizenry of a community...
...Accounts of the Meidner Plan can be found in Carnoy-Shearer and Bowles-Gordon-Weisskopf (see note 4...
...But this consideration applies to all social forms, even when democracy and participation are not normally at issue, as in athletic teams, classrooms, monasteries, or military units...
...the ultimate source of authority remains private ownership...
...only democratic consent and participation can justify political authority...
...Some suggested that the family itself needed radical democratic reform...
...Yet a basic consensus on the private control of corporate property survived such conditions...
...Formally democratic structures weren't enough: many radical activists felt that unequal and hence undemocratic power was exerted at meetings simply because some participants were more verbally agile and competent than others...
...The authors imagine "a true capitalism, the economic substructure of democracy, that will produce for the first time in history the ideal classless society in which the whole mass of humankind will constitute a single class...
...Different work situations have different sources of appeal and different drawbacks...
...During the early New Left period, the slogan of "participatory democracy" suggested a maximalist position...
...9 The psychology of workplace alienation in a "people's democracy" is captured in Milos Haraszti's A Worker in a Worker's State (New York: Universe Books, 1981), a poet's account of life in a Hungarian tractor factory...
...But this principle needs to be worked out in detail...
...In Spheres of Justice: A Defense of Pluralism and Equality (Basic Books, 1983), Walzer retells his fable as an actual case study of the Pullman Company and the town of Pullman, Illinois...
...Since the time of Adam Smith, the advocates of free enterprise have been able to repel or absorb major challenges without giving up their essential creed: free markets and private control of productive property...
...See Allen Graubard, "We've Never Done It This Way Before," in David Moberg, Shutdown, a collection of pieces from In These Times (Chicago: In These Times, 1979...
...Certain distinctions need emphasis...
...And in a pluralist, "feasible" socialism there will be room for private initiative and risk where neither workers' control nor community control will dominate...
...The asymmetry suggests the importance of social and economic innovation...
...but once the scale, scope, and purposes of enterprises are taken into account, the generality becomes questionable...
...As the educational level of the working class A brief account of the ESOP, as a possible tool to gain worker control, is Daniel Swerdling, "Employee Ownership: How Well Is It Working...
...For a good brief criticism of Nozick's book, see Thomas Nagel, "Libertarianism Without Foundations," Yale Law Journal 85, November 1975...
...Democratic consent and equal participation are not the only moral bases for authority...
...On this scale, it would be easy for people who want democratically run cooperatives to establish Walzer's "Town Meetings and Workers' Councils: A Story for Socialists" (Dissent, Summer 1978), is reprinted in Michael Walzer, Radical Principles: Reflections of an Unreconstructed Democrat (Basic Books, 1980...
...The current libertarian vision of a Leviathan state destroying individual liberties is a fantasy in the capitalist West...
...In other situations, there would be other aspects of the work that would compensate for the absence of participation opportunities (for example, apprenticeship with a master craftsman...
...Dissent, Winter 1984, and his forthcoming book, A Preface to Economic Democracy, to be published next year by the University of California Press...
...And this is only a step, as the troubles of Mitterrand's administration in France demonstrate...
...Mill imagined the good effects of participation, even with private ownership, in terms that are still used by advocates of genuine workers' control...
...There are good arguments for a right to some form of participation, as well as to the kinds of representation and consultation that have been achieved by the more advanced European labor movements in recent years...
...in arguing against the notion that "what affects all should be decided by all" states clearly...
...This attitude is especially relevant to the giant productive enterprises that form the commanding heights of the economy and are the obvious candidates for public control...
...but they will not have risked their time and capital...
...Whatever For a somewhat different approach to this important subject, see Robert A. Dahl, "Democracy in the Workplace: Is It a Right or a Privilege...
...In these cases, to be bound justly to the authority that regulates work relations and basic investment decisions, the employees must be democratic participants in the governance of the enterprise...
...Many people say that all they want is a secure job that is interesting, with good personal relations in the workplace, respect from managers, " In theory, where there is a market sector, a business enterprise should never be risk-free...
...or if there is failure, the losses are "socialized" while the so-called entrepreneur ends up making a bundle...
