Institutions that Promote Consent
Direct democracy got a boost in the 1600s when the English Parliament conceived the idea of the “sovereign people” to act as a legal and moral counterweight to the powers of a sovereign king. Over a century later, James Madison evoked the same principle when he insisted that the House of Representatives be elected directly by the people and not by their proxies in state legislatures, as had most of the old Continental Congress. He wanted to offset the power of the states by establishing a direct link between the federal government and the people. This was still guardianism, but guardianism lite: dependency with less hierarchy.
A century after that, America’s upper house, the Senate–until then, still chosen indirectly by state legislatures–was similarly “liberated” and elected by popular ballot. That most anachronistic of all American guardian institutions, the Electoral College, however, remains. It was created because constitutional framers thought the widely scattered and largely rural population would not receive sufficient information about presidential candidates to make informed choices. Today, in the age of mass media, voters and guardians complain about too much, rather than too little, electoral information; but that has not been enough to eliminate this most anti-democratic of guardian systems.
Notwithstanding these changes, the “democratization” of U.S. politics has generally meant giving power not to the people, but back to state guardians from the federal government; this despite the widespread belief among the framers, as articulated in Samuel Bryan’s 1787 essay, that government is primarily accountable to its citizens, not to other government bodies. “The only operative and efficient check, upon the conduct of administration,” Bryan wrote, “is the sense of the people at large.”86 Tocqueville also warned that America would eventually become an oligarchy or bureaucratic despotism unless widespread economic well-being, pluralistic associations, popular mores, and a separation of state powers was maintained.87 In the twentieth century, Dahl added that, “The democratic process isn’t likely to be preserved for very long unless the people of a country preponderantly believe that it’s desirable and unless their belief comes to be embedded in their habits, practices, and culture.”88 The biggest obstacles to this, he thought, were a fragmented demos (democratic dialog usurped by special interests and identity groups), the cult of professionalism (too many people claiming a monopoly on truth based on myopic expert opinion), and the flourishing of demagogues–egotists and coercive altruists who wield their power arbitrarily.
These forces all strengthen the guardian status quo and make meaningful experiments in direct participation difficult. They deform the popular conception of what direct democracy is, and can be, and promote apathy among the disengaged and cynicism among the active. They reduce all public discourse to the level of an auction: rationing claims against public assets that could and should be widely shared. At minimum, they make guardians very possessive of their power, because distributing real authority among a wider demos means diminishing any one group’s ability to get what it wants and the power of any one guardian to help them.
Because of this, a hybrid form of participation, which Dahl calls polyarchy–the “rule of many”–has appeared as a kind of way point on the road to consensual democracy, or the rule of all.89 Despite its shortcomings, polyarchy is still a big improvement over the rule of a few, or the one, and it is gradually working its way into many American institutions. Here are its signature attributes:
First, elected officials, not bureaucrats (those accountable to the demos, not to other guardians, for their jobs), must make policy-level decisions and control their implementation. Bureaucratic despotism became a real threat under the Keynesian Accommodation, but has weakened in recent years, though some agencies, like the IRS, DEA, Department of Education–even the old ICC and the partially privatized U.S. Postal Service–have shown resistance to meaningful reforms.
Second, elections must be fair and frequent. Except for the occasional, local corruption scandal, this is generally perceived as true in America, although incumbency and the power of parties to shut out new candidates keeps representative turnover, and the diffusion of guardian power, low.
Third, suffrage must be inclusive: all adults qualified to vote must have the right and opportunity to do so. This has been promoted to the point of fetish in some areas, with multilingual ballots, voter turnout drives (including tangible incentives like food giveaways, in some cases90), motor-voter registration, and the soaring popularity of absentee ballots. Still, much of this encouragement is selective: confined to voter groups congenial to specific guardians and parties.
Fourth, all members of the demos qualified to vote and not excluded from a particular office because of Constitutional restrictions (such as minimum age) must have a right, and be encouraged, to seek election. Lay recruitment has not fared as well, mostly because of party gatekeepers, widespread disenchantment with guardian politics (including the sensationalistic, deep-background investigations and mud-slinging that accompanies many campaigns), and the need to court special interests. Still, lower-level offices generally have no shortage of candidates, though these people usually aspire to be higher-level guardians, not democrats.
Fifth, citizens–whether voters or not–should have a right to openly criticize public officials, the administration, the socioeconomic order, and other ideologies and beliefs that shape society. This seemingly fundamental right has, in practice, enjoyed only mixed success. While first-amendment rights are trumpeted loudly and often, mostly by newspapers and broadcasters, and more people than ever take advantage of the instant dissemination of news and opinions on the Internet, enormous financial and legal resources are still devoted daily to shutting people up–to silencing opposing or politically incorrect views and enjoining the activities of one’s ideological foes. As a result, average citizens who want to be heard discover that guardians listen best to people who obstruct traffic, block government offices, and chain themselves to trees–desperate acts that often lead to arrest.
