2. Is there a Mutual Road to Economic Democracy?

Democracy; is there a next step ?

Democracy, is a form of  government where people govern themselves or they elect representatives to do so on they’re behalf.  In ancient Greece where the idea emerged  some pointed out that democracy does not always lead to desirable outcomes, but perhaps as has been said, it is the least worst form of governance around.  From the reformation onwards established authority has been challenged and the idea gradually took hold that each person is entitled to their own opinion, conscience and is free to act within certain constrains, today established by some democratic means.  This idea implies freedom to decide  some aspects of our lives and  that each is to be treated  equal in some areas of our lives.  We see that generally peoples who seek emancipation from oppressors will  appeal to the idea of democracy.   The democratic content of government may be restricted but at least a still significant portion of the population retain the notion of democratic entitlement, this perhaps is at least as important as any  formal legal rights. Our cynicism towards the democratic character of government is tempered by the memory that universal franchise which allows all adults, regardless of property ownership and over the age of eighteen to vote, was only finally established fully in 1950,   after a great struggle by the nineteenth century Chartists and  in  first half of twentieth century completed by the suffragettes.

Since this achievement and especially towards the latter quarter of the twentieth century, democracy in the UK and in other western countries has  decayed,  powers of governments have been dwarfed by the powers of financial markets, banks and corporations, who have foisted they’re writ by dominating international trade bodies, such as the World Bank, IMF and GATT.  The European Union is to a large extent set up to accommodate the interests of these entities. The result is that national governments are often impotent and in thrall to bond markets and other financial and corporate markets. This economic space is one where the  political vote is subordinated by the economic “vote”, each pound a person has is in effect a token of entitlement to direct economic resources so those with more will have proportionately more power. To add to this inequitable settlement is the dominant form of corporate ownership by shares, each with a vote.  It is sometimes claimed that capital has been socialized by being owned by pension funds, but  the pension holders have no say in how they are run; furthermore  the majority of stocks are held by corporate bodies, insurance companies, hedge funds and sovereignty funds..

In the UK local government had a golden period from the 1880 to the 1930s but since then it has been hollowed out. Today it is weak with hardly any fund-raising powers, often reduced to a “next step” agency of  Westminster.  Elected Mayors with near exclusive powers, and now single police commissioners, with little or no representative accountability, no checks and balance,  degenerate local government to a celebrity show.

Disillusion is registered by the decline   of political parties,  engagement with politics and is reflected in low election turn outs.  Plutocratic interests have returned emboldened  to dominate governments. A main reason is that the process of democratic emancipation was contained  to general political government and never was  extended to the governance of the economy  Before coming back to this issue as it stands today it will help to recount how democratic governance evolved.

Before universal franchise the British working class set up for itself a host of self-help organizations which included friendly societies, building societies, cooperatives as industrial and provident societies, trade unions and in Germany credit unions, all these were based on one member one vote. Their democratic character may have been far more active in the past when it was much more usual for people to congregate and participate in meetings. These characteristics were extended to the political field after pressure from movements demanding universal franchise.  They hoped  this would lead to more equitable outcomes.  The beginnings of the welfare state  in the early twentieth century was in part prompted by this as was also the possibility of revolution. This  tendency is now in retreat. The modern age has cultured many to become customers as a substitution to being members or citizens , these categories imply   active agents with  some equal rights. Customers are empowered to the degree that they have the means to purchase.  The drive to privatization, dismantling the public sector and the mutuals has undermined both political democracy and led to the reduction of  surviving consumer cooperatives and mutuals with their  minimal economic democracy .  There has instead  been a substitution,  to governance through the “market”  which favours those that can pay.

The term market covers a range of phenomena, your local street market or shopping centers, where they survive, are usually socially benign, economic fields where mostly small retailers will tend to sell more from local sources supporting a wide range of  small-scale ownership and enterprises which the community can support by their purchases.  At the other end of the scale are the corporations, financial markets, banks, these include, commodity, stocks and shares, derivatives and other exotic “products”; usually debts mixed and bundled then given triple AAA designations by the rating agencies. These have often proved to be fictions if not fraudulent and what undermined our economy in the last five years.  With these  dubious assets financial institutions have been able to lever huge amounts of loans to play on the financial markets; these are wealth extraction schemes and do not add value, as  partly admitted by Adair Turner.  The City of London is substantially like a casino and those who own the casino will in end  come out best; the system is weighted in their favor.  Wealth buys the media and government to do their bidding.  Modern democracy never perfect has decayed.  The consequence has been an impoverishment and disempowerment of a significant portion of our people while the very rich become increasingly wealthy. Hayak”s “Road to serfdom” has proved to be a manifesto for wage and debt serfdom.

No solution will be perfect and anything new will generate problems but can we do better?  There is a democratic deficit that needs addressing.  A pressing question is why does democracy  not extend to the economy, in the work place, finance and community?  This may be the next great debate which is emerging prompted by the Occupy movement. In the USA some have begun to bring this issue out in a clearer way.  Can we do anything directly;  making our own economic democracy!?

See links: to Gar Alperovitz, Richard Wolff through Democracy at Work and David  Scheickart at Solidarity Economy.   David Korten more spiritually orientated approach is an option pointing approximately in the same direction.  Also see, Will Hutton on bank rate-fixing scandals.

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