Economic Democracy through Collective Capital Formation: The Cases of Germany and Sweden, and Strategies for the Future

Abstract

The global economic crisis, whose effects are ongoing, was the result of an undemocratic, anti-social system of production, investment, and finance. Therefore, it is an opportune time to revisit the question of economic democracy. This question has emerged in various periods and places as a salient issue within the labour movement and the Left. In Europe, two paths to economic democracy have been considered: the co-determination line and the more radical property line challenging private ownership of capital. While the former has been dominant in social democracy, in the 1970s, the latter became the main focus of debates in Germany and especially Sweden in the social democratic parties and trade unions. In both cases, system-transforming proposals for collective capital formation, aiming beyond the Fordist accumulation regime, played a key role. This article examines these experiences, paying particular attention to the issue of hegemony in a changing mode of production, and then explores several newer strategies of collective capital formation: trade union pension funds, societal funds, and hybrid citizen—worker ownership. Based on the lessons of the German and Swedish debates, it concludes that labour and Left forces need to form a transnational hegemonic bloc to overcome the resistance of international capital and advance an economic democracy agenda, with the structural reformism of collective capital formation occupying a central place on this agenda.