Sixth, citizens must have not only the right, but also the means, to seek alternative sources of information; and those sources must be protected by law. Again, the growth of the Internet and cable television networks–including several devoted to news–is encouraging, but this is matched by a dwindling number of daily newspapers and the death, by merger and acquisition, of many long-established book publishers.
Finally, citizens must be free to pursue these and other rights through associations and organizations of their own, within the framework and protection of the law. Again, theory in this area has fared better than practice. As with their freedom of speech, marginal or unpopular groups are often deemed “less equal” than those favored by guardians, and they face social hostility and economic sanctions as well as legal harassment and legislative discrimination when they try to assert their rights, such as holding rallies on public land.
While we see many similarities between Dahl’s polyarchic institutions and certain features of the U.S. Constitution, there are also differences. For example, freedom of speech under polyarchy is not just a “negative freedom” (to use Isaiah Berlin’s term for a right which may not be interfered with); it is a positive freedom–that is, something that society not only tolerates, but encourages and enables. In this sense, it becomes a stepping stone to more direct forms of participation and consent. Under polyarchy, citizens don’t participate in spite of their guardians, but because of them.
Barber believes that polyarchial institutions, already encouraged to some degree by the presence of multicultural enclaves in the United States, flourish when citizens are educated and motivated to use, and are supported by, “...a constitutional system offering to these multiple peoples a regime of democratic tolerance, stable pluralism, and mutual respect that (to the degree that the ideal is made real) can protect all these constituent cultures.”91 This is one reason the United States has become a testing ground for many participatory schemes, and a worldwide magnet for immigrants and various identity and interest groups that would be visibly suppressed in other circumstances and societies. It is one of the few countries on earth where access to guardians, if not the guardian role itself, has limited restrictions. If you have enough cash and persistence and are willing to play the game, you can literally move mountains.
One of the West’s oldest institutions of direct participation–the judicial jury–is also receiving new recognition as a vehicle for democratic learning.
Despite their long history in classical Greece and Rome, and their resurrection in the Middle Ages as a means of protecting citizens from the predations of kings and aristocrats, juries fell into disfavor in modern Europe (especially in non-English-speaking countries) when alternate forms of guardianship, such as socialism, gained currency. Even Tocqueville, who admired the American jury system, was hard-pressed to explain exactly how it worked, or why Anglo-Saxons deemed it so fundamental to their democratic traditions.
English juries started off as little more than village busybodies who made it their business to mind everyone else’s business: resolving disputes and pre-empting vendettas and clannish violence. Common law in the 1600s organized these irregular groups into judge-like panels pledged to render impartial verdicts in accordance with evidence presented at orderly trials. However constituted though, juries in the West quickly came to symbolize the superiority of a participative, consensual peer process over the arbitrary decisions of sole guardians, be they magistrates, churchmen, or aristocrats whose allegiance was assumed to be with the ruling elite.
This belief contradicts a parallel stream of political thought which views the democratic process as one of peer-bargaining and power-brokering within the “political class,” a view that has nothing to do with ideals like shared values and the common good. In his study of citizen-jurors, Brandeis professor Jeffrey Abramson categorically rejected two modern notions that juries were mere “demographic markers” representing the interest groups from which they were drawn; and that supermajorities in verdicts (now permitted in the United States after two 1970s Supreme Court decisions) are acceptable substitutes for unanimity.92 Both of these ideas, he claims, discourage democratic learning. The first reduces individuals to ciphers for identity groups, mostly for the convenience of lawyers choosing sympathetic jurors or challenging verdicts they don’t like. The second eliminates, for the sake of expediency, the hallmark of a truly democratic process–the search for consensus.
Other critics argue that juries are less democratic than they seem. They point out that pluralistic democracy requires only a bare majority to reach most decisions, and that super-majorities–let alone consensus–allow jurors holding minority opinions to exert disproportionate control over results. Even worse, jurors are specifically excused from duty for showing the one trait deemed most important to democratic engagement: a passionate opinion about the issue at hand.
