Economic Democrazy
Oh, baby. Economic Democracy. What an exciting idea that totally isn’t just literally socialism. Let’s hop right into it.
So, this was something I’ve seen linked in multiple different contexts. Invariably, it’s by someone who has become disillusioned with our current system, and believes we need to change things up. Similar to Marx, they might even believe this change is inevitable, and it’s simply up to us if we want to make it happen now or later. On an entirely unrelated note, some people have pointed out death is something that is also inevitable, and that we can choose to make it happen now, or we can wait for it to happen later. But frankly, I don’t see the correlation between death and socialism, nor does any truly woke individual, so I don’t know why I even brought that up.
Now, there is a whole website explaining this idea of Economic Democracy. But within, there is a little YouTube video I will be focusing on. Why? I dunno… just seems like a good place to start. They wouldn’t have included it if it didn’t accurately represent their positions, right? It’s near the top, too, so that means it doesn’t require much context leading up to its viewing.
The video starts by explaining how the current system has companies providing goods or services to paying customers. It’s an interesting way of framing a free market, to be honest, as it shows a single customer next to a big, opaque company. Usually, a single business requires customers far outnumbering the number of employees to stay solvent. Additionally, businesses can be owned and operated by a single person while serving many customers. Even this initial characterization seems to waste no time in framing the customer base as fundamentally powerless and the company as overwhelmingly powerful. Ah, I’m starting to get into conspiracy theory land, and the video is only thirty seconds in. Let’s focus more on some actual quotes going forward.
Markets can often behave badly in ways that are destructive and wrong, but they do also provide a reasonably efficient and decentralized way of allocating productive capacity to match demand.
Whoa, whoa, whoa. Hang on. This video just said that markets actually work. That’s an admission that capitalism works. Too bad they spend the rest of the video trying to explain how the free market doesn’t work. Limber up for some mental gymnastics, everyone.
Corporations today are not democratically organized: the workers inside them have very little say in how things are run.
Eh, kinda correct. Most are not. Not everything should be democratic, otherwise minorities can be very easily abused by the majority. I mean… is… is this system pro-slavery, provided enough people support it? WTF???
Ok, wait… perhaps I’m being hasty. Sure, I can already imagine multiple issues with purely democratic organizations, one being where they are coopted by an influx of new members that twist the agenda to something else entirely, destroying the organization from within while sidelining those who founded the organization in the first place, but maybe Economic Democracy has safeguards against that. (Message from me from the future: no, it really doesn’t. At least none that I could find.)
But as a quick sidenote, there are companies that are owned and operated by the workers. They are called Worker Cooperatives, and apparently there are 300-400 democratic workplaces in the US. So these are entirely possible to create with our current laws; notably, without burdensome government involvement or coercion of the citizenry. Why doesn’t this video mention that? It seems relevant… Whatever, let’s continue.
It’s the people who own the companies that are in charge: not only do they get to decide how things are run, but they also get to extract the profit made, which increases the resources under their control.
Indeed, this is an inescapable effect in any meritocracy I typically understand as the Pareto Principle. Basically, the more people acquire, the easier it is for them to acquire even more. This creates distributions where a very small number of people have an enormous amount, while people with very little struggle to increase their earning potential even slightly. This borders on Law of Nature territory, meaning there is no easy way of preventing this. The only real way is to massively constrain those who reach an arbitrary threshold, but that has not been shown effective at helping people who haven’t reached that threshold. Even redistributing the money from the wealthy to the poor only temporarily fixes the problem, and usually ends up creating even worse situations for those who were given the money. A perfect example of this is the fact that lottery winners are more likely to go bankrupt in the following three to five years than the average American who has not won the lottery.
There is a substantial body of evidence suggesting behaviors are much more important in creating success than simply preexisting available resources, and I already explained that in my previous blog under the “Then How Do We Properly Use Money?” section. I know, catchy chapter title. Moving on, but I have a link right here to that previous blog if that interests you.
So that’s what our economy looks like today: a market system with lots of privately-owned, non-democratic companies.
