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Introduction to Economic Democracy


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Economic democracy, as it applies to human beings, is a system whereby members of society enjoy economic, social, and political equality. Underlying this philosophy is the belief that economic activity is best left to those who do it voluntarily rather than having the government control it through taxation. It also advocates a minimal state and regards the interests of the many as equal to those of the few. Social democracy is also a broad political theory, which regards economic and social democracy as essential for a democratic political system. It is also a form of liberalism, characterized by tolerance for other views, a rejection of extreme ideas, and a rejection of right-wing or left-wing politics, individualism, protectionism, and protectionism.

economic democracy

 

What is "social democracy"? As defined by Wikipedia, "a political theory that favors economic and social equality and the maintenance of social welfare programs as a major aim of government policy." So, basically, it is a sort of liberalism, but with a more social orientation. The main difference between socialism and social democracy is that socialism attempts to create economic growth through the control of resources via collectivities (comparatively to capitalism, which are more capitalistic), collectivism tends to repress individual enterprise, and collectivism is associated with violence and war. Socialism also aims for overall economic equality.

 

Which type of government best serves the public's interest? A fair question, which we must ask ourselves all the time, as when it comes to economic policies and systems. For, while economic policies can provide jobs, enhance economic growth, and decrease economic inequality, they can also adversely affect free-market capitalism, as some policies limit free-market capitalism's freedom to act in ways that are beneficial to the public.

 

For instance, high levels of taxation and heavy regulation of the economy can reduce economic freedom and reduce the potential for economic growth. Moreover, these sorts of economic policies can adversely affect the freedom of entrepreneurs, as they often need to resort to protectionism to protect their interests. In short, socialism promotes economic policies that are not generally desirable to the majority. A better solution might be to move towards something like economic planning, which concentrate on economic growth through the proper use of the planning system, rather than on overall spending.

 

In addition to limiting freedom of action, socialism encourages corruption, since those who benefit from such systems do not have an incentive to increase economic freedom. For instance, when a socialist regime is in place, it is unlikely that businesses will start up or hire employees who are able to compete for the right to invest. The only action they have is to invest in things that are left for the private sector. This is why, when economic policies are inefficient, it often leads to the rise of social conflict.

 

Ultimately, it is important to understand what differentiates between economic systems and economic democracy. Both are ideal, though each has its disadvantages. The difference lies mainly in how they treat citizens. In economic democracy, those who are economically disadvantaged are allowed a say in how they would like to live their lives. Whereas, in a free-market capitalism system, those with more capital have the upper hand and are able to choose the societal rules that govern their lives.

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