Abstract

As a new enterprise institution, economic democracy is aiming at injustice and exploitation of the capitalist enterprise in which capital ownerships the power core. The prevailing principle of economic democratic firm is that labor employs capital. It will grant the power base of the control and management of economic organization to all workers who have equal rights and same importance, which is carried out on the basis of“one person, one vote”. This type of economic power allocation structure determines the firm's two most significant features, namely participating in collective decision-making（participatory economy）and sharing the collective income（sharing economy）.

The economic democratic firm allocates its economic power according to“Rawls' Standard”, which means under the conditions of“original position”and“veil of ignorance”, it must be a unanimous choice among the entire labor force. Therefore it is justice. At the same time, economic democracy is the extension and development of political democracy into the economic field. Both are based on the same ideas, the same principles, and the same ways of dealing with social affairs. They complement and supplement each other, and will definitely become the only legitimate foundations for acquiring political power and economic power.

In terms of economic performance, democratic economy exhibits the unparallel superiority of the capitalist economy. At the microlevel, it will improve the allocative efficiency and non-allocative efficiency of scarce resources, and promote a more equal distribution of income. At the macrolevel, if there are no external shocks from supply, demand and policy, it will achieve full employment, price stability and long-term steady growth. Outside the economic sphere, it will also play an active and useful role.

Furthermore, economic democracy is an extensive and enduring practice by working class in the East and West in order to win their liberation. The study on operating efficiency of economic democratic firm has been a prolonged topic in Western economic circles（many famous Oriental economists have also been involved）. It has attracted many economists with different stances and views to join the debate. Consequently, a new branch of economics, economics of laborsmanaged firm, has emerged.

If a society's basic economic institutional arrangements are both just and efficient, it is a good society. Economic democracy is not unrealistic or unfeasible. In modern society, social justice and political democracy are widely accepted, and productivity is highly developed. Economic democracy can be achieved so long as it becomes the choice of unanimous consent.