Well, I already pointed out how this isn’t really true about the market, as well as that this frames things where customers have no power to influence companies by petitions, forming boycotts, or creating competing companies. But this next part is where things get real interesting.
But where does the capital for all this come from? How do companies start and grow?
From people who have money, of course. Usually wealthy investors looking to turn a profit by supporting a company financially early on, but nowadays things like crowdfunding exist to allow good ideas get off the ground even easier. Business loans, usually from banks, are also an option, albeit one requiring more hoops to jump through in exchange for a more definite amount.
In our current system, capital is undemocratic, too, driven by private interests pursuing private profit.
Markets are highly democratic, where customers will vote with what they purchase. People looking to invest so they can acquire those private profits are not guaranteed a return on investment. Thus, they try to predict what businesses the people will support, and invest in those businesses. The way this is phrased in the video makes it sound like investors create mega corporations that customers are forced to support. That’s only true with basic necessities being provided by monopolies, and that is why we have laws against monopolies and other laws for regulating public utilities. Are those laws perfect? Probably not, but they are still more coherent than this new framework being laid out.
This means that private investment, a market in capital, determines who gets the resources they need to build or expand their company. And these decisions get made based on who the owners of capital think will be able to generate more profits from their company.
Holy crap. The video does know. They just wanted to obscure it as much as possible, but they definitely know. Profits are not made from investors, they are made… from customers.
Customers that, in a free market, can democratically decide among themselves who they want to support or not.
It’s a feedback loop, and a bad one.
Why is it bad to let customers purchase what they want? I thought the whole premise of this new system was the rule of democracy.
What’s most profitable has the most ability to grow under the current system even if it conflicts with community needs or ecological demands.
I understand the ecological demands part, given people are rightly adverse to their local natural resources being polluted. But conflicting against the community needs? Did they actually say that?
...Yep, I heard that right. What an embarrassingly dumb statement. If the community does not purchase that product from the company… the company won’t survive. If the company doesn’t pay the workers enough and there are other places they can work(again, if it isn’t a monopoly)… they won’t be able to hire people. So this statement is just completely, utterly, objectively wrong.
So what does David Scheickart think a democratic economy looks like? His idea is that we should keep markets, but get the economy itself under democratic control.
That sounds rather… ominous.
The first step is to get rid of those private owners who control the individual companies- instead, companies should be democratically managed by the people who work in them, as cooperative enterprises.
Get rid of those private owners?
Oh my god… Get rid of those private owners.
GET RID OF THOSE PRIVATE OWNERS.
GET RID OF THOSE PRIVATE OWNERS!!!
All that talk of being non-coercive and peaceful, and this is still what they suggest. SEIZURE of companies from the people who own them. I’ve skimmed all over the place, as the entire webpage is poorly structured and rather long, but I’ve so far found no answer to how they do this non-violently if people don’t want to sell. I consider not allowing people to create businesses or sell them to each other a form of violence against them, and I implore ANYONE explain how this system could ever be implemented fully without government confiscation.
You really can’t make this stuff up. Even the most dystopian of fiction doesn’t try to sugarcoat things to this degree. This entire explanation led up to the forced removal of people from positions of power in businesses that they founded or were put in charge of by the owners. And it switches to this happy, upbeat music when it says it. AND PEOPLE ARE LINKING TO THIS AS A GOOD IDEA.
This isn’t founding a cooperative; as I said, those things already exist, and can be created by people at any time. This is the FORCED removal of entrepreneurs from their positions, and the addition of barriers for NEW entrepreneurs.
It’s chilling. I was honestly horrified when I first got to this point in the video. What a terrible, terrible, awful, terrible idea that has always and predictably crashed markets across the world when implemented.
We need to bring democracy into the workplace. Capital also needs to be democratized, and that means making it publicly controlled. In Schweickart’s system, the cooperative companies pay a tax – like a rental charge – for using public money to grow their businesses.
OH, I see… we tax existing businesses to gain money so those businesses can then be given that money to grow their businesses. That definitely isn’t the most insane thing I’ve ever heard at all. It’s just like taxing the people so you can give them welfare! It’s for their own good.
