“Democracy and Capitalism – Or Economic Democracy?”

The third public event of our events series “Democracy: Bridging Facts and Norms” took place on June 9, 2016, at the University of Zurich, thanks to the support of Graduate Campus UZH. A large audience attended the lecture of the philosopher and sociologist Alex Demirovic on “Democracy and Capitalism – Or Economic Democracy?” in the Aula of the University of Zurich.

Those who couldn’t make it can learn more about what was discussed:

  • By watching the video recording of the event here
  • By reading Lukas Peter’s report of the event below

Summary of the event, by Lukas Peter

In the first part of the event, Alex Demirovic offered a lecture on the theme “Democracy and Capitalism – Or Economic Democracy?” He first presented his views on the relationship between the democratic and the economic sphere, using the development of the state and democracy in relationship to the development of a capitalist economy as a starting point.

He insisted on the fact that the state has rarely been opposed to the market. Instead, it has constituted (or failed to constitute) a fundamental precondition of the development of a capitalist market economy by protecting specific property rights and market regulations. In this constellation, parliamentary democracy was often understood as both a threat to the market, due to the increased power of the laboring class, and as a means to create a class compromise, ultimately providing certain benefits to the working class and simultaneously stabilizing power asymmetries and privileges.

However, later in the development of capitalism and globalization, this compromise has become weaker, because while the economy has become global, the power of states to tax and control the economy has remained on the national level. For this reason, since the mid 1970s power has been shifting towards capital and those with capital interests and has undermined the power of less mobile workers and nation state democracies.

In the second part of his lecture, Demirovic suggested an answer to this problem: Democracy should be extended to the economic sphere. In his view, democracy is not merely to be limited to its representative and parliamentary form. It should be understood much more broadly and fundamentally as the right of people to co-determine the organization of their lives. This definition offers a more participatory concept of democracy that in turn legitimizes the extension of democratic participation rights to economic activities and institutions – whether this be the firm or the market.

Demirovic used the case of worker co-determination in 20th century Germany as an example, as it represents an existing model of how such participation could take place. He also mentioned the work of Michel Albert who has developed the idea of “participatory economics” – or “parecon” – as a way to democratize not merely the firm, but also the market. Albert’s model is based on councils that enable the needs and desires of producers and consumers (and other civil society associations) to communicate and organize the production and allocation of goods and services not merely through a price mechanism, but primarily through democratic arenas and deliberation processes.

The lecture was followed by a discussion by and with the economy Professor Andreas Scherer. While Demirovic focused on the democratization of firms and more regional markets, Prof. Scherer brought in a new perspective by focusing on the problem of globalization, asking how participation could be conceptualized on this supranational level.

Scherer’s historico-sociological answer to this problem emphasized the importance of NGOs and other such associations who have been able to put pressure on transnational corporations by using different means of political activism, e.g. reports and campaigns. While such activities might not necessarily be understood as being themselves “democratic,” they are in Scherer’s view of utmost importance to build a more international civil society and to criticize and hold certain economic practices and institutions in a more global public arena accountable.

Of all the engaging questions asked by the audience in the end of this event, one was especially relevant to the problem of democratizing the economy. The question highlighted the tension between the desire to increase democratic participation (in the economy) and the currently declining voter turnout in most Western countries. Isn’t the participation desire a form of wishful thinking, especially in relation to the many people who are less well-off, have to work more (and therefore have less time), and statistically generally participate much less in politics? Demirovic’s answer to this question was twofold, On the one hand, providing people with real opportunities to participate in decision-making processes on matters “close to home” (local economic policies or at the workplace) could raise their motivation to participate compared to the current situation where they can only participate to elect some distant – and often elitist – politicians every four years. On the other hand, Demirovic suggested that other incentives could be added to engage more people in the democratic process, such as monetary remunerations. As stakeholders in firms and economic institutions are paid for attending meetings, citizens should be paid to participate in democracy rather than being expected to spend time for the democratic organization of the economy on a voluntary basis. This pecuniary motivation could enable people to participate who otherwise could not “afford” to.