CHAPTER 25
Economic Democracy
Describe the formal structures of democracy.
Distinguish between formal and effective democracy.
Discuss characteristics and examples of economic democracy.
OUTLINE OF CHAPTER
I. Evolution of Democratic Institutions
VI. The Public Road to Economic Democracy
VII. Alternatives in the Energy Industry
Private Profit-Making Corporations in the Electric Industry
Publicly Owned Corporations in the Electric Power Industry
Cooperative Ownership in the Electric Industry
LEARNING OBJECTIVES
KEY TERMS
cooperative enterprise
concern in which each employee/owner has one vote on how to run the enterprise
economic democracy
the people rule the economy, not just politics
ANSWERS TO END OF CHAPTER REVIEW QUESTIONS
Describe the formal structures of democracy.
1. What is the definition of democracy? Give examples of the formal structures and
institutions of democracy.
2. How can you have a formal democratic structure in place that is not really democratic?
Give historical examples and explain.
Examples include ancient Athens where the legal structures of democracy, including free
Distinguish between formal and effective democracy.
3. Can you have an effective democracy without the structures of democracy? Can you
have a formal democracy without having an effective democracy? Explain.
A country with formal democracy may not have a fully effective political democracy
4. What are some barriers to effective democracy?
5. What are some possible conflicts of interest in how the media presents news and events?
How could these conflicts create bias in reporting? What policies would you recommend
to attempt to stop biased reporting?
Corporate interests own the media outlets and present news in such a way that furthers
6.
elections?
7. What is the relationship of income to percentage of voter turnouts and political
participation? What might be some reasons? What would you suggest to increase voter
participation at lower income levels?
As income declines so does political participation. As household income rises, so does a
8. Does big business have total control of elected officials and policies? Support your
argument.
Discuss characteristics and examples of economic democracy.
10. What is a cooperative enterprise? Give examples. In what way is a cooperative
enterprise democratic? Could a cooperative enterprise be operated in a way that was non–
democratic? Explain.
A coop is one in which each person has one vote in the cooperative.
11. What is an ESOP? Give examples.
12. What are the arguments for and against cooperative enterprises?
13. What are the arguments for and against public enterprises?
14. What is a natural monopoly? Give examples of how policymakers deal with businesses
that are natural monopolies.
A natural monopoly occurs when the most efficient organization is a single supplier due