Economic Democracy and the Left in Central and Eastern Europe

by Nyegosh Dube

The Left in Central and Eastern Europe (CEE) finds itself in an odd position. Just 23 years ago, the region began a dramatic transformation away from a system called socialism by the authoritarian regimes that presided over it and towards the reigning model of Thatcherite freemarket capitalism, or what we now generally call neo-liberalism. In CEE the term socialism is widely equated with the defeated and discredited system that prevailed for over 40 years in the region. So, the Central European Left doesnt dare talk about socialism, or any forms of social ownership or social control of investment, as an alternative to neo-liberalism. At the same time, the option of social democracy, i.e. a more socially oriented form of capitalism, was largely swept aside together with the debris of Communist socialism by the neo-liberal wave of the 1980s and early 1990s. There Is No Alternative became the mantra in the West and even more so in the newly democratising East. Today the CEE Left cannot advocate socialism, and cannot implement social democracy even if it advocates it because of the realities of the neo-liberal economy and the neo-liberal ideological hegemony. Even as it clings to social democracy, Central Europes Left has been unable or unwilling to do much to stem the neo-liberal tide that has swept over the region. In many cases, it has actually been at the forefront of neo-liberalism (like much of the mainstream Western European Left) in line with the if you cant beat em, join em philosophy. The neo-liberal hegemony has meant that the Left can govern only by embracing neo-liberalism, while speaking the language of the Left to win and retain popular support. Yet the result more often than not has been voter disillusionment and the defeat of Left parties. In Slavoj ieks words, the Left seems to offer Pepsi compared to the Rights Coke.1 The Left is adrift, without fresh ideas, without a vision. When major crises rocked the capitalist system in recent years, the mainstream Left across Europe failed to come up with a powerful response it was paralysed. Yet there is a vision, a set of ideas that have been around for a long time and are sparking interest once more: economic democracy. This is a vision that can breathe new life into the Left, enabling it to champion a clear, solid, appealing alternative to the current dysfunctional, anti-social economic paradigm.

Socialism, Social Democracy, Economic Democracy In the preceding paragraphs Ive mentioned three key concepts relevant to the Left: socialism, social democracy, and economic democracy. Socialism is of course problematic because of the dismal 45-year experience with a system called socialism in Central and Eastern Europe and the impact this has had on popular perceptions of socialism and attitudes towards the Left. It is also problematic outside the Communist context because it is associated with nationalisation and state ownership, the welfare state and heavy taxation, and a preference for regulation and planning. But to me, it should be associated first of all with democracy, in particular the expansion of democracy into the economic sphere, and the economic empowerment of citizens
1

Lubo Blaha, The Perspectives of the Left in Slovakia and in Europe, in Micha Syska (ed.), The Left in Central-Eastern Europe. Ferdinand Lassalle Centre for Social Thought, Warsaw-Wrocaw 2011, p. 161

