The following is a short preview of a talk to be delivered at SIPTU’s Workplace Democracy webinar on Wednesday, February 3rd at 1:00.
Arguing for workplace democracy as a right is not sufficient to win over the public debate. Opponents will counter with spurious arguments: collective bargaining undermines competitiveness, adds costs, reduces business flexibility, and delays decision-making (a popular argument among anti-democrats). In short, they will argue workplace democracy impedes economic growth.
We need to champion workplace democracy as a superior economic and social model. A number of democratic workplace practices - collective bargaining, employee participation, co-determination, worker-directors, labour-managed enterprises – have been shown to increase productivity, innovation and efficiencies. Countries where these feature more prominently, and firms where these are practiced, have higher levels of productivity, income and resilience. Whether in politics or the economy, democracy works.
This superior model, however, is constrained by the current corporate culture and its emphasis on shareholder value and hierarchy (or, in the case of GameStop, a casino-frenzy that has absolutely nothing to do with the productive economy). It is not a matter of grafting democratic practices on the current model. This invites us to reframe enterprise and business activity. For instance, it may seem counter-intuitive, but no one owns a corporation. This has long been known to business scholars. A corporation is a social space – a commons. In this space, complex networks of contracts between various stakeholders such as shareholders, workers, management, suppliers, creditors, state, community, and the environment are regulated by law (that is, by politics).
Shareholders may not ‘own’ the company, but they exercise power which is politically derived. The corporation is not a natural market phenomenon but a product of law - shaped by power relationships in the economy and society; that is, by politics. So when a Bernie Sanders or an Elizabeth Warren proposes worker-directors, employee shareholdings and stronger organising rights, they aren’t attacking business. They are reforming the social space that is the enterprise – writing new rules for how business operates. Whether it improves business efficiency is, ultimately, an empirical matter. And most of the data we have strongly suggests it does.
To bolster this political shareholder control, we are fed bedtime stories of entrepreneurial heroes, their exploits and eventual victories over malevolent forces (taxes, government regulations, trade unions). Of course, the lone entrepreneurial hero is a myth, much like the cowboy in the American West. But the myth serves the purpose of marginalising the role of employees and the collective foundations for innovation. We need to challenge this reading with another: a democratic entrepreneurship that spurs collective innovation. Quite simply, we are all entrepreneurs. We all have a contribution to make to innovation in the workplace and wider society. But most of us are not allowed due to the suppression of economic democracy. And we are all the losers for that.
There is a ladder of democracy starting with the first rung: collective bargaining. Every rung we climb, every increase in democracy and participation, leads to ever better outcomes. These are not just confined to the economic sphere. Health, environment, political and social participation are all impacted positively by increasing workplace democracy. This is the single greatest challenge facing the trade union movement – to campaign politically and industrially for greater participation, greater democracy.
And it all starts from the simple proposition:
Business in Ireland is too important to be left to Irish Business.