Why is True Democracy Indivisible from the New Economy?

By Alvaro J. de Regil

Reflecting on the “Principles of the New Economy” advanced by the “New Economy Network”: Measuring progress; Respecting natural limits; Democratising the economy; Ensuring economic progress; Localising control; Taming finance; Reducing inequality; Providing adequate livelihoods; Re-defining globalisation; Fostering new values, at first glance, they seamlessly and coherently make much sense.

I am, however, pleasantly and particularly surprised with the explicit reference to the need to exert “democratic control” over the system, which must be its most important underpinning. Furthermore, these principles have much in common with the concept of degrowth economics (Latouche, Harribey, Custers, Stoll, et al) that proposes a new paradigm of no more conventional growth, where GDP growth ceases to have a meaning and where progress and development are based on qualitative human development with a much smaller bio-ecological footprint. Well, it so happens that such concept requires a true democratic ethos. Hence, in our living wages initiative, that we advance at Jus Semper, this truly democratic paradigm is also embedded at its core.

Consequently, for these principles to have a realistic possibility to become the core of a new economic paradigm, we must explicitly call for the urgent need to first build a new societal edifice of true democracy. That is, currently we do not live in a truly democratic ethos whatsoever. On the contrary, we are enduring the consequences of allowing capitalism to impinge on our “so-called” democratic institutions and transform them into marketocratic institutions. Thus, we are enduring a marketocracy where the public matter has been privatised and politicians discuss it in private with the owners of the market, the so-called institutional investors of the casino economy, the same people who finance their campaigns and obviously get to set the public agenda.

Accordingly, I believe that it is indispensable –to develop a new economic model– to first move from the current mockery of “representative” democracy to a “true democracy paradigm for the sustainability of people and planet, and not the market”. True democracy must be direct, bottom-up and with the citizenry empowered to permanently participate in the public matter, propose, approve and reject initiatives, and remove public servants every time they fail to fulfil their responsibilities. In this new ethos, the only purpose of truly democratic governments would be to unrelentingly pursue the sustainable welfare of all ranks of society and the planet with a much smaller bio-ecological footprint (with all its implications). Thus, the market would no longer be an end in itself, like today, and would strictly be a medium for the exchange of the output of sustainable economic activities.

In this way, the new economic paradigm, with a new set of principles would be firmly anchored in a new truly democratic context. If, on the contrary, we attempt to build a new economic system, without first building a truly democratic edifice, I am certain that we will never achieve this quite alluring new economic ethos.

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Alvaro J. de Regil is Executive Director of The Jus Semper Global Alliance and initiator of The Living Wages North and South Initiative. He writes on various subjects such as CSR, business and human rights and the long-term sustainability of people and planet for Jus Semper and occasionally for journals and academic books such as the Social Responsibility Journal and the Gower Handbook of Corporate Governance and Social Responsibility.