and working people. This in turn strengthens democracy in the political sphere by substantially reducing the influence of oligarchic power on the political process. Indeed, economic democracy is my idea of socialism or to put it more accurately, its at the core of what I think socialism should be all about. So, there is a considerable overlap in my mind between the two concepts. Social democracy, on the other hand, seems to function as a counterweight or even a complement to the economic undemocracy of capitalism. With the rise to dominance of neoliberalism, this role has become increasingly difficult to sustain. Social democracy has withered under the onslaught of neo-liberalism and the challenge of neo-liberal globalisation. To avoid irrelevance and impotence, it embraced neo-liberalism in the 1990s under the banner of the Blairite Third Way. Now that the neo-liberal delusion has led the world into major economic crises, social democracy is at a crossroads. It needs to reject neo-liberalism and reconnect with its socialist roots via economic democracy. Unless it reconnects with socialism, social democracy will be ideologically marooned on the desert island of neo-liberalism. But isnt it enough to reconnect with Keynesianism, the idea of an active state intervening in the economy with public investment and social spending, and with the classical redistributive welfare state? No it isnt, because this approach fails to deal with the structures of economic power in society. The failure of social democracy to embark on democratisation of these structures helped to pave the way for the neo-liberal ascendancy and the growing power of the corporate oligarchy. Two things happened to socialism during the last century: on the one hand, it got diluted and transformed into the welfare state and the social market economy, and on the other, it got distorted and misappropriated by Leninist-Stalinist regimes. By the 1960s, major Western socialist, labour and social democratic parties stopped actively advocating socialism though they still paid lip service to it. The Cold War had much to do with this, with Western mainstream Left parties reacting against the undemocratic, centralised, state-controlled systems of the Communist world. Rather than responding with socialism understood as economic democracy, they retreated from socialism understood as nationalisation and state management of large parts of the economy, a sort of democratic variant of the Communist model. Its important to clear the air about socialism. I propose to do this by tackling the question of what I think socialism is not. (By now, readers will have an idea!) First and foremost, and this is perhaps the most relevant for the Left in Central and Eastern Europe, socialism is not the system that existed in the Communist world, because socialism must be based on democracy, freedom and human rights. Socialism is about empowering people as citizens and workers and pursuing the common good, social justice and equality. Soviet-bloc Communism was antithetical to these values. As the 1951 Frankfurt Declaration of the newly re-established Socialist International stated: Communism falsely claims a share in the Socialist tradition. In fact it has distorted that tradition beyond recognition.2 This was echoed in the 1959 Godesberg Program of the German Social Democratic Party: Socialism can be realised only through democracy and democracy can only be fulfilled through Socialism. Communists have no right to invoke Socialist traditions. In fact, they have falsified Socialist ideas.3 (Ironically, Godesberg signalled a retreat from

Socialist International website: http://www.socialistinternational.org/viewArticle.cfm?ArticleID=39 http://germanhistorydocs.ghi-dc.org/pdf/eng/Parties%20WZ%203%20ENG%20FINAL.pdf

socialism, but thats another story.) Let me also say that American socialist leader Michael Harrington was right to refer to Communism as a form of anti-socialist socialism. 4 Describing those regimes as socialist has done tremendous damage to the socialist brand, if I may use such a term. Not only did these regimes call themselves socialist, but many people who are not linked with them, including many on the Left, have accepted this self-description uncritically. Should we also accept that East Germany was a democracy because it called itself the German Democratic Republic? Even worse is the Soviet-bloc term real socialism: its use today is incomprehensible since Communism was hardly real socialism! The term democratic socialism has been used by Western socialists to differentiate what they believe in from what the Communist regimes called socialism. While this is understandable, it is actually redundant like the term free gift. Although Communism is itself a misnomer, I think given the very fact that it is an unrealisable utopia (in my opinion) in contrast to socialism, we can apply this term to the authoritarian, single-party state collectivist system of the Soviet bloc. Secondly, socialism is not nationalisation and state ownership, nor is it the welfare state and redistributive taxation, nor economic planning and opposition to markets. France, for example, has many state-owned firms, with the state traditionally playing an active role in the economy, regardless of whether the Right or Left has governed. As for the welfare state, it is a sort of substitute for socialism, invented in the 1880s by German chancellor Bismarck, author of the Anti-Socialist Laws. The Swedish welfare state was the result of the 1938 Saltsjbaden Agreement, a compromise between labour and capital that left the economy largely in private hands. And as for planning and markets, France and Japan engaged in non-command planning for decades, with private business leaders closely involved in the planning process. At the same time, market socialism has a long pedigree in socialist economic thought and practice, and has been much debated among socialists. Yugoslavia was the perhaps the prime example of market socialism, with socially owned, worker-managed enterprises competing on the market. Of course, state ownership and planning can be important elements of a socialist economy, and it is sometimes hard to draw a line between what is socialist and what is not, if there is a net gain for the public interest. The point is that these institutions should not be seen as sine qua nons of socialism or even as primarily socialist. To me, what is crucial here is whether a given institution serves to democratise economic power or as an instrument of democratised economic power. If it does either, it can be called socialist. Regarding the welfare state, naturally major components of it such as universal health care, retirement pensions, and unemployment insurance are essential to a socialist system the solidarity and security of citizens are, after all, core values of socialism. To conclude this discussion, I think the Left, both in Western Europe and CEE, needs to move to a position where socialism, social democracy, and economic democracy are substantially overlapping. Economic democracy is of central importance here: if you take economic democracy out of the equation, youre left with socialism without real content and social democracy without a solid foundation. One could say that social democracy should aim for socialism by means of economic democracy.
4