...Pluralism might justify some forms of private ownership...
...No single formulation would apply to all work situations...
...This basic claim is then extended to the economic enterprise...
...It is a bizarre American perspective that serves only to highlight strategic ambiguities in the concept of "economic democracy...
...Their version of economic democracy begins with a leftist perception— that there is a great concentration of wealth and that this concentration is the source of serious economic, social, and political problems, including poverty, the business cycle, low productivity, alienation on the job, strikes, and social disorder in general...
...419 rose, the most able workers would find it intolerable to be treated in the usual authoritarian manner and would demand a work situation that acknowledged their autonomy...
...Legislation would require that every year a certain proportion of corporate profits—say, 10 or 15 percent —will be transferred as corporate stock to funds owned collectively...
...This program and its more mundane ESOP version can't be considered as serious attempts to deal with the issues of work, ownership, and control...
...He agrees with critics within the Social Democratic party who complain that the plan has moved only part way toward economic democracy, that there is insufficient public influence on decisions about capital formation, that unions will very possibly have interests that clash with public planning of the economy through the government...
...415 Growing governmental intervention in economic affairs has not significantly constrained the most important form of economic liberty— the right of property owners to control production, investment, and work...
...All these programs imagine a democratically elected government that would plan economic activities, while restricting the prerogatives of owners more than the dominant American ideology allows...
...On the other extreme, there are such organizations as the militia or the fire department, performing inherently public functions, with job tasks and "products" that are functionally determined...
...416 part of describing what real democratic socialism would be like...
...The absolute rights of private property, which are the basis for this sort of libertarianism (a basis which one either finds intuitive or not—no moral argument is offered for these absolute rights) are unaffected by any considerations of the sort cited by socialists like Walzer or even liberal utilitarians...
...423...
...Stock earnings are used to pay back the original loan until the stock is owned free and clear by the new worker-capitalist...
...the vast stimulus given to productive energies, by placing the labourers, as a mass, in a relation to their work which would make it their principle and their interest—at present it is neither—to do the utmost, instead of the least possible, in exchange for their remuneration...
...The same argument against private control by the founder-owner or by the current corporate owners works, I believe, against private control by a community of employees...
...Some years ago in Dissent, Michael Walzer constructed an argument-by-fable to show that democracy requires the shift of ultimate decisionmaking authority to the workers of the enterprise...
...The workers have a right to their pay, whether or not the enterprise eventually succeeds...
...But these two dimensions of economic democracy are not necessarily related, though the phrase "economic democracy" mixes them together...
...The Model of Sweden's Meidner Plan IN WESTERN DEMOCRACIES, even within socialist movements, there are almost no defenders of the East European model of centralized control of the economy, with state ownership of all productive property...
...More decisions would be referred to political bodies on different levels, and workers would participate more actively in enterprise management...
...For some people, not having to participate would be a real plus...
...The worker community of a potent enterprise like IBM or U.S...
...Even at 421 the earliest and riskiest period of the project, when there was no profit and no assurance of success, the decisions of the owner-manager clearly "affected all...
...The argument seems to be a general one...
...One important way an enterprise and a community differ, as Walzer notes, is that an enterprise has goals of production and sale of products or services...
...The grounds for such a claim are the right to autonomy and respect for persons—moral claims that do not necessarily raise issues of democratic decision-making...
...With regard to the economy, "democratizing" could mean using the existing powers of the state but with a greater scope of activity...
...What affects all must be decided by all" is the venerable maxim that Walzer quotes to express the democratic spirit of socialism...
...See John McDermott's "The Entrepreneur's New Clothes, the Nation, November 12, 1983...
...Kelso and Adler propose the democratization of capital ownership as the solution to these troubles...
...The fable describes the founding of a town and an economic enterprise by the same person...
...but they are not the same ideals...
...It helps distract attention from the actuality of state involvement in economic affairs, which is primarily to aid business, as it has always done under capitalism...
...They don't want the risk or the responsibility, the office or the power...
...Rights of workers could be described in a labor code applicable to all enterprises, public and private...
...But for economic enterprises, it isn't only the form that should vary...
...Thousands of people work for IBM at a number of sites here and abroad...
