Workplace Democracy (How to be Your Own Boss)

Introduction.

If you ask the average American why they believe their country is great they’ll usually mumble something about free speech, civil liberties, and eventually they’ll get around to democracy. In recent years the concept of democracy has lost its weight due to forces all around us working to diminish democracy; because at its core, true democracy is still a radical idea. I for one still believe in democracy. But it is curious that we continue to strive for a democratic process in our politics but not where it matters most: in the workplace.

The mainstream discussion about social issues does not even consider the idea of a democratic workplace because of the radical implications of democracy. But, if anything, it makes more sense to focus on democracy in the workplace. We are told to go participate in politics every 2-4 years when elections roll around to help shape our futures the way we see fit, but we spend far more time shoved into a workplace where we have no control at all about what happens there. People’s entire livelihoods – their entire means to keep surviving – are all the result of their time in the workplace, yet we have less control over this than we do the entire workings of our government.

If we truly believe in the principles of democracy, then those principles need to be extended to the most consequential parts of our lives. If our society promoted the idea of democratic workplaces then not only would that give people far more control over their own lives, but it would make society more productive and more equitable. The majority of our days would not be going to work to serve some boss that was placed over us arbitrarily, but instead every day when we go to work we would be working for ourselves to reap the benefits of our own labor.

How They Work.

            A democratic workplace is exactly what it sounds like. Workers vote on issues concerning the workplace with each worker getting one equal vote to make their voice heard. Any worker can raise an issue or propose something to vote on, and each time the workers collectively go through the democratic process to resolve the issue. The workers themselves can decide how often they should meet to vote on issues and which issues are more pressing than others. Undoubtedly a workplace democracy that is just starting will have far more things to vote on than a workplace that has been functioning for a longer time. This means that establishing a workplace democracy will be a process that needs fine tuning, just as any other thing in life. Once the workers have decided how they will function as an industry, things will flow more smoothly once they have the proper mandates in place. A workplace that is transitioning from a traditional structure (where the owners tell the managers what to do that tell the workers what to do) into an economic democracy will save time and run more efficiently if the workers can agree what the previous management did right. That way they can keep those rules in place and change the ones that don’t work for them.

The next question is: if every worker is equal then who will manage the workplace to make sure it runs smoothly? There are several different answers to this question. For smaller independent workplaces we’ll find that often they don’t need any managers at all. If the entire business consists of just a handful of workers then it should be no hassle to divvy up what responsibilities there are and keep the other workers responsible.

But the larger the company is the more structure will need to be set in place. For larger workplaces there will be the need for the workers to vote on who they want to be managed by. The workers can convene and nominate certain people that are interested in the position and then vote on who will be manager. The manager can be in that position for an indefinite period of time until someone raises the issue to vote them out, or it the position can be rotational, where approved persons are in the position of manager for a specific period of time at the end of which it rotates to a different person. This would be the preferred method, because while the rotation from manager to manager may not always happen as smoothly as wished (even though each person in the rotation should be trained adequately) having the manager position on rotation would keep from giving a single person prolonged authority over the other workers.

To make the process as fair as possible, each division of the workplace should be the ones to vote who their boss is. The term “division of the workplace” is ambiguous for a reason, but basically it means that the people on the second floor of an office shouldn’t be voting on who the boss is for the people on the first floor. Each individual workplace will be divided up how they see fit. The result of this is that the workplace becomes a sort of meritocracy. Whereas before all a person had to do to get promoted was to suck up to the boss, now a person must be approved of by their peers and be an all around good person to have in that workplace. If the workers vote to promote the person to a higher position, it means that the workers really do approve of and respect that person.

When the workers convene to vote on issues they have to trust that the information they use to vote on this is trustworthy. So if they vote on whether they should purchase a new machine, they have to trust the accountants that tell them they have the money for it. But how do they find trustworthy accountants? If we take the example of a warehouse, the accountant of that warehouse is doing a very different kind of work than the majority of other workers. It is increasingly tempting for the workers to say “Well I sweat my ass off all day in the warehouse while the accountant sits in a desk and crunches numbers. His job is easier, so I should get compensated more.” And this is a fair argument. But we have to consider that the accountant had to go through a certain amount of training to have the knowledge of accounting (an incredibly boring trade).

