Politics, Ethics and Social Responsibility of Business

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DEMOCRACY |

7.3 DEMOCRACY – ITS VARIETIES AND PROCESSES

Democracy (literally ‘rule by the people’, from the Greek words demos , which means ‘people’ and kratos ,

which means ‘rule’) is a form of government for a nation state or an organisation. Today, a democracy is

often assumed to be a liberal democracy but there are many other varieties of democracy and the methods

used to govern differ amongst these varieties. While the term democracy is often used in the context of a

political state, the principles are also applicable to other areas of governance. The principles of democratic

governance could extend to the ‘organisation’ or ‘corporation’ or ‘business’ as well. Therefore, the corporation

or company is to be seen as a ‘microcosm’ of society. It should also have all the desirable features of a ‘good

society’. In the context of a corporation, democratic ‘rule by people’ would mean a demonstration of the will

of the shareholders.

7.3.1 VARIETIES

The def nition of democracy is made complex by the varied concepts used in different contexts and discussions.

Political systems, or proposed political systems, claiming or claimed to be democratic have ranged very

broadly. For example, Aristotle contrasted rule by the many (democracy), with rule by the few (oligarchy),

and with rule by a single person (autocracy).

On the one hand, in the case of tribal assemblies, the system randomly selects leaders from the population.

On the other hand, in the system that seeks consensus, we have a ‘deliberative democracy’. Even what is

usually seen as de facto dictatorships may claim to be democratic and hold sham elections to gain legitimacy

(for example, the former German Democratic Republic).

7.3.1.1 Direct

Direct democracy is a political system where the people vote on all policy decisions, such as questions

of whether to approve or reject various laws. It is called direct because the power of making decisions

is exercised directly by the people without intermediaries or representatives. Here, the emphasis is on the

process and procedure of democracy. Historically, this form of government has been rare because of the

diff culties of getting all the people of a certain territory in one place for voting. Criticism is also drawn upon

the use of this term for it implies the notion of voting, while it neglects other democratic procedures such

as speech, media and civic organisations. That is, these critics argue that democracy is more than merely a

procedural issue.

7.3.1.2 Representative

Representative democracy or polyarchy is so named because the people do not vote on most government

decisions directly, but select representatives to a governing body or assembly. Representatives may be chosen

by the electorate as a whole (as in many proportional systems) or represent a particular subset (usually a

geographic district or constituency), with some systems using a combination of the two. Many representative

democracies incorporate some elements of direct democracy, such as referenda. Our parliamentary system is

a representative form of democracy.

7.3.1.3 Liberal

Liberal democracy is a representative democracy (with free and fair elections) along with the rule of law,

a separation of powers, and protection of liberties (thus the name liberal) of speech, assembly, religion and

property. Conversely, an illiberal democracy is the one where the protections that form a liberal democracy