What is Economic Democracy

The term ‘Political Democracy’ is commonly used, however mentioning the term ‘Economic Democracy’ can bring on a blank stare. At EDA, this concept is central to our mission.

One cannot understand ‘Economic Democracy’ without having an intuitive grasp of Our Commons. It is an intuitive concept, however modern society has erased the structural concepts of The Commons from our collective memory making it a hidden, largely unconscious part of our deep heritage as human beings on this planet. Learn more about The Commons.

Implementation of principles of Economic Democracy is crucial to properly honoring Our Commons, as we believe that it defines the fairest, most balanced form of governance of our shared resources. Here are some terms that help to define Economic Democracy:

  • Self-governance of resources
  • Decentralized control of resources
  • Sustainable usage of natural resources
  • Fair access to resources for all who require them
  • Self-governance of resources

    Having a platform in place where all users of our resources (natural, man-made, and social) can share their input meaningfully and fairly, into influencing the decision-making process that governs usage, access, and protection of the resources; in other words, we all get to be involved, even if at a basic level, in making the decisions about how our resources are managed.

    Cooperatives, especially worker-owned ones, are an excellent form of resource self-governance. They are a direct example of producers of resources being the direct beneficiaries of the resources produced value. The Mondragon Cooperative Corporation located in Spain, is perhaps the largest and most successful example of a workers’ cooperative. You can watch a YouTube video that explains Mondragon. The average pay scale ratio within Mondragon companies, from top organizational employees (administerial) to floor workers is 5:1, which is determined by the employees of each company. Compare that to, according to Forbes Magazine, 381:1 corporate pay scale ratio between compensation of CEO’s to that of workers in today’s private corporation-led system, where the decision to delegate this compensation is made exclusively by the top level of management. At Mondragon, a major portion of profit goes to employee education, retirement, and in assuring that employees keep their jobs during economic downturns. We invite you to watch at least the first six minutes of the Mondragon video to get a feel for the excitement that successful industrial cooperatives bring.

    Some even suggest that all agriculture and agribusiness industries should be run under cooperative environments as opposed to private corporate enterprise, to better ensure proper sustainable usage and access to food and agricultural resources.

    Decentralized control of resources

    This means having the decision-making process for creating, accessing and distributing of resources mainly located within the demographic region where the resources are accessed from.

    Again, successful cooperative environments are well-suited for this arrangement. Other examples of decentralized control are solar and wind energy projects, especially when implemented by homeowners and small groups of owners. Social contracts such as commons-based resource trusts are other examples, when the trust is controlled by, and accountable to the stakeholders of the resource. An example that are in use are community land trusts, where a community who collectively owns the land assigns a trusteeship to administer the usage and leasing of parcels of the land, but always remains accountable and reportable to the community.

    Sustainable usage of resources

    This means managing them in a way that ensures they will continue to be accessible and properly usable for future generations.

    Depletable resources refers to resources, typically natural resources, that are not replenished, therefore their future availability decreases as they are consumed. A sustainable platform means having a governance system of resources that properly balances the use of depletable resources with using renewable ones – whenever renewable resources are a viable option, they are used instead of depletable ones.

    EDA is focusing on the concept of bioregions as a major aspect of sustainability where economic health is seen more in terms of stewardship and resilience, rather than the status quo of focusing on growth through resource extraction and production as the metric. This is about connecting the dots between resources located in a region defined by specific natural characteristics such as water sources and vegetation, and how the region itself is affected by producing or exploiting those resources. Bioregions can be vastly different natural environments, so industrial and agricultural behavior in one bioregion can affect it in devastating ways when compared to similar behavior in other bioregions.

    Fair access to resources

    This refers to the ability of users who need Commons Resources to access them despite their personal means of access.

    The value of the needs of people and the environment becomes a primary concern when metering distribution of resources, placing linear concepts such as availability of money and/or credit as a more pliable priority.

    Does this sound like the capitalist system that we have learned to live within? If you say ‘no’ or ‘probably not’, then you are beginning to get the picture. Capitalism may very well exist for the foreseen future in our society, however when it comes to basic needs that we all cannot do without in the short and/or long term, it falls short of handling resources in a way that reflects economic justice. Luxury items such as cars, airplanes, large and vacation homes, recreational vehicles, may always be marketed through a form of capitalism – but when it comes to air, water, soil, safe shelter, food, healthcare, education, and other requirements underpinning human beings’ abilities to live a relatively safe, healthy, dignified life, these common basic needs can be handled by a platform that ensures they will always be available to all who need them.

    The term ‘Economic Justice’ tends to reflect having the system in place working for everybody, however the conversation tends to stay within the current framework of the public/private sector market-state. Grass roots insistence on making the rules more fair to the general population is needed, but will probably not make the system itself a model of Economic Justice.

    We do not see the means to Economic Democracy to be a state-managed platform of ‘socialism’, as some may make this misunderstanding about what we are defining. True Economic Democracy will form when the grass roots sector of society asserts an active and meaningful role in the decision-making process to keep the platform of rules, institutions, and organizations that manage our resources accountable to everyone.