{"insight":{"id":"72743889","lede":"Codetermination is sometimes suggested as one potential remedy for the growing inequality between worker and executive pay. The authors find that in Finland, codetermination had little impact on executive pay.","slug":"finnish-codetermination-had-no-effect-on-executive-compensation","title":"Finnish codetermination had no effect on executive compensation","showTitleAsQuote":null,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"inequality","name":"Inequality","id":"69359341","lede":"","ledeExcerpt":"","featured":null},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474","lede":"

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

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But as Robert Dahl writes: "...the agrarian economy and society on which it was based underwent a revolutionary transformation into a new system of commercial and industrial capitalism that automatically generated vast inequalities of wealth, income, status, and power. These inequalities were in turn a result of liberty of a certain kind–liberty to accumulate unlimited economic resources and to organize economic activity into hierarchically governed enterprises."

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Or, as David Schweickart comments: "Contemporary capitalism celebrates democracy, yet denies us our democratic rights at precisely the point where they might be utilized most immediately and concretely: at the place where we spend most of the active and alert hours of our adult lives."

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Economic democracy, broadly, is the idea that decision-making power should not be the exclusive right of managers and shareholders, but held in equal by all stakeholders affected by those decisions. In practice, both Dahl & Schweickart see "workplace democracy" - from codetermination to worker-owned cooperatives - as one concrete manifestation of economic democracy.

\n","ledeExcerpt":"Economic democracy, broadly, is the idea that decision-making power should not be the exclusive right of managers and shareholders, but held in equal by all stakeholders affected by those decisions. In practice, both Dahl & Schweickart see \"workplace democracy\" - from codetermination to worker-owned cooperatives - as one concrete manifestation of economic democracy.","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

We define stability as the resiliency, robustness, and constancy of our nested social, financial, and environmental systems. Stability is the degree to which our systems can withstand stress and maintain their functionality over time.

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Why do we need stability? All else equal, a stable society is preferable to an unstable society. Stability - the product of the harmonious interaction between parts, or interwoven systems - protects against uncertainty and decay. For example, a healthy body regulates its blood glucose levels to provide cells with their required energy. Too much glucose makes cells sticky, with a paralyzing effect. Too little glucose starves them. What's important is the constancy of glucose regulation within functional limits, and the resiliency to maintain this regulation amidst adversity.

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Instability occurs when systems transgress functional limits, causing the breakdown of other systems and suffering for those who depend on them. When interlocking systems remain stable, they provide a fertile foundation for positive expectations that fuel investments in progress and broad cooperation throughout society.

\n","ledeExcerpt":"We define stability as the resiliency, robustness, and constancy of our nested social, financial, and environmental systems. Stability is the degree to which our systems can withstand stress and maintain their functionality over time. \n\nWhy do we need stability? All else equal, a stable society is preferable to an unstable society. Stability - the product of the harmonious interaction between parts, or interwoven systems - protects against uncertainty and decay. For example, a healthy body regulates its blood glucose levels to provide cells with their required energy. Too much glucose makes cells sticky, with a paralyzing effect. Too little glucose starves them. What's important is the constancy of glucose regulation within functional limits, and the resiliency to maintain this regulation amidst adversity.\n\nInstability occurs when systems transgress functional limits, causing the breakdown of other systems and suffering for those who depend on them. When interlocking systems remain stable, they provide a fertile foundation for positive expectations that fuel investments in progress and broad cooperation throughout society.","featured":true}],"sources":[{"id":"69609432","lede":"This study of Finnish codetermination uses both a difference-in-difference model and a qualitative survey of Finnish workers. They find a small reduction in layoffs, moderate increase in survey-based job satisfaction, wage increases for the lowest earners, and small, positive, but tenuous effects on firm survival, productivity, and capital intensity. Interviews suggest that Finnish codetermination facilitates information sharing and cooperation rather than shifting power to labor.","link":"http://economics.mit.edu/files/21196","slug":"voice-at-work","kind":"","title":"Voice at Work","year":"2021-06-01","researchers":[{"id":"69609412","location":"","name":"Jarkko Harju","seoDescription":"","slug":"jarkko-harju"},{"id":"69609426","location":"","name":"Simon Jäger","seoDescription":"","slug":"simon-jager"},{"id":"69609429","location":"","name":"Benjamin Schoefer","seoDescription":"","slug":"benjamin-schoefer"}]}]}}