By Isabelle Ferreras

Book Cover: Firms as Political Entities; Saving Democracy through Economic Bicameralism (2017)
Editions:Paperback: $ 27.99
ISBN: 9781108402521
Pages: 226
Hardcover: $ 105.00
ISBN: 9781108415941
Pages: 226
ePub: $ 22.00
ISBN: 9781108246767
Pages: 226
  • Offers a new perspective on firms as political entities rather than purely economic organizations, giving readers a new way to look at the problems of the globalized world
  • Presents a new history of capitalist democracies and addresses the contradiction between democracy and capitalism by examining the distinction between corporations and firms
  • A groundbreaking proposal for governing the firm inspired by the history of political bicameralism

When people go to work, they cease to be citizens. At their desks they are transformed into employees, subordinate to the hierarchy of the workplace. The degree of their sense of voicelessness may vary from employer to employer, but it is real and growing, inflamed by populist propaganda that ridicules democracy as weak and ineffective amid global capitalism. Democracy has been disrupted by capitalism to the point of near extinction. At the same time, corporations continue untouched and even unremarked as a major source of the problem.

Isabelle Ferreras proposes a simple, yet revolutionary solution: democratizing capitalism. For generations, workers have been viewed as human capital, and firms as private economic organizations. Starting with the sociological observation that workers expect to be treated as full citizens, and drawing on the history of Western democracies, this book argues that workplaces are part of the public sphere, and that firms can only be fully understood in that light – as political entities in need of democracy.

Examining political revolutions since Roman Antiquity, Ferreras identifies a “bicameral moment” that was the lynchpin of their successful democratic transition, and argues that the time has come for corporations to undertake this transition in a bicameral moment of their own, by granting the same rights to workers – firms’ labor investors – as the ones held by capital investors. Economic Bicameralism, the book’s central idea, is a revolution that is no less political or powerful for its quiet efficiency. Once read, the idea cannot be ignored: firms are political entities with global impact, and must be governed as such – democratically.


For more information, please visit the website accompanying the book:

Reviews:Michael J. Poire on , ILR Review (Industrial and Labor Relations Review) wrote:

"This book is super interesting, but it is also super difficult to review. On its face, it is a proposal for a radical revision of corporate governance structures in advanced developed economies. The proposal is to substitute the current structure, which is built around the shareholder value model, with a bicameral legislature, one chamber of which is composed of representatives of the shareholders, the other of representatives of the workers. Read in this way, the reader is drawn immediately into a debate about what exactly this structure would look like, how it would operate, and whether such a radical innovation in one of the basic institutions of industrial society is feasible at all. But the most interesting part of the book, at least for me, is the argument about why this new structure is desirable at all. That argument is built around a view of the changing nature of work in our society and the nature of the firm as an institution in which work is performed. In this sense, the book belongs to the burgeoning academic literature about the 'future of work,' except that in the debate that has already become so stylized, almost ritualized, Ferreras’s argument is refreshingly different and original."

Roy J. Adams on Canadian Journal of Industrial Relations wrote:

"Through unions, collective bargaining and related institutions, workers may participate in the management of the firm but only within a framework set by the capital investors. This is wrong, Ferreras argues, because firms depend equally on capital and on labour. Both are essential 'investors' in the firm and, thus, each should have an equal say in its governance. Indeed, drawing heavily on the work of Jean-Phillippe Robé (2011), Ferreras argues that the 'corporation' is not the same thing as the 'firm.' The latter is a real community of human beings engaged in a productive process. The former is a legal chimera that has taken over, haunted and kidnapped the real world firm in an intellectual 'sleight of hand' that has left employees trapped in a historical cul-de-sac with a status similar to that of servants in a despotic household or as a 'production factor among others.' (p. 114). [...] Even if she convinces enough people that economic despotism is illegitimate and inconsistent with democratic values, they will have to also be convinced that removing control from shareholders will not produce an economic catastrophe. Capitalists can be counted on to make a strong case for chaos and calamity [...]. If the firm is to be cured of its despotic disease, what might be called the 'New Industrial Democrats' will have to be able to carry the day against that certain storm. To date, capitalist despotism has withstood every challenge to hegemony."

Jean-Phillipe Deranty on Critical Horizons; A Journal of Philosophy and Social Theory wrote:

"The book’s strengths are many: Ferreras mobilises a substantial amount of scholarship to make an original proposal with substantial implications for both the theory of work and for democratic theory. Her defence of an institutionalization of workplace democracy by reference to the history of democratic practices provides an important, original addition to the literature on workplace democracy. Similarly, her original defence of workplace democracy adds an original element to current reflections on how to strengthen democracy. Ferreras situates her proposal within the study of Erik Olin Wright’s ‘concrete utopias’ and adds a whole new, though-provoking win to this project. Some readers will undoubtedly find weaknesses in her argument. She rejects stakeholder theory because it accepts the mainstream, corporate conception of the firm, but one important insight that is gained from stakeholder theory is the multiplicity of missions and forms of social relations around modern firms. Ferreras’ study of the form remains focused on its internal life, and the rationalities within it. Beyond the financial and expressive rationalities of investors and employees, one could argue that other rationalities need to be considered, in particular, the broader economic one of the fulfilments of socially defined needs, what we might call the productive rationality."