All such arguments reflect misperceptions, based on guardian lore, about the nature of direct democracy. We’ve already seen how one-time, yes-no, majority-rule voting is not, and never has been, the acid test for democracy. Instead, it has always been just one way among many for determining a course of action. Historically, it has been used most often to select winners and losers in contests for power–not as a way of determining the common good and general will, which on juries meant serial balloting until consensus was reached. Further, judicial “disinterest” does not preclude passion as long as that passion is for procedural fairness. Again, guardians and their boosters have trouble conceiving that a passionate advocacy can exist for anything other than a particular, partisan outcome. Radio commentator Adam Hochschild was surprised by his own pleasant reaction to juror democracy when he wrote, “What moved me most about the jury process was that it tended to bring out the best in people. ...When the case was over, we shared the feeling that justice had been done. In a world so full of injustice, there is something heartening when you see one small spot where the system actually works... .”93
Hoschild’s experience echos the feelings of lawyer-author Stephen Adler, who says his own interviews with former jurors, “was like having a conversation with someone who was just back from Nepal or who’d just had sex for the first time. They betrayed the same sense of wonder at having been to a new place and having seen life differently.”94 Indeed, a sense of psychological breakthrough, of emotional passage, of transformation and realization of latent personal and collective power is a common reaction to jury service;95 vastly different from the way most people feel after casting their one-time, win-lose, majority-rule ballot on guardian election day.
A movement already exists to apply the random process used in jury selection to other areas of civic life.96 South Dakota proposed an amendment to its state constitution allowing defendants to plead guilty but submit for jury review the propriety or reasonableness of the statute used to convict them–essentially putting the law, not the defendant, on trial. This movement, despite opposition from political guardians, is based not only on moral and social grounds, but on sound statistical evidence (including Condorcet’s Rule and the Flynn Effect) that decisions made by a group of diverse, educated people skilled in the arts of consensus-finding will consistently produce better results than one or a few guardians pursuing their own agenda. The key to success is democratic learning gained through democratic practice; and juries right now are one of the best incubators we have for that process–but there is much more that schools, parents, corporations, and governments can do as well.
Despite a heritage of citizen legislation going back to the 1640s, mainly in New England, the framers’ antipathy to direct democracy permeates the Constitution and dominated our first century as a republic. During the ratification debate, Franklin himself pointed out that, “...popular opposition to a public measure is no proof of its impropriety.”97 Rhode Island was the only state to refer the draft constitution directly to its people.
However, as America evolved toward direct election of high-level guardians, a parallel–if narrower and belated–movement began toward direct citizen legislation. During the 1800s, states such as Massachusetts, Maryland, Rhode Island, and Texas occasionally used citizen referenda to resolve non-constitutional questions. Around the turn of the century, sparsely populated states in the far west, beginning with South Dakota, Utah, Oregon, and Montana, adopted the initiative and the referendum as occasional alternatives to representation. Bigger states such as Missouri, Arkansas, California, Ohio, and Michigan followed shortly thereafter.
Plans for national initiatives and referenda in the Unites States have not fared nearly so well–though they have succeeded remarkably in other countries. Proposals for direct national legislation have been floated regularly in Congress (most recently in the 1970s) only to be quashed, usually in committee and with the complicity of both major parties. Typically, these plans (which would require a constitutional amendment) allow Congress or the president to submit deadlocked legislation to the people; and permit citizens to organize referenda on existing laws. They also allow citizens to initiate legislation based on a petition signed by a certain percentage of voters participating in the last general election. Although most proposals limit national initiatives and referenda to domestic matters, demands for a “war referenda” surfaced before World War I and again whenever a major conflict loomed–mostly as a way of defusing “war fever” among representatives. (So much for dispassionate guardians!)
Although these proposals were defeated, showing the U.S. government’s lack of faith in its own people, those defeats did not stop the government from recommending, and in some cases requiring, citizen referenda to settle political disputes overseas–from Central America, the Philippines, and Southeast Asia to Africa, the Balkans, Afganistan and Iraq. As Colorado College professor and initiative scholar Thomas Cronin wryly observes, “The irony that the United States prescribed a direct democracy device for others but does not permit its own citizens the same right went largely unnoticed.”98
Such plebiscites have created whole new nations (such as Norway’s separation from Sweden in 1905 and the dissolution of the Soviet Union in 1990), liberalized old nations (such as the votes in Greece and Spain to overturn dictators), and put citizens in charge of major economic reforms (as in 1975, when British voters approved their nation’s return to the Common Market). The best and most sustained example of direct legislation undoubtedly comes from the Swiss, whose 1848 and 1874 constitutional provisions permit citizens to put both legislative measures and constitutional amendments on the national ballot. Since the mid-1800s, the Swiss have held over 300 referenda and proposed more than 135 initiatives, causing some Swiss to sigh, “We vote too much”; although few complain that their system is corrupt, lacks moral authority, or holds them captive to special interests.
The history of the referendum movement in California illustrates most of the social and political forces involved in citizen legislation. Led by then-governor Hiram Johnson, Californians had grown weary of the influence-peddling and delaying tactics employed by state legislators, particularly those “bought and paid for” by the Southern Pacific Railroad, a major player in California’s development.99 Concerned citizens wanted a way to either act on their own or allow civic-minded legislators to bypass committee chairmen and power brokers and take their bills to directly to constituents.