...But there would also be questions as to what new productive investments were appropriate, and what the level of social expenditures should be...
...Propagandists at Mobil Oil had their writing gnomes attack Lindblom's book across the country in corporate ads...
...The capital assets are immense, and the importance of the enterprise to the economic performance of the American economy is considerable...
...Even at the height of laissez-faire ideology in the 19th and early 20th century, the state was deeply engaged in promoting the interests of business...
...Hence the fundamental fact about democratic capitalist politics: business holds a uniquely privileged position with respect to government...
...The authority for major decisions of the enterprise should rest in the larger public, the democratic polity...
...ALL OF THIS suggests that the right to democratic participation in management is not always a right inherent in the role of the worker, the way political participation is inherent in citizenship...
...if,someone starts a private 'town' on land whose acquisition did not and does not violate the Lockean proviso, persons who chose to move there or later to remain there would not have a right to a say in how the town was run, unless it was granted them by the decision procedures for the 'town' which the owner had established" (Anarchy, State, and Utopia, Basic Books, 1974...
...Such examples suggest that ownership and effective control issues need to be clarified before the status and variety of democratic participation rights are settled...
...Neither freedom nor economic efficiency is seen as compatible with this version of a planned economy...
...This situation reflects the important difference between justification of authority in the political realm and justification within the economy...
...If a plurality of voters chose the party that represents enlightened sectors of the corporate world advocating "industrial policy," and this policy were then carried through by the president and Congress, this would be "democratic planning" in a fairly obvious sense...
...During World War II the government planned production, rationed consumption, and controlled prices, wages, and the allocation of resources...
...For a regime to be successful politically, the economy must function well...
...It wouldn't arise if it were only a question of distributing some stock ownership while the management structure stayed the same...
...This approach applies only to an individual company and its workers, and it falls short of the Adler-Kelso program— alas, never to be realized...
...Samuel Bowles, David Gordon, Thomas Weisskopf, Beyond the Wasteland (New York: Doubleday Anchor, 1983...
...But the question is which form of democracy applies within enterprises, not the issue of whether all enterprises are required to be fully democratic...
...Why then should the relatively small number of workers and technicians that are the employees of Union Oil or Bethlehem Steel own or control these resources...
...Workers apparently would be doubly counted, voting as citizens and also as workers...
...The Lucas story is important for any thinking about the various notions of economic democracy, the potential for worker participation in planning, the question of the social responsibility of capital, and the power of the ideological barrier of private property control of productive resources...
...External effects" are largely absent...
...Unions have shown no interest in the whole affair, though some academics have 418 written favorably of the ESOP as a possible route to worker-controlled enterprises.' The practical result of the Adler-Kelso vision is tax legislation that supports the creation of ESOPs, Employee Stock Ownership Plans...
...They would say that they should be adopted through democratic political procedures...
...Procedures were suggested for correcting such distortions of equality, requiring, for example, that everyone speak once before anyone was allowed to speak twice...
...He could expect monetary recompense for the public takeover of his economic enterprise, but only appreciation, thanks, and a plaque for his political entrepreneurship...
...The power of the Meidner Plan—what has generated the intense opposition of the Swedish Employers Confederation—is the prospect that within a relatively short time (15 to 30 years), depending on profit rates and percentage of profits transferred, majority stock ownership and, accordingly, legal control of eligible firms (firms of sufficient size) will be in the hands of the owners of the wage-earners' funds...
...The New Deal, though much more heatedly contested, did show that during severe economic crisis even significant groups within the business community would support extensive governmental curtailment of the rights of free enterprise...
...Working out this suggestion in detail can help clarify what sorts of democratic participation are appropriate to what sorts of enterprises and kinds of decisions...
...To cast an unusual light on the relations between these two aspects of economic democracy, I will make a short digression to tell a strange American story...
...This outlook characterizes the kinds of "quality-of-work-life" schemes that progressive management types are encouraging in American industry today—all lacking the crucial element of democratic sovereignty...
...What is the appropriate extent of democratic government, and where, other than in the political realm, is democracy the proper principle of authority...
...These boards would make basic decisions about the utilization of the accumulating profits...
