Political democracy has long been considered an essential component of a developed nation. It ensures that at least the majority of citizens have a voice and choice in who runs their government, how it functions, and what it legislates. However, after several hundred years of democratic experience, the evidence shows that these political systems fall short in providing their people with the amenities they need to survive and thrive. In contrast, LE proposes economic democracy as essential for solving this most critical problem of humanity. Below are three components of economic democracy:
First, democratizing the economy entails the decentralization of the economy decision-making. Currently, large trans-regional and multinational corporations dominate production and distribution systems for their own short term profit, often at the expense of people and localities. In an economic democracy, local people determine how the economy should be developed in order to meet their own needs, not the interests of non-local entities. They are knowledgeable of local resources and capable of sustainably utilizing them to realize their community’s economic potential.
Second, economic democracy must guarantee basic requirements for everyone. People can not successfully participate in the economy without being able to satisfy their basic needs. To achieve this goal, localities must utilize all the resources and market mechanisms at their disposal to ensure the availability and affordability of core products and services, including food, clothing, education, medical care, and shelter, for all their residents. This will create the economic base upon which the standard of living can be constantly increased.
Third, the democratic control over the economy is not only exercised through local economic planning but also through the democratization of local ownership. Economic democracy recommends more collective forms of ownership, particularly for larger businesses and industries. Democratic workplaces allow local residents to share wealth more equitably among themselves, determine what goods and services best meet local needs, and make sure that their economic activities have positive impacts on the communities where they live. In this regard, the cooperative is a particularly useful model for achieving effective collective ownership.
Keywords: Local control, community economic planning, democracy, basic needs, cooperative