It wouldn't require the overthrow of existing order, merely a modification of the tax code to generate revenue which can then be used to establish public banks with the purpose of starting up labor co-ops, capitalizing existing co-ops, and buying out existing firms to be reorganized into co-ops. In time, you will have an economy with a large co-op sector as well as a private sector. In essence, workers would have a true choice between working for each other collectively in employee-owned firms or working for a traditional private employer. Given such an environment of competition between co-ops and traditional firms, private employers would be constrained in terms of exploiting labor unless they want to drive workers away into the co-op sector permanently:
http://en.wikipedia.org/wiki/Economic_democracy#An_alternative_modelMany analysts argue that both full employment and basic income guarantee are impossible under the restrictions of the current economic system for two primary reasons: First, unemployment is an essential feature of capitalism, not an indication of systemic failure.<4> Second, while capitalism thrives under polyarchy, it is not compatible with genuine democracy. <4> Suggesting that these "democratic deficits" significantly impact the management of both workplace and new investment,<4> some proponents of Economic Democracy favor the creation and implementation of a new economic model over reform of the existing one. In these terms, Dr. Martin Luther King Jr. suggests that, "Communism forgets that life is individual. Capitalism forgets that life is social, and the Kingdom of Brotherhood is found neither in the thesis of Communism nor the antithesis of Capitalism but in a higher synthesis. It is found in a higher synthesis that combines the truths of both".<22>
Assuming that "democracy is not just a political value, but one with profound economic implications", David Schweickart suggests "the problem is not to choose between plan and market, but to integrate these institutions into a democratic framework".<23> According to Schweickart, "Economic Democracy, like capitalism, can be defined in terms of three basic features:
* Worker Self-Management: Each productive enterprise is controlled democratically by its workers.
* The Market: These enterprises interact with one another and with consumers in an environment largely free of governmental price controls. Raw materials, instruments of production and consumer goods are all bought and sold at prices largely determined by the forces of supply and demand.
* Social Control of Investment: Funds for new investment are generated by a capital assets tax and are returned to the economy through a network of public investment banks."<4>
Schweickart concedes this basic model might seem stylized and oversimplified, as analysts tend to use simplified models to explain the basic laws of any system. In real-world practice, Economic Democracy will be more complicated and less "pure" than this abstract model. However, to grasp the nature of the system and to understand its essential dynamic, it is important to have a clear picture of the basic structure.
...
Although workers control the workplace, they do not "own" the means of production in Schweickart's model. Productive resources are regarded as the collective property of the society. Workers have the right to run the enterprise, to use its capital assets as they see fit, and to distribute among themselves the whole of the net profit from production. Societal "ownership" of the enterprise manifests itself in two ways.
* All firms must pay a tax on their capital assets, which goes into society's investment fund. In effect, workers rent their capital assets from society.
* Firms are required to preserve the value of the capital stock entrusted to them. This means that a depreciation fund must be maintained. Money must be set aside to repair or replace existing capital stock. This money may be spent on whatever capital replacements or improvements the firm deems fit, but it may not be used to supplement workers' incomes.
If a firm is unable to generate even the nationally-specified minimum per-capita income, then it must declare bankruptcy. Movable capital will be sold off to pay creditors. The workers must seek employment elsewhere. In such economic difficulty, workers are free to reorganize the facility, or to leave and seek work elsewhere. They are not free to sell off their capital stocks and use the proceeds as income. A firm can sell off capital stocks and use the proceeds to buy additional capital goods. Or, if the firm wishes to contract its capital base so as to reduce its tax and depreciation obligations, it can sell off some of its assets, but in this case proceeds from the sale go into the national investment fund, not to the workers, since these assets belong to society as a whole.
According to David Schweickart, Economic Democracy is a market economy, at least insofar as the allocation of consumer and capital goods is concerned. Firms buy raw materials and machinery from other firms and sell their products to other enterprises or consumers. "Prices are largely unregulated except by supply and demand, although in some cases price controls or price supports might be in order -- as they are deemed in order in most real-world forms of capitalism."
Without a price mechanism sensitive to supply and demand, it is extremely difficult for a producer or planner to know what and how much to produce, and which production and marketing methods are the most efficient. It is also extremely difficult in the absence of a market to design a set of incentives that will motivate producers to be both efficient and innovative. Market competition resolves these problems, to a significant if incomplete degree, in a non-authoritarian, non-bureaucratic fashion.
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