The California constitutional amendment authorizing this was bitterly opposed by most guardians. “The voice of the people is not the voice of God,” boomed one former Assemblyman, “for the voice of the people sent Jesus to the cross!”100 Opponents called amendment sponsors socialist radicals–revolutionaries bent on overthrowing the state. However, the propositions that appeared on ballots during the first few decades after the amendment was passed were anything but revolutionary. A smattering of oddball and utopian schemes–from a statewide prohibition of hard liquor and foul language to an attempt to ban vaccination of school children–were all soundly defeated, while a number of much-needed reforms, including annual state budgeting and civil service employment, both resisted by many guardians, sailed through.
To date, twenty five states have adopted the model established by these pioneers and a renaissance in plebicitary politics occurred after the so-called taxpayers’ revolt in 1978–the passage of California’s “Prop 13,” the property tax initiative, these acts were enough to move the author of Megatrends John Naisbitt, to proclaim (a bit prematurely) that representative democracy was dead.101
Experience to date suggests that direct legislation has worked best at resolving highly charged issues–from the death penalty, abortion, affirmative action, and gay rights to more prosaic but essential matters as tax reform, term limits, and environmental laws. This is understandable, since guardians facing these issues in highly visible state legislatures or city councils stand to make as many enemies as friends, no matter which way they vote.102 Legislators seeking to avoid controversial votes “stay off” or “lay off” the job on the day the measure is presented for approval. When enough legislators abstain in this manner, many bills die a quiet death–without the need for the lawmaker to go on record as voting against a measure championed by colleagues or key constituents. Representatives seeking to placate noisy activists or accommodate special interests sometimes sponsor referenda, sparing their fellow guardians the pain of a public vote while allowing themselves to take the high road by “placing their trust in the people”–no matter how loathe they are to do that in other matters.
One implication of this pattern, though guardians will never admit it, is that even representatives think the demos is better suited than they are to make our toughest political decisions. When pressed, guardians often agree that controversial laws passed by popular vote have a better chance of being accepted by opponents than those forced upon it by representatives, who are always subject to criticism for being bought for caving-in to special interests.
This is not to say that the track record of citizen legislation is unblemished, or that existing schemes for initiatives and referenda make perfect models for national participation. All the ills associated with one-time, win-lose, majority rule voting apply to current initiative systems–proving, if nothing else, that consensus building counts almost as much as who is casting the ballots. Also, in a hybrid system that combines direct legislation with compulsory representation, guardians have a big advantage in setting the agenda and manipulating the process. These devices range from the almost mandatory use of highly paid, insider initiative consultants, who exercise great power over which issues get aired, how signatures are gathered, and how propositions are worded and advertised; to guardians who use existing fund-raising networks and political alliances to promote or defeat certain issues. In 1996 alone, California’s seventeen ballot initiatives attracted $141.3 million in contributions–over a third more than the entire state legislature spent to get elected, or re-elected, that year.103
For their part, many citizens complain that initiative ballots have become too long and complicated and are misleading. All propositions claim to be sponsored by such non-partisan, apple-pie organizations as Friends of Good Government, Citizens for a Fair Economy, and so on, leaving the average voter with little to go on when judging a sponsor’s credentials and possible ulterior motives. To make matters worse, the electioneers who commodify guardian politics with slick candidate packaging and attack ads do the same on initiative campaigns: eliminating any chance of consensus by demonizing opponents, and reducing reasoned arguments to catchy slogans and sound-bites–and why not? Their job is to win elections, not determine the common good and achieve the general will.
These problems are mitigated somewhat by voter information pamphlets prepared by the state and distributed before each election. These surprisingly cogent, if unexciting, documents feature a plain-language summary of each proposition’s main features, a reasonably objective analysis of its probable fiscal impact (prepared by a nonpartisan public agency), arguments for and against the measure, a list of sponsors–many of whom are political or community leaders–and a sample ballot that voters can mark at their leisure and take to the polls. If nothing else, the wide use of these pamphlets, in concert with the growing use of absentee ballots (which allow voters to avoid polling place hassles), show that individual citizens can, indeed, gather information, deliberate, and come to both provisional and final decisions quite successfully without having to meet face-to-face in the same room.
Some citizens suggest that initiatives should be submitted first to the Secretary of State for a review of language, clarity, and legal implications before they are put on a ballot, giving sponsors time to remedy any of the technical problems that are often cited by opponents in later judicial challenges.104 This review, roughly analogous to the FDA’s inspection of new drugs or the FAA’s certification of airliners, would not give bureaucrats or incumbents the power to veto citizen legislation before it is made. (The FDA does not decide which medicines have a market, and the FAA lets airlines and manufacturers decide what kind of planes they need.) Rather, it would assure voters that ballot measures meet the same legal standards applied to any law that is passed by representatives.
