Understanding Democratic Decision-Making in Cooperatives

Cooperatives are businesses that operate under democratic ownership and governance. The term “democracy” has its roots in the Greek words demos meaning “the people” and kratia meaning “power.” Historically, “the people” referred to the poorest and most numerous class, but the meaning of democracy has evolved over time. In contemporary usage, democracy generally refers to the liberal representative model, though various democratic systems can encompass features of other models.

This article examines three common democratic models––liberal representative, participatory, and deliberative––as well as an alternative model known as sociocracy. These models will be evaluated for their suitability as governance models for platform cooperatives.

Liberal representative democracy involves citizens voting in elections for officials with experience and expertise to handle self-governance. The media and journalists act as neutral facilitators between these officials and the public. Specific models within this include elitist or competitive democracy, which allows elites to compete for the public’s vote and to implement policies without meaningful citizen participation, and liberal or realist democracy, which allows for more participation by citizens but still leaves them vulnerable to manipulation and disinformation during election competition. Both models view the public’s role as one of detached participation in governance.

Participatory democracy is a model where citizens have direct participation in the daily activities of self-governance. The media and journalists play the role of motivating and mobilizing political interests, civic participation, and self-expression. This model emphasizes mass participation in public life and counts each vote equally. However, participatory democracy leaves out the importance of public deliberation, and citizens often lack the necessary information and attention for such deliberation. This may result in substituting the whims of the people for the will of the people. This model is susceptible to the criticism of “the tyranny of the majority.”

Deliberative democracy involves citizens participating in public reasoning and decision-making, alongside electing representatives. The media and journalists are responsible for maintaining deliberative discourse as “moderators of rational discourse.” This model focuses on rationality and impartiality, aiming for a broad consensus on the common good or the interests of citizens. However, it lacks institutions for regulating and enforcing this consensus and downplays the role of power and conflict in politics. Some prominent advocates of deliberative democracy include John Rawls, Jurgen Habermas, G.A. Cohen, Seyla Benhabib, Amy Gutmann, and Dennis Thompson.

Lastly, let’s consider sociocracy, an alternative governance model for cooperatives, most
significantly developed and applied by Gerard Endenburg in Endenburg Elektrotechniek, Inc.
Instead of rule by the demos, sociocracy implies rule by the socios, derived from the Latin word
socius (people who have a social relationship with each other). While the other governance
models introduced often work at a larger scale, sociocracy operates most commonly at the
organizational level, in groups of up to 1,800 people. Sociocracy uses consent-based decision-
making and organizes individuals into “sociocratic circles” based on domains of responsibility.
Circles work together to arrive at a decision that is acceptable to each individual, and circles are
interlocked/networked through individuals.

Ted Rau, program director of Sociocracy For All, distinguishes democracy as a model that prioritizes deliberation and input, while sociocracy prioritizes decision-making and implementation. Rau argues that democracy’s majority rule often polarizes opinions, rewards superficial populist opinions, and drowns out minority voices, whereas sociocracy avoids these pitfalls with consent-based decision-making, which prevents a majority from controlling a minority. Additionally, sociocracy has institutions for regulating and enforcing decisions, which democracy lacks.

However, comparing democracy and sociocracy may be problematic due to their different scales. Democracy is typically applied in states and governments, while sociocracy is more commonly used in organizations. Buck and Endenburg compare sociocracy with other corporate models, such as the classic corporate model that employs majority vote and autocratic decision-making, the classic corporate model with union feedback, and the classic corporate model with employee stockowner feedback. Although Buck and Endenburg find sociocracy superior to the classic corporate model, they fail to envision sociocracy outside of a management-controlled, investor-backed business.

Despite this limitation, sociocracy has become a popular governance model for platform cooperatives, as it aligns with cooperative principles and allows cooperatives to define “democracy” in their actual governance.

The goal of this investigation is to explore different models of self-governance and their application to technology development. The comparison between designers and technologists to public policymakers and civil servants is valid in two ways: 1) these governance models can be applied to technology workplaces, and 2) these governance models can be used to govern the online public spaces (platforms) that they create and maintain. However, the comparison only makes sense under the cooperative structure. It is essential for both workplaces and online platforms to have a democratic ownership structure that reflects their democratic governance. In this sense, cooperatives are unique because workers and users invest in a community that is genuinely theirs to own and govern. Some scholars, like Buck and Edenburg (2012), do not draw this conclusion in their examination of sociocracy in the workplace, instead distinguishing workers and bosses. They argue that dynamic governance does not eliminate the boss but sets aside the either/or logic of workers versus management. However, in a truly democratic workplace or online platform, democracy must be reflected in the ownership structure; otherwise, democratic design becomes mere rhetoric, and democracy becomes unenforceable.

[This essay is situated within the context of the 2023 Platform Co-op School.]