Michael Harrington, Socialism. Bantam Books, New York 1973, p. 187. Harrington writes later in that chapter: Where the state owns the means of production, the crucial question is, who owns the state? The people can own the state in only one way: through the fullest and freest right to change its policies and personnel. (p. 225)

A Portrait of Economic Democracy Before discussing some key issues surrounding the Left in Central Europe and how it should approach economic democracy given the specifics of the region, we need to look more closely at what this vision entails. I would describe economic democracy as a system where citizens and working people exercise democratic control over economic processes through substantial collective ownership and control of capital, ensuring that these processes serve their best interests rather than narrow oligarchic interests, whether based on private capital or state power and, as a corollary, result in an equitable distribution of income and wealth. A hallmark of economic democracy is diversity: a variety of enterprise, governance and ownership forms and a variety of investment mechanisms. Moreover, it builds on a range of currently existing institutions that function as islands within the capitalist system, but more importantly, it also develops directly out of the corporate mainland of that system. The democratic control over economic processes that I refer to above is exercised on three different levels: micro, meso and macro. Micro is the enterprise or company level, while macro is the societal level. In between we have the meso or multi-enterprise level with collective institutions set up by worker-managed firms and trade unions. Europe already has functioning examples of micro-level economic democracy in the form of worker cooperatives and employee-owned companies, as well as works councils and codetermination. Mondragon, the worlds largest worker cooperative (actually a federation of worker coops), based in the Basque Region of Spain, is clear proof that industrial firms can function very well without wealthy owners and shareholders and absurdly overpaid executives. As further proof of this, we have the successful British chemical company Scott Bader, owned by a charitable trust that belongs to its workers and democratically run by them. Another example is the Italian region of Emilia-Romagna, home to the worlds biggest concentration of worker cooperatives, mainly small and medium enterprises in a variety of sectors. The economy of this region has been an Italian success story for decades, no small thanks to the worker coops. Regarding co-determination and works councils, these institutions function within capitalist corporations rather than being alternatives to them, but certainly have the potential to effect meaningful change from within. As to whether co-determination, where workers representatives sit on company boards, is a genuine exercise in worker power or a sophisticated form of corporate co-optation, the truth probably lies midway. The same applies to works councils, which serve mainly as consultative and communication channels, with some decision-making powers at shop-floor level. In Germany, all companies with over 500 employees are required to institute co-determination, and the EU requires all multinationals with 1000 or more employees to set up European Works Councils if they have at least 150 employees in two or more EU states. The German-based multinational Robert Bosch GmbH is an interesting example, representing an intersection of two models diverging from the classic capitalist corporation: it is 92% owned by a charitable foundation that channels company profits into philanthropic activities, and like all bigger German firms, practices co-determination (within its German operations) as required by

