On economic bicameralism

Abstract

(cont.) for both economic profitability and democratic justice, is explored after the roots of the idea of economic bicameralism in socio-economic history and existing socio-economic institutions (such as Works Councils) are reviewed. Economic bicameralism is thus an original form of governance of the firm with regards to both its philosophy and its institutions. It is founded on the recognition that two quests take place within the context of the firm, each of which is pursued primarily by one of the firm's two major agents, capital and labor. In the structure of economic bicameralism, two chambers, one representing each group of agents, govern the firm jointly. The Chamber of Capital assembles the investors in capital, who value an instrumental rationality while seeking profit as their foremost objective; and the Chamber of Labor assembles the investors in person, who display a political rationality and are best understood as seeking democratic justice as their primary goal. While investors in capital remain the sole legal shareholders of the bicameral firm, the governance of the firm is managed by these two chambers, which occupy an equal footing and are consequently bound to cooperate in order to allow the firm to function efficiently. The collaboration hence induced between investors in capital and investors in labor enables the firm to effectively respect the aspiration towards democratic justice that infuses the work experience with the objective of economic profitability that motivates first the investors in capital.

This study contributes to normative democratic theory by exploring the relevance of the democratic ideal within the context of the capitalist economic system. It reviews the five traditional arguments for economic democracy before advancing a sixth, original argument, which both encompasses and surpasses its predecessors, based on the political meaning of the work experience. This provides for an understanding of the "political rationality" that animates workers, who, in investing their own person in the firm, experience work as an expressive, political experience that places them in a public space where their conceptions of the just are challenged in complying with the rules of the workplace. In the traditional capitalist shareholder firm, where workers are not entitled to take part in setting those rules, this political rationality also involves a normative content: an aspiration towards democratic justice within the context of the firm, embodied in the idea that every investor-in person as well as in capital- should have a say in the decisions that concern the organization. Consequently, after reviewing the limits of the traditional models of the shareholder firm and the stakeholder firm, this study introduces a theory of the firm capable of reflecting the two rationalities that animate the firm: on the one hand, the traditional rationality of the capitalist firm which is instrumental, displayed by the shareholders (the investors in capital), which is tied to the quest for economic profitability, and on the other hand the political rationality, displayed by the workers (the investors in person), informed by a quest for democratic justice. The scheme of the bicameral firm, whose institutions are conceived in order to jointly address the quests