Economic Democracy and Financial Participation: A Comparative Study

Economic Democracy and Financial Participation: A Comparative Study

Economic Democracy and Financial Participation: A Comparative Study

Economic Democracy and Financial Participation: A Comparative Study

Synopsis

The ideas of economic democracy and financial participation are not new. The International Congress on profit-sharing first met in Paris in 1889. However since then, the numerous schemes have met with mixed reactions and various levels of success.
In Economic Democracy and Financial Participation, Daryl D'Art has two objectives. Firstly, to examine if, and under what conditions, profit-sharing schemes and employee shareholding can motivate workers and generate cooperative striving. Secondly he identifies the schemes of financial participation which have the potential to realise economic democracy within the individual firm and wider society.

Excerpt

The basic idea of providing employees in organisations with a share in the surpluses generated by work activities sounds seductive in its simplicity and apparent common sense. Not surprisingly, it has been argued that this will act as a work incentive and will promote co-operation. The assumption of such reasoning is rooted in judgements about the unfairness and conflictual nature of laissez-faire capitalism, based on capital provided by those with surplus wealth and wage labour provided by those with appropriate skills and knowledge. As the author of this new comparative analysis of ‘financial participation’ makes abundantly clear, the debate on the utility of such an approach has existed right from the beginnings of the joint stock corporation system in the nineteenth century; yet protagonists of financial participation have continually produced new schemes and methods of employee shares in such surpluses. The technical basis for financial participation schemes in different societies has varied considerably and has also clearly reflected very different ideologies and perspectives. One consequence of this, is that debate on the issues of financial participation has become confused and ambiguous. It is argued that financial participation is essential for economic democracy, but equally that it is a way of preventing democratic control. It is seen as a basis for employee motivation, but also as a way of reducing managerial power and shareholder influence. It is seen as a way of reshaping capitalism, but also of preserving and defending it. What was simplistic logic has turned into conceptual confusion and a discussion of tax law and pension practice. Why did this happen? The answer to this question must lie with the way that financial participation conflates a number of major issues of political and social philosophy.

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