law.5 It bears some similarity to the Scott Bader model in terms of ownership by a charitable trust, the difference being that in the latter case, the companys employees own the trust. The examples of worker ownership that I have given so far Mondragon, Scott Bader, and the worker coops of Emilia-Romagna involve single-company ownership, i.e. workers of a given company owning that company. But worker ownership can also take a multi-company form, which brings us to the meso level. The best example is probably the Solidarity Fund in Canadas Quebec province. Set up by the Quebec Federation of Labour, it is a pension-based investment fund and invests in companies across the province with the aim of strengthening local economies and reducing unemployment, as well as ensuring that companies meet high social and labour standards. It also supports worker participation and worker buyouts of individual companies. Another notable model of multi-company worker ownership is the ingenious Meidner Plan proposed in Sweden in the late 1970s. Although it was never implemented because of fierce resistance by the business oligarchy and the ambivalence of the Social Democratic Party, it remains a powerful and attractive model for those on the Left seriously interested in transforming the ownership structure of corporations. Under the plan, worker ownership in sector-based groups of large companies was to be built up over time through mandatory annual allocation of shares, amounting to 20% of profits, to trade union-controlled wage-earner funds. Eventually workers would have gained majority ownership of all large Swedish corporations. The plan was strongly supported by the Swedish trade union confederation (LO). Also worth mentioning as an example of a worker-based multi-company investment fund is the Coopfond in Italy. This is a fund maintained by Legacoop, the largest Italian confederation of cooperatives, through a 3% levy on the net profits of its member coops, and supports the development of the cooperative sector itself. Within the Mondragon federation, the Caja Laboral bank plays a similar role using the funds of its depositors, worker-members of Mondragon. The bank itself is organised as a worker cooperative. Probably the most important and most interesting of the three levels of economic democracy from the point of view of this article and the future of the Left across Europe is the third one, the macro or societal level. This is certainly the most socialist of the three as it concerns citizens and working people on the national and European levels democratically steering economies to achieve socially beneficial outcomes. Traditional fiscal tools, i.e. public investment and tax policy, are not what I have in mind here, much less monetary tools. While more public investment is definitely necessary, especially in tougher times, we also need public control of investment more precisely, social control over corporate investment. The best way to achieve this is by giving citizens and working people a controlling stake in Europes large corporations and the massive reservoir of capital that they command. These corporations are at the heart of capitalist economies and constitute the economic base of oligarchies enjoying disproportionate power and wealth. By embedding citizen and worker control in large corporations, we can transform the structure of economic power and the distribution of wealth. Unlike the micro and meso levels, here we enter largely into uncharted seas and the realm of ideas as opposed to existing models. One possibility would be to set up a Citizens Investment Fund (CIF) in each EU member-state as a sort of national foundation the CIFs would be linked
5

Robert Bosch GmbH, Wikipedia. http://en.wikipedia.org/wiki/BOSCH

together under a European Citizens Investment Fund (ECIF) functioning as a federation of CIFs. Companies would be divided into two groups: large shareholding corporations above a certain size (based on turnover or number of employees), and all the rest. The Citizens Funds would be given ownership of up to one-third of each corporation in the first group, while worker equity would be gradually built up using the Meidner Plan until the relevant CIF and wage-earner fund (WEF) together gain at least 51% ownership. (The ECIF would replace the CIF where a company has less than half its EU employees in any one EU country.) Actually, majority citizenworker control can be achieved immediately where co-determination already exists or where even limited co-determination is newly instituted. How would the stake given to the Citizens Funds be paid for? Simply by abolishing corporate taxation on the companies concerned.6 The percentage of Fund ownership in each country should be equal to the corporate income tax in that country this ranges from 10% to 35% in the EU, with 27% being the average in Western Europe, 18% in CEE.7 The foregone taxes would still be allocated to public interest goals, but through the Citizens Funds. As for the WEF allocations, they would work as a sort of wealth tax, having the biggest impact on the biggest shareholders. The CIFs would be autonomous public bodies overseen by national parliaments funded primarily through profits from their share ownership. Their governing councils would include a wide range of civil society stakeholders, including trade unions. In addition, there would have to be a strong participatory component to enable citizens to make their voices heard and take part in goalsetting and policymaking from the community level on up. The ECIF would be overseen by the European Parliament and have a governance structure similar to the other funds. The Citizens Funds would steer companies to make socially responsible business decisions, ensuring that they serve the public interest while still making a profit by producing quality products and services for the market. This includes keeping the unemployment rate low by making sure that companies invest and hire, and dont just sit on piles of cash and keeping CEO and other executive pay within reasonable bounds. Companies would be steered to invest in ways that strengthen communities, help depressed areas, and protect the environment, and to act in ways that respect worker and consumer interests. Moreover, the Funds would allocate their share earnings through grants to a wide range of socially beneficial goals, and also perhaps invest in small and medium businesses in order to achieve socially desirable economic objectives. Also, the CIFs would be decentralised, with a large part of their resources allocated at regional (i.e. sub-national) level based on regional priorities. Regarding the remaining companies, a target would be set of converting one-third of them into employee-owned firms (including cooperatives) and foundation-owned firms (with codetermination) over a ten-year period and also Quebec-style funds would be set up that can acquire equity in companies within this group. Naturally, the necessary state support and incentives would be provided. Finally, regional public investment councils would be set up (with broad-based representation) to vet major investments by firms in either of the two basic groups to ensure that they dont harm workers or communities.
6

