Some dilemmas of economic democracy: Indicators and empirical analysis

Abstract

The article addresses certain current and recurring dilemmas concerning economic or industrial democracy in modern society. First, it identifies the main indicators and proxies of economic democracy. Then it undertakes an empirical analysis and calculation of levels of economic democracy among contemporary Western and related societies, specifically the OECD countries, and compares and ranks these accordingly. It concludes that the type of economy such as that denoted by the variety of capitalism primarily explains and predicts these variations in economic democracy among OECD countries. Specifically, a ‘rationally regulated social economy’ in the form of regulated, welfare capitalism determines and predicts the highest level of economic democracy. Especially the continental Western ‘European social model’ via welfare capitalism is determinative and predictive of the highest levels of economic democracy in its multiple dimensions, including high collective bargaining coverage, widespread codetermination, strong employment protection and others. Conversely, an unregulated economy such as unrestrained, plutocratic capitalism that the American model epitomizes tends to cause and predict the lowest level of economic democracy. A mixed economy such as hybrid or residual capitalism causes levels of economic democracy lower and higher than those of regulated, welfare and unrestrained, plutocratic capitalisms, respectively. Overall, the article builds on and contributes to the literature and analysis of economic and industrial democracy in modern society.