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1. The Need for and Objectives of Economic Democracy

Sigmund C. Shipp is an Associate Professor, Department of Urban Affairs and Planning, Hunter College (CUNY), New York, NY, USA.

Democratic workplaces are needed to countervail against the kinds of jobs that take advantage of the poor. The most important aspect relative to democratic models is education. This would include education that explains the purpose of the co-op and what is expected of members. This process should be ongoing. Education is also important to allow members to be able to fully participate as real actors in the businesses that they own. This requires an understanding of technical issues like budgets, taxes, and other financial aspects of running a company. This is tricky because in low-income areas, education, even basic education, may not be available to prepare people to fully understand technical issues.

The willingness of individuals to participate in a cooperative depends on their ability to want to achieve a common purpose. This can happen in terms of local residents sharing in the responsibility in developing and implementing alternative plans for the revitalization of their neighborhood. In this sense, a democratic workplace would be promoted as a way to provide income for local residents. Such workplaces also require and can promote cooperation and solidarity. The term social capital is used to explain the level of cooperation and solidarity in neighborhoods.

Solidarity was important for the success of the Mondragon cooperatives. Solidarity within Mondragon, however, was achieved through cultural cohesiveness. The importance of culture as a binding agent explains how disadvantaged groups come together to achieve a common purpose, e.g., to fight against oppression. Cooperatives in “minority” communities can make use of this element. The commitment to a wider purpose such as the uplift of the race can cause individuals to work together. This was certainly true in the 19th century when black congregations started black colleges. Abdur Farrakhan uses the cultural value of race consciousness to help members of his cooperatives in the African-American community in Brooklyn remain committed to workplace democracy.

A best cooperative practice would include a fully active membership at all levels of management and operation of the business. This would include holding regular meetings for workers who have policy roles and are not simply subject to managerial orders, as well as ensuring that individuals are making a living that enables them to take care of themselves and their families. Beyond this, it would enable participants to be engaged in their communities and to utilize their membership to assist the revival of their neighborhoods—by making purchases, paying rent, or serving on community boards.

One of the great barriers is the difficulty of upgrading worker skills. The last time that I spoke with Rick Surpin about Cooperative Home Care Associates in the South Bronx in New York City, he acknowledged that the goal of taking the home health care worker-owners to the level of being licensed practical nurses (LPNs) had not been well met. The problem was the lack of basic skills. To CHCA’s credit, they have helped to transform many of the co-op members, giving them jobs and boosting their confidence. As far as other models, one place to start would be the 2000 Annual Report from the ICA Group, which contains brief case studies of several innovative initiatives for lower income worker-owners. (See Case Studies in Economic Democracy and Cooperative Economics)

Ewald Engelen is a Postdoctoral Research Fellow, Department of Philosophy, University of Amsterdam in the Faculty of Humanities, Amsterdam, The Netherlands.

The concept of “economic citizenship” is an attempt to create an alternative to the one-sided view on own-ership, property rights, managerial prerogatives and the corporation predominant within the political economy of classical liberalism. Starting with the twin democratic principles of political equality and popular control, I argue for “co-determination” rights, as extensive and for as many participants as possible. In practice, this form of citizenship should not fall into the trap of radical or direct democracy. Not everyone should have a say in everything all of the time. Naive conceptions of democracy that are satisfied only if the full and complete participation of everyone is assured make themselves vulnerable to simple counter-attacks concerning the overburdening of the decision making process itself as well as the individual motivation to participate; for these reasons alone, they should be shunned. Instead, the process of decision-making can be split up into different phases as well as different domains.

For example, in the Dutch and German systems there is an executive board, a supervisory board, a work council and an annual shareholders meeting. These boards, councils, and meetings possess specific rights and responsibilities over specific domains of decision-making and overlook specific moments of control. A complex political structure like this makes it possible to enlarge the democratic transparency and accountability of corporate decision-making without overburdening it and without disregarding restrictions of time, motivation and expertise. In other words, the more complex the system of corporate governance, the better it is suited to weigh moral claims (inclusiveness) against prudential (effectiveness) and realist (feasibility) ones. We need a conception of democracy that is both gender and race-sensitive, and that is plural in the sense of encompassing civil, political, social as well as economic rights that can be guaranteed by public, semi-public and private agencies. Firms are too important to be left to managers, accountants, economists and lawyers.

David P. Ellerman is author of The Democratic Worker-Owned Firm: A New Model for the East and West, and Economic Advisor to the Chief Economist, World Bank, Washington, D.C., USA.

Absentee ownership is the problem. The market is not itself the problem. The problem is the employ-ment relationship that treats people as being “rented” or “employed” by a company (which then allows absentee control) instead of being members of the company. Democratic businesses, “owned” and controlled by the people working in them, are the best structural solution. Then companies are automatically part of the community; the market is then socially embedded and can be a servant rather than master of social life.

Community development strategies emphasizing democratic companies tend to have only marginal effects by ameliorating the usual business system around the edges with ethically oriented start-ups or worker buyouts to avert plant closings or bankruptcies. Enclaves of democratic development will always be problematic, and democratic firms often succumb to the temptation of the current generation of members to cash in by selling out the next generation of potential members reducing them effectively to employee status again.

But the real hegemony of the current business system is not economic but intellectual. Progressive forces have essentially wasted the 20th century with a disastrous love affair with socialism. Diehard leftists continue to think that the principal mistake in socialism was ownership by the national government rather than the local municipal or community government. One of the most successful intellectual defense mechanisms of the employment system (aka “capitalism”) was, after the democratic revolutions of the 19th century, to restrict democracy to the public or governmental sphere instead of generalizing the idea of democracy or joint self-determination to all organizations. The latter would entail abolishing the employer-employee relationship of “employing” or “renting” people instead of just substituting a public for a private employer. Instead of attacking the root idea that democracy only applies to public government, socialists concluded that the only way to have “democratic” businesses was to have public ownership, and we have been paying the price ever since.

This has lead to the current intellectual hegemony of the employment system where people support democracy as a core principle and yet hardly think of applying it to what people do all day long. We look back with a feeling of moral superiority on the times when people had the moral schizophrenia of thinking it “normal” that blacks or women lacked basic human rights, and yet the normal moral schizophrenia of our times is like the air we breathe.

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