Sara Lafuente Hernandez on Transfer wrote:

"Can capitalism be democratised? Yes, it can! Isabelle Ferreras provides us with a recipe for human emancipation within capitalism: intervening inside the firm, the last bastion of despotic rule. Expanding on her essay Gouverner le capitalisme? (2012), Ferreras builds her argument on three discussions: the redefinition of the firm as a polity, the democratisation of capitalism, and ways to enhance workers’ power in the firm, touching upon industrial democracy debates. Drawing on political theory terminology in an accessible and eloquent manner, the author proposes ‘Economic Bicameralism’ as a new, better and feasible institutional form for governing the firm. [...] Some of the high expectations raised by the introduction risk not being fully satisfied. First, the book does not (intend to) develop a complete substantive and functional political theory of the firm, as it only focuses on its internal dimension (p. 110). [...] Secondly, the book does not propose a ‘one size fits all’ recipe for democratising capitalism in any context. It only targets large and ‘mature’ companies governed by a board of directors and an executive committee, where trade unions and other forms of workers’ representation are assumed to be present. The book’s roadmap is humbler than initially announced but remains a worthwhile appetiser for a democratising agenda. [...] A main point of critique relates to the failure of the author to develop two essential links between her theory and her concrete policy proposal of Economic Bicameralism based thereon,which in my view uncovers some contradictions.First, after dismantling the understanding of the firm as limited to the legal corporation and its shareholders (p. 97; p. 106), the author does not provide concrete criteria for a positive definition of the contours of the firm as a polity. [...] The second missing element, although crucial for the feasibility of Ferreras’ proposal, is a theory of collective action in the firm. [...] All in all, the book is a refreshing addition to re-emerging debates on industrial democracy. It offers an exciting intellectual challenge and a creative spinning of theoretical arguments drawing on different disciplines and scholarly sources. With her brave and provocative policy contribution, Ferreras leans out from the academic ivory tower, engaging with burning social and political concerns. Her powerful and progressive language is also timely, at a moment when workers’ participation is increasingly being reformulated and colonised by mainstream corporate governance and corporate social responsibility discourse. Plenty of questions remain open but these constitute fruitful paths for future research. "

Abraham Singer on Political Theory wrote:

"On Ferreras’s account, the development of economic theory led to a view of the firm as an institution fundamentally underwritten by instrumental rationality—the idea that human action is motivated solely by the intended achievement of some action-independent end. [...] Ferreras argues that this theory is crucially flawed. [...] By grounding critique and prescription in the idea of 'expressive rationality,' Firms as Political Entities refreshingly points us toward a path for critical reflection that is easily occluded by existing theories of capitalism. As Ferreras correctly notes, Marxists, despite their opposition to liberalism, often ground their critiques of capitalism and capitalist workplaces in similar instrumental assumptions about human action, which can lead them to miscomprehend human actions in ways similar to those of their liberal counterparts. By emphasizing the significance of expressive rationality, Ferreras offers a decidedly political account of the workplace, making good on the project of transcending the dichotomies and tensions inherent to 'political economy' in a manner that other radical critiques sometimes fail to do. That said, Ferreras sometimes tries to do too much with the concept of expressive rationality, often discounting how it will conflict with, and be constrained by,instrumental rationality. [...] Aside from offering a useful historical and comparative survey of the different ways in which work is organized, the book’s core insight—that a conceptual and normative account of the firm must recognize the importance of both expressive and instrumental rationality—is fundamentally sound and important. What weight we ought to accord these competing logics in the governance of the firm may not be answered completely in this work, but Ferreras has done a great service by posing the question and illuminating the stakes involved."

Lecture by Ferreras on the Book

Relevant Links

Table of Contents of Firms as Political Entities

  • Introduction: what about the workers?

Part I. Critical History of Power in the Firm: The Slow Transition of Work from the Private to the Public Sphere

  1. Stage one: the workplace and its emergence from the household
  2. The nineteenth and twentieth centuries: workers' movements and the invention of collective bargaining
  3. The twentieth century and the ambiguities of institutional innovations in the capitalist firm
  4. The twenty-first century service economy is bringing work fully into the public sphere

Part II. What Is a Firm?

  1. Obsolete vision: instrumental rationality as the firm's sole logic
  2. Foundations for the political theory of the firm

Part III. Looking to the Future: From Political Bicameralism to Economic Bicameralism

  1. Bicameral movements: a pivotal institutional innovation for governments in democratic transition
  2. Analogy