Democracy & Economy Democracy and Term Paper

They couldn't protect themselves with diversification, as an investor-shareholder would in corporate-capitalism. All their eggs would be in one basket. This could result in the firm's stagnation from lack of creativity, innovation, and willingness to take a risk.

Dahl's issue is how to extend democracy and its values, especially equality, into the workplace and thus create a better economic system. He concludes that self-governing enterprises where the workers were responsible for the success of their firms, is the answer. Because every worker would have an interest in the well-being of the firm, greater participation, harder work, and more attention to duty would be the result. Greater economic equality would lead to more harmonious relationships in the workplace and in the greater community as well. He avoids discussing the issue of social ownership. It is not clear who would actually own these enterprises. Would the public own them? Would the workers? He does mention statistical findings in which only 90 of 3,000 firms were found in which "a majority of the equity is owned by a majority of the employees" (93). Perhaps that is his idea of ownership, but it's unclear.

Although Dahl says the economic system should be efficient, he doesn't show specifically how self-governing systems would increase efficiency. He does a better job of showing an improvement in the quality of life for workers and the consequent transformation of their attitudes and values as they invested themselves in the success of their enterprises. He seems to assume that a person's work is central to the person's identity and life satisfaction, which may or may not be true. He also assumes that central planning is the reason why socialism failed before, but he doesn't show why, or why it is so desirable to decentralize. Neither does he address the issue of reforming corporate capitalism rather than changing the whole structure. He does admit that rules and regulations governing the behavior of self-governing enterprises would be necessary, but he doesn't say what form these would take. Would there be a government agency set up? What would be the limits of its power? How would it be prevented from taking to itself the power to plan and make economic decisions?

Although he doesn't openly say so, Dahl seems to be looking for the perfect solution to the problem of unequal wealth distribution. His arguments might be stronger if he addressed the issue directly and admitted that there is no perfect solution to that problem. Self-governing enterprises might be a really good idea, but he makes them seem like the answer to all that is wrong with capitalism. It is wishful thinking to believe that everyone would suddenly be willing to participate if they had an equal share in the benefits of their enterprise. Some might, but most would not be any more willing to participate (especially if it involved going to meetings) than they are in the greater political arena. All Americans have a right to vote, but how many do? Why would they act any different in a business? A small group of people could end up running everything -- just as they do now. That could result in corruption and more inequality, rather…