Industrial Democracy: Historical Development and Current Challenges

The following article gathers notes and comments on industrial democracy, its terminology, history and current developments. Industrial democracy is an enigmatic term whose spectrum of meanings is explored in the first section. The Anglo-Saxon terminology, going back to S. and B. Webb will be compared with the German vocabulary of Wirtschaftsdemokratie and co-determination. The following sections deal with the peculiarities of German co-determination. First the emergence of co-determination is explained by a conflictual interplay of employers, state and trade unions, followed by a sketchy number of the crucial steps of its development up to today's challenges. An additional section is devoted to the rationale of the works council, which has surprisingly evolved from a Cinderella to the most significant institution of industrial relations in contemporary Germany. The final discussion focuses on the ideological permutation of co-determination changing its socialist embeddedness into a marketeconomy one. The paper concludes with a proposal to couple the legitimacy of co-determination with the normative framework of social market economy.