In Defense of Workplace Democracy

• Author: Isabelle Ferreras,Hélène Landemore
• DOI: 10.1177/0090591715600035
• Published date: 01 February 2016
• Date: 01 February 2016

Political Theory

2016, Vol. 44(1) 53 –81

© 2015 SAGE Publications

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DOI: 10.1177/0090591715600035

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Article

In Defense of Workplace

Democracy: Towards a

Justification of the

Firm–State Analogy

Hélène Landemore1 and Isabelle Ferreras2

Abstract

In the wake of the 2008 global financial crisis, an important conceptual

battleground for democratic theorists ought to be, it would seem, the

capitalist firm. We are now painfully aware that the typical model of

government in so-called investor-owned companies remains profoundly

oligarchic, hierarchical, and unequal. Renewing with the literature of the

1970s and 1980s on workplace democracy, a few political theorists have

started to advocate democratic reforms of the workplace by relying on an

analogy between firm and state. To the extent that a firm is an organization

comparable to the state, it too ought to be ruled along democratic lines.

Our paper tests the robustness of the analogy between firm and state by

considering six major objections to it: (1) the objection from a difference in

ends, (2) the objection from shareholders’ property rights, (3) the objection

from worker’s consent, (4) the objection from workers’ exit opportunities,

(5) the objection from workers’ (lack of) expertise, and (6) the objection

from the fragility of firms. We find all of these objections wanting. While

the paper does not ambition to settle the issue of workplace democracy at

once, our goal is to pave the way for a more in-depth study of the ways in

which firms and states can be compared and the possible implications this

1Department of Political Science, Yale University, New Haven, CT, USA

2University of Louvain/FNRS, Louvain-la-Neuve, Belgium

Corresponding Author:

Hélène Landemore, Department of Political Science, Yale University, 115 Prospect Street,

New Haven, CT 06520, USA.

Email: helene.landemore@yale.edu

600035PTXXXX10.1177/0090591715600035Political TheoryLandemore and Ferreras

research-article2015

54 Political Theory 44(1)

may have for our understanding of the nature of managerial authority and

the governance of firms.

Keywords

firm, state, workplace democracy, firm–state analogy, democratic theory

In the wake of the 2008 global financial crisis, an important conceptual bat-

tleground for democratic theorists ought to be, it would seem, the capitalist

firm. This crisis has indeed brought to light a number of issues that were

always present but did not seem to raise much concern as long as economic

growth was supporting the stability of the system. In the dominant so-called

investor-owned model of the firm, which represents the majority of firms in

the United States and other industrialized countries, we are now painfully

aware that the typical mode of governance remains profoundly oligarchic,

hierarchical, and unequal. As a result, for example, there is no preventing

certain boards of directors from awarding themselves indecent levels of com-

pensation while at the same time they run companies into the ground.

Meanwhile, employees have little to no influence on almost any kind of deci-

sions made in or about the firm, whether they concern hiring and firing of

personnel, safety or work hour regulations, or business matters such as stra-

tegic investment decisions or the distribution and use of profits.

Inequalities in decision power, status, and compensation may not be a

problem from an efficiency point of view, although the crisis, again, suggests

otherwise. But they ought to raise at least some questions from the point of

view of justice. To the extent that the economic domain is a “sphere of

justice,”1 like any other domain of human activities where the distribution of

scarce goods is at stake, it has a moral and political dimension as well. From

that point of view, the unequal distribution of control and decision-power in

an environment where individuals spend most of their waking time is prima

facie both undemocratic and unjust.

Traditionally, though, the focus of democratic theorists has been else-

where. For deliberative and participatory democrats, the focus has been on

deepening the democratic nature of already democratic institutions in the

state, from the level of grassroots associations all the way to the highest rep-

resentative institutions.2 Cosmopolitan democrats, on the other hand, have

been focused on justifying the democratization of relations between states, at

the global level, with a focus on international institutions.3 Given that the

great work of political theory of the second half of the twentieth century—

Rawls’s Theory of Justice—is virtually silent on the question of justice in the