Basically this is the problem of how a workplace will treat specialized workers. There are several solutions to this, some more satisfying than others depending on the workplace. The first is that the accountant can be an accountant for as much of the time as it requires and then a warehouse worker the rest. I doubt that will satisfy many people. Another option is to have the accountant train other people on how to manage their books and then go through a rotation of other jobs with the other people trained for those positions. This may be feasible, but the task of training other employees increases in difficulty the more specialization is needed for that position. So if a person is willing to be an accountant one day and a forklift driver the next, then why not? The most likely solution is that supply and demand will solve how the accountant is compensated. The rest of the workers may vote on how much they are willing to pay the accountant, but if no accountant will work for that wage then they have to rethink their option. The wages can vary depending on training and qualification of course, but at the end of they day each worker depends on the other workers doing their job properly so that everything runs smoothly. If the workers understand this, they will judge the value of the accountant correctly so that they can continue to operate.

The more complications arise the larger the workplace becomes. The larger it is the more structure is required to operate it, the more decision making and bureaucracy is put in place. The point is that no matter what the workers that work in that workplace will get to decide how it operates through those growing pains. There are examples of how large entities can manage in a democratic fashion. One such example is the Mondragon Corporation in the Basque country in Spain. It is a federation of different cooperatives all under the same banner that coordinate with each other that employs over 75,000 people. Although not a perfect workers democracy because of the power structure they have in place, it gives example that larger workers democracy are a realistic goal.

Technology.

            In any conversation about economics, technology is always the big “what if”. This is because how we view the workplace now could be radically transformed by technology in a matter of just a few years. New technologies can make entire fields of jobs irrelevant and reshape the existing jobs left. In a rational world if I came along and told you that a new technology existed that could make your job 10x more productive (therefore 10x easier) that would make any person ecstatic. But the reality is that a technology improving productivity significantly is only going to put that person’s job and many other people’s jobs in danger. After all, why would a company need 100 workers when they can buy a machine that does the same amount of work for them?

In a workplace democracy the workers won’t have to worry about automation taking jobs away from them, since the workers would be the ones implementing the technology. The result of this is that any increases in productivity directly benefits the workers to make their jobs easier.

Let’s say that a workplace democracy that produces cars votes to implement some new technology that will make a job 10x more productive. Now it has a few options. The first is that if the workers believe there is enough demand out there for their cars then they continue business as usual, but they have to be sure that if they increase production 10x then there should be 10x more people than before that want to buy their cars. In this case nothing really changes for the workers besides having their job made easier because of the technology. But maybe demand for their cars doesn’t change, so in this case they have to make the same number of cars as before but now they have a technology that can make it 10x easier. So, what does that mean? It means they don’t need as many workers doing that job as before, since the technology does it more efficiently.

What happens to the employees in a workplace democracy that are no longer needed to do that job as efficiently as before? In a normal job the boss would just fire them since it would save the company money. This wouldn’t happen in a workplace democracy, after all the workers would be terribly aware that the people they are laying off are their fellow coworkers, their friends that they’ve confided with and worked with for upwards of several years in cases. Instead of firing those workers the democracy would vote to find them a suitable job in a different department. Perhaps instead of working on that assembly line those workers could begin doing maintenance or some other job that is needed. Or there is a third option for them. If a technology displaces workers from their job and those workers aren’t needed in other departments, the workers democracy could vote to shorten the working day for its workers.

It sounds like a radical idea to those of us that work through all hours of the night, but in reality, shortening the working day would be the logical result for many workers democracies. If a technology does improve the productivity of the workplace, that would mean that they can produce the same amount as before with less effort and still make the same amount of money back on the product. In this scenario, they have the same amount of money coming in as before with less work being done by the workers. The democracy could easily shorten their work day so they produce the amount that they need to (in a shorter time because of the technology), bring in the same amount of money, and still pay the workers the same wages.

With any technology that improves productivity it can only benefit everyone in a workers democracy, while in a normal firm technology often hurts the workers. Just a side note: when a technology does improve productivity drastically any economist will tell you that the company will decrease the price of their product which will make more people want to buy it. More people wanting to buy it will mean they increase how many they make, so in this case the new technology is put to good use and the workers would maintain their jobs. This sounds nice and often times will happen since the companies have to keep prices low to compete with other businesses, whether they be workers democracies or not. My response to this is that even if the worker democracy chooses to increase production and lower price, the increased production in many cases will still allow for the workers to do less actual work, which leaves the options above still on the table.

Either way the result is the same: technology in a workers democracy will benefit everyone and not just the few. Workers will enjoy every new gadget or machine that will take the work load off their shoulders and still enjoy the same profit at the end of the day. No longer would technology fight against us, but instead fight for us just as it always should have.

Unions.

