Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate shareholders to a larger group of public stakeholders that includes workers, customers, suppliers, neighbors and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit, and deny the polity a democratic voice in economic policy decisions. In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's claimedly inherent effective demand gap.
Classical liberals argue that ownership and control over the means of production belongs to individuals and firms and can only be sustained by means of consumer choice, exercised daily in the marketplace. "The capitalistic social order", they claim, therefore, "is an economic democracy in the strictest sense of the word". Critics of this claim point out that consumers only vote on the value of the product when they make a purchase; they are not voting on who should own the means of production, on who can keep profits or on the resulting income distribution.
Proponents of economic democracy generally argue that modern capitalism tends to hinder or prevent society from earning enough income to purchase its output production. Corporate monopoly of common resources typically creates artificial scarcity, resulting in socio-economic imbalances that restrict workers from access to economic opportunity and diminish consumer purchasing power. Economic democracy has been proposed as a component of larger socioeconomic ideologies, as a stand-alone theory, and as a variety of reform agendas. For example, as a means to securing full economic rights, it opens a path to full political rights, defined as including the former. Both market and non-market theories of economic democracy have been proposed. As a reform agenda, supporting theories and real-world examples range from decentralization and economic liberalization to democratic cooperatives, fair trade, and the regionalization of food production and currency.
Read more about Economic Democracy: Deficiency of Effective Demand, Alternative Models, Reform Agendas
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