Most of us can agree that political democracies, based on equality and individual freedoms, are the best systems of government in the world today. We know that democratic countries are the least likely to go to war with each other; they suffer from the fewest internal conflicts, the lowest counts of terrorism, and the lowest number of human rights violations. It’s also very clear that democratic political systems are the most fertile grounds for economic prosperity; the countries that rank highest on the United Nations Democracy Index also head the Human Development Index. Freedom, equality and prosperity appear to go hand-in-hand. Why then, do we only apply the principles of the democracy to politics, and not the economy?
The global economy is one of the most undemocratic and inequitable systems imaginable. In 2000, the UN estimates that 10% of the world’s richest adults control 85% of the world’s wealth. According to Forbes, the three richest people in the world control as much wealth as the poorest 47 countries combined. Almost 3 billion people live on $2 a day or less, while the average American lives on $119. The Royal Bank of Scotland controls more assets than the entire GDP of Brazil. Wal-Mart is richer than Thailand.
We criticize and scoff at theocratic political regimes and autocratic non-democracies around the world, but we embrace them in economic markets. Worse, we encourage the world’s poorest countries to adopt our political and economic models with the same degree of enthusiasm. For those countries – the world’s poorest – the adoption of democracy in politics has brought greater individual freedoms, but not economic development. Their embrace of “liberal”, free-market economics has been devastating. Only one country that began the 20th century in the Third World closed out 1999 in the “First World” column (South Korea). The UN estimates that in most countries that have undertaken rapid trade liberalization, wages have fallen 20-30%. The world’s economy continues to grow, rich nations become richer, but inequality and indigence remain the same. The world’s developing nations may be progressing (I’d say that’s up for debate), but developed countries are as far ahead of them as ever, if not further.
The disparity between political and economic equality brings to mind the Cold War debate over Human Rights, seemingly forgotten with the implosion of the Soviet Union, between civil and political human rights, and social and economic rights. The USA championed freedom of speech, religion, and self-determination, while the Soviet Union hammered on the right to housing, food, water… It’s hard to swallow our loving embrace of free speech and the right to vote, without acknowledging the right to food. Does is matter to a poor Cambodian that she can vote, if she can’t feed her children? Are we really patting each other on the back and congratulating ourselves for growing our economy if it doesn’t benefit the people who need it most? I’m so glad Americans are richer this year than last; it’s really too bad Africans aren’t.
We know that democratic governments promote economic growth and prosperity, but we’ve yet to realize that undemocratic economies also ruin democracies, and economic inequality makes true democracy impossible. Massive economic prosperity has resulted in billions of “interest” dollars. Just in the United States, the tobacco lobby alone spends an estimated $106,415 every day the legislature is in session to promote their poisonous agenda. In 2000, oil and gas companies gave $34 million dollars to political candidates (78% to Republicans); a sum greater than the combined annual income of 26,336 Haitians. And we wonder why there isn’t a serious, government-led alternative energy initiative? Countries like South Africa and Nigeria, with relatively high per capita GDP’s, have struggled for decades to forge a political system based on equality in an economic system epitomized by inequality.
If political democracy begins with self-determination and free speech, a democratic approach to trade must begin at the roots of human development; with life’s fundamentals and the right to food, water and shelter. Contrary to popular belief, it is not required of us to provide those things to the world’s disenfranchised, only to create a system in which the average world citizen can provide themselves with those absurdly simplistic necessities. Believe it or not, small farmers, hunter-gatherers, and pastoralists have been feeding themselves since the advent of time and the human race; long before genetically-modified corn or the “green revolution”. What has changed since then is homo sapiens’ access to land and water and the means of producing survival. A capitalist (selfish) and undemocratic approach to human nature – the idea we all compete with each other for limited resources – has set us on a path that is decreasing the ability of people to live on this planet.
The idea of economic democracy isn’t so revolutionary; and certainly not mutually exclusive with political freedom. “Public Goods” and infrastructure, like roads and water, are controlled by the government to ensure a certain threshold of access and standard of living to the population, equally. Public schools provide a decent education for everyone; not just those that can afford Phillips Andover or Miss Porters. Cooperatives exist because they represent democratic economic structures. They are formed to provide goods and services for their members in a way that is fair and just; based on the same democratic structures and systems we employ in our government. They have constituents who form a voting body, an “executive branch” and a Board of Directors that plays the role of the Supreme Court.
If co-ops are the democracies of the economy, privately-owned companies are autocracies and dictatorships that exist solely to benefit the owners. Corporations on the other hand, are oligopolies that exist solely to create wealth for a few owners. The “owners” are not involved in the process or implementation of production, and are generally unaware and unaccountable for the casualties along the way, the backbone of the Limited Liability Corporation. It’s like American voters electing the congress and president of Zimbabwe, and basing their votes on what’s best for America.
If you believe in the justice and equality of democracy, you have to believe cooperatives are less likely to exploit one another, less likely to steal, cheat and destroy the environment. Examples like the Associated Press, Organic Valley and Equal Exchange are shining examples of successful cooperative businesses that promote equality, transparency, justice and social responsibility. Trade between democratically-organized cooperatives was the foundation of the organic and fair trade movements. By bringing wholesome food to people in a way that values people and the environment, they exemplify the transformative potential of democracy in economics; to empower, develop and invest in all people, fairly and equally.