The Meaning of Economic Democracy

THE MEANING OF ECONOMIC DEMOCRACY c. B. MACPHERSON THE term economic democracy has been used so loosely by so many writers in the popular press and elsewhere that it is in danger of having no meaning at all or any meaning anyone cares to give it. Since this is what commonly happens to a concept which expresses some real, popular aspirations, we need not view the fact with too much concern. But some attempt at clear definitiOn is necessary. Economic democracy, then, may be defined as an economic order which would make possible the realization of the purposes or values which political democracy can no longer realize by itself. Alternatively it may be defined as an economic order which would make democracy work, or permit it to be more nearly democratic. Such a definition, I believe, comes close to stating the essential meaning of the phrase) economic democracy. For it should be noticed that it is not just a question of what meaning the term could possibly have. It is a question of finding in. the term some meaning at once fairly definite and fairly real, that is, expressing the real hopes and intentions of those who use the t. erm. We are tryingto understand a real movement, or rather an idea which the adherents of many movements-trade unionists, new dealers, co-operators, socialists-share to a greater or lesser extent. That idea is not conveyed by a mere literal interpretation of the two words, economic democracy. Yet it is not necessary to go as far as Professor Maclver, who, after showing with deceptive clarity that a strict interpretation of the words gives an absurd result, goes on to argue that e~onomic democracy is a ((questionbegging phrase,'' involving a "misuse of language" against which he emphatically protests.l We may agree with Professor Madver that this strict meaning of the words does not convey the real' notion embodied in the phrase. But I do not b~lieve that the phrase is therefore a misuse of language or an unfair attempt to capture the word democracy, with all its favourable connotations, for proposals which are not essentially democratic. If we think of democracy as not merely a lR. M. Maciver, Leviathan and the People (Louisiana, 1939)1 pp. 84-6. 403 404 THE UNIVERSITY OF TORONTO QUARTERLY set of institutions-popular parties and majority rule-but as a set of purposes or ends to which these institutions are but means, it is surely legitimate to hold that any other institutions, including economic ones, which can be shown to be also essential means to the democratic ends are equally entitled to the shelter and support of the word democracy. I conclude therefore that the phrase economic democracy may fairly be used to mean such an arrangement of the economic system as is believed to be a necessary means to the ends which democratic thinkers and movements have always sought. Proposals for economic democracy today are proposals for such rearrangements of the relations between capital and labour and the state as the proponents believe necessary to make democracy real. So much for definition. It is apparent that this definition raises more problems than it settles, as is the way with definitions. \Vhat are the ends or purposes of democracy? Why is a rearrangement of economic relations necessary today to provide any chance of those ends being realized? What rearrangements are most likely to provide their realization? These are the main questions to which this article is devoted. And luckily they are not entirely abstract questions. They are questions partly of poll tical philosophy and partly of administration, but even in so far as they are questions of political philosophy they exist in a definite historical setting. The democratic philosophy has been stated by generations of democratic thinkers; the forces which have to be contended with, as well as t'he forces which may aid, in the attempt to realize this philosophy today are capable of historical and empirical analysis. To come to the first of these questions: What are the essential ends which democratic thinkers and movements have commonly proposed and sought? The basic postulate of democrats is the equal humanity...