This idea of converting taxation into equity is based on a proposal by E.F. Schumacher in his influential book Small is Beautiful: Economics As If People Mattered, Harper & Row, New York 1973, pp. 285-286
7

Tax rates of Europe, Wikipedia. http://en.wikipedia.org/wiki/Tax_rates_of_Europe. Another option is to set 27% as the rate across Western Europe, and 18% across CEE, based on those averages.

The bottom line of all this would be greater pluralism, both vertical (i.e. within large corporations with ownership by citizens through CIFs and by workers through WEFs, as well as by conventional shareholders) and horizontal, and a genuine mixed economy with a substantial democratic content. This combined with financial sector democratisation (involving democratic, community, cooperative and public banks), wealth taxation, income ratios (stipulating maximum intra-organisational differentials), and greater unionisation would lead to much more democratic and egalitarian societies in the European Union.

Challenges for the CEE Left and the Way Forward I started this article with a call for Left parties in both Western Europe and CEE to adopt the vision of economic democracy and then outlined it in some detail, so it may come as quite a surprise that all the political parties that belong to the Socialist International (SI) have already signed up to this vision! This includes most of the major Left parties in CEE, such as Polands Democratic Left Alliance, the Czech Social Democratic Party, Slovakias Direction Social Democracy (Smer), the Social Democratic Party of Lithuania, and the Hungarian Socialist Party. The Socialist Internationals 1989 Declaration of Principles, still in force, announces that the organisation is committed, as ever, to the democratisation on a global scale of economic, social and political power structures. It talks about achieving social control of the economy through a variety of means, including: democratic, participative and decentralised production policies; public supervision of investment ...; worker participation at company and workplace level as well as union involvement in the determination of national economic policy; self-managed cooperatives of workers; public enterprises, with democratic forms of control; democratisation of theworld financial and economic system; international control and monitoring of the activities of transnational corporations8 The Declaration continues: There is no single or fixed model for economic democracy and there is room for bold experimentation in different countries. But the underlying principle is clear not simply formal, legal control by the State, but substantial involvement by workers themselves and by their communities in economic decision-making The concentration of economic power in few private hands must be replaced by a different order in which each person is entitled as citizen, consumer or wage-earner to influence the direction and distribution of production, the shaping of the means of production, and the conditions of working life. I quote at length from the Socialist Internationals Declaration because, as we clearly see, it contains what is in effect a manifesto for economic democracy! In fact, the term economic democracy appears three times in the document. It is also important to note that the SIs 1951 Frankfurt Declaration, already referred to earlier, contains an entire section titled Economic Democracy.9 And yet, these facts are either not known to or totally ignored by its member
8

