Democracy and the Corporation

Last Monday Shout Out UK held a Parliamentary event to openly talk about the influence of corporate interests on government, and also discuss Economic Democracy at large. By chance, we couldn’t really have picked a more poignant moment. As the economy grows at its fastest since 2007, to many, the moment of crisis will seem to have passed. Yet for all the suspicion of ‘the elite’ that was thrown up into the air in 2008, not an ounce appears to have settled as we prepare to be getting back to business as usual.

Speaking on our panel was veteran social justice campaigner Peter Tatchell, TUC senior policy officer Janet Williamson, foreman of Occupy London’s Economics Working Group Dave Dewhurst, and author of ‘Post-Democracy’ Professor Collin Crouch. Two prominent themes emerged, 1. that the sort of corporate irresponsibility we want to be rid of, would be prevented by a greater involvement of employees in the making of decisions, something still relatively unseen, and 2. that with a number of portals of influence and wealth flowing one way, that we are walking further along the road to Post-Democracy.

Peter and Janet each spoke about democracy within companies themselves. Janet opened by saying that it was a point of natural justice that those affected by a decision should have some impact upon its making; a law that she feels is being left at the door on the way in to working life. Peter also began in a similar vein ‘My starting point is very simple; We expect political democracy, why not economic democracy?’ before going on to say that we live in an ‘economic dictatorship’ where only those at the top of organisations have any part in decision making.

Quoting from the Workplace Employment Relations Study 2011, Janet told us that only one in three employees felt their employer was good at involving them in decision making; and that employee satisfaction in this area was particularly low for those on low and middle incomes but increased with wages. She argued that whilst the law focused on the satisfaction of shareholders, and that many shareholders were in fact large insurance firms and their ilk (holding to many shares to be able to focus on the issues significant to individual companies), the system was not working even by its own terms. With most shareholders aiming to benefit from sales as opposed to collecting dividends, Janet thought share traders made for poor guardians of our corporate governance system.

If we are to get away from a small elite holding all economic power, Peter Tatchell urged that it is ‘absolutely fundamental that we try and develop new ways of inculcating a new spirit and set of institutions that will enshrine economic democracy, accountability, transparency and decentralisation.’ In aid to this he put three ideas to us that he believed would suggest something of a path to making Economic Democracy a reality:

1) All medium and large sized companies, and public institutions, should be required to have a management board where at least a third of directors are employee elected, and where independent directors are appointed to represent the interests of consumers.

2) Employee mutual societies should have control of employee pension funds – which account for a third of the entire stock market, and yet the people whose money it is have no say over how it is invested.

3) To have a mechanism for Employee Share Ownership, collectively held and administered on behalf of all the employees by employee mutual societies. Concluding he advised ‘Don’t accept the economy as it is. Dream of what the economy could be, and then help make it happen.’

Following on from what he described as ‘a set of very good practical, feasible, concrete recommendations’ Occupy’s David Dewhurst confessed, with a smile, that he would be being ‘wussy and theoretical’. Discussing theory, David went on to say ‘The market that you’re taught about in first half term of A-Level of economics does work perfectly to distribute resources, if everybody starts off with and maintains the same level of resources.’ before adding a dose of reality, ‘Once you move away from that you get multipliers for the economically powerful, positive feedback systems that make some people richer and richer; than everybody else.’ And that this effectively leads to economic dictatorship.

David, continuing on the subject of the super rich, making reference to Oxfam’s recent a shocking figures on wealth inequality, said ‘These people may be a little bit more hard working than us; They may be a little bit more intelligent than most of us… But they’re not thousands and thousands of times more so. That is physiological nonsense.’

Earlier quoting Marx that a person cannot have freedom without economic freedom, Dewhurst expanded the point to argue that today’s generation is struggling and often failing to find monetary security in housing, whilst rents have risen incredibly and the current of wealth pouring heavily upwards, that the youth of today are being left without economic freedom.

Our final speaker, Collin Crouch, with a perceptibly heavy heart told us ‘I think we have to start questioning whether democracy and capitalism are mutually compatible’, that it once seemed that they were uniquely mutually compatible, but that now overwhelmingly ‘neo-liberalism is being interpreted as not actually free markets, but the importance of business interest having privileged lobbying status’. In alignment with a point made by David, Professor Crouch stated that ‘because business interests are being seen as the most important, there is then a legitimation of almost any political influences by business.’

Speaking on the revolving door (where politicians will take jobs with those whom they had dealings with in office, or employ those whom they have dealt with as advisers etc. whilst in office) Professor Crouch said that ‘It used to be seen as corrupt and improper for politicians and civil servants to take jobs in firms with which they had been dealing… that is now see as taken for granted, and a thing to do.’ In questions to the panel he put this increase and acceptance down to the rise of the public-private Partnership in Britain and Europe.

Undoubtedly world-weary Crouch said quite plainly that he thought we had travelled quite bit further along the road to ‘post-democracy’ than when he had first used the analogy, ten years ago; but he had hope for the future of real democracy yet. Colin argued that for political change to occur there is most often the need for a collective identity. And thus whilst the majority of middle and junior positions are held by women, and the majority of Union representatives in the EU are women, that there should be some hope for a revival or reimagining of the feminist movement that could revitalise democracy.

It was our host though, Conservative MP Bob Blackman, who spoke of the tests to pass to make a difference. In order to hold those in power to account you must know what you’re talking about, you must be clued up enough to know when the explanation you are being given is not good enough, you must know that it is hard and cannot be done without actually bringing it to those whose decisions count. And most importantly, that change comes from the will of the people.

We would like to all thank Mr Bob Blackman MP for hosting the event in Parliament

BY: Ali Saul