Equality, Participation, Transition: Essays in Honour of Branko Horvat

Tea Petrin and Alesa Vahcaica 105
open and the least rigid communist regime, opted for the fully capitalist
solution and never really considered continuing and further developing
the self-management system. The last attempt to save at least some
elements of the self-management system in Slovenia were the privatization
proposals that favoured management-employee buyouts.
In all 27 new East European countries the free market system based
on private ownership was, with few exceptions, faithfully implemented.
So, the free market system, based on private ownership, is the
winner. Although it is the winner, it is still far from ideal, and serious
problems, like those we shall discuss below, persist.
First, the concentration of income and wealth is occurring at an
accelerated pace on a global scale. The ultimate consequence of this system
under the present institutional arrangements is that the winner
takes all. This has become a topic of serious discussion among influential
government and academic circles throughout the world (Stiglitz, 1998).
Secondly, in a large number of countries there is large-scale corruption
and appropriation of income by the privileged classes. This is
characteristic not only of the underdeveloped market economies, but
also of advanced democracies like Italy, Japan, Mexico, USA, and so on.
Thirdly, the free market approach has consequences for workplace
democracy. Here, the results are rather contradictory. On the one hand,
we are witnessing increased employee participation within companies.
Increased employee involvement has become a prerequisite for attaining
competitiveness. On the other hand, competitiveness requires a
high degree of flexibility not only regarding production processes but
also regarding workforce. In the past decade, this has created the wave
of layoffs during the downsizing periods of large companies. Workforce
flexibility, another prerequisite for attaining competitiveness, is hampering
workers’ participation because job security is no longer assured.
Are we then witnessing an era of increasing or decreasing workplace
democracy on a global scale? This question is addressed in the
next section.
7.3 Employee involvement and competitiveness
Separate from a largely ideological discussion on the three systems (for
example, which one is the best, or which system assures greater justice),
a new perception of how firms should be run has gradually been
emerging. This new perception is not a result of political or academic
discussion on the relative merits of different economic systems.
Instead, the new approach to management emerged from the pragmatic
day-to-day running of corporations and companies. The two