Avoiding Economic Democracy: Parallel Legal Trajectories in the United States and China

Jedidiah Kroncke, J.D., Ph.D., Associate Professor of Law, The University of Hong Kong

12:30pm - 1:30pm | CSCC Conference Room, PCPSE Room 418, 133 S. 36th St

Over the last forty years, the economic development of the United States and China became increasingly intertwined. Today, recriminations are made with growing vigor in the United States regarding assumptions about the relationship between democracy and markets that were used to justify this growing interdependence between the economies of two nations with quite distinct political systems. The current content of these recriminations concerning economic growth and political democratization elide completely that the integration of American and Chinese economic activity was made possible in large part through a common consensus on the ademocratic, at best, and anti-democratic, at worst, nature of the modern workplace in both countries. This parallel evolution was facilitated by the mutual development of contractarian norms of employment law and authoritarian norms of corporate governance which displaced both traditional socialist and republican claims to economy democracy.

The rhetorical tensions generated by this displacement have played out in one perhaps unexpected manner: dual failed attempts to appeal to employee ownership to sooth the dislocation between political and economic democratic values. In the United States, these attempts have largely revolved around Employee Stock Ownership Plans, long promoted and subsidized as facilitating worker-owner capitalists. In the 1990s, the Chinese state also began promoting employee share ownership plans, highlighted recently by controversies over the ownership structure of Chinese multinational Huawei. In quite telling fashion, the legal techniques used to obviate actual worker empowerment in both countries under these regimes follow consonant fiduciary logics to avoid any genuine practice of economic democracy—often actually reinforcing managerial or owner domination.

These twin developments lead to what should be a troubling conclusion for both countries: that fundamental differences in formal political organization appear to have far less impact on this core aspect of economic citizenship than contemporary popular rhetoric would imply.