A bigger problem is the fact that some citizen legislation simply goes unenforced by bureaucrats and other guardians simply because it lacks conventional political patronage. That is, most laws are subject to an unofficial understanding, or accommodation, among key legislators, high-level bureaucrats, local officials (including district attorneys and police)–and in some cases, corporate executives–about how energetically such laws will be enforced. For example, California’s Proposition 187, a 1996 initiative to deny illegal immigrants access to public schools and non-emergency, state-paid health care, was passed by a large majority. However, many school principals, hospital directors, and other public administrators who had facilities and staff in place to accommodate these clients, simply refused to enforce the law even if it survived appropriate legal challenges. Opponents of the measure praised these people for their “highly ethical” stance, comparing them to Germans who defied Hitler’s anti-Semitic discrimination in the 1930s. Supporters were outraged and condemned them as arrogant bureaucrats who believed themselves and their “administrative empires” above the law. Whatever individual guardian motivations may have been, this civil disobedience unquestionably revealed a serious gap in perceptions about sovereignty: who really controls the government, its agents or the demos?–and underscores how essential the perception of validity and consensus-building are to the democratic process.
In the last analysis, existing initiative systems, although widely popular (and considered by many to be more trustworthy than politicians),105 are no substitute for a more fully democratic, consensual system. They are subject to many of the problems of guardian-dominated politics with the exception of corruption in the classic sense (it is simply impossible to bribe an entire demos), and inclusiveness–laws passed by initiative are perceived by many to have greater moral force. This situation is not likely to change as long as a one-time, majority-rule victory–not consensus–is the objective and citizen-workers are still excluded from key economic decisions.
If politics is moving by fits and starts toward more democratic participation, what about meaningful reforms in the workplace?
In a 2001 Gallup poll, one in five American workers described themselves as “actively disengaged” from their company’s management, complaining that, among other things, they didn’t know what was expected of them, lacked necessary resources, and were often ignored by their bosses.106 This should come as no surprise to the economic guardians involved. In his essay “Reinventing the Corporation,” Roger E. Alcaly writes “Employees, as we shall see from a variety of studies, tend to be happier, more productive, and better paid under collaborative or participative work arrangements.”107
Although so-called participatory management has a long and checkered history–characterized mostly by managers misrepresenting their consultative style as participation–it was not until the dramatic success of Japanese automakers in the 1970s and early 1980s (the result, paradoxically, of participative ideas introduced by American quality-control consultant W. Edwards Demming) that U.S. industry began to change its traditional hierarchial ways to any noticable degree.
One early success was Ford’s use of Demming-style work teams to design and produce the Taurus: the car credited with reversing that company’s decades-long decline. The challenge, as explained by Ford’s former chairman and CEO Donald Peterson, was getting workers to realize they “had permission” to think for themselves after a half-century of top-down, one-way communication.108 This problem was compounded not just by the workers’ hesitancy to trust their own judgment, but also middle management’s reluctance to share the power created by their previous monopoly on information. Unfortunately, “democracy” at Ford–and in most other, similar experiments–was confined to a flattening of vertical communications and better recognition of merit. The corporate culture was still authoritarian and great disparities persisted in executive-versus-worker compensation, as well as other benefits that had nothing to do with contribution and everything to do with guardian power and prerogatives.
