Democrats Turn To ‘Economic Democracy’

“We cannot save our democracy unless we democratize our economy.” A truck is backing up to the loading dock, delivering a giant cargo of old wine in new bottles. You’re going to be hearing more of this language.

Speaking this week at the annual conference of the National Association of Latino Elected and Appointed Officials (which they somehow abbreviate as NALEO, skipping a letter), California Governor Gavin Newsom called for a new era of economic democracy:

The term “economic democracy” (ED) has been bouncing around for a long time, extensively defined and discussed by academic theorists: “Rather than being made unilaterally by private actors, important decisions about production are the results of broad deliberation processes among workers and, potentially, other constituencies … All models of ED, as conceived here, appear incompatible with capitalism.”

You can read the “core ideas” of economic democracy here, at the Stanford Encyclopedia of Philosophy. That page explains that under the magic unicorn conditions of true economic democracy, “it is not the owners of capital, or the anonymous forces of the market, but the democratic voices of all citizens that controls the economy.” We vote to make houses free, for example. Owners don’t get to decide anymore how their resources are used, which means that ownership ceases to exist.

At the base of all this discussion is the view of what a “market” is, the foundation of economic exchange. In a 2020 book, the former Clinton administration official turned UC Berkeley professor Robert Reich offered this absolutely extraordinary explanation of the term:

If you and I live in the woods with no contact with anyone else, and I offer you some of my venison in exchange for some of your acorns, we would start negotiating over the value of the exchange: No way am I giving you this much venison for just twenty acorns, but I’d think about it for forty. We’re setting a price. We’ve made a market. Robert Reich, being a very smart professor, feels confident that we couldn’t possibly have a market until a government showed up to create one for us. We’d just have to stand there holding our food items with no way to exchange them, in the absence of regulatory agencies to facilitate the trade. Government first, then everything else.

They are moving forward on this conception of the world, abandoning the idea of free trade outside of the mechanism of state power. And the euphemisms are going to pile up in a hurry. “Social control of investment,” moving decisions about the allocation of resources to government. “Wage replacement” or “wage buyouts,” finding more and more ways to pay people for not working. “Guaranteed basic needs,” the reconception of food, clothing, housing, fuel, medical care, and so on as inviolable rights that don’t attach to effort. Free stuff, no matter what, after a seizure of the means of production.

In a press release on Newsom’s comments at NALEO, the governor’s office gave examples that help to make sense of the term:

It means redistribution of wealth from earners to takers, more and more free stuff from the government. Benjamin Franklin probably didn’t say the thing that people incorrectly attribute to him: “When the people find that they can vote themselves money, that will herald the end of the republic.” But if he’d met Gavin Newsom, he would have.

Chris Bray is a senior correspondent at The Federalist and a former infantry sergeant in the U.S. Army. He has a history PhD from the University of California Los Angeles, not that it did him any good. He also posts on Substack, at “Tell Me How This Ends,” here.