Economic Democracy in the 21st Century: The Vote in Labour, Capital and Public Services

Abstract

How should power be shared in the economy? This article offers a framework, and three models, for making choices about the economy’s main legal institutions: for property in capital, the obligations related to work, and organisation of corporate persons. An authoritarian economic model entails financial institution or director control of capital; a duty to work and state control of unions; and the principle of ‘leadership’. A neo-liberal model advocates individual capital ownership including employee share schemes; individual ‘freedom’ of contract and privatised unions; and information and consultation as the limits of voice. A democratic model advocates diverse share ownership through pensions, wealth funds, and public bodies; collective bargaining and independent unions; and codetermination for workers and citizens based on one-person, one vote. Most countries have an unsettled mixture of these models. The UK, Germany, and the US are analysed as case studies, and empirical evidence is summarised which suggests that a more democratic economy enables greater human development. Because reason and evidence will remain the basis for public policy and debate, it seems economic democracy in the 21st century will swiftly become reality.