A new historical vista is opening before us in this time of change. Capitalism as a system has spawned deepening economic crisis alongside its bought-and-paid for political establishment. Neither serves the needs of our society. Whether it is secure, well-paid and meaningful jobs or a sustainable relationship with the natural environment that we depend on, our society is not delivering the results people need and deserve. We do not have the lives we want and our children’s future is threatened because of social conditions that can and should be changed. One key cause for this intolerable state of affairs is the lack of genuine democracy in our economy as well as in our politics. One key solution is thus the institution of genuine economic democracy as the basis for a genuine political democracy as well. That means transforming the workplace in our society as we propose in what follows.

We are encouraged by The Occupy Wall Street (OWS) movement spreading across the United States and beyond. Not only does OWS express a widespread popular rejection of our system’s social injustice and lack of democracy. OWS is also a movement for goals that include economic democracy. We welcome, support, and seek to build OWS as the urgently needed, broad movement to reorganize our society, to make our institutions accountable to the public will, and to establish both economic democracy and ecological sanity.

1) Capitalism and “delivering the goods”

Capitalism today abuses the people, environment, politics and culture in equal measures. It has fostered new extremes of wealth and poverty inside most countries, and such extremes always undermine or prevent democratic politics. Capitalist production for profit likewise endangers us by its global warming, widening pollution, and looming energy crisis. And now capitalism’s recurrent instability (what others call the “business cycle”) has plunged the world into the second massive global economic crisis in the last 75 years.

Yet both Republican and Democratic governments have failed to bring a recovery to the great mass of the American people. We continue to face high unemployment and home foreclosures alongside shrinking real wages, benefits and job security. Thus, increasing personal debt is required to secure basic needs. The government uses our taxes to bring recovery from the economic crisis to banks, stock markets, and major corporations. We have waited for bailouts of the corporate rich to trickle down to the rest of us; it never happened. To pay for their recovery we are told now to submit to cuts in public services, public employment, and even our social security and Medicare benefits. The budget deficits and national debts incurred to save capitalism from its own fundamental flaws are now used to justify shifting the cost of their recovery onto everyone else. We should not pay for capitalism’s crisis and for the government’s unjust and failed response to that crisis. It is time to take a different path, to make long-overdue economic, social and political changes.

We begin by drawing lessons from previous efforts to go beyond capitalism. Traditional socialism – as in the USSR – emphasized public instead of private ownership of means of production and government economic planning instead of markets. But that concentrated too much power in the government and thereby corrupted the socialist project. Yet the recent reversions back to capitalism neither overcame nor rectified the failures of Soviet-style socialism.

We have also learned from the last great capitalist crisis in the US during the1930s. Then an unprecedented upsurge of union organizing by the CIO and political mobilizations by Socialist and Communist parties won major reforms: establishing Social Security and unemployment insurance, creating and filling 11 million federal jobs. Very expensive reforms in the middle of a depression were paid for in part by heavily taxing corporations and the rich (who were also then heavily regulated). However, New Deal reforms were evaded, weakened or abolished in the decades after 1945. To increase their profits, major corporate shareholders and their boards of directors had every incentive to dismantle reforms. They used their profits to undo the New Deal. Reforms won will always remain insecure until workers who benefit from the reforms are in the position of receiving the profits of their enterprises and using them to extend, not undermine, those reforms.

The task facing us, therefore, goes well beyond choosing between private and public ownership and between markets and planning. Nor can we be content to re-enact reforms that capitalist enterprises can and will undermine. These are not our only alternatives. The strategy we propose is to establish a genuinely democratic basis – by means of reorganizing our productive enterprises – to support those reforms and that combination of property ownership and distribution of resources and products that best serve our social, cultural and ecological needs.

2) Economic Democracy at the Workplace and in Society

The change we propose – as a new and major addition to the agenda for social change – is to occur inside production: inside the enterprises and other institutions (households, the state, schools, and so on) that produce and distribute the goods and services upon which society depends. Wherever production occurs, the workers must become collectively their own bosses, their own board of directors. Everyone’s job description would change: in addition to your specific task, you would be required to participate fully in designing and running the enterprise. Decisions once made by private corporate boards of directors or state officials – what, how and where to produce and how to use the revenues received – would instead be made collectively and democratically by the workers themselves. Education would be redesigned to train all persons in the leadership and control functions now reserved for elites.

Such a reorganization of production would finally and genuinely subordinate the state to the people. The state’s revenues (taxes, etc.) would depend on what the workers gave the state out of the revenues of the workers’ enterprises. Instead of capitalists, a small minority, funding and thereby controlling the state, the majority – workers – would finally gain that crucial social position.

Of course, workplace democracy must intertwine with community democracy in the residential locations that are mutually interactive and interdependent with work locations. Economic and political democracy need and would reinforce one another. Self-directed workers and self-directed community residents must democratically share decision-making at both locations. Local, regional and national state institutions will henceforth incorporate shared democratic decision-making between workplace and residence based communities. Such institutions would draw upon the lessons of past capitalist and socialist experiences.

3) Benefits of Workplace Democracy

When workforce and residential communities decide together how the economy evolves, the results will differ sharply from the results of capitalism. Workplace democracy would not, for example, move production to other countries as capitalist corporations have done. Workers’ self-directed enterprises would not pay a few top managers huge salaries and bonuses while most workers’ paychecks and benefits stagnate. Worker-run enterprises sharing democratic decision-making with surrounding communities would not install toxic and dangerous technologies as capitalist enterprises often do to earn more profits. They would, however, be far more likely to provide daycare, elder care and other supportive services. For the first time in human history, societies could democratically rethink and re-organize the time they devote to work, play, relationships, and cultural activities. Instead of complaining that we lack time for the most meaningful parts of our lives, we could together decide to reduce labor time, to concentrate on the consumer goods we really need, and thereby to allow more time for the important relationships in our lives. We might thereby overcome the divisions and tensions (often defined in racial, gender, ethnic, religious, and other terms) that capitalism imposes on populations by splitting them into fully employed, partly employed, and contingent laborers, and those excluded from the labor market.

A new society can be built on the basis of democratically reorganizing our workplaces, where adults spend most of their lifetimes. Over recent centuries, the human community dispensed with kings, emperors, and czars in favor of representative (and partly democratic) parliaments and congresses. The fears and warnings of disaster by those opposed to that social change were proved wrong by history. The change we advocate today takes democracy another necessary and logical step: into the workplace. Those who fear (and threaten) that it will not work will likewise be proven wrong.

4) An Immediate and Realistic Project

There are practical and popular steps we can take now toward realizing economic democracy. Against massive, wasteful and cruel unemployment and poverty, we propose a new kind of public works program. It would differ from the federal employment programs of the New Deal (when FDR hired millions of the unemployed) in two ways. First, it would focus on a “green” and support service agenda. By “green” we mean massively improving the sustainability of workplace and residential communities by, for example, building energy-saving mass transportation systems, restoring waterways, forests, etc., weatherizing residential and workplace structures, and establishing systematic anti-pollution programs. By “support service” we mean new programs of children’s day-care and elder-care to help all families coping with the conditions of work and demographics in the US today.

However, the new kind of pubic works program we propose would differ even more dramatically from all past public works projects. Instead of paying a weekly dole to the unemployed, our public works program would emphasize providing the unemployed with the funds to begin and build their own cooperative, self-directed democratic enterprises.

The gains from this project are many. The ecological benefits alone would make this the most massive environmental program in US history. Economic benefits would be huge as millions of citizens restore self-esteem damaged by unemployment and earn incomes enabling them to keep their homes and, by their purchases, provide jobs to others. Public employment at decent pay for all would go a long way toward lessening the gender, racial, and other job discriminations now dividing our people.

A special benefit would be a new freedom of choice for Americans. As a people, we could see, examine and evaluate the benefits of working inside enterprises where every worker is both employee and employer, where decisions are debated and decided democratically. For the first time in US history, we will begin to enjoy this freedom of choice: working in a top-down, hierarchically organized capitalist corporation or working in a cooperative, democratic workplace. The future of our society will then depend on how Americans make that choice, and that is how the future of a democratic society should be determined.

5) The Rich Roots Sustaining this Project

Americans have been interested in and built various kinds of cooperative enterprises – more or less non-capitalist enterprises – throughout our history. The idea of building a “cooperative commonwealth” has repeatedly attracted many. Today, an estimated 13.7 million Americans work in 11,400 Employee Stock Ownership Plan companies (ESOPs), in which employees own part or all of those companies. So-called “not-for-profit” enterprises abound across the US in many different fields. Some alternative, non-capitalist enterprises are inspired by the example of Mondragon, a federation of over 250 democratically-run worker cooperatives employing 100,000 based in Spain’s Basque region. Since their wages are determined by the worker-owners themselves, the ratio between the wages of those with mostly executive functions and others average 5:1 as compared to the 475:1 in contemporary capitalist multinational corporations.

The US cooperative movement stretches today from the Arizmendi Association (San Francisco Bay) to the Vida Verde Cleaning Cooperative (Massachusetts) to Black Star Collective Pub and Brewery (Austin, Texas), to name just a few. The largest conglomerate of worker owned co-operatives in the U.S. is the “Evergreen Cooperative Model” (or “Cleveland Model”), consisting e.g. of the Evergreen Cooperative Laundry (ECL), the Ohio Cooperative Solar (OCS), and the Green City Growers. These cooperatives share a) common ownership and democracy at the workplace; b) ecological commitments to produce sustainable goods and services and create “green jobs”, and c) new kinds of communal economic planning, mediated by “anchor institutions” (e.g. universities, non-profit hospitals), community foundations, development funds, state-owned banks or employee ownership banks etc. Such cooperatives are generating new concepts and kinds of economic development.

These examples’ varying kinds and degrees of democracy in the workplace all attest to an immense social basis of interest in and commitment to non-capitalist forms of work. Contrary to much popular mythology, there is a solid popular base for a movement to expand and diversify the options for organizing production. Workplace democracy responds to deep needs and desires.

If you are interested in getting further information about this proposal, in joining the discussion it engages, or in participating in activities to achieve its realization, please find us on Facebook at Economic Democracy Manifesto or email manifesto@rdwolff.com

“Economic Democracy Manifesto” Group

David van Arsdale
Michael McCabe
Costas Panayotakis
Jan Rehmann
Sohnya Sayres
Billy Wharton
Richard D. Wolff