• Economic Democracy: A Crisis Alternative

  • By Dominique Crozat | 22 Oct 09 | Posted under: Contemporary Capitalism , Democracy
  • On June 22, 2009, at the initiative of Espaces Marx (transform!) and the regional government of the Île de France, labour leaders, elected officials, scholars and representatives of civil society met to discuss economic democracy as an alternative to the political crisis.

    Democracy and business

    One fact is obvious from the start: inside companies, the burden is heavy. Management techniques that link intensified work to pseudo-responsibilities without giving people real responsibility cause people to experience a loss of their own worth and cause individualisation, stress and guilt. The expression suffering at work does not allow us to see the full complexity of this depressive state since “work may destroy, but work also builds.” This contradictory reality is either not taken into consideration or is used to manipulate workers. Despite their need to recognise and take a critical view of the “excesses” of financial capitalism, middle management often accepts or even promotes this policy pro-financial capital policy, resigning themselves to what they come to consider an immutable law of nature.

    For the Greek sociologist Georgia Petraki, the information technology revolution tends to a division of labour but also to its unification. It enables a socialisation of knowledge, makes it more accessible to wider society and also makes possible the circulation of knowledge created by new issues involving the control of knowledge and of decision-making. The individual aspires to take initiative, to greater participation. The discussion pointed to capitalism’s ability to meet the aspirations generated by an IT-based economy. This economy reinforces exploitation through individualisation, breaks down collectives, individualises performance evaluation, all of which increases suffering at work. Knowledge is greater but fragmented. The more a person specialises, the less he or she masters the whole. Increased knowledge, therefore, has not been accompanied by greater democracy.

    Totally free circulation of capital is the basis of all European regulations and implies the destruction of previously established labour law. While this ideology prevails, business and the right use every possible method not only to limit the rights of workers but also to convince them that they are not competent to participate in company policy-making. The very work conditions tend to diminish the ability of workers to feel like citizens outside the workplace. Workers are cut off from the work process itself. They must recover control of this process if they are to participate in the life of society.

    Today’s crisis also is linked to the crisis of managing the efficiency of human labour. The latter crisis helps us better understand what is happening, and, as a result, the need to make work life more democratic.

    Before workers can aim at acquiring power in a company, they need to know what to do with power and be able to manage production themselves. This presupposes a wider and deeper participation in decision-making.

    Another dimension of economic democracy is the question of the relationship between workers and their representatives. This means tackling the problem of the limitations of the union representative model. Union and political traditions of the left that characterise attempts at worker participation as “class collaboration” still have not disappeared and continue to impede economic democracy. However, there must be movement toward a general modification of authority within a company.

    Considering the difficulties that workers face, the notion of job security is indispensable to the exercise of citizenship within, as well as outside, the enterprise.

    Territory and democracy: The National Interest Operation in the Saclay Plateau

    The National Interest Operation (OIN) in the Saclay Plateau1 clearly illustrates the need to ensure that decision-making includes all the players: citizens, workers, elected officials. This Operation subscribes to the Lisbon Strategy, which, by calling for the most competitive knowledge economy in the world, implies a logic of competition between territories. To speak of competitive knowledge is to make knowledge a tool of the market, which is the opposite of what science is about. Researchers will lose control of their work. In fact, research is possible only in a context of freedom resting on exchange of knowledge between researchers. Setting up competitive centres does not respond to the issue of the rationality of labour. Wage workers are not present in any of the instruments and projects designed to create competitive research centres.

    Campus plans aim to develop higher learning as if it were industrialisation, imposing a managerial vision with indicators for guidance. The prime objective is to produce good results, defined in an undemocratic manner, with, as a consequence, the plan to group various CNRS laboratories, graduate schools and a university, all in the Saclay OIN. The Saclay Plateau happens to have some of the most fertile land in Europe, but its size and the agricultural issues are completely left out of consideration.

    Democracy is totally absent from the OIN, which makes it possible to work around local communities, even while imposing part of the financing on them. Community groups and associations are ignored or co-opted. Everything is imposed. How can space and time be found for workers’ meetings when everything is compartmentalised? Economic democracy is needed – without it, political democracy is disabled – and this presupposes coordination.

    Some relevant questions: Could a territory be the level at which to develop an economic policy? How should companies and regions be linked? Who decides? What is the best level of governance – regional or local institutions? In this context, how should relationships be built among workers, inhabitants, citizens’ groups and elected officials? These questions go beyond the domain of workers in a company or of researchers at universities.

    Some concrete proposals

    For Claire Villiers, member of the Regional Council of the Île-de-France, economic democracy means eliminating the dichotomy between social democracy and political democracy. Workers should be represented as such in local communities – which would provide the institutional means to break with the idea that democracy stops at the work place gate.

