Economic democratisation is not a utopian ideal, as the Mondragon Corporation in Spain and citizen owned energy schemes in Germany demonstrate.
Economic democratisation refers to a process of changing the ownership structure of our economy so the average citizen plays a greater role. There are three pillars of economic democratisation.
Workplace democracy is the first pillar of economic democratisation.
This includes any measures which allow people meaningful control over their workplaces. Those who work somewhere should be the ones making decisions about its future. The concept applies both to administrative control and ownership. Indeed, those that have a true stake in their workplace would be more inclined to invest their time, money and effort.
What does the concept of workplace democracy look like in practice?
The case of the Mondragon Corporation (MC) in the Basque region of Spain is the largest and one of the most successful cases of the concept in action. The MC is a federation of hundreds of cooperatives, currently employing over 80,000 people and with a global turnover of €12 billion worldwide. The corporation works in four areas: finance, industry, distribution and knowledge. Several features distinguish the MC from other corporations. Firstly, there are wage caps in which the general managers and executives earn no more than 9 times as much as the lowest paid workers, which stands in stark contrast to the average large corporation where the CEO may earn hundreds of times more than the lowest paid worker. Secondly, those who work at the MC have real power to make and influence decisions, with the existence of a General Assembly where each worker has a vote, regardless of how rich or poor the individual is. Workers therefore go from passive observers to active participants. Thirdly, the core focus of the model is the maximisation of employment.
Spain suffered tremendously in the 2008 financial crisis and in the following years countless corporations reduced their workforce. The MC, however, voted to lower wages for everyone and therefore retained more workers even if they were being paid less than before. A lower paying job is better than no job at all. The example of the MC demonstrates a clear alternative to our current order of things.
The second pillar of economic democratisation is citizen owned energy.
This is distinct from the state ownership of industries as existed from the post 1945 era until the 1980’s. Community ownership means the residents own or have a stake in energy companies in their respective areas. The importance of energy is two fold. Firstly, energy is universal and therefore crucial to all our current and future considerations. Secondly, how we meet our energy needs in a sustainable way is one of the principal questions of the 21st century.
DiEM25’s Green New Deal for Europe (GNDE) campaign is a key step forward aimed at uniting communities across Europe to democratise the energy sector and ensure long term environmental sustainability. This will entail including people who are most affected by changes in energy consumption, whether it’s issues of pricing or the type of renewable energy chosen. The process will involve a range of unions, political parties, organisations and activists but the final goal will be the same: sustainable energy ensured by and for a democratic Europe.
Germany provides a fascinating case study. 42.5% of all renewable energy generation is community owned. This consists of various schemes including wind farms, bioenergy schemes and solar parks. The nature of ownership and involvement varies from case to case but the essence of the idea is that the average citizen and community own energy installations involving them in decision making while also benefiting them financially. Individual citizens have installed solar panels on their roofs, with the subsequent electricity serving for personal use or channeled back into the grid. The entire enterprise allows greater freedom of action for people, more money in their pockets and represents a concerted effort to meet our needs in a sustainable manner.
The final pillar is energy security and independence.
One example is the UK, which from 2004 onwards has been a net energy importer meaning it relies on other countries, including unstable and undemocratic ones, for its energy supply. In 2015, 36% of the UK’s crude oil imports came from the OPEC (Organization of the Petroleum Exporting Countries) countries and most of the country’s coal is imported from Russia. The dangers of this are not to be understated, with the OPEC countries embargoing the West during the Arab-Israeli War in 1973, causing an energy crisis.
More recently, Russia has used energy as a foreign policy tool against the EU. Considering 30.3% of the EU’s crude oil import comes from Russia this is a tool worth worrying about. An absence of energy diversification creates an energy dependency. Democratising the sector, however, will help to diversify our sources of energy by encouraging greater domestic production thereby ensuring energy security for the future.
Finally, placing control in the hands of ordinary citizens will mean heading towards the ‘Internationalist Europe that treats non-Europeans as ends-in-themselves’ as outlined in the DiEM25 Manifesto, whereby we choose to support democratic governments and entities around the world rather than supporting authoritarian, undemocratic regimes hostile to these values.
Economic democratisation is the next stage of economic development.
It reimagines the relationship between the individual and their community. It is a system that seems to produce greater satisfaction among workers, greater income parity and an alternative to polluting our environment.
As the 21st century progresses we will face newer and stranger challenges such as our relationship with data. Will our rights in this sphere be subject to governmental restriction or monopolised by corporations or will they be determined by us? The concept of technological sovereignty, a cornerstone campaign of DiEM25, puts citizens at the heart of technological change, to benefit from it, rather than to be subjected to it.
Economic disaster in the last decade, rising economic inequality and the recent effects of COVID-19 make our need for economic democratisation greater than ever and provides what is often demanded by many — a true alternative.
Photo: Mondragon employee.
Photo Source: TU Lankide on Flickr.
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