The essential link between economic and political democracy

A genuinely effervescent and resilient democracy gives more people a genuine stake in economic production and wealth.

As democratic processes face the growing threat from the influences of power and wealth with citizens and communities underpowered and ever distant, there is a pressing need to reform our democracy- ensuring it is resilient and works even better for our communities. Indeed this is a key focus of much activity across the globe including the ‘democracy matters’ agenda in Scotland. However, it is essential that any reform of political democracy is intertwined with progressive economic ideas, that seek to advance economic democracy such as Community Wealth Building.

In thinking through the necessity of the links between political and economic democracy it is important to highlight that whilst they operate in separate spheres - both seek to decentralize power. In this political democracy refers to systems where citizens have the power to elect leaders as representatives, influence laws with appropriate participative democratic sites for transparency, debate, discussion and decision making. Economic democracy, on the other hand, involves equitable access to economic resources, power, wealth, opportunities, and decision-making in the workplace or broader economy.

Indeed, through Community Wealth Building in Scotland and Independent Scottish Government review of Inclusive an Democratic Business Models there are aims and actions taking place which seek to decentralize economic power, predistribute wealth, promote local ownership, and empower citizens. Indeed inclusive and democratic business such as cooperatives, employee ownership, community-owned enterprises and Development Trusts help can also help make citizens active stakeholders, fostering a more robust democracy.

This connection is vital because without economic democracy, the growth of inequality can see a distortion of political influence - enabling wealthy elites, big corporations and individuals to have disproportionate access to policymakers, campaign financing, and media platforms. This can skew political agendas toward their interests, sidelining the needs of the broader population. Looked at singularly, political democracy runs the risk of being influenced or constrained by concentrated economic power, undermining the very essence of democracy.

Furthermore growing poverty and inequality reduces public trust in democratic institutions. Citizens may perceive the system as rigged or unresponsive, especially when they have few levers of control and little improvement in their own economic conditions despite political participation. And of course resultant political alienation can fuel resentment and alienation, creating fertile ground for populist or extremist movements.

Moving forward we must not detach the politics from the economic. True democracy cannot be fully realized without economic democracy. Progressive ideas like community wealth building are vital steps toward that goal, as they seek new just patterns of wealth and investment, greater control and democratization of economic power into the political fabric. This agenda alongside democracy matters need to work harder to build a more unified framework where democratic and economic reforms are joined and integrated into the political system, ensuring that economic power is accountable, participatory, and just.