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Political institutions and contemporary workplaces operate according to different rules. The seeming contradiction between these two spheres, one democratic and the other something else, presents an opportunity for productive speculation about the possibilities for reconciliation. The purpose of this paper is to provide a guide for future research investigation of this perennial topic.

The discussion of whether the workplace can catch up with the democratic achievements of political life requires an understanding of the status quo, the prevailing frames or metaphors that govern our understanding of organizational life. Four metaphors are put forward to describe the prevailing spectrum of thought. In addition to metaphors, analogies are introduced as an interpretive tool to help guide the imaginative transition between political and workplace domains.

Democratic political cultures are supported by structures and institutions which encourage the expression of individual and collective voice. Workplaces, comprised of the same citizens who participate in the governance of communities, do not, with some important exceptions, offer the same opportunities for democratic participation. If a general analogy between political and workplace sphere is found persuasive, it should be possible to import and adapt democratic traditions from the former to the latter.

Discussions of workplace democracy often suffer from a certain naiveté, a bias against structure and toward informal consensus. Insofar as democratic workplaces are by definition smaller scale than political communities, this bias is defensible. This paper concludes however by asserting certain minimal “acid test” challenges to those who would promote the goal of workplace democracy.

The purpose of this paper is to delve into three themes about democratic enterprises.

(1) The first theme is the question of capital structure where labor-managed firms (LMFs) are often pictured as having “horizon problem.” Yet this is only a minor technical problem which is solved by the system of internal capital accounts as in the Mondragon cooperatives.

(2) The second theme concerns the attempt to implement participative management and the related ideas of active learning in educational theory in the workplace. The point is that the democratic firm is the natural setting to implement these ideas, not the conventional firm where the staff have the legal role of “employees” rented by the company.

(3) The third theme is the old canard the cooperatives are incompatible with entrepreneurship. My rethinking of the issue was inspired by the analysis of the late Jane Jacobs who emphasized that the primary means of growing economic “biomass” is through economic offspring (e.g., spin-offs) – in analogy with the biological principle of plentitude. Yet the conventional form of ownership operates as a fetter on this process since the ownership and management wants to expand its empire and maintain “ownership” of any potential offspring. But that constraint against spin-offs is absent in democratic firms, and the Mondragon complex has indeed illustrated how to catalyze this process of growth through offspring.

A public policy to encourage all companies to grow by affiliated and perhaps democratic spin-offs would create more jobs (through filling extra niches) and more stability (through the agility of separate companies).

Nancy MacLean’s book, Democracy in Chains, raised questions about James M. Buchanan’s commitment to democracy. This chapter investigates the relationship of classical liberalism in general and of Buchanan in particular to democratic theory. Contrary to the simplistic classical liberal juxtaposition of “coercion vs. consent,” there have been from Antiquity onward voluntary contractarian defenses of non-democratic government and even slavery – all little noticed by classical liberal scholars who prefer to think of democracy as just “government by the consent of the governed” and slavery as being inherently coercive. Historically, democratic theory had to go beyond that simplistic notion of democracy to develop a critique of consent-based non-democratic government, for example, the Hobbesian pactum subjectionis. That critique was based firstly on the distinction between contracts or constitutions of alienation (translatio) versus delegation (concessio). Then, the contracts of alienation were ruled out based on the theory of inalienable rights that descends from the reformation doctrine of inalienability of conscience down through the Enlightenment to modern times in the abolitionist and democratic movements. While he developed no theory of inalienability, the mature Buchanan explicitly allowed only a constitution of delegation, contrary to many modern classical liberals or libertarians who consider the choice between consent-based democratic or non-democratic governments (e.g., private cities or shareholder states) to be a pragmatic one. But Buchanan seems to not even realize that his at-most delegation dictum would also rule out the employer–employee or human rental contract which is a contract of alienation “within the scope of the employment.”

To examine how different types of ownership, including investor-owned, employee-owned, and mixed models, affect the dynamics of participatory practices in the workplace, and the broader social effects of these differences.

Brings together literature from democratic theory and empirical research in workplace participation and employee ownership. The first step is to articulate the range of democratic practices from nondemocratic to strongly democratic. The essay then discusses the different forms that participation can take and the threshold for what can be considered democratic participation. It then considers different models of ownership and the impact of ownership type on participatory practices.

It is found that investor-owned firms cannot be considered strongly democratic and that worker cooperatives are more likely to be strongly democratic and cannot fall below the threshold of weak democracy. However, strong democracy is not necessarily a feature of worker cooperatives.

Little work has been done to consider the way the type of ownership affects the kind or degree of democratic practices that may be present in an enterprise.

This chapter maps existing patterns of broad-based worker ownership and control in contemporary advanced capitalism and considers future possibilities for expanding democracy within firms. Section one discusses worker ownership and control arrangements in relation to different theories of the firm and shows how these arrangements map onto different national systems. Section two compares Germany, which is characterized by worker control without ownership, and the United States, which is marked by worker ownership without control. Section three explores three pathways through which broad-based worker ownership and control might be deepened and more strongly coupled in the future.

Today, there is the real possibility that self-management and workplace democracy will follow socialism into the dustbin of history. But the connection of self-management to socialism was misconceived from the beginning. Workplace democracy has its own roots in the historical struggle against slavery and against autocracy. The paper reviews the history of the theory of inalienable rights that applies not only against the self-sale contract and the political contract of subjection but also against of the self-rental or employment contract, today's contract of subjection for the workplace. The paper concludes with the current debate about corporate governance.