Economic democracy is the idea that the norms of equality and participation that classical liberalism confines to a narrowly defined sphere of government should apply to the sphere of economic life. Economic democracy thus entails a challenge to the classical liberal notion of property. In classical liberalism, property defines a realm of private enjoyment. No particular property right is a prerogative of, or a prerequisite to, citizenship, and the exercise of property rights by those who have them is not assessed in political terms.
One alternative to classical liberalism responsive to the ideal of economic democracy is classical socialism. Classical socialism opposes to the liberal notion of private property the notion of state property-property controlled by the officials of a democratically constituted state. Another alternative to classical liberalism inspired in part by the ideal of economic democracy is social democracy or welfare-regulatory liberalism. Social democracy retains the classical liberal notion of private property rights, but it both qualifies them by regulatory restrictions on their exercise and supplements them with welfare rights to minimal subsistence funded and administered through a tax-transfer system.
This essay is about aspects of a further alternative to classical liberalism inspired by the ideal of economic democracy. This alternative can be found in converging elements of the traditions of republicanism and market socialism. Like social democracy, the alternative rejects both state property and the unrestricted accumulation and exercise of private property rights. However, to a greater extent than social democracy, it pursues its concerns by encouraging a politically desirable primary organization of economic activity and distribution of income and wealth.
William H. Simon,
Social- Republican Property,
UCLA L. Rev.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/888