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Promoting economic democracy in the twenty-first century

Promoting economic democracy in the twenty-first century

Amidst the furore created by the recent Panama Papers revelations and the growing clamour to shed light and rein in the tax dodging activities of the super-rich, a more fundamental truth is evident in the workings of the global economy.

As various commentators have pointed out, this adds up to a very basic underlying reality. The economy seems to be increasingly structured and organised to benefit the wealthy at the expense of the vast majority of the rest of the population.

Whether it is the way that employment laws and regulation favour corporations at the expense of workers, housing markets seem to be out of reach of people on average incomes, or more fundamental issues such as the way central banks operate to serve the interests of financial classes, it is difficult to escape the revelation that the economy seems to be becoming less democratic. The UK seems to be the paradigm case of this phenomenon with the over-centralisation of decisions making power, assets and resources in London and the malevolent influence of the Treasury-City nexus.

There is a sense that elsewhere things might be different. In Scandinavia, Germany and even further afield, the capture of the economy by elite and vested interests is less assured and more democratic and deliberative forms of economy are still evident. Anecdotally, such countries seem to do better at tackling the big questions that face us such as such as combating climate change and dealing with inequality.

In a new research project, with colleagues at the University of Glasgow, Nottingham Trent, Oxfam and New Economics Foundation and with the support of organisations such as Class, we are investigating the issue of economic democracy on a more systematic and robust basis. More specifically, we are creating a global index of economic democracy that can develop a set of comparative indicators about levels of democracy and public participation in the economy.

The Index will include traditional indicators of economic democracy such as workforce participation and levels of union representation but will be novel in compiling statistics and indicators about the broader decision making processes in the economy. Three other areas that we want to explore are: the degree of associational economic governance (e.g. level of cooperatives within economy, number and extent of business and labour associations in economic policy forums); the distribution of decision-making powers across space and sector between different economic and political governance institutions; and the levels of engagement of the broader population in macro-economic decision-making (e.g. governance of central banks, nature of economic policy formulation, governance structures in economic policy formation at national and subnational levels, role and participation of different interest groups).

The project started in February and we have already compiled an extensive statistical database. The next eighteen months will see us develop the index and conduct research on the relationship between economic democracy and key public policy goals.

Key questions are: what is the level of public engagement and deliberation in economic decision-making and how does this vary internationally? What is the relationship between different levels and types of economic democracy and achieving key public policy goals around sustainable economic development and social justice? We will be posting regular updates and findings on the Class website as our research unfolds.

Find out more about the Transforming Public Through Economic Democracy Project here: