Introduction

As we enter the third decade of the twenty-first century, the world is at a crossroads with a number of inter-related economic, ecological and political crises. Economically, there are widening inequalities between rich and poor, and a growing chasm between the elite billionaire class and the rest of us. Linked to this unequal and imbalanced system of global capitalism, we face an environmental catastrophe with global warming brought on by two centuries of rampant industrialization and ill-considered economic growth. Even if we can mitigate its worst effects, the rapid depletion of our natural resources in pursuit of profit threatens to leave the planet barely fit for habitation by future generations. Taken together, these economic and ecological crises are producing a third crisis, the focus of much public debate and angst among media, academic commentators and our ruling classes. This is the crisis of democracy itself.

When most people talk of democracy, they are almost certainly thinking about political democracy with a capital 'P': elections, representative government, political parties, the relations between parliament and the public. Very little consideration is given to whether the economy itself should also be thought of in democratic terms. Yet, how the economy functions, who controls it and makes key decisions regarding how it functions, what is produced and who benefits, is fundamental to everything else in our lives. Accessing the economic resources to lead decent lives, doing so in a way that is fair to others, and sustainable in caring for the planet and future generations, should surely be at the core of our discussions about democracy.

This book is motivated by the absence of these issues from public debate. In writing it, I aim to put the question of democratizing the economy back onto the agenda, making the case for economic democracy an important step in dealing with the manifold crises that we face. From the outset we should note that democracy - by any meaningful definition of the term - is absent both from the workplace and the wider economy. In the workplace, workers have diminishing rights over enterprise decision making, trade unions are in retreat and collective bargaining is under attack. There is still a tradition of cooperatives and employee-owned enterprises, nominally committed to democratic practice, though these are marginal to the dominant corporate and privatized economy. More broadly, whether we are talking about the big macroeconomic decisions, such as the setting of interest rates, fiscal decisions about how much tax and spending is required (apart from highly superficial election-time debates), or more fundamental questions over what forms of economic organization, ownership and institutions are required to combat the climate emergency, the broader public has little real say or participation in how the economy functions.

It is my view that the absence of democracy from the economy is a fundamental crisis in itself. A functioning democracy, in a stable and civilized society, is one that respects the rights of individuals, citizens and communities to participate on equal terms in the public and civic realms of that society. Given the central importance of the economy in providing the resources necessary for a society to flourish, the decision making around these resources should be a matter for public engagement and democratic debate.

From this departure point, my intention with this book is to make a renewed case for economic democracy appropriate for our times. To do this, I develop an expansive sense of economic democracy and how this might be applied in the twenty-first century. This involves addressing a set of issues around what concepts, institutions and political agency are required to enable us to move from a capitalist, largely privatized and marketized economy - driven by narrow self-interest and greed - towards a more democratic economy, capable of serving the common good in tackling the ever more prescient social and ecological crises that we face.

The economic roots of the democratic crisis

The re-emergence of an authoritarian, xenophobic and fundamentally anti-democratic right-wing politics, symbolized by Donald Trump's US Presidency, is one of the key features of our time. On every continent, the retreat from universal human rights, international solidarity, respect for minorities, a tolerance of migrants and refugees and a commitment to shared solutions to global problems is a disturbing reality. As I write (in July 2019), a striking fact is that none of the world's ten most populated countries, which includes 'nominal' democracies such as Brazil, Russia, India and the United States, is listed by the Economist Intelligence Unit (EIU) as a 'Full Democracy' in its 2018 Democracy Index, which measures among other things, the commitment to pluralism, civil liberties and political culture. The EIU has noted 'a broad-based deterioration in the practice of democracy in recent years' (EIU 2017: 3).

Among many liberal academic and political commentators, there seems general agreement on what the problem is: a growing chasm between global elites and an increasingly disaffected populace, in part characterized as a 'deepening divide between people and experts' as the EIU puts it. The rejection of the existing political system leads to support for faux 'outsiders' - those members of the economic elite, like Trump, who can successfully position themselves to appeal to underlying nationalist and racist tropes among key voter groups, especially those 'left behind' by economic globalization.

While the crisis of democracy is now a central trope of mainstream commentary, there is seldom much discussion of the underlying economic system of global capitalism, which I would argue is the root cause of this malaise. The democratic crisis is usually talked of as a separate event to the almost four decades of rapacious wealth and income accumulation by global elites alongside stagnant real wage growth amongst workers and the decline of regular jobs capable of providing a decent income to afford basic necessities for many people on the planet. The threat to regular low-skilled and even more skilled, but routine, work by automation in the future threatens to deepen this jobs crisis, adding more grist to the mill of right-wing populists. The collapse of well-paid and unionized industrial jobs in Europe and North America, and the shift of work to China and other parts of the Global South, has fuelled a reaction against globalization, or at least its neoliberal free trade form, which right-wing autocrats, rather than a more progressive left, have capitalized on. A slide into a dark Fascistic politics reminiscent of the 1930s is not far away unless we are able to fashion a very different kind of economy to the one we have now.

Not only is there little sense of the economic fundamentals, but there is seldom much introspection among the liberal establishment on their own role in fashioning the current democratic crisis. While acknowledging that political elites have neglected the 'white working class', a rather simplistic and racist trope in itself, there is little critical reflection on the existing economic order that underpins this sense of disconnect. When genuinely radical popular policies such as more progressive tax regimes, dramatically raising minimum wages, a Green New Deal, or creating democratic public ownership are mooted, they continue to be derided or ignored by the liberal political establishment and its shrinking support base.1 There is still a commitment not to interfere with 'business as usual'.

The roots of this liberal democratic crisis go back to the 1990s and the centre left's embrace of economic policies that largely served global business interests. While Margaret Thatcher famously announced in 1981 that 'there is no alternative' to business-friendly, market-driven economic policies, it is the acceptance of her creed by the governments of Blair, Clinton, Schroeder, Jospin and other supposed progressives that have arguably contributed as much to our current impasse. The centre left's headlong embrace of economic deregulation, privatization and marketization, now collectively described as neoliberalism, and the retreat from a traditional concern with social justice and income redistribution, leave many lower income groups bereft of political power and support. The argument made then was that, in the face of globalization, old left policies no longer worked because business would go elsewhere if threatened; though like many compelling 'common sense' narratives, there is little 'real-world' evidence to back this up.2 Instead, the centre left told us, progressives should provide a favourable environment to attract business which would lead to more tax revenues that could then be spent on public services. The financial crisis was the end game of this laissez-faire equivocation, though many still seem dangerously unaware of this.

The retreat from democratic scrutiny in economic policy

The espousal of neoliberal policy doctrine went hand in glove with the evacuation of democratic decision making from critical spheres of public life - especially economic policy - and their delegation to experts and technocrats. The best example is the tendency for politicians to make central banks 'independent'. This is generally seen by mainstream media...