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Private Enterprise Committed to Social Interests

by Joachim Beerhorst Wednesday, Apr. 05, 2017 at 4:29 AM

Social needs like energy- and water-supply, the waste industry, education, senior pensions and health care can be solved better publically than privately.


Interview with Joachim Beerhorst

[This interview published in March 2017 is translated abridged from the German on the Internet,]

spw: Economic democracy is a component of the current discussion about a social-ecological New Deal. Where must economic democracy begin to overcome the short-term orientation of businesses with its fixation on stock price development and to strengthen the just determination of employees and democratic control of investments?

Joachim Beerhorst: I think economic democracy can and must begin wherever work and the economy are organized.

On the plane of economic policy through orientation in social desirability and ecological compatibility; on the business plane through orientation in sustainable development and on the different composition of the supervisory groups; on the internal plane through the policy of the works’ councils…and finally on the plane of the workplace where employees can be addressed by creative ideas, social reason and self-organization. This is a possibility and challenge at the same time.

In all this, we must not wait for institutional changes – like the joint-determination-, social- or industrial-relations law – or for the federal German policy that is hard to influence. In communal and regional policy, interests can be organized; alliances forged and political spaces filled so local economic development is accessible to democratic control. The unions could politicize the work of the supervisory boards so – together and in an effective public way – they can turn away from a pure profit-oriented business leadership of short horizons…

spw: Are we not obliged to reflect about entirely new forms of business or economics after the failure of the “shareholder value” model? In which branches in Germany could public and cooperative businesses be developed or transferred into common property? Where is there a realistic prospect?

J.B.: With cooperative ideas, we have a hard time after the decline of union social economy businesses. Nevertheless I will not give up. In some businesses, there are cooperative enterprises. They are widespread in the global perspective and not only in developing or threshold countries. But first the obvious question presses how do we limit and reverse the privatization of public services and how do we enforce social interests against businesses and branches?

One answer is certainly the transfer of transportation services to public responsibility like the de-privatization of vital necessities – social themes like energy- and water supply, the waste industry, education, senior pensions and health care can be solved better publically than privately. The paper economy (Kreditwirtschaft) is one of the crucial social areas. This is demonstrated by the continuing open financial market crisis. Savings banks and cooperative banks are stabilizing. The world of banking should be strictly regulated (the bankruptcy escapades of the regional central banks confirm this).

How private enterprise is committed to social interests and thereby partially socialized is crucial. Two things are conceivable besides social and ecological legislation:

Firstly, similar to mastering the steel crisis in the 1980s, the regulated reduction of industrial overcapacity and economic structural change, for example in the auto industry through assigned production quotas for businesses – under socially agreed reduction and redistribution of working hours. New EU institutions and trade boards must take over the function that the European board for coal and steel carried out. More rational ways of crisis management do not seem doomed to fail since suffering increases through overcapacities. Secondly, we should understand the profit expectations of capital as socially adjustable and not as an economic law. This could mean agreeing on socially acceptable profit margins for private capital and making everything accessible to social control. I can envision a social economy orientation as a binding regulative idea when it is implemented across Europe, if not globally, in coordinated social agreements.

spw: What mobilizing power do goals of economic democracy have in union work?

J.B.: I am not sure. On one side, the widespread business practice of joint determination has not made democracy experiencable in the economy. Economic democracy is not currently a mass theme. On the other side, historical and current examples show people are activated when they feel they are gaining influence on their own affairs through expanded joint determination – in the existential questions of work and the economy.

The conflicts around the coal, iron and steel industries in Germany, around the investment funds in employee control in Sweden or – in the most radical and under non-capitalist conditions – redefinition of conditions of the economy, society and democracy in the 1968 Prague Spring, the increased participation and membership of the IG Metal union speak for the attractiveness of political offers and possibilities to come out of the object role and overcome experiences of powerlessness. Over against the “terror of the economy,” there are no certainties but potentials based on experience for realizing the political concept “democratization of the economy.”

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