(MGMT8110-17F) The people supporting economic democracy argue that everyone

(MGMT8110-17F) Global
Perspectives

 

Assignment II – Essay on
Economic Democracy

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By- Ankita Thakur

Student Id – 7919327

 

 

Submission To – Dr.
Michèle  Bowring

Submission Date – 5TH
January 2018

 

Economic
Democracy: Introduction

No Democracy without Economic
Democracy:  (Blog, 2012)

Economic Democracy also known as stakeholder democracy refers to a
socioeconomic philosophy, that means that every employee who contributes in the
work and operations of the company should earn the share of the profits, be it
in wages or any other form. The people supporting economic democracy argue that
everyone who contributes should get their justified share whomsoever it is. (Quora.com, 2016)

Fiscal Equality is considered
to be an important part of the future socio-economic ideas. For example, it has
been measured that a good way to securing one’s financial rights, it can open
different ways of political privileges, considered as involving the prior. Given
the scenario both the theories have shown the economic democracy has brought an
enthusiasm of change. Decentralization and financial advancement to majority
rule cooperatives, public banking, reasonable exchange, fair trade, and the
regionalization of food production and currency are few of the existing
examples. (Quora.com, 2016) (Wikipedia.com,
n.d.)

 

 

 

 

 

 

     I.       
Economic Democracy and market demand.

 

Many
analysts believe that deficiency of effective demand is the essential economic issue. These people conclude that the modern
society does not earn high enough to purchase output. Wages
spent by workers is a source of effective demand. Since the wage bill is less,
they spend less, therefore, there is no circulation of funds in the market
creating less demand for the commodity. (Blog, 2012)

 

    II.       
Eliminating extreme wealth and poverty it
causes. (Blog, 2012)

 

Wealth
concentration is a serious issue that people chose to ignore. Wealth
concentration if not controlled can have serious consequences, such as
political power staying in the hands of few powerful nationalists, widespread
poverty as money increasingly stays in few hands.

Further,
a main perception that the nationalist have is that only a few good entrepreneurs
can win n the business world and make all decisions and get themselves disproportionate
amount of profits increasing their wealth every time. (Blog, 2012)

In the
recent commercial enterprise, people bicker about how the administration works,
one does not have much knowledge about the lower levels of management, when it
comes to understanding how the business works. The managers at top level
positions collect salaries that are many times larger than us, the people
working at lower levels. The sad part is almost most of the individuals around
the world have been in at least one job like this. (Blog, 2012)

If the
rigid hierarchy order is eliminated, there will be no more capitalists to gain
huge amounts of money, the organizations will be able to run without exploiting
any of the employees working, on a democratic
basis. Yet this is not the whole story:?In what sort of economic system
would such enterprises operate? (Blog, 2012)

 

In a
cooperative model, all strategic organizational decisions would be supposedly
made by workers vote. There will be meetings held to discuss and vote on the
working of the organizations as a part of the regular workweek.

The
workforce will have most of the ownership, which one would own and share and
give up eventually when they leave or retire from the company. Also, shares
couldn’t be sold or transferred except to
the collective. (Blog, 2012)

Without
Extremely high pay or investors getting rich by getting taking off a large
share of the profits, there would be a less need for more money. Resulting in
reduced work hours, higher pay and more amount left for investment and taxes to
be given to the community for supporting education and social services. (Blog, 2012)

 

  III.       
Cooperatives can’t compete to cooperation. (Blog, 2012)

 

The
working environment of capitalism only results in high competition and
inequalities in the organization. The market forces would need the collectives
to be more resourceful like they would have to reduce costs including salaries
of their own and gain more market share for their commodities if the organizations
are run internally by the workforce. (Blog, 2012)

Failure
to adopt these market conditions would
result in failure and not surviving the competition.
The gathering of capital ends up plainly foremost under liberated market powers
because of the need to extend, neglecting to grow dangers being driven
bankrupt. Since all materials and completed items would remain products subject
to value unpredictability in this situation, the helpful specialists’ own
particular work would likewise turn into a ware,
in short, they would “turn into their own entrepreneurs.” (Blog, 2012)

There
would be a far better rational and societal distribution of income in the
society if there are cooperation and self-management in organizations as with no
profits being grabbed by the owners, executive or speculators there will be a
good amount of fair share distributed among the employees. (Blog, 2012)

In
spite of the fact that the theoretical case of cooperatives fighting fiercely against
each other would be an odd half and a half
since it would be based at the same time in light of collaboration and rivalry,
the misrepresentations of capitalism would, in any case, be imitated, but less
extreme. (Blog, 2012)

 

Extreme
competition would only lead to a big difference of income and authority.