...But there was no disagreement on one crucial area —the democratization of the economy...
...But who is the "public...
...The literature of alienation under capitalist work relations is massive...
...Outlining a constitutional and legal arrangement that effectively codifies such "economic democracy" is difficult...
...But what about a corporation like IBM...
...The enterprise is a national resource, vital to any effective planning of the economy, a key element in the country's long-term economic health...
...The large differences between Harrington's program and those of such corporate planners as Rohatyn aren't, strictly speaking, issues of democracy...
...for this to happen, business must act appropriately...
...the basic idea is to issue company stock to employees...
...THESE REFLECTIONS on Walzer's appealing vision of enterprise democracy lead me to emphasize the primacy of the traditional socialist idea of democratic political control over the commanding heights of the economy...
...Adler and Kelso insisted that workers, although partowners, should not share in the governance of the enterprises, since they were not really qualified for that...
...Often in big business circles, financing institutions like banks, the use of defense contracting relations, government subsidies and other factors assure that the business will not be allowed to fail...
...In Walzer's fable, the company and the town are inextricably tied...
...This situation does not have a political analogy...
...But justification within the wide variety of economic enterprises is a more complex issue...
...These critics would like to see something like "citizens' funds," under political democratic control...
...The opposite approach emphasizes more governmental involvement in the economy, even planning, at least in the vague apparition of "industrial policy...
...For democratic socialists, the Meidner Plan, developed in recent years by economists of the Swedish Labor Organization, has emerged as an attractive approach to economic democracy within a mixed political economy.' The basic idea of the Meidner Plan is the "wage-earners' investment fund...
...Swedish Social Democratic theorists, responding in part to the fear that the plan would give too much power to the trade-union leadership, are looking for structures that would express a more dispersed and democratic form of control.' There are proposals for regional boards that would include representatives elected by all voters in the region, as well as representatives of the labor federation and even of private capital...
...The left insists on different priorities concerning welfare and sacrifice, on a different sense of a decent social minimum, a more adversary relation to the views of corporate owners...
...But even they may not want to participate in largescale management concerns...
...The term is said to have been suggested to Hayden by economist Derek Shearer as a pragmatic American substitute for "socialism...
...The entrepreneur started the enterprise, with his ideas, skills, time, and capital...
...It is assumed by adherents of the Meidner Plan that macrodemocratization, so to speak, will also strengthen trends toward enterprise-level democratization, the participation of workers in workplace management...
...The embedding of economies in international systems means that "control of the commanding heights" should be said with some sense of modesty...
...The basic reference is Rudolf Meidner, Employee Investment Funds: An Approach to Collective Capital Formation (London: George Allen & Unwin, 1978...
...Carnoy, Shearer, and R. Rumbarger, A New Social Contract (New York: Harper & Row, 1983...
...The great transformation," as Karl Polanyi called it, let the economy run on its own, with good results guaranteed by the "invisible hand...
...Maximum profitability, the fundamental principle of capitalist economics, would lose its dominant position...
...So they would form producer cooperatives, trading off some of the efficiencies of the authoritarian form of organization for the creativity and commitment of cooperative production...
...Many people on the left would say quite firmly that no individual or family should own or control great oil deposits or billiondollar steel mills...
...For many people who feel this way, this is not an "escape from freedom," as the analogous refusal to accept democratic participation in the political realm might be...
...This emphasizes claims of opponents within Sweden that the plan would threaten pluralist democracy by concentrating power in union leaders...
...This new ownership would be democratic in the complex ways in which the working population of the country, represented by its elected union representatives, and the general citizenry of the region, represented by specially elected board members, would share control of basic economic decisions...
...In capitalist economies, the power of ownership and the drive for profits (in Communist economies it would be production quotas) so largely determine workplace relations that it does seem plausible that only by transferring control to the workers could workplace relations be systematically and securely transformed...
...This argument would apply equally to managers appointed by private owners or elected by the employees...
...The IBM employees...
...There are similarities too, as socialists point out when they rebut the capitalist claim that people who accept employment acknowledge at the same time that they have no rights in the enterprise...
...In most discussions of economic democracy, small enterprises (say, a master woodworker with some apprentices) do not seem to require democratic structure...
