Economic Democracy as a Contested Concept

Abstract

The chapter provides a brief history of economic, industrial and enterprise democracy before the 1960s. It shows that extending democracy to the economic realm and giving regular citizens more economic power has been a predominantly socialist and social democratic vision, but conservatives and liberals have put forward their own versions of it. The chapter then shows how economic democracy again became a topic of heated political debate in the 1960s. It was connected to the New Left’s calls for democracy and autonomy, but also to liberal ideas of citizen participation and aims of making capitalist management more efficient by considering the human factor. Social democrats associated economic democracy with democratic control and even planning of the economy (active industrial policy) as well as the collective power of workers in workplaces, while liberals and conservatives spoke for participation and consultation on the grassroots level of workplaces. Conservatives also put forward the concept of ‘people’s capitalism’ as a form of economic democracy. It meant dispersing private ownership more evenly amongst citizens. A major problem for social democratic ideas of economic democracy was balancing between the principles of representation, collective control and planning, on the one hand, and participation, decentralization and market mechanism, on the other hand. The new movements of the 1960s in general called for decentralization and were critical of prevailing state institutions, which were viewed as centralized bureaucracy.