By 1990, while the incomes of top managers and workers continued to diverge at an astounding rate, a UCLA survey discovered that almost a quarter of the Fortune 1000 companies employed self-managed work teams (compared to just over 12 percent at the time of Ford’s turnaround) and that more than half of those planned to expand their experiments in worker participation. According to UCLA professor Ed Lawler, “Companies don’t change because they’re nice. They change because they want to make money... If it wasn’t for Japan Inc., I don’t think a lot of this would be happening.”109
At an employee-run cereal plant in Georgia, General Mills factory manager Pat McNulty agrees. “It’s not a social experiment,” he says. “It makes good business sense. Nobody knows the job as well as those doing it. If you empower those people to make decisions, they make good ones.”110 The result, according to McNulty, is reduced costs, better quality, and greater efficiency. At its Tire and Rubber Hose plant at Mount Pleasant, Iowa, Goodyear traded its system of hierarchy, regimentation, and close supervision for an organization featuring one manager, numerous work teams, and rotating squads of coordinators, with workers determining their own raises. “Sometimes sparks fly,” says Dave Smith, the plant’s human resources manager. “You have to take constructive criticism, and not everyone can.”111
Smaller firms seem more willing to experiment with radical reforms, and therefore gain more lasting success. For example, when Johnsonville Foods, a family-run sausage business in Sheboygan, Wisconsin, had problems keeping up with fast-growing markets–losing sales orders, mislabeling and misrouting products, damaging equipment and neglecting maintenance–owner Ralph Stayer responded by turning the plant over to the very people who seemed to be fouling things up. He gave them complete power to hire and fire each other, grant or deny their own raises, promote or demote themselves, set schedules and profit targets, control finances, develop new products and markets, and make capital investment decisions. Stayer says, “Everybody looks at what we’re doing and says, ‘God, that’s kind of flaky.’ It isn’t a soft or crazy deal. I’m a real hard-nosed, pragmatic guy... Teach people to do for themselves, this way you get far better performance.”112
Over eight years, Johnsonville sales increased 20-percent annually and productivity rose by 50 percent. Business consultant John Zenger does not see this as a fluke. “Companies become more competitive,” he says. “The employees...learn more skills. The more you have a sense of autonomy, the happier a camper you are.”113
This experience applies to capital providers as well. Twenty years ago, a Vanderbilt-trained economist, Muhammad Yunus, returned to his homeland, Bangladesh, with the idea of helping that newborn country improve its economy using the latest ideas in Western banking and finance. What he found, though, was that traditional capitalist guardianism was keeping the country poor. Starving people could raise themselves to subsistence, and subsisting people could achieve some prosperity, only if someone would stake them to the paltry sums needed to start a street-corner business or tide them over a lean period. Yunus discovered that all these people needed was literally a few pennies a day to keep them afloat and generate the income needed to buy not only food and shelter, but enough trade goods to pay back the loan.
Naturally, no conventional bank was interested in funding what eventually became the worldwide phenomenon known as microloans. “The banking system was designed to keep poor people out,” Yunus says. “They said, ‘The poor are not creditworthy.’ I said, ‘How do you know?’ They said, ‘Everybody knows. Why don’t you?’”114 In fact, Yunnus’s research showed that wealthier people defaulted on loans far more often than those few poor people who ever got them. Poor merchants were generally much thriftier and more cautious than their well-to-do counterparts, knowing quite well how to stretch a rupee. To tap this resource and solve this social problem, Yunus in 1983 founded Grameen (meaning “rural village” in Bengali) Bank, which specializes in microloans. Borrowers are required to meet weekly in small support groups to help each other solve problems and share ideas. By the end of the 1990s, Grameen granted over $1 million per day in microloans in more than 36,000 villages, and it has spread its methods to the United States. Arkansas, Illinois, and other locations with sizeable pockets of poverty use elements of its method–although here, public guardians insist that the loans be administered through “proper” welfare channels, and they usually dispense training, not cash. However, some private groups are beginning to fill this gap, raising funds for a system of national microloans ranging from $500 to $10,000.115
Despite these and other small-scale successes, most people still look to big companies for cues on how to make economic democracy work, and the results continue to be mixed. Union workers at General Electric’s jet engine plant at Lynn, Massachusetts asked to examine the company’s troubled plan for selling generator casings–a huge breach of organizational etiquette–but came up with a new, more cost-effective bidding system that won business back from a Korean competitor. At PepsiCo, where its once-profitable Frito-Lay unit was forced to lay off employees and cut back production of its high-end products due to ferocious new competition, executives could find no conventional solution to its problems. Their response was to “push” operational decisions further down toward the factory floor.
“At first workers viewed us suspiciously,” manufacturing manager Steve Smith reports, “when we said we were going to turn management of the business over to them. They only believed us after we spent a lot of time teaching them the fundamentals of our business: what consumers are looking for, how to calculate profit and loss, the importance of quality, how our plants fit into Frito-Lay as a whole.”116 At the end of each shift, workers enter information about their daily operations into computers and receive instant feedback on their progress against their goals. If the results are poor, nobody yells at anybody; the team simply gets together, figures out what went wrong, and tries a new solution.
Other participative techniques have infiltrated the corporate hierarchy in bits and pieces. These include the rise of ESOPs–pension-oriented Employee Stock Ownership Plans–through which control over companies can pass (often with the help of leverage) from disinterested stockholders to the workers themselves; and, less dramatically, the “360-degree evaluation” where subordinates evaluate superiors as well as vise-versa.
