A democratic view on prosperity

Purpose - This paper aims to advance the argument that the process of wealth creation predominantly originates from the economic system of democracy. It seeks to put forth the concept of economic democracy and understand as the process enabling the opportunities for welfare gains to multiply in favour of ever‐larger parts of population. Design/methodology/approach - The paper questions the main insight of the conventional view on the benefits of specialisation according to which a nation's prosperity becomes inevitable under the circumstances of efficient allocation of available resources. It takes instead account of how economic interests intertwine with political processes and proposes an analytical deconstruction of the economic influence of political decisions with extensive consideration to Olson's perspective on collective action. Findings - The argument is that the conventional prediction is necessarily limited by several particular occurrences that make the process of wealth creation take a course dependent on the democratic organization of economic activities. The set of policy actions, as well as its underlying principles rest on the understanding that diversification of sources of economic gains should stand as option number 1 on any governmental priority list in order to achieve a better standard of living. Originality/value - The paper sheds light on a different perspective, which does not take for granted the principles of free market and open society as determinants of a country's prosperity and proposes instead an understanding of the sources of prosperity based on occupational diversification as a practical consequence of the economic democracy.