An
organization that is run aggressively would theoretically have the control of
the market share for a particular commodity that is higher in demand, resulting
in the organization that is fighting for itself a position that is commanding.

Maybe
a few forceful attempts would do this, and we would once again end up in a society
that has power imbalance though not as much as the imbalance of capitalism
prevailing today, yet in any case, the
objective of making a completely law based society with no permanent sources of
power would have been blocked. In this theoretical society, there would still be
a market that worked on a capitalist basis, further tipping the balance of
power to those who accumulated these profits. (Blog, 2012)

  IV.       
Safeguards against re-assertions of inequality.
(Blog, 2012)

 

In any
nation in which a model of worker cooperation or self-administration, in which
undertakings are run on the whole and with an eye on profiting the community,
is the predominant model, there would be a need of regulations that increase goodwill. Constitutional guarantees would also
be needed. A few businesses are basically substantially bigger than others. In
a complex, industrialized society, a few ventures will be significantly bigger
than others. Limiting the issues that would get from measure irregular imbalances
would be a consistent concern. (Blog, 2012)

Furthermore,
if the organizations function on a cooperative basis, then it is only
reasonable that relations among organizations should also be run on a
cooperative basis. A contrasting option to capitalist markets would need to be
planned, such an option would need to be found
on local contribution with every interested party included. Such an option
would need to have the capacity to decide request, guarantee adequate supply,
consider reasonable estimating all through the inventory network and be
sufficiently adaptable to empower changes in the states of any factor, or
numerous variables, to be represented in a reasonably timely and appropriate
fashion. (Blog, 2012)

 

Regulators
that are similar to central planners can never have sufficient skill or
knowledge to perform jobs, so local enterprises can use their knowledge to give
themselves an edge rather than sharing it with other regulators. Therefore,
central planning in a command based structure with nil or almost no local input
proved to be not a long-term practical
alternative system and nor is rigid regulation a solution on its own. (Blog, 2012)

There
would be a need for responsibility for the overall society and a need to
determine the distribution and solve
other issues after the negotiations are done among suppliers and buyers to set
prices. Such negotiations are already common in certain industries, for example,
in the chemical industry, where companies set prices on a monthly or quarterly
basis. Those
are focused arrangements in which the prevailing position moves amongst buyer
and seller, bringing affected value changes. (Blog, 2012)

In a
cooperative economy, there will be negotiations that would be done in a
cooperative manner that involves discussion and participation from a wider group.
In a model like this there will be negotiations done up and down the supply
chain for the prices of raw materials, component parts, consumer products and
fixed assets, semi and finished goods that result in a rationalization of prices. Changing prices to create high profits
or pricing below cost to undercut competitors would not be sustainable in a
system where prices are negotiated and pricing information is easily available
and all organization financial information is public. (Blog, 2012)

These
would have to be reasonable negotiations. All the prices throughout the supply
chain would have to be set only after researching on rational economics. Industry
facilitators to help transactions or a government arbitration board to settle
on choices when parties can’t agree to terms may be needed. In cases of communities
being directly involved there would be a need for
community input to set retail prices of consumer goods. It may be required to
include these community interests in pricing negotiations directly. (Blog, 2012)

   V.       
Regulations to safeguard social standards. (Blog, 2012)

Although
regulation won’t be a solution in itself as discussed but that doesn’t mean we
should stop considering it. Certification may be considered as one method of applying
regulation to make sure there is socially positive economic activity. Enterprises
would be responsible for investment, production, and financial decisions, but would be required to establish full
compliance with standards on matters like equal opportunity, employee privileges,
health and care, eco-friendly measures and buyer protection. There will a need for regulations like regular monitoring the
enterprises for all the related issues and further,
be re- certified at regular intervals
instead of just providing certification once and be done with it. (Blog, 2012)

Though
in a cooperative economy, it is possible that industries like that of public
transportation or services like water and electricity would stay in state hands
but would still subject to public accountability. Employees in such enterprises
would also have the same role of being the workers as well as managing the
enterprise at the same time. Further, there will be no biasedness or favoritism
as a union would be providing these employees another source of protection would
defend a worker as an individual when required. (Blog, 2012)

Workers
in enterprises that are collectively owned by them, may discover less
uncertainty between their two roles, as long as strategic decisions are made together since they would be owners as well and
not just managers. All things considered, it might be that there remains a
place for trade unions even in these sorts of undertakings, or it may be the
case that unionization is essentially a social value and all individuals from
the venture join or shape a union for reasons of social solidarity or to check
against any issues developing inside the enterprise or inside the government. (Blog, 2012)