The point of unions is that the workers get together to collectively argue against their employer to benefit the workers, so it’s not hard to see that workers democracies wouldn’t need unions since they don’t really have a single employer to argue against. Any issue that a union would normally take on like safety conditions, wages, benefits, and more could be easily raised as an issue to be voted on through the worker democracy.

But as we know the vast majority of workplaces are not democracies. What that means is that in most workplaces we find ourselves, the unions are the first shred of worker democracies that we have. The fact that workers can get together to collectively raise issues and make decisions – even if those decisions are to fight against their abusive employer – the union represents the budding flower of workplace democracy. For this reason we should support workers right to unionize, and even moreso, support unions struggle against their employers for a fairer and more safe workspace.

How to Get There.

The idea of economic democracies probably sounds nice to anyone that pictures a better world than the one we currently live in, but it means nothing if we can’t work to make that world a reality. The establishment of economic democracies can be a tough venture, but there are several very clear steps we can take to promote their creation and continual growth.

The first thing we can do is to support any workplace democracies that are in your area. This is easy, all you have to do is a google search for worker cooperatives (again cooperatives being a general term for worker democracies) that are near you and you are likely to find at least a few that offer different services. They may come in the form of grocery stores, farm supplies, electric companies, etc. But by giving these cooperatives your business you are supporting the idea of worker democracy and inching the market closer and closer to making these democracies the norm.

The second is that we can support any kind of legislation that promotes worker democracies. The legislation may come in the form of giving grants, tax cuts, administrative support, or really anything that encourages the growth of worker democracies financially. The most ambitious legislation to support these democracies was Italy’s Marcora Law that was established in 1985. The general idea of the law was that workers affected by lay-offs or cutbacks that lost their jobs could be given their entire three years’ worth of unemployment benefits as a lump sum. The stipulation was that the workers then had to take that lump sum – likely combined with the benefits of other laid off workers – and use it to invest in capital and start a worker democracy. Not only were the workers given the money to start a democracy of their own, but a specialized institution was created by the Italian government to aid the worker democracies. The Compagnia Finanziaria Industriale (CFI) would monitor the workers success, establish helpful contacts for the worker democracies, and give managerial training to the workers.

The Marcora Law was largely a success in Italy and even helped turn a profit for the Italian government. This is because the money paid in dividends (the amount paid to investors, mostly the workers and community members) saw about 15% of that go back to CFI to reinvest in other worker democracies. This creates a self-sufficient system that permanently raises people out of poverty and actually creates meaningful jobs in the process. It is legislation and principles like this that lead to places like the Emilia Romagna region in Italy, a dense and wealthy region where cooperatives make up nearly 40% of the GDP and almost 2 out of every 3 people work in some kind of democracy.

It is examples like this that show that workers democracies are not a pipe dream nor are they impossible to establish, all it takes is ambition and the support of your community. If we raise these issues, no matter where we raise them, as long as we force the words out of the mouths of our politicians the idea will catch on and we can begin to see the financial support we need for this movement. And that leads to the final step in enacting workers democracies as a reality: if you have the resources to do so, start a worker democracy.

Conclusion.

Nearly everyone wants to be their own boss, likely because nearly everyone dislikes the boss they have. But this sheds light on another truth, the fact that people want to be their own boss shows that people have a tendency towards self-determination, the will to take their lives into their own hands. Worker democracies allows for just that. It offers a way for people to take nominal control of their lives, have a say of what goes on in their chosen profession, and even influence things for the better.

But worker democracies aren’t just superior because of ethical reasons. They are more productive and more efficient than normal businesses as well, and we have the empirical evidence to prove this. The largest research done on existing cooperatives throughout the world was conducted by Virginie Pérotin entitled “What do we really know about worker co-operatives?” which compared the workings of conventional businesses with those of some form of worker cooperatives. The results are that cooperatives are:

• “larger than conventional businesses and not necessarily less capital intensive”
• “[they] survive at least as long as other businesses and have more stable employment”
• “are more productive than conventional businesses, with staff working ‘better and smarter’ and production organised more efficiently”
• “retain a larger share of their profits than other business models”
• “Executive and non-executive pay differentials are much narrower in worker co-operatives than other firms”

For which all of the empirical results of the research directly support what I’ve stated above. If our society is going to progress into the future we have to be willing to rethink something as basic as the standard business model and not be afraid to say “we can do better” because the truth is that we can do better. We must embrace democratic control over the economy and our workplaces. If we don’t act all we will be left with is extreme unemployment, shriveling natural environments, abhorrent wealth gaps, and disenfranchised masses. All of this can be avoided, with democracy being the cure.

Advertisement