Wednesday, August 30, 2017

Worker democracy

A part of the left in countries with sovereignist movements has supported the idea of self-determination referendums as an example of radical democracy. This is surprising, as radical democracy has a very different tradition in labour movements and the left. Self-determination referendums are the preferred tool of populists and autocrats, and are the ideal way to divide the working class and promote an organization of the world based on nations and identities instead of based on the universal values of egalitarianism and common prosperity.
The true good tradition of radical democracy in the left is the ideal of worker democracy in the firm. The fall of the communist systems did nothing to erode the good properties of worker participation in the ownership and control of firms, because communist systems were not systems of worker participation but of state control. Prestigious economists such as John Roemer and Samuel Bowles and their co-authors have explained the positive properties of worker democracy in the firm both from the point of view of equity and the point of view of efficiency. There are positive productivity effects through enhanced individual and team incentives and through dispersed innovation. And of course there are positive egalitarian effects as the value of production is not asymmetrically captured by the owners of capital, and therefore the tendency of capitalism to concentrate income and political power in the wealthy is restrained. Fair structures of voice and decision-making also have an influence on more altruistic preferences, which contributes to internalizing externalities and solving social problems such as corruption. Since both efficiency and equity can improve, there is an improvement of the terms of the equity-efficiency trade-off to the extent that any trade-off remains. Improving worker democracy is a pre-distribution step that reinforces redistributive mechanisms in welfare states. Worker democracy and better institutionalized redistribution through a better federal system may make flexicurity mechanisms more acceptable for unions. In addition, a significant increase in the share of companies that practice worker democracy may be part of a more diverse economic ecosystem. Worker participation already exists in a large part of the economy. In some countries' large enterprises, such as in Germany, it is compulsory, which does not stop these societies from being among the most prosperous and efficient in the world. A good federal system of a multilevel democracy starts in the firm. That is what a radical democracy means for workers.

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