While these developments are helpful, they still lack a crucial ingredient: namely, a mandate for consensus among relevant stakeholders before significant, binding decisions can be made. As far as ESOPs go, most participants exercise no more control over their enterprises than conventional stockholders do–largely because they are still hemmed in by the same guardian-oriented property laws and traditions that dictate corporate governance. Because of this, corporate executives often use ESOPs for their own purposes, such as foiling hostile takeovers or controlling worker behavior by manipulating the contents of, and access to, pension benefits.117 The bankruptcy of United Airlines ended America’s biggest experiment with so-called employee ownership. ESOP advocates note that a series of fatal flaws, all aimed at placating conventional guardian managers and investors, doomed the experiment from the start: exclusion of flight attendants–the airlines most visible public representatives–from participation; inability of worker-shareholders to vote for directors; inability of employees to sell their shares until they quit or retired; and cessation of employee stock allocations after 2000, creating a caste system of old employee-owners versus newcomer “hired help.” As for 360-degree evaluations and other such schemes, they are, for the most part, simply job enrichment and job enlargement devices–well-known tools for increasing short-term productivity. Since they are nonbinding, guardians may disregard them without penalty.
In short, none of these piecemeal devices addresses the much deeper and more central questions of democratic corporate governance, such as asset ownership and the legal powers and prerogatives it bestows. Participative management, as most firms define it, has become just one tool among many–including outsourcing and downsizing–for guardians to contain costs and increase profits. The big questions that lie at the core of a capitalist system–allocation of investable funds, how much surplus should be generated and how it should be used, and so on–are still in the hands of traditional property owners and other economic guardians.
The sad fact is: owners and managers really don’t want to (and often, legally can’t) give up the rights and privileges bestowed by government to owners and custodians of property, including the suppliers of capital. Without reforms in these areas, any sort of workplace democracy will always be window dressing that disguises, or complements, traditional guardian power.
What has changed because of these experiments is stakeholder expectations. The democratic genie, once out of the bottle, can’t be put back. One generation’s “benefits and concessions” have a way of becoming the next generation’s “rights and entitlements.” Most observers agree that workplace democracy, in one form or another, is here to stay and will become an ever-more-palpable force in our political economy. It has already altered certain relationships among investors, lenders, owners, managers and workers that began in the industrial revolution, and promises to change them further.
According to Claremont College’s Peter Drucker, “We’re in one of those great historical periods that occur every 200 or 300 years when people don’t understand the world anymore, when the past is not sufficient to explain the future. We are entering a ‘post-capitalist’ era...”.118 Drucker sees the so-called knowledge workers of the post-industrial age as the vanguard for a new classless and non-ideological society. In his view, the old European class system from which both communism and liberalism took shape is gone. The entrepreneurial function once performed by capitalists has been largely replaced by professional managers, and the industrial proletariat by “employees who are neither exploited nor exploiters...who are subordinates but also often without bosses themselves.”119 Drucker predicts the ascendancy of a “third sector” midway between the private and public: those institutions concerned with non-profit, non-business, and non-governmental matters–a web of community-based groups that helps guide and shape these other, traditional endeavors.
One manifestation of this new, more participative era is the willingness of stakeholders to demand a voice in a firm’s decisions, often using the power of “consumer strikes”–organized boycotts–as well as judicial activism to achieve their goals. Using such tactics, consumers and various interest groups forced tuna canners to employ dolphin-safe fishing practices; induced Coors brewery to liberalize its minority-hiring policies; compelled McDonald’s to replace polystyrene packaging with a less environmentally harmful substitute; made AT&T withdraw its contributions to Planned Parenthood (whose programs offended a variety of Christian groups); persuaded the state of Alaska to ban wolf hunting; and led a large pharmaceutical firm, Burroughs-Wellcome, to reduce the high price of AZT, a leading AIDS therapy.120
But even successful boycotts are not true participation–no more than citizens staging sit-ins or street demonstrations can be said to be “participating” in normal government. These are the tools of frustrated, excluded advocates, not members of a demos collaborating to determine the common good and achieve the general will. When economic guardians respond to them, it is not because they have been persuaded through the consensus-building process, but because they have been compelled to do so by the threat of economic loss or pressure from higher guardians. Nor is the broader base of stakeholders involved in most of these adversarial actions. They are undertaken mainly by disaffected activists who wish to advance a specific agenda despite potential costs to other, excluded stakeholders–guardianism by any other name.
The bottom line is that economic democracy can never really succeed without complementary changes in the political environment–just as democratic reforms in politics can go only so far until the daily experiences of citizen-workers consistently reflect true democratic values and practices.
Dahl describes three historical “transformations”–historic waypoints on the road to direct participation–in which these seminal changes would make their first, halting steps. Transformations one and two have already happened: the experiments of the ancient Greek city-states and the emergence of large-scale representative democracy after the eighteenth century, a process that continues today with over 139 of the world’s more than 200 countries now featuring free elections and multi-party politics.121 The third–a political economy in which strong democratic procedures are valued as highly as specific policy outcomes–may be closer than we think.