 

Full
disclosure of information like records and deals of all enterprises and major
production units of enterprises would have to be available publicly in order to
have a system of democratic control. All information would have to be presented
in order for the fairest deals and to prevent any attempts at getting benefits that are unfair.
Organizations involved in social welfare such as the justice, consumer rights
or the environment should also have a part in enterprise negotiations when
required but that more focused towards helping to set social goals, in
compliance with regulations by the bodies that issue certifications. (Blog, 2012)

Though
there would be a need for planning and coordination to meet the raw material
needs. But then again, any committee planning this would have to be controlled
democratically and would have people to check production and even assist in
determining how much investment is required. The planning here would be based
on guidance and not numerically. They would be based on the aggregate demand
and not the top-level management and other authorities. (Blog, 2012)

Sectors
like that of finance and banking would need to be in state hands and not
collectives because of its nature but would still subject to full public
accountability. Organizations looking for finance, expansion or any other
projects would have to justify their requirements. There will be an end to financial speculation. (Blog, 2012)

 

  VI.       
Democratic decision-making for public
investments. (Blog, 2012)

 

Government
infrastructure projects should also be treated with the same parameters with
that of enterprises. People in the areas where these projects are to be done
should also be involved in the discussion
and get opinions in local political
bodies and any other public committees. Also, no private contractor with money
and political influence would be able to design and make projects that destroy
societies and environment, just to get more profits. All the development done
would be monitored by processes that are democratic at local levels and the
projects that are national or regional would require views from all local
bodies that are being affected because of these projects. (Blog, 2012)

 

If the
power of capital is broken then there is a chance of a democracy that is unique
in itself. There will be a requirement of restrictions that prevent anyone from
gathering enough capital leading to power. (Blog, 2012)

The
society described here is a society in which the working people, that is the majority of the society would be able to have
control over their lives. The capitalists now ex- capitalists would still be
free to go to and do work like all other workers. Then again some of these with
knowledge and skill would end up among these cooperative members that are
elected into administrative positions but they would have to become regular
cooperative workers that don’t benefit themselves and instead contribute to the
production of a quality product or service. (Blog, 2012)

 

VII.       
Conclusion

 

The
community as a whole grows and benefits when everybody is entitled to
positively contribute to it. So, the more people who do so the more likely there
will be right solutions to issues that arise. People who were not able to
contribute to the society will now be able to do so in a social or artistic way
enriching the society. It doesn’t mean that all ideas are entitled to be
followed or good enough to apply but it does mean that there will be good
chance they will have heard and given a thought, rather than listening or
working on ideas given by just those who are privileged, and the ideas that
only benefit them.  (Blog, 2012)

These
steps may sound interesting and the ones that have the capacity to bring huge
change worldwide but they are ideas that capitalists would not be willing to
take. It is a herculean task to bring
such changes that involve enormous amounts of struggle and change in
organizations present worldwide.

Apart
from all of it, there would be a
requirement of a whole new set of rules and regulations worldwide.
Constitutions will have to be written justifying these new society changes,
preventing any centralization of power without the assumption of responsibility
and participation. People would have to be educated about these changes and
their rights and mindsets would have to be changed in order for them to adopt
these changes. (Blog, 2012)
(economist.com,
n.d.)

Also, As
the history states freedom and democracy have never been gifts just handed down
from above, they always had to be won by proper planning, struggle, and determination. So, may it be any type of
democracy may it be political or economic, we have to fight for it. (economist.com, n.d.) (Blog, 2012)

References

Blog, S. D.
(2012). https://systemicdisorder.wordpress.com/2012/09/05/there-is-no-democracy-without-economic-democracy/.
Retrieved from systemicdisorder.wordpress.com: https://systemicdisorder.wordpress.com/2012/09/05/there-is-no-democracy-without-economic-democracy/
economist.com.
(n.d.). http://www.economist.com/news/essays/21596796-democracy-was-most-successful-political-idea-20th-century-why-has-it-run-trouble-and-what-can-be-do.
Retrieved from economist.com:
http://www.economist.com/news/essays/21596796-democracy-was-most-successful-political-idea-20th-century-why-has-it-run-trouble-and-what-can-be-do
Quora.com.
(2016). quora.com/What-is-economic-democracy. Retrieved from
Quora.com: https://www.quora.com/What-is-economic-democracy
Wikipedia.com.
(n.d.). https://en.wikipedia.org/wiki/Economic_democracy. Retrieved
from Wikipedia.com: https://en.wikipedia.org/wiki/Economic_democracy