Socialist International website: http://www.socialistinternational.org/viewArticle.cfm?ArticleID=31 Socialist International website: http://www.socialistinternational.org/viewArticle.cfm?ArticleID=39

parties who have done nothing in this direction for decades. Moreover, as far as I know, the SI itself has done little on this front. So, it is high time that European socialist, social democratic and labour parties that are members of the SI should promote and implement the economic democracy principles they already adhere to! Focusing now on the mainstream Left parties of Central and Eastern Europe that are members of the Socialist International and also of the Party of European Socialists, the central problem for these parties is how to free themselves from the baggage of pre-1989 socialism and the trap of post-1989 neo-liberalism. With varying degrees of resignation and enthusiasm, Left parties in this region accept todays neo-liberal realities. The socialism of the Communist era is certainly a major reason why there is little appetite on the Left for mounting a challenge to the current system. A coherent, comprehensive ideological challenge requires advocating socialism but socialism in this region remains associated with Communism. But also, leaders of Left parties have gotten quite comfortable with neo-liberalism. In fact, after 1989 many ex-Communists quickly jumped on the neo-liberal bandwagon, developing cosy ties with the corporate class and international capital. If you cant beat em, join em! Poland is a particularly interesting case study, illustrating the confused political landscape of this region. Genuine workers' self-management is the basis of the self-governing republic proclaimed the 1981 program of the Solidarity trade union that led the fight against Communism in Poland. In 1989, after some hesitation, its leaders succumbed to the forces of neo-liberalism, embracing shock therapy under heavy pressure because of the need to get debt relief for Poland from the West.10 Lech Walesas admiration for Reagan and Thatcher certainly made it easier to adopt their philosophies. So, we had the paradox of both ex-Communists and their Solidarity opponents turning to neo-liberalism. But Solidaritys base was alienated by the negative effects of shock therapy and turned to the populist, nationalist Right. No major Left party emerged out of Solidarity. Poland has ended up being dominated by two right-wing post-Solidarity camps: one neo-liberal and pro-European, the other populist and nationalist. And the post-communist Left, after forming two (neo-liberal-oriented, catch-all type) governments, is now in a shambles. Throughout the region, populist right-wing movements, often coopting the Lefts economic policy positions and language while espousing xenophobic and socially reactionary positions, have won over much of the Lefts natural electorate. However, the xenophobia-laced economic populism of these parties has done little to roll back the neo-liberal hegemony. At most, we have seen lip service to some form of national capitalism combined with a quasi-welfare state. Speaking of the welfare state, what about social democracy as an alternative to both pre-1989 socialism and post-1989 neo-liberalism? The problem is that, as things stand now, social democracy is itself a de facto branch of neo-liberalism. Of course, Left parties can return to social democratic Keynesianism, pursuing large-scale public investment and social spending. Gavin Rae and Micha Syska point out that EU-funded public investment in Poland in the past few years has played a crucial role in enabling the country to avoid recession during the global crisis by offsetting the significant drop in private investment. Although this public investment program has been carried out by a centre-right government, it provides a powerful argument for a
10

Much of the post-1989 privatisation in Poland involved turning state companies into employee-owned companies. But in most cases this proved to be just a transitional step to management buyouts and conventional ownership.

