1. Social Democracy and Capital Investment: An Unexplored Democratic Left Option in Western Europe?
- Author
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Allen, Christopher S.
- Subjects
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POLITICAL science , *CAPITALISM , *CAPITALIST societies , *CAPITAL investments , *PENSIONS , *WELFARE state - Abstract
Of all the issues that democratic, trade union, and left wing political parties have tried to address in capitalist societies, the most difficult to challenge has been the issue of capital investment, from private investment to even their own pensions. Democratic and popular forces have been quite successful in establishing welfare states, forming trade unions, imposing regulatory controls on market activity, and achieving modest degrees of worker participation (at least in the most advanced industrialized democracies). Yet they have been generally incapable of obtaining any influence ? let alone control ? over the location of investment in these societies. This paper will examine the possibilities of raising questions of social democratic influence over private and pension investment in Western Europe. By examining the historic contours of the 20th century debates in Germany and Sweden, the two countries where the debate went the farthest, I hope to generate hypotheses as to whether this policy option might represent a viable tactic by the contemporary democratic left to both the pension and democratic deficit issues in Western Europe generally, and the EU specifically. Germany and Sweden have been chosen as critical case studies because their experiences can likely offer useful guidance about the concrete limits to utility of this approach. This paper is divided into three sections. First, it analyzes the issue of investment and private control and shows how difficult it has been for democratic societies to challenge private interests on this core issue. Despite the growing predominance of collective funds (e.g. private pensions and public social insurance funds), democratic societies have never been able to ?democratize? investment decisions. The general arguments raised against such radical proposals by traditional controllers of investment have been that they too directly challenge ?managerial autonomy? or, alternatively, such radical steps are unnecessary because the free choice of individuals to decide where to invest is the essence of individualistic shareholder democracy. Second, the paper looks at the origins of German and Swedish attempts to democratize investment via two different paths and two different kinds of political institutions. It then analyzes their evolution through the 1970s and 1980s and suggests why they ultimately were unsuccessful in achieving their respective goals. Third, the paper concludes with some speculative consideration ? and perhaps more questions than answers ? on the relationship between democracy and investment in societies, such as those in Western Europe and/or the EU, that are both democratic and capitalist. [ABSTRACT FROM AUTHOR]
- Published
- 2004
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