Abstract
Lisa Herzog has caught the Zeitgeist that troubles so many citizens in the United States and other advanced countries: the rise of right-wing authoritarianism and the growing economic and social inequalities generated by economies increasingly controlled by techno-billionaires. She frames our current malaise as one of exhaustion and domination: Neo-Liberal capitalism—based on unequal property ownership, hierarchies of power, and largely unregulated markets—has had its day but the economy and its competitive and ecologically destructive practices continue to dominate society, eroding democracy. Herzog believes that without a redistribution of power in the economy, democracy will fail, and the growing environmental crisis will become critical. A great deal then hinges on, first, re-imagining democracy and the economy, and their relationship to one another; second, invigorating democracy with policy proposals and experiments; and third, suggesting a way to transition into a new future.
The route to addressing these questions is via a selective critique of US capitalism. In Chapter 1, Herzog argues that the concentration of corporate power has resulted in economic and political power becoming more closely connected (p. 22). This shift is evident in decisions that shape markets and corporate self-aggrandizement. Social attitudes and behavior are also affected, as economy-related values and norms (hierarchy and competitiveness) undermine democratic values and norms (egalitarianism and cooperation). To offset this imbalance, corporate structures need to be democratized (Chapter 2) so that workers relate to managers more as equals than as subordinates. But this is not enough. In Chapter 3, Herzog highlights the far-reaching adverse effects of economic inequalities on the social distribution of power and related restrictions on individual opportunities for democratic participation.
If the economy were democratized as the author proposes, what goals should be pursued? In Chapter 4, Herzog criticizes the current preoccupation with GDP growth, arguing for economic objectives decided by democratic politics. These aims are likely to include human and environmental sustainability based on a range of indicators. In subsequent chapters, the author turns to key policy proposals that support economic democratization. These recommendations include a reduction in working hours (Chapter 5) and propagation of new social norms that effectively counter conventional economic beliefs (Chapter 6).
Herzog’s concept of democracy is anchored in values that include the moral equality of all citizens, mutual respect, cooperativeness, and a commitment to democratic institutions and procedures (pp. 15–16). These values “need to be present in society as a whole and on people’s minds, not just on election day” (p. 15). They are activated through deliberative citizen participation—vigorous exchanges of opinion and argument—that feed into representative institutions. According to the author, this form of participative democracy requires a strong culture of public discourse occurring within a pluralistic society (based on different community identities and cultures) and a system of checks and balances that hold the powerful to account (p. 18).
Herzog argues that when corporate concentration distorts markets and involves regulatory “capture,” as occurs currently, worker exploitation and natural resource extraction (the harmful use of natural resources) are likely outcomes (p. 27). Markets need effective regulation and can be helpful in decentralizing power, but they are ill-suited to supplying human services and public goods (e.g., security and public health). Herzog contends that corporate dominance is also evident within organizations. Workers must choose between submission to direct management control or working precariously in the “fissured” workplace that also assumes the form of algorithmically controlled platform work. In both cases, relations of subordination, including inadequate pay and conditions, militate against democratic practice, causing resentment and possibly loss of trust in democracy (p. 54). Moreover, bosses often have far more power over employees than is necessary from an operational standpoint, and employees’ experience of subordination makes it difficult for them to see work as having a social purpose.
What should be done? The author advocates substantive improvements and organizational change. The former includes “new rules both to minimize the harmful dimensions of jobs and to provide extra benefits in compensation” (p. 65), training leave for persons in low-skill jobs to facilitate upward job mobility, and a job guarantee based on minimum wages for people to undertake socially useful work. Regarding organizational change, Herzog argues that democratizing work improves worker motivation and performance, and it leads to better decision-making because those who implement have input. Surveys indicate broad public support for more worker voice (p. 71), and evidence from a Norwegian study (Barth et al., 2020, “Union Density Effects on Productivity and Wages”) suggests that strong unions acting in formalized bargaining and consultation settings contribute to increased productivity (p. 70). In addition, the author cites a German study (Scholz and Vitols, 2019, “Board-Level Codetermination: A Driving Force for Corporate Social Responsibility in German Companies?”) that shows more democratic firms do better on social and environmental criteria (pp. 74–75). Herzog suggests that organizational democracy may take various forms but should entail both strategic-level worker representation and work-related participation.
In Chapter 3, Herzog rebuts arguments that seek to justify high income inequality in the United States and even wider differences in the distribution of wealth. She then considers the requirements of democracy, particularly the need for a citizenry that has sufficient resources to participate in civic life and the motivation to do so. Inequality undermines these conditions in three ways: first, by means of a spillover effect. Money influences political decisions and access to education, the law, and health care (p. 88). Consequently, many citizens lack the resources and motivation to actively engage in democratic processes. Second, inequality creates social classes separated by dissimilar lifestyles that lead to “behaviors of domination or submission” (p. 91), causing resentment and disenchantment with democracy. Third, inequality encourages continuous striving for higher pay. The “rat race” and fear of falling behind or losing one’s job causes anxiety and distress and reinforces the competitive norm rather than encouraging cooperativeness. Herzog’s answer to reducing inequality and hence promoting citizen support for democracy, includes a combination of an inheritance tax and special-purpose youth grants for those who do not inherit, state provision of important services such as education and health care, and generous social insurance (pp. 94–95).
Time, according to Herzog, is an especially significant resource enabling citizens to engage with, debate, and make decisions on public issues. However, “for many individuals and families, overwork and exhaustion are the rule” (p. 123). We learn that two-parent, middle-class, full-time working families spend 135 hours on paid and unpaid work per week (p. 127). Time poverty is common, but time is needed for practicing democracy in NGOs and unions and for engaging in local public projects. Reclaiming time requires consideration of new policies, such as a shortened workweek and paid sabbaticals (p. 146).
How then to move from envisioning and proposing participative democracy to implementation? Herzog believes that wide public support for democracy-inspired reforms is needed. This requires changes in social values and norms, beginning with a critique of myths about efficiency, private property, and competitive capitalism. Research and experimentation should also inform change, particularly around a desirable balance between centralized and decentralized systems, more effective accountability in large organizations, and the integration of formal and informal governance processes (pp. 164–65).
The Democratic Marketplace is interdisciplinary in content and admirable for its clarity, conciseness, and explicit commitment to democratic values. However, the author’s conception of democracy and her critique of US capitalism are controversial. This reviewer’s particular concern is with Herzog’s notion of transition to a more democratic system. She ignores the problem of mobilizing people in an era of corporate control of social media that collects and analyzes personal data to influence social and political attitudes. These limitations do not, however, detract from the book’s value as a vital text addressing an important topic. Academics and policymakers will find much in this book to consider and debate. I particularly recommend its inclusion in advanced industrial relations and other social science student course readings.