Northwestern University professor Jane J. Mansbridge, imagines that this new brand of practical, participative democracy will be based on a widespread culture of “civic friendship,”122 under which citizens treat each other with social respect; seek consensus instead of win-lose contests; define the demos in terms of its common interests; and view both civic and private relationships as interpersonal contracts–as promises made and promises kept. When general interests conflict with specific interests, the collaborative atmosphere established by a belief in consensus will encourage noncompetitive bargaining (facilitated by mediators and citizen juries) in place of our current system of win-lose contests and its reliance on legal coercion.
Of course, such a society can evolve only after an extended period of democratic education and experience in which the lessons of participation learned in one area are not extinguished by compulsory guardianism in another. In many places and in certain ways, this process has already begun.
- 86. Bailyn. Debate on the Constitution. Part 1, 55.
- 87. Dahl. A Preface to Economic Democracy. 32-34.
- 88. Dahl. Democracy and Its Critics. 221.
- 89. Dahl. Democracy and Its Critics. 221.
- 90. Matier, Phillip and Ross, Andrew. “Parties, Gifts Lure Voters To Polls Early: Mayor-friendly groups hit 3 poor SF areas.” San Francisco Chronicle. December 12, 2000.
- 91. Barber. An Aristocracy of Everyone. 147.
- 92. Abramson, Jeffrey. We, the Jury: The Jury System and the Ideal of Democracy. New York: Basic Books. 1994.
- 93. Hochschild, Adam. “Jurors Weigh the Facts,” San Francisco Chronicle, July 12, 1988.
- 94. Adler, Stephen J. The Jury: Trial and Error in the American Courtroom. New York: Doubleday/Main Street. 1995.
- 95. Associated Press. “80% in Survey Found Jury Duty to Be an Uplifting Experience,” San Francisco Chronicle, August 14, 2000.
- 96. New York Times. “State could let juries decide laws.” Marin Independent Journal. September 22, 2002.
- 97. Bailyn. Debate on the Constitution: Part 2. 404.
- 98. Cronin, Thomas E. Direct Democracy: The Politics of Initiative, Referendum, and Recall. Cambridge, Mass.: Harvard University Press. 1989. 162.
- 99. Kershner, Vlae. “Democracy Gone Awry: Explosion of initiatives lets voters, not elected leaders, steer the state,” San Francisco Chronicle, May 18, 1998.
- 100. Wildermuth, John. “1911 Reform Was Meant to Give Citizens More of a Say,” Ibid.
- 101. Naisbitt, John. Megatrends. New York: Warner Books. 1982.
- 102. “Do-nothing politics: When the going gets tough, more and more lawmakers are taking a walk.” San Francisco Chronicle, June 25, 2002.
- 103. Howe, Kenneth. “Big Money Swamps the Ballot: Initiative industry’s bankroll now dwarfs that of candidates,” San Francisco Chronicle, May 19, 1998.
- 104. Barabak, Mark Z. “State Voters Like Initiative process, San Francisco Chronicle, March 10, 1993.
- 105. Gledhill, Lynda, “Ballot Initiatives Trusted More Than Politicians,” San Francisco Chronicle, Nov. 11, 1999.
- 106. Wall Street Journal “1 in 5 Workers Called ‘Disengaged’” San Francisco Chronicle, April 15, 2001.
- 107. Alcaly, Roger E., “Reinventing the Corporation” New York Review of Books, April 10, 1997.
- 108. Peterson, Donald E. and Hillkirk, John. A Better Idea: Redefining the Way Americans Work. New York: Houghton Mifflin Company. 1991.
- 109. Cohen, Sharon, Associated Press “Workers Happy to Be in Charge,” San Francisco Chronicle, December 2, 1990.
- 110. Ibid.
- 111. Ibid.
- 112. Ibid.
- 113. Ibid.
- 114. Ryan, Michael. “A Recipe for Prosperity,” Parade magazine, August 17, 1997.
- 115. Associated Press. “Microloans Help Start Businesses,” San Francisco Chronicle, August 15, 2000.
- 116. Grant, Linda. Los Angeles Times, “Firms’ Futures Rest on More Worker Involvement,” San Francisco Chronicle, May 4, 1992.
- 117. Pender, Kathleen. “United ESOP tragically flawed.” San Francisco Chronicle, December 8, 2002.
- 118. Ibid.
- 119. Drucker, Peter F. The New Realities: In Government and Politics/In Economics and Business/In Society and World View. New York: Harper & Row. 1994.
- 120. Asimov, Nanette, “There’s Big Power in the Boycott,” San Francisco Chronicle, October 2, 1990; Sietsma, Tom, “Ready, Aim, Boycott: media savvy bocotters find that high-pressure tactics can force corporate change,” San Francisco Chronicle, February 24, 1993.
- 121. Wright, Robin. Los Angeles Times, January 19, 1993.
- 122. Mansbridge, Jane J. Beyond Adversary Democracy. Chicago: University of Chicago Press. 1983.
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