social democratic program based on an active state role in the economy, in contrast to the Third Way-inspired austerity policies advocated and pursued by centre-left parties in Western Europe. But Rae and Syska both emphasise the need for a Europe-wide public investment program given that todays globalised economy makes action at the national level alone inadequate. 11 I think that as a policy focus for the next few years, this EU-wide Keynesian approach should definitely be adopted by the Left across Europe and in a coordinated way. When private investment collapses or is insufficient, and unemployment soars or remains stuck at high levels, public investment becomes essential to make economies grow and create jobs. Undoubtedly, it was government action on a massive scale that prevented an economic meltdown on both sides of the Atlantic in 2008-2009. However, since that time, in both Europe and the US, we have seen what amount to investment strikes by the corporate sector.12 The very fact that economies are so dependent on private investment decisions, which are guided by asocial and anti-social criteria, makes it essential to move towards public control of investment. Public investment is not enough as a long-term solution. Besides the fact that public spending often increases budget deficits and requires higher taxes, both of which are easy targets for the neo-liberal Right, we need to keep in mind that it stimulates economies that are largely in private, corporate hands and therefore serves to reinforce unaccountable, unelected corporate oligarchies. The Left needs to tackle the very structure of economic power. Ultimately, that should be its core task. The Left in Central Europe has tied itself to neo-liberalism for understandable reasons. Wishing to distance itself from the socialism of the pre-1989 period, finding itself in a world where the neo-liberal Washington Consensus was dominant and in control of major international financial institutions, observing the US Democratic Party, the British Labour Party, and the German Social Democratic Party all embrace Third Way policies, and being in countries that needed Western corporate investment to modernise and develop their economies, the CEE Left was drawn into neo-liberalism as if being sucked into a whirlpool. All these factors conspired to make it very difficult to pursue an independent, more authentically left-wing course. Central Europes continued heavy dependence on Western corporate capital seriously limits the freedom of action of the Left in this region and makes an EU-wide approach all the more essential. Social democracy can be a viable alternative to neo-liberalism in CEE and elsewhere only if it detaches itself from neo-liberalism. But, as I have argued, it is not enough to return to Keynesianism and state economic activism. Social democracy must go further. It must reconnect with socialism and economic democracy. To borrow Thatchers famous catchphrase, there is no alternative! The global crisis has created an opening for a revival of both social democracy and socialism (without quotation marks!) I would say the two go hand in hand. And in turn, these
11

Micha Syska, Social Democracy and the State, Social Europe Journal, March 2012, http://www.socialeurope.eu/?s=syska; Gavin Rae, The Third Way and the Left in Central-Eastern Europe in Micha Syska (ed.), The Left in Central-Eastern Europe, op.cit. pp.132-136
12

Gavin Rae, Strikers Hold Back Economic Growth, Beyond the Transition (blog), May 2011. http://beyondthetransition.blogspot.com/2011_05_01_archive.html; Corporate Cash Hoarding Holds Back Job Creation, AFL-CIO, 2012. http://www.aflcio.org/Corporate-Watch/CEO-Pay-and-the-99/Corporate-CashHoarding-Holds-Back-Job-Creation; Michael Burke, The investment strike is one the government would do well to bust, The Guardian, August 4, 2012. http://www.guardian.co.uk/commentisfree/2012/aug/04/investment-strikebusiness-economy

revivals must involve a movement towards economic democracy. Neo-liberalism has to be challenged in a fundamental way, for if social democracy leaves economic undemocracy unchallenged and unchanged it will find the going very tough. The corporate oligarchy and the forces of neo-liberalism will remain strong and will be able to battle against social democratic efforts and sabotage social democratic achievements. Several of the authors contributing to the Lassalle Centre publication The Left in CentralEastern Europe have rightly bemoaned the lack of vision of the Left in their countries, but also in Europe generally, and the Lefts failure to focus sufficiently on economic issues and on fighting neo-liberalism.13 Indeed, they observe that Left parties have generally tried to ride the neo-liberal tiger in the hopes of taking it in a more leftward direction, but this effort has failed. It is noteworthy that Lubo Blaha mentions economic democracy no less than three times in his contribution in the context of modern progressive issues and a new vision for the Left.14 In her study of social democracy in Poland, Anna Materska-Sosnowska also complains about the lack of vision of the Democratic Left Alliance (SLD), the countrys main Left party, and its powerseeking pragmatism.15 Vision this is the crux of the matter. The problem of vision is not limited to the Central European Left; it is also very much a problem plaguing the Left in Western Europe. As we saw earlier in this section, all European parties belonging to the Socialist International have already formally adopted the vision of economic democracy. So these parties lack of vision is really a systematic failure to act on the vision they signed up to when they joined that body. Be that as it may, it is time now for mainstream Left parties in both halves of Europe to take a serious look at economic democracy and strategies for pursuing this vision. So what should the Left in Central and Eastern Europe do to pursue the vision of economic democracy? The single most important thing I can say is that it cannot fight for economic democracy on its own. The vast majority of the EUs big corporations are based in Western Europe, which is still much wealthier than CEE. This region is in the process of catching up with the Western half of the continent and much of this process depends on Western European and American corporate capital. Therefore, any drive for economic democracy must be panEuropean in scale, which means the CEE Left should act primarily in concert with Left parties in Western Europe and at the level of the European Left, particularly the Party of European Socialists (PES) and ideally there should close cooperation between PES and other Left groupings in the European Parliament. To face the concentrated power of the European corporate oligarchy, the Left must act in a concerted manner across the EU. A united front is needed not just for economic democracy but also for a program of European public investment as an alternative to neo-liberal austerity policies that aim to dismantle the welfare state. In fact, I would advocate a two-pronged approach: an EU-wide push for Keynesian-style investment coupled with an EU-wide push for greater economic democracy.
13