...There is no simple model that can adequately answer the simultaneous and often contending claims made for democracy and for other valued social goals...
...IBM is certainly a "public thing," in Walzer's sense...
...Studs Terkel's Working (New York: Pantheon Books, 1974) is the most accessible work in this genre...
...But unleashing the power of economic liberty and lifting the burdens of regulation and taxation did not spark a general boom as Jack Kemp and Arthur Laffer had promised...
...Equal participation in the management of the enterprise is not a universal right, even in principle...
...Planning certainly does not have to be democratic...
...This economic function creates a crucial issue of responsibility and liability...
...Working Papers for a New Society, May–June 1979...
...They value ways of life not easily compatible with management roles...
...12 Walzer has recently extended his reflections on industrial democracy as an ideal...
...The issue of what rights workers can claim in "their" large public enterprise is complex...
...He also addresses more fully the issue of who is appropriate for which decisions in enterprises and between enterprises...
...Business approved and participated, as did every other organized group...
...It is For a useful description of the centrality of business interests in democratic capitalist polities see Charles Lindblom, Politics and Markets: The World's PoliticalEconomic Systems (Basic Books, 1977...
...Each enterprise can make decisions about its affairs without worrying about the larger community, very much as the ideal conception of the market would have it...
...The shift to the left by this respected liberal academic seems to have threatened the stability of corporate capitalism...
...and which, without violence or spoliation, or even any sudden disturbance of existing habits and expectations, would realize, at least in the industrial management department, the best aspiration of the democratic spirit...
...the economic enterprise is the material base of the community's existence...
...Mill foresaw a time when even private capitalists would be moved to support worker participation...
...Their shares would not be voting shares...
...An important aspect of democratization would be the radical shifting of criteria for investment...
...In The Principles of Political Economy, Mill has a chapter on the "Probable Future of the Labouring Classes" in which he presents his ideal enterprise form, the workers' cooperative: The form of association, however, which if mankind continues to improve must be expected in the end to predominate, is not that which can exist between a capitalist as chief, and workpeople without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves...
...True enough, if the project doesn't pan out, the workers will be out of their jobs...
...For Walzer, the claim of the founder-owner of the enterprise is defeated by the more potent democratic rights of citizens to participate in decisions that affect their lives in fundamental ways...
...two dimensions kept far apart...
...As Michael Walzer put it in his fine essay "A Day in the Life of a Socialist Citizen," political participation might take up too many evenings...
...In some sense, the unions would be the owners of the funds...
...The most eloquent description comes from the great philosopher of 19th-century liberalism, John Stuart Mill...
...From a public view, both of these are private...
...Eventually, and in perhaps a less remote futtire than may be supposed, we may, through the cooperative principle, see our way to a change in society, which would combine the freedom and independence of the individual, with the moral, intellectual, and economical advantages of aggregate production...
...417 nal effects" on environment and employment, on regional planning, and so on.' Presumably, the wage-earners' funds, whatever their structure, would come into a controlling interest in corporate property that would remain legally private (just as in this country it is possible in theory for union pension funds or such institutions as Harvard University to buy up controlling percentages of a corporation's stock...
...And some university students took democracy to mean that all members of the community— faculty, students, clerical and maintenance workers—should share equally in university governance...
...Problems of social relations within the enterprise are solved by the feeling of participation...
...Walzer's argument for democratic control of the enterprises seems to apply only at a point considerably later than its establishment, when questions of risk and responsibility are effectively settled...
...Others express a desire for participation in the planning of their immediate work environment...
...Of course, there would be the question of reinvestment in the firms from which the profits were coming...
...else happened, the productive promise of capitalism was fulfilled, a story told more eloquently by Marx than by many writers committed to capitalism...
...In practice, however, ESOPs are used to get tax breaks on investment capital, to unload unprofitable subsidiaries on workers desperately trying to preserve their jobs, or as substitutes for more expensive and secure pension plans...
...There is a place for individual actions in the economic realm—actions whose authority is not founded on the consent of the people who may be affected, even directly affected, by them...
...Clarity of ideals and arguments can serve as a real force in the growth of a democratic socialist movement...
