The Issues Of Economic Democracy In America

“There can be no real political democracy unless there is something approaching an economic democracy. ” (Theodore Roosevelt).

The first point needed to be discussed is what exactly an economic democracy means. In simplified terms, it is basically the philosophy according to which the power of forming decisions should be transferred from industrial capitalists or corporate managers into the hands of the ones who are working for it, or with it, or are using it as a consumer. This would entail people such as wage workers, suppliers, creators, consumers or public in general.

There is no approach that is agreed upon by experts as to what constitutes an economic democracy but proponents argue that a system which lacks economic equality has a lot of moral questions hanging over its head. The main concern is that it basically outsources the well-being of the community to private, for-profit organizations and denies fair representation in a democratic system to people who are not financially strong.

Proponents of economic democracy argue that our capitalistic society is set up in a way that further increases inequality because of repeated economic crises leading to people working longer hours for lower wages. Then there is the dilemma of private monopolies over natural resources hindering access to economic opportunity for the average worker. Economic democracy has been portrayed as a collection of reform ideologies designed not to overhaul the entire system, but make necessary adjustments in order to give access to economic and political rights to everyone in the system instead of a minority. Some examples include:

• Decentralization
• Public banking
• Fair trade policies
• Regionalization of food production and currency

It’s been more than 200 years since the Constitution of The United States of America was drafted. The document was designed with one notable feature: it was drafted for a society with economic democracy.

Throughout history, statesmen and political philosophers including our founding fathers were vary of the problem of economic inequality. Our founding father could not have foreseen the radical changes in technology and business America has gone through over the late 20th and early 21st century. Hence the constitution was not built for a scenario in which so much wealth is concentrated amongst in the hands of the elite which has given rise to oligarchs and political demagogues. As history has shown us in the past, societies with high inequality are subject to continuous unrest and revolution. Hence it can be seen that a lack of economic democracy leads to a lack of political stability.

We can also look to history and different political institutions for a solution to this problem. One common theme found by studying the political structure of the British Government and the Roman Empire is that we find economic class integrated into the structure of the government. For example in Britain, the government was set up in such a way that Lords and Commoners had equal representation in Parliament. If we look to ancient Rome, then we find a patrician Senate for the affluent and a tribune of Plebeians for the lower class. The classes not only shared equal representation, but also kept a check on the other. This was done not only to hinder the rise of oligarchy but also to stop the spread of tyranny based on a populist movement.

Our constitution is not planned for class warfare and obviously gets a lot of things right placing individual freedom at the top of its priority. It does not allow only the wealthy to become senators nor do we have a tribune of plebs. However there is a lack of structural checks and balances between economic classes. This means private organizations with access to unlimited funds can lobby for their interests and steer the political system in favor of their own interests ahead of the interests of the ordinary worker.

And this is not a coincidence. Our founding fathers debated on proposals to include class warfare in the constitution during the summer of 1787. However they decided not to pit class against class in the workings of the government. The reason was pragmatic in nature. There were numerous debates on the topic during the Philadelphia Convention and the delegates just could not come to a conclusion as to how this class-based system would operate in America. After gaining independence from the British and their class based political system, the delegates knew it would not be acceptable to the American people.

But we can’t blame the founding generation for this oversight since at the time there was a wide spread belief that America would not be subject to the problems of economic inequality because there was hardly any inequality to begin with among white men. It’s only today when we look at the early days of America with a microscopic lens, we realize how undemocratic that era was in reference to our values – widespread slavery, no voting rights for women and violence against Americans. However amongst the community of white men, that generation was not subject to the problem of economic inequality as we face today.

Living in an age there exist two extremes of economic discrimination and monopoly power is a grave situation when examined closely. In any job market, it can be easily seen that wages for the average worker have been more or less stagnant for an increased amount of time. And when that is compared to the fact that positions such as those of CEOs are instead earning more than half of a company’s workers earn, it can be seen even more pronounced. There is a trifling number of companies and establishments that dominate in particular sectors of the economy and this staggering fact leads to consequences that are dismal. Since such a stark difference exists and gives two polar ends of a socioeconomic background, it gives clear power to those at the top. And it is a given that those at the top thus get to influence more decisions in the political world giving them a bigger voice. This can result in the decisions being taken by a government rigged by the wealthy for their personal benefit, which pushes those at the lower end even more down, and it starts to create a vicious cycle.

This is where Populists recognized such situations and after seeing such concentration of power at one end of the spectrum, they work against it since it presents as a big hazard to the existence of democracy as well as freedom. It allows for the wealthy to oppress the poor, and even bend the law and get away with corruption. Reformers’ aim to break this vicious cycle lies in breaking up the economic supremacy and tax it so whilst also regulating it.

Practices that are unsafe were barred such as those concerning child labor, or food and drugs. Activists campaigned to enforce internal regulation in establishments and to construct a fairer and just economic democracy in industries. This ultimately resulted in a settlement on labor union which promoted the empowerment of workers and closer eye at executives, and this axed down on the biggest threats present in capitalism.

Theodore Roosevelt’s words “there can be no real political democracy without something approaching an economic democracy” entails a lot of reality. The truth is that the two work hand in hand. If political democracy exists in a system it will in turn aid the existence of economic democracy as the people of the nation will work towards a society that is not harshly divided into socioeconomic classes. And if a society is equal economically, no one will be sitting at a polar opposite position where they will be able to accumulate enough power to dominate the rest of the society.

The most important problem that exists, except for ethical or economic concerns, is that our constitutional system was not built for such a state of economic inequality, and may just collapse. It skews the generating viewpoint of a government when so many of those at the top tier are the ones holding the reins inside it. And they will always favor their own interests over those of the general public, which completely distorts the original point of a democracy. The state will become to look more close to an oligarchy instead of a free democracy.

When the point reaches that a nation’s structure starts inclining towards that of an oligarchy, it is understandably seen that the people rise against those in power. Revolts by Anti-elitists cannot be carried out spontaneously, they need a leader to stand up in the front line for them. Gouverneur Morris projected that the elite would manipulate the common man’s “passions” and make them the instruments of oppressing them. ” It always gives a ticking point when populists stop being pushed down and rebel against the tyrants.

A tax system that is fair and unbiased needs to be created which will include the treatment of all income in a similar manner, implementing a wealth tax, inheritance tax as well as an estate tax. Utilities that are used by the mass public must be regulated and decisions need to be made and discussed regarding the indispensable infrastructure of today’s society. The range is massive from a public option for a bank account to insurance or basic phone carrier options for everyone. Such decisions may start to cut down on the “pseudo-aristocracy” and bring about a new outlook to how our society currently functions. To accomplish these strategies, it if of course important to actually start building new laws. These laws need to thwart the corruption that exists in the political tree and empower the mass public instead.

All of these reforms will be challenging to implement in practical life. People from the industrial class, political class, and even some intellectuals will be against the implementation of such practices and regulations. They will give arguments that such reforms will stall economic growth as well as efficiency of the existing system, while those who have been benefiting from this divide of capital and power will fight it rigorously. As the American orator Frederick Douglass said: “Power concedes nothing without a demand. It never did and it never will. ”

But even if we revitalize those strategies, even if there is political movement to support them and resilient, daring leaders who are ready, standing at the front of the line to start implementing these various strategies and policies, the pathway that we will be taking to remodel industrial capitalism will still be deficient on its own in order to save the structure of democracy today. It will be unwise to think it can be done without finding new approaches for this matter.