Stephen’s thinks

In my last post, I set up the idea that we can identify three seperate domains where we can usefully introduce some aspect of democratic control: the economic, the social and the political. In this post, I want to talk about economic democracy.

Economic democracy is an almost counter intuitive idea in a system like ours where all economic relationships are articulated primarily through the market. We tend to explicitly reject morality, or mutual obligation as a factor in our economic relationships.  As Adam Smith suggested, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest.” In the modern context, we expect our local supermarket to stock the most profitable items, not those which will do the most to make our lives better. And we expect our employers to pay us just enough and make our working lives just tolerable enough that we don’t work somewhere else. In the market, our power is simply that of ‘exit’ – if we don’t like the deal we’re offered we can try to find a better one.

But, this is, in many ways, an impoverished idea of our economic relationships. The individualised, impersonal transactions of the marketplace are not neutral, nor are they the only way of deciding what’s important. The market produces decisions of a particular character – self-interested and self-regarding.  Given the freedom to choose in other contexts – like collective, values-oriented spaces of political debate – people may make different kinds of choices. Witness for example, the widespread popular support for the BBC,  an instituton which explicitly sets out to be different to those that reflect the pressures of the way people choose in the market.

Given this, it’s legitimate to question whether the market is the only, or the best, way that we can interact with the economic  institutions which have such a huge impact on our lives. Rather than accepting that all the institutions that we have economic relations with value us only in so far as we can help them turn a profit, we can look for ways to reframe the relationships of one of mutuality where each actor values the welfare of the other.

One promising way to introduce this mutuality is by encouraging the spread of co-operatives and other mutual structures. Co-operatives – organisations which are collectively owned by their employees (and sometimes customers) create spaces where their actions are open to scrutiny and control on grounds other than pure profitability.

In practice, co-operatives are linked to greater wage equality – itself an important step in equalising political power. But they can also offer a real gain in terms of reconnecting disengaged embmers of the public with collective decision making. By offering people a chance to get involved in the institutions which have the greatest effect on their lives, co-operatives make democracy vibrant and immediate.

Of course, there’s much more to economic democracy than co-operatives – local ownership of human-scale enterprises, locally controlled currencies, real opportunities to express democracy through unions – all of these will provide a counterbalance to the dehumanising logic of the market. But thinking about how we inject the moral and the collective back into economic transactions is a good place to start.