Principles of Economic Democracy

Economic Democracy is a socioeconomic philosophy that suggests transfer of decision-making

authority from a small minority of corporate shareholders to the larger majority of public stakeholders.
While there is no single definition or approach, all theories and real-world examples of Economic
Democracy are based on a core set of fundamental assumptions.

In order to practice economic democracy, we must engage certain principles. I do want to be

clear that economic democracy is a practice that you are either doing or not. In this way it is much like
liberation theology. It is praxis. The practice of economic democracy not only includes a particular
economic structure and the legislation and theory that supports this particular economic way of life, it
also includes how we talk about economic democracy. I would like to introduce a principle called
“digging to the roots.” By this I mean that as one uses terms when practicing economic democracy in
the form of dialog, the story of those terms needs to be common knowledge. What I have noticed is that
terms are often used in discussion when their meaning and function may not be clear at all, even though
the terms can be defined. The only way to deal with this possibly deceptive practice is to know the full
story of the terms being used. I will provide two examples of what I mean by the principal that I have
called “digging to the roots.” The two terms that I have chosen, terms that I think are important to the
conversation of economic democracy, are “holding company” and “entitlements.”

The holding company can own and control many companies that are similar or diverse. It is
possible that the roots of the holding company can be found in the formation of the East India company
and the Dutch East India (1600) company where merchants pooled their funds to support the military
and economic invasion of India and China. When we talk about the holding company, we also need to
consider the theme of limited liability. I do not know what role limited liability played in these early
excursions. Officially we see limited liability first legislated in The Limited Liability Act of 1855 in
England.

In today's world, the holding company is like a golden ball hovering with positive wonderful
energy. Accepting offerings of green and gold, it moves out across the globe and does whatever it needs
to do to subdue as it organizes each and every land it encounters in order to send its masters offerings.
They have an industry to transform culture. They have an industry to transform your infrastructure.
They have an industry to transform your financial and economic structure. They have an industry to
send armed men in tanks, Navy ships, and Air Force planes. They have an industry for what ever need
they have, i.e. the holding company.

I am going to highlight where the holding company became grafted into USA law. In the early
1850's, a feature of corporate charters was that companies could not own stock in other companies.
However a man by the name of Tom Scott (some say the father of our country as it exists today)
persuaded the Pennsylvania legislature to forgo this restriction for the Pennsylvania Railroad. Can you
see the light from the golden ball, there -- keep looking -- you’ll see it, an array of golden light, the
ghost of the East India company that had its first taste of blood in the legislative halls of the United
States of America? This same holding company began to set its sights on small southern railroads.
Scott was able to purchase and control these railroads through his holding company, by-passing state
legislature oversight. The citizens found themselves without recourse to what the Pennsylvania
railroad's emerging empire was doing -- an empire that would eventually run the country for 50 years,
and pave the way for corporations becoming citizens with all the rights and privileges that a citizen has
thanks to Thomas Jefferson. How would Jefferson have responded to corporations' oppressing human
citizens and deriving benefits for themselves by way of his contribution of civil liberties? The Holding
Company, a corporation, now has civil liberties. Does that mean that the members of the board and
stock holders have the double blessing, two layers of civil liberties, God really loves them, blessed are
the hard working.

Pennsylvania Railroad please. Here is $200. Well, should I buy it or not? If I buy it I will not be
able to build houses on Marvin Gardens, or if I buy it and I land on his property and I can not afford the
rent, I will have to mortgage houses and property; ah life is a game. And around the Monopoly board
we go, indoctrination at its finest.

In the 1850's we see one of the first victories against economic democracy. Prior to that change, the
local community had authority to oversee the operations of corporations as part of the state charter. The
business and operations of the corporation were clear, direct and governed by an agreed upon purpose
through contract with state legislatures. Corporations were locally oriented.

Update on holding companies.

The energy bill that passed by our dubious legislative halls in the year 2005 repealed the Public
Utilities Holding Company Act (PUHCA) of 1935. Our free democracy had encountered before the
power of the holding company and decided that there needed to be some boundaries. Like most
centralizing powered animals who participate in the holding company party, they did not appreciate this
movement toward getting along and playing more fairly on the playground. They were after all the
bullies collecting your lunch money for a long time and took this pattern with them into the halls of
adulthood. So in spite of all the history leading up to the year 2005, the great wisdom of our legislative
halls decided to return us to the condition in which we absolutely needed some boundaries to be put in
place caging the clearly destructive economic beast.

During those years our constitutional government was in serious trouble. There were many in our land
who thought a constitutional government could not handle the world crisis in which we were involved.
They believed it would take a government like Italy or Germany, with leaders of great promise like
Mussolini and Hitler, to help steer our nation through the crises, (See the story of General Smedley
Butler). Placing the boundaries on the holding companies was an essential act for our democracy. In
terms of topic we are now living in 1934 about to redo history without the Public Unities Holding
Company Act. Hold on, the tapestry begins with the holding company unleashed.

As I hope you can begin to see that engaging in economic democracy is a process. It is a process of
understanding how it is we have arrived here and now at this place in this time functioning with this
economic system. By knowing this history we can with speak confidence, so when corporation
ambassadors speak of the founding father we know they bow at the statue of Tom Scott, and the
holding company is as important to those who would sacrifice the constitution to gain wealth and
power as civil liberties are to citizens who support economic democracy.

The next term is Entitlement.

I never liked the way the term is used when describing medical care, Medicaid, social security or
retirement benefits. Entitlements are a benefit because you have a right to them. Yet I never get that
warm cozy feeling when I hear TV's shamed-based pundits saying, “The entitlements are going to
bankrupt us in 2053.” That means my rights are going to be sacrificed because I am one of the entitled
people. I never heard of an elected official refer to his/her retirement or life-long medical care being
called “entitlement” programs, just those government programs that were created to cope with a
stressed democracy looking for a way through difficult times, attempting to make life better for most
of the citizens. Social Security, Medicare and Medicaid are all the free expression of democracy. Our
democracy said we need these programs to ensure the well being of our people. They balanced out the
power of greed. They are not entitlement programs; they are symbols of democracy working. The
purpose of continuing the programs is to prevent a return to a time in which they were needed by
impoverished working Americans. Because they became part of the life of our culture, to privatize
them and eliminate regulation is to return to a land of chaos and drunken capitalism in need of social
programs and stronger politicians. How is it some of the greatest acts of our democracy become labeled
socialism, expendable, in need of privatizing-- those acts caring for a great many people get labeled as
less budgetarily important than the stuff of war and war structures, even when there is no war. However
those girders against poverty are still in place.

Rev. Dr. Gregory Wilson