Micha Syska (ed.), op. cit. Lubo Blaha, The Perspectives of the Left in Slovakia and in Europe, in Micha Syska (ed.), op. cit., p. 152ff.

14

15

Anna Materska-Sosnowska, The Crisis of Social Democracy in Poland: A New Start for the Left?, Internationale Politik und Gesellschaft 4/10, Friedrich-Ebert-Stiftung, Bonn, pp. 213, 215. http://library.fes.de/pdffiles/ipg/ipg-2010-4/materska-sosnowska.pdf

Having said all this, the Central European Left should not forget this regions own legacy of economic democracy manifested in various efforts to build alternatives to Soviet-style socialism, most notably: Yugoslavias relatively successful multi-decade experience with workers self-management; the 1968 Action Program of the Czechoslovak Communist Party, adopted during the Prague Spring, which called for workers self-management, and also the actual setting up of workers councils in that period; the workers councils set up during the 1956 Hungarian uprising; and Solidaritys 1981 program already quoted above. Solidarity abandoned self-management only in 1989 under neo-liberal pressure. Finally, returning to the link between economic democracy and socialism, this is a rather tricky question in terms of the political programs and goals that Central Europes Left parties should adopt in the future. Given economic democracys clearly un-capitalist and anti-capitalist essence, it will inevitably be associated with socialism and in this region, that means the system of 1945-1989. Certainly, right-wing forces, whether neo-liberal or national-populist, will attack economic democracy as being socialist. So be it! This makes it essential for the CEE Left to differentiate genuine socialism from Communism, and do so precisely by explaining that socialism means the expansion, not suppression, of democracy and the building of an advanced mixed economy combining efficiency and equality. Social democratic parties in Central and Eastern Europe must not shy away from socialism; on the contrary, they should embrace the goals of socialism, stressing that the essence of socialism is democracy political, economic and social while firmly repudiating the phoney socialism of the ancien regime. Economic democracy, as the best embodiment and vehicle of socialist ideals, should become a major part of social democratic party programs. The way forward is increasingly clear for the Left in this part of Europe. In tandem with the Left in Western Europe, it must move away from neo-liberalism and become a strong voice opposing it. But to oppose the current paradigm, you must show the people of the region that there is another option besides Communism, neo-liberal capitalism and right-wing populism, you must be able to propose an alternative that is attractive and viable. There is such an alternative: economic democracy! Let us unfurl our sails and chart a course towards it.

About the author: Nyegosh Dube has a B.A. in economics and political science from Yale University and an M.A. in political science from Columbia University. He is an editor, writer, journalist, and translator, with a decade-plus of experience in the European philanthropy sector. Among other subjects, he has extensive knowledge of the history and politics of Central and Eastern Europe and the former USSR, the history of socialist and communist movements, and the theory and practice of participatory and democratic economics, including workers self-management in Yugoslavia, guild socialism, worker cooperatives, and collective capital formation. He has published articles about economic democracy in the United Steelworkers blog and Social Europe Journal. Born in Yugoslavia (Slovenia), he grew up in India and spent many years in the US. His current home is Warsaw, Poland.