Instead of flowing back to corporate finance, profits flow back to the government and the people, and the government, democratically controlled by all the people who make up the economy, gets to decide which companies get more capital. Public investments can be made based on what creates more jobs, what pollutes less, and what meets the needs of the people, not profit.
Oh, I definitely see it now! This system understands that consumers are idiotic neanderthals who make incorrect purchasing decisions far too often. So, the government needs to step in and select the correct businesses, while the people who are too stupid to make correct purchasing decisions democratically control the economy through the third party known as Politicians. You know, Politicians? That portion of society world renowned for their honesty, resistance to corruption, trustworthiness, transparency, and frugal use of other people’s money? Those guys. Yep. Sounds about right.
With democracy in the workplace and in the way capital is invested, David Schweickart thinks we can have economic democracy: a system which still uses markets to handle the problems of coordinating supply and demand, but which is run by and for the people.
...and that’s the end of this dumpster fire of an idea. I’m told there is also a book by this David Schweickart, but after watching this video, I’m not inclined to believe it will have much in terms of interesting points. Maybe I’ll read it at some point, but it’s not going to the top of my reading list. This entire system is rotten to the very core, removing power from individuals to hand to the government, thinking that will somehow keep it from being abused.
You want to know the craziest part? People on the Left, generally speaking, seem to support this idea of moving more power to the government.
AS IF BUSINESSMEN THAT GO AGAINST ALL OF THEIR IDEALS COULD NEVER BE ELECTED TO THE HIGHEST GOVERNMENT POSITIONS IN THE ENTIRE UNITED STATES AND DO THINGS THEY DON’T WANT WITH THE POWER THEY HAVE HANDED OVER TO THEM.
They make some other strange assumptions. Like that a group of people acting democratically will make better decisions at a comparable efficiency to corporate leaders. I’ve seen plenty of groups without clearly designated leaders calling the shots, and they are absolutely plagued with indecision and inefficiency. Not to mention abundant infighting and drama, usually beyond even the current problems we have in politics. I just don’t understand what people expect to happen differently with this new system.
Also, there are several references to environmental protections throughout the video. I generally ignored these, since this is already a thorough breakdown for such a short video, and they were more sidenotes. But consider this; would a group of people be willing to avoid polluting a portion of their local environment if it meant losing out on production, thus directly affecting their own prosperity? A good example of what I’m getting at is AOC, who complains about being forced to use plastic bags despite being perfectly capable of using reusable bags. Most people are fine with environmentalism when it doesn’t affect or inconvenience them, but what about when it actually costs them something real?
Anyways, that’s about it. To sum up Ecocomic Democracy, it apparently involves removing entrepreneurship and instead only allowing heavily regulated and taxed worker cooperatives to operate, while the government also is allowed to pick winners and losers in the economy and move around resources as they see fit. Honestly, it’s hard to imagine a more authoritarian regime where you aren’t allowed to own a business and the slim majority can force minorities to bend to their will.
But that’s the thing with socialism; it preaches one thing while actually being something else entirely. And given that economic democracy fundamentally involves deeply integrating government control into every single business in order to attempt controlling the entire economy for the “greater good”, I fail to see how it isn’t literally socialism. In the end, it’s almost like the people pushing this don’t understand one of the main points of a republic was to protect minorities and fringe opinions from a conformist, group thinking majority who would otherwise force them to fall in line.
Sources:
Economic Democracy: https://thenextsystem.org/economic-democracy
Worker Cooperatives: https://institute.coop/what-worker-cooperative
Pareto principle: https://en.wikipedia.org/wiki/Pareto_principle
Lottery winners: https://wolfstreet.com/2018/04/17/nearly-one-third-of-u-s-lottery-winners-declare-bankruptcy/
No, Money is Not Theft: https://www.minds.com/RhetoricalHypothetical/blog/no-money-is-not-theft-968015348840488960
Business loans: https://smallbusiness.chron.com/definition-business-loans-1902.html