Economic Democracy

It is in the workplace that wealth is created, income differences are first established and where we are most likely to be subjected to hierarchical ranking. But businesses do not have to be run as profit-making cash-cows where the employees simply serve the interests of rich external shareholders; there are already vast numbers of organisations that work in a different way.

Despite the demutualisations of the 1990s, the UK still has 63 building societies with over 2,000 branches and 38,000 employees, 650 credit unions, 250 friendly societies and 70 mutual insurance companies. There are 170,000 charities with a combined annual income of over £44 billion. The Co-operative Bank has £40 billion of assets and was recognised as the most ethically responsible bank, while Triodos functions well with a pay ratio of only 1:7.7 between the lowest and highest paid staff.

The Equality Trust believes that greater economic democracy is essential in order to transform our economy, reduce income differences by bringing pay differentials under democratic control, redistribute wealth and create the foundations for a healthier, happier and more sustainable society.

What is economic democracy?

Economic democracy exists when the units of economic organisations are owned and controlled by the people who work in them, and/or by those who use their services – people who have a genuine long-term interest in the organisations and the communities in which they operate rather than remote shareholders whose overriding interest is short-term financial gain. There are many different ways for employees to control a business and we believe that economic democracy in all its forms should be tried and evaluated until it becomes clear which work best.