...The essential difference lies in the content and spirit of the policies...
...I think there is much to be said for this simple idea of "democratic planning...
...The claim of democracy will override the traditional rights of private ownership, though such rights will not be abolished entirely...
...Who exactly these owners should be is an issue that remains to be settled theoretically and practically...
...THE ENTERPRISES Walter has in mind are the factories and foundries, the mines and mills that make up the productive core of the economy...
...Jobs provide the livelihoods of the employees, and the social conditions of a major part of their waking lives...
...Walzer recognizes this, and he writes in a footnote: "The political rights of individuals are relative to the character of the activities in which they voluntarily engage...
...For some jobs, democratic participation in management would be a powerful appeal...
...Fables of ESOPs: Economic Democracy as "People's Capitalism" "ECONOMIC DEMOCRACY" is generally taken to be a phrase from left political thought, and on the whole this is justified...
...Some forms of participation ought to be an 422 aspect of all jobs...
...Productivity would increase because of...
...THE CURRENT ECONOMIC MALAISE would seem to require a radical revision of traditional liberal policies...
...Eighteenth-century Europe saw a new idea emerge—that economic activity ought to be free of public control...
...There, the worker is also "an owner," but control of the enterprise and its work relations, as well as of the macrodecisions concerning production and investment, remain in the hands of managers who are not democratically chosen by the enterprise workers.' The Idea of Workers' Control WORKERS' CONTROL is an old idea, going back to Robert Owen and the early utopian socialists...
...In their view, an adequate, assured income from capital ownership is the ideal material basis for economic independence...
...Should they be able to decide democratically to distribute the profits to themselves, while curtailing investment and expansion...
...If there were non-constitutional means of achieving respect and dignity, as there are, occasionally, even in private enterprises, then the pressure to universalize the principle of workers' control would be lessened, and it would be easier to take a more nuanced view...
...But there is another American use of the phrase...
...Who then would control IBM...
...Even the question whether a particular enterprise or institution should be governed according to democratic principles will be variously answered...
...This could apply even to shared management, as in a democratically run cooperative...
...Internal work relations could easily have democratic components, but workers in such organizations don't have democratic rights to decide on alternative uses for the equipment or alternative purposes for the institution...
...There are research scientists, computer designers and programmers, production workers, clerks, janitors, middle managers, and so on...
...The democratization achieved by such a radical shift in ownership and control addresses the macroeconomic issue of how to use corporate wealth in more socially responsible and more democratic ways, without adopting the classic socialist solution of "nationalization of the means of production...
...Through most of human history, economic activity has been embedded within a social and political framework...
...and democracy is the proper basis for justifying claims to authority within "public things...
...Economic democracy" is only part of the answer to questions of mixing public and private authority and establishing humane work situations...
...ESOP is a way of acquiring borrowed funds to purchase the stock, which is then assigned to individual workers...
...The external effects are almost total...
...The author, although critical of the plan, feels such criticisms are exaggerated...
...In the political realm, the variation of form cannot violate the universal right of democratic citizenship...
...Walzer's argument is that the entrepreneur-owner couldn't maintain his claim to control of either the company or the town...
...In this version, the ideal results are self-respect through shared capital ownership, without government intervention in the economy (beyond requiring corporations to be truly capitalist) or any modification of the concept of private property in the means of production...
...The same might be true of the working day.' It is not only a question, as Walzer suggests, of the variety of forms democratic participation within enterprises might take, analogous to the various forms of political democracy...
...Soviet-style command economies plan undemocratically, and capitalist states could do so too.' Supporters of planning in the American style, like Felix Rohatyn, assume democratic justification for their proposals...
...Walzer's fable illustrates the complexity of the responsibility and risk aspect of ownership and control...
...Walzer parallels the process by which the townspeople claim democratic sovereignty over political affairs—a plausible claim even in capitalist countries—with a process through which the workers come to claim sovereignty over the economic enterprise...
...And though economic rationality requires concern for profitability, there would also be systematic concern for the usefulness of the products, the "exter° Serious attempts are being made to provide such descriptions along with critiques of the current situation...
...There does not seem to be such conceptual space within the political realm...
...There never was a time when the state was merely a "watchman" assuring fair competition...
...Many people prefer not to be managers or entrepreneurs...
...It was understood that profits would still be made (even guaranteed), and that such control was only "for the duration...
...For a thoughtful discussion of participatory democracy, see Jane Mansbridge: Beyond Adversary Democracy (New York: Basic Books, 1980...
...People do want, of course, to be treated with respect: they do want their autonomy and dignity acknowledged...
...decent pay, a chance for advancement...
...both private capitalists and associations will gradually find it necessary to make the entire body of labourers participants in profits...
...The entrepreneur-owner would take the loss...
...Economic enterprises are essentially public, like the town...
...In a way, this matches the official psychology of Communist economies...
...but for economic enterprises control belongs on moral grounds to the workers, the "citizens" of the institution...
...The current use of the phrase in the Campaign for Economic Democracy, associated with Tom Hayden and Jane Fonda, refers back to New Deal times...
...The basic political point is not plausible to everyone...
...See Martin Carnoy and Derek Shearer, Economic Democracy (White Plains, N.Y.: M. E. Sharpe, 1980...
...For both private owners and producer cooperatives there is the "external effects" issue...
...But the ultimate control of enterprises of significant public scope would seem as inappropriately assigned to the voting "mini-public" of the employees as to the scions of the founder-owner...
...Control of key decisions for production and investment, regulation of plant closure, management of money supply, public ownership of utilities and natural resources, creation of infrastructures, such as a large renewable-source energy system and a new rail system (all suggested by Michael Harrington in "A Path for America," Dissent, Fall 1982)—all this could be done through democratic government...
...420 them...
...The face-to-face consensus group was idealized as the best if not the only real democracy.' There were attempts to extend democratization to children in elementary schools...
...But the Meidner approach conceives of a much broader collective ownership than traditional profit-sharing schemes, which assigned company stock to individual workers...
...But the logic of the situation doesn't support the argument that these decisions should be made by all...
...Constraints on the scope of participation are the interests of the enterprise as perceived by the managers...
...and Shearer (with Martin Carnoy) has written a book called Economic Democracy that presents a democratic socialist program for the United States...
...As soon as there is a political community, the principle of democratic consent applies...
...And for business to act appropriately, the government must act appropriately—from the point of view of business.' Under special conditions, large sectors of the society, including business, will find extensive governmental regulation of the economy justified...
...There has been talk of using some share of the profits for education of workers in the skills of industrial self-management, for improving public services, and for environmental protection...
...Workers' control and community control are both democratic ideals...
...A recent description of the situation in Sweden and the current state of thinking among Meidner Plan advocates is Ulf Himmelstrand, "Sweden: Toward Economic Democracy," Dissent, Summer 1983...
...A strict libertarian, like Robert Nozick...
...The citizenry of the town and the citizenry of the enterprise are essentially the same...
...We are all democrats politically...
...In fact, there is an unrealistic glorification of the entrepreneur in our culture...
...It would have enacted federal legislation requiring all corporations to distribute all their profits as stock dividends, while the government would create a lending arrangement to finance a stock portfolio for every American, starting out with the neediest and ending with a utopia of "80 million capitalists...
...The issue of control is even more complex...
...Walzer proposed this notion of economic democracy as the most effective argument for the socialist vision...
...As owners, these funds then could delegate control to the current managers or attempt a number of different arrangements...
...Mansbridge distinguishes the concept of "adversary democracy," based on the assumption of individual interests in constant conflict, from an older idea of "unitary democracy," based on common interests and equal respect...
...A critical account of the Meidner Plan by a Swedish writer is N. Elevander, "Sweden," in Benjamin Roberts, ed., Towards Industrial Democracy—Europe, Japan and the United States (Montclair, N.J.: Allanheld, Osmun, 1979...
...Owners and managers of corporate capital and their academic "industrialrelations" experts would like to see these A fascinating example of an attempt by workers to apply such criteria to a long-range production plan in a large enterprise is the saga of the Lucas Aerospace Combine Shop Stewards Committee in Great Britain...
Vol. 31 • September 1984 • No. 4
