A Democratic Future Requires a Democratic Economy
By Marjorie Kelly
May 14, 2025
When I published Wealth Supremacy in the fall of 2023, little did I know that America’s billionaires would so fully capture government just a year later. As we watch the world’s wealthiest man, Elon Musk, take a chainsaw to the U.S. government to further his own interests, I cannot say I’m surprised.
As I wrote, and as we at The Democracy Collaborative have said often:
A world half plutocratic, half democratic cannot long endure. One half will eventually supersede the other. This is occurring today before our eyes, as the plutocratic economy attempts to consume the democratic polity.
The alternative, the solution commensurate with the problem, is system change—suffusing democracy into our economy, and building the new political-economic system now necessary to our survival.
Amid the unfolding catastrophe, it’s hard to pull our attention away from the news of the latest daily chaos, but doing so is vital.
The challenges we face in building the next economy can be likened to climate change: yes, we need immediate action to help people in floods and fires, but if that’s all we do, we’re dooming us all to a world with far more flooding and burning. We also need a shared vision of the deep, ultimate change needed.
In that spirit, I was heartened to see the Roosevelt Institute’s new collection of essays: Restoring Economic Democracy: Progressive Ideas for Stability and Prosperity. The authors acknowledge returning to the status quo is neither prudent nor possible. They urge the building of an economy that is more democratic, more equitable, and more empowering, both because that is the way to improve the daily lives of Americans—and because it is the only path toward a sustainable democratic polity.
For us at TDC, two themes, in particular, resonate with our vision of a democratic economy. First is the need to reimagine and redesign the corporation — not simply regulating it but changing its internal DNA. I explored this at length in my piece “The End of the Corporation: It’s time to make the profit-maximizing, shareholder-controlled corporation obsolete.”
Lenore Palladino, senior fellow at Roosevelt, has long been a fellow traveler with me in this important but often overlooked line of thinking. I was delighted to see her essay zeroing in on the negative impact of the current corporate governance paradigm of shareholder primacy, which is at the heart of what I call “wealth supremacy.”
The idea that the only purpose of the corporation is to maximize profit for shareholders— delivering more wealth to those who already possess wealth— is the driver behind growing inequality. As the chart below from The Democracy Collaborative’s Index of Systemic Trends illustrates, the top 10 percent today own 70% of all wealth, while the bottom 50 percent own less than 2%. This is unsustainable. Of American workers, 70 percent have not received a raise in the past 50 years.
I argue that businesses should be profit-making, not profit-maximizing.
It’s profit maximization that leads to multiple negative social consequences, from growing inequality to the hollowing out of Main Street to environmental destruction and a world unable to grapple with a changing climate.
Palladino furthers her argument by calling attention to the erroneous assumption that shareholders are “investors,” whom the market should reward. As she points out, shareholders in public companies are market speculators—their money does not reach companies to fuel growth and innovation, but only changes hands, one speculator to another. Yet in pursuit of rising share prices for speculators, the executive suite manages the company to extract as much wealth as possible. Wages are cut, unions are fought, jobs are offshored, pollution is ignored—all in the interest of higher asset values and larger dividends.
The reach and extent of this phenomenon — creating wealth for investors by extracting from workers and society — is much more vast and pernicious than most people realize, as The Democracy Collaborative’s work on financialization demonstrates.
Essential to redesigning corporations is making them more democratic. Here I loved the Roosevelt essay “By the Workers, For the Workers: Building Economic Democracy,” where journalist Osita Nwanevu explores infusing democracy into our work lives through policies that support stronger unions, employee ownership, and worker representation on corporate boards. We spend one-third of our lives at work—if democracy thrives there it will spillover into our politics, he argues.
Nwanevu highlights Senator Elizabeth Warren’s Corporate Accountability Act, in which she proposes that companies with $1 billion or more in revenue be required to adopt new federal charters explicitly requiring the corporation to serve multiple stakeholders, not just stockholders, and also requiring 40 percent worker representation on boards. Senator Bernie Sanders has proposed that large public and private companies (with at least $100 million in valuation) establish Democratic Employee Ownership Funds that would, over time, give employees control over 20% of company shares. As owners of company shares, workers would have the same voting power as other shareholders and would receive financial dividends.
Broadening ownership and corporate decision making to include workers, through proposals like Warren’s and Sander’s, as well as Employee Stock Ownership Plans (ESOPs) and worker cooperatives, is crucial to narrowing the wealth gap and challenging the plutocrats. The good news is that support for a more democratic economy across business and political ecosystems is growing.
State centers for employee ownership are educating business owners on the benefits of employee ownership exits, some private equity companies are providing shares to workers, an Employee Ownership office has survived government cuts at the Department of Labor, and most recently, the bipartisan American Ownership and Resilience Act, a bill designed to overcome some of the financial challenges for ESOP formation, has been introduced in both the House and Senate.
As we continue to confront the destruction of our democracy by Donald Trump and his administration, it’s heartening to see that work is continuing on the long-range democratizing of our economy that we need. “It’s a republic, if you can keep it,” admonished Ben Franklin.
Infusing democracy into our economy is the only way to save it.
Marjorie Kelly is Distinguished Senior Fellow at The Democracy Collaborative and author of the recent book Wealth Supremacy. Cofounder of B Lab Jay Coen Gilbert credits Kelly’s first book, The Divine Right of Capital, with inspiring the creation of the B Corporation movement.