    She raises three problems:

    • since functions are different in society, who is legitimate?
    • consumers and workers are treated as if these categories were not intersected by differences of opinion, not to say class conflict;
    • l there should be dictatorship neither of the global nor of the local. Inter-level discussion, therefore, is necessary and needs to be conducted on democratic principles.

    Different options emerge from the discussion: for some, democracy in a company is a matter for workers in the company, who must acquire decision-making power (reinforce the role of Works’ Councils). For others, democracy at company level must involve consumers and citizens. It is a question, to some extent, of building on old worker-participation experiments in order to enhance them and bring them up to date. The idea of consumer participation has yet to gain ground. Public water utilities, for example, do not have consumer representatives. And how, for example, should workers, consumers and elected officials share decision-making power in insurance groups like AXA? Democratic procedures are needed to place the financial resources accumulated by the company at the disposal of social objectives. There must be structures in which to bring together workers, elected officials and consumers. Everyone is legitimate, when it comes to participation in a company like AXA.

    An investment fund for employment and regional development managed together by representatives of unions, employers and the public sector could make it possible to manage public (even private) money and to extend credit, not according to current rules, but according to rules that focus on employment.

    A social and solidarity economy

    Ideas of how to realise a concept of economic democracy are not new. In the 19th century, cooperatives took the form of production cooperatives in France, purchasing cooperatives in England and financial cooperatives in Germany. The principles are: one person-one voice, respect for collective agreements, reduced difference in wage levels, participating shares, that do not fluctuate in value as a result of speculation, no runaway shops.

    Today, however, the social and solidarity economy is often represented by large technocratic structures permeated by the ideology of competition. It is indispensable to return to a concept of society that is more cooperative, more self-managing, more directly democratic and less delegated. A social and solidarity economy already makes up 12% of (French) GDP. In the Île de France, the Regional Council led by the left has strongly supported this sector, since it does not hold to profitability as the sole criterion and has tried to associate individuals – workers, citizens and consumers – on the same project. A social and solidarity economy can help promote another way to produce, exchange, manage and finance. Of course, it is threatened from without by the Treaty of Lisbon and from within by certain tendencies, but, considering the values of democracy and transparency that it embodies, economic democracy has a future – if it modifies the structure and exercise of power, develops partnerships with public services and moves beyond the mere delegation of power. 

    The state, Europe and democratisation of the economy

    Javier Navascue’s points out that the struggle for democracy is, by definition, a struggle of the powerless against the powerful. The struggle for universal suffrage was a struggle for representation of the working class. Political parties of the working class arose by intervening in what had been the preserve of the higher classes. Democracy is, therefore, always economic.

    Rather than economic democracy, we should speak of democratisation of the economy. Today, democratising the economy means democratising the state. Democracy must intrude into the economic decisions of the state. The intrusion of the people into the state should transform its structure but must not replace the actions of the representatives of the people. In this regard, experience with the participatory budget of Seville makes it possible to connect representative democracy to direct citizens’ democracy in allocating and implementing public spending. How transformative this process is depends on its autonomy vis-à-vis the state and political parties.

    We need to think of local entities, companies, the state and public authorities as totally intertwined. Citizens are asking for strong political intervention in the economy. Democratisation of the economy therefore requires determining what kind of state intervention is needed. If the left is unable to put out strong proposals, it will cede ground to populists and the right.

    For Klaus Dräger, democracy is a necessary but insufficient condition for moving in the direction of a socialist society; it could be co-opted by the right. The neoliberal contents of the European Union Treaty are an obstacle to the development of economic democracy at the EU and member-state levels. Unions, NGOs, and social movement may, through different channels, make their positions known at EU level. But their role is purely consultative. Their players have absolutely no “institutional” influence on the decision-making process. Economic democracy at the European level is perceived primarily as a means to give more power to the European Parliament, to the civic organisms of society, to democratise the Commission … Yet the force to fight against a “neoliberal Europe” will not come from European institutions but from the capacity of the left, the unions and social movements to construct power relations within their own member-states while addressing the big issues that concern the European Union as a whole. This will make it possible to transcend divisions on the left over “federalism” versus “sovereignism.”

    The discussion shows that the path to economic democracy is a fertile one. There is still a lot of work and thinking to do on this issue, notably concerning the role of the state, of Europe, of the relationships that remain to be built among citizens, workers, elected officials and public authorities. All of this ground – from companies to regions, from the local to the global – remains to be occupied.



    1. A joint economic development project initiated by the French Chambers of Commerce and Industry

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