Economic Democracy as Opportunity for Trade Unionism

Foto: London School of Economics and Political

Interview with Richard Hyman, Emeritus Professor of Industrial Relations at the London School of Economics and Political Science (LTE), about his view of eco­no­mic demo­cracy and the oppor­tu­nities it offers for trade unio­nism: it can rein­vi­go­rate trade uni­ons as a social move­ment - if we for­mu­late it con­cre­tely and ask the key ques­ti­ons: What do we do with money? And who deci­des? Why not working people?

Richard, what does eco­no­mic demo­cracy mean to you? And why should trade uni­ons put it on top of their poli­ti­cal agenda?
Hyman: The cur­rent eco­no­mic cri­sis is the result of how capi­ta­lism has evol­ved during the last three deca­des. It led to an expo­nen­tial rise in the inco­mes of the rich, who used their sur­plus to spe­cu­late on finan­cial mar­kets. The con­ti­nuing out­come of the cri­sis is gro­wing ine­qua­lity and an increase in social exclu­sion. There is cle­arly some­thing wrong with the sys­tem. There can be no return to "busi­ness as usual", yet neo­li­be­ra­lism seems stron­ger than ever. The idea of eco­no­mic demo­cracy offers a vision of popu­lar empower­ment which could rein­vi­go­rate trade unio­nism as a social move­ment – and help launch a struggle for a genui­nely alter­na­tive economy.

Is eco­no­mic demo­cracy really a future topic for trade unio­nism? In Germany, we had that idea hund­red years ago, but after World War II trade uni­ons have rather con­cen­tra­ted on co-determination via works coun­cils and employee board mem­bers.
I think uni­ons were too reac­tive during the last deca­des, respon­ding to an agenda set by those in charge of the exis­ting eco­nomy. Too com­for­ta­ble with the insti­tu­tio­nal role which they were assi­gned wit­hin the sys­tem. But their power resour­ces, and thus their abi­lity to work the sys­tem in the inte­rests of their mem­bers, have dras­ti­cally declined. Unions need new goals and a forward-looking vision. In this respect, the cri­sis was a mis­sed oppor­tu­nity for trade uni­ons. Before the cri­sis, people belie­ved in the sys­tem, in the "Social Market Economy", which see­med to deli­ver the goods. But now they are puz­zled: what went wrong, what needs to change? If trade uni­ons came up with a con­vin­cing expla­na­tion, with a new vision … they could reco­ver a popu­lar social mission.

A vision for an alter­na­tive eco­nomy, a social move­ment. This could only work as an inter­na­tio­nal move­ment. Is that kind of soli­da­rity rea­listic? In the cur­rent Euro debt cri­sis, we rather observe wide­ning gaps bet­ween people in dif­fe­rent coun­tries who point fin­gers on each other.
We have to demons­trate the simi­la­ri­ties and make clear: It’s not the fault of "the Germans", "the Spanish" or "the Greeks", but it’s the fault of the sys­tem. A sys­tem that lacks effec­tive insti­tu­ti­ons to con­trol extreme imba­lan­ces in the inter­na­tio­nal eco­nomy, that deli­be­ra­tely fos­ters unre­gu­la­ted finan­cial mar­kets and that gene­rally increa­ses ine­qua­lity – or in short: a sys­tem that prin­ci­pally makes the rich rich. And a sys­tem where poli­ti­ci­ans and busi­ness lea­ders blame the vic­tims. How many people rea­lise that Germany has one of the hig­hest ratios of public debt in Europe: Merkel pre­a­ches aus­te­rity to others, but does not prac­tise it at home – which is one rea­son why Germany has wea­t­he­red th cri­sis bet­ter than most.

But is eco­no­mic demo­cracy really more than an expert topic? A goal that people really under­stand, not only in Germany, but also in other coun­tries? And can trade uni­ons really mobi­lize people for that goal?
We must for­mu­late it, not as an abstrac­tion or a poli­ti­cal slo­gan, but con­cre­tely: "Should workers have a voice in how the money ear­ned by their com­pa­nies is inves­ted?" "Why should finan­cial spe­cu­la­tors be allo­wed to wrech our eco­nomy?" "Should we be able to con­trol whe­ther our plant gets clo­sed?" "Why can’t we – or our cho­sen rep­re­sen­ta­ti­ves – say no to a hos­tile take­over of our com­pany?" For a lot of people, this would be a good idea. We just have to argue for the con­tent of "eco­no­mic demo­cracy" wit­hout neces­sa­rily using the slo­gan. But it is clear too that if uni­ons want to con­vince people to sup­port eco­no­mic demo­cracy, they must first prove that they are demo­cra­tic them­sel­ves. And I believe that many people have the cou­rage to join in such a demand. There are many recent exam­ples, like the Occupy move­ment, where ordi­nary citi­zens are in revolt against the greed and incom­pe­tence of our eco­no­mic rulers. Even in Great Britain, many people sup­port the idea of a finan­cial tran­sac­tion tax, much more than most people in Germany think. But if a "Robin Hood" tax is on the agenda, we must ask the key ques­ti­ons: What do we do with money? And who deci­des? Why not working people? This is what I under­stand by eco­no­mic democracy.

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