The Disastrous Economic Misunderstanding of our time

1991 was a year that began full of hope and ended in disillusionment. It was a year when a better world could have become reality, yet instead laid the foundations for the broken world we inhabit today. In 1989-90, the peoples of Eastern Europe had finally cast off the yoke of post-Stalinism. The heads of state of the USA and the Soviet Union had officially brought the Cold War to an end. The great promise of 1991 was that the world would now find its way to fraternal unity and lasting peace, grounded in freedom and justice and that the social achievements of Communism in Eastern Europe would henceforth be combined with the freedoms of Western Democracies. What vision of an ideal economic system did such diverse statesmen as Yugoslav President Josip Broz Tito, US President Ronald Reagan, Soviet President Mikhail Sergeyevich Gorbachev, Czechoslovak Communist Party leader Alexander Dubček (during the Prague Spring), and Polish trade union leader and President Lech Wałęsa share at some point in their political careers? A truly democratic economic system!

An economic system in which workers were meant to be entrepreneurs and free, equal masters of their own enterprises. Indeed, even the conservative Ronald Reagan viewed it this way-at least for a time. For him, this concept was not socialism or communism, but something quintessentially American. He drew inspiration from figures such as Thomas Jefferson, who had envisioned a decentralized, free republic of small farmers and small-business owners, and Abraham Lincoln, whose Homestead Act of 1862 created a pathway allowing even the poorest individual to become an independent smallholder on their own debt-free land. Reagan regarded worker ownership of enterprises as a logical evolution of these ideas-even as an essential prerequisite for a truly free people. The Catholic, anti-communist trade union movement Solidarność, which brought down socialism in the Polish People’s Republic, also originally championed genuine, democratic worker self-management of enterprises as a core objective. 1991 was supposed to be the year when the perfect symbiosis of freedom and democracy became a reality in Eastern Europe. Yet what happened instead? Nationalism, corruption, and a sudden explosion of organized crime dashed all hopes for a better world as the year unfolded.

Alexander Rutskoy, the Russian Vice President at the time, who had become a critic of Russian President Boris Yeltsin, summed up the situation shortly before New Year's Eve 1991 by stating, in essence, that the most repulsive form of dictatorship had taken over: The dictatorship of the street. There is nothing to add to that. Instead of economic democracy, the year 1991 brought gangster capitalism. Instead of solidarity, freedom, and equality, it brought a hypercompetitive socio-economic system based on Social Darwinism. Essentially, nothing has changed in this regard. Yet the idea of ​​a democratic economic system is not dead. It lives on, and in early 2026, it experienced a powerful rebirth in Slovenia with Slovenia's Employee Ownership Cooperative Act (ZLZD). From 2022 to 2026, Slovenia was governed by a coalition of liberals, social democrats (former Titoists), and leftists. This social-liberal government, which was unfortunately replaced in June 2026 by a right-wing populist government, left behind a truly significant achievement in the form of the Employee Ownership Cooperative Act. This law enables the transformation of private enterprises into democratic, self-managed worker cooperatives. It provides a concrete framework for implementing democracy within the economy. A democracy that exists only outside of working hours is no democracy at all. There is no valid reason why, in the 21st century, we should accept that working life is usually organized in an authoritarian, hierarchical, and simply undemocratic manner. If we are to be free and equal citizens within the state, then let us be so within the economy as well. Found cooperatives! Advocate for a democratic economy based on self-management and employee ownership.