The Movement for Industrial Democracy

The term “industrial democracy” (ID)1 is used increasingly in Western Europe to refer to a variety of legally required changes in the organizational structure, methods of decision making and ownership of enterprises in the market sector that have major implications for both welfare and efficiency. These changes are justified, their proponents believe, because workers—or their trade-union representatives—have the right to participate in enterprise decisions affecting their employment, incomes and psychic and physical well-being. In contrast, the opponents of these changes fear that they will severely impair the efficiency of the affected enterprises and hence the ability of the economy over the longer term to maintain, let alone raise, the levels of welfare already attained. Because these developments are regarded as welfare improvements and are legally mandatory, they must be included in a study of welfare/efficiency relationships although they are quite different from those ordinarily comprised in the concept of a national welfare system—even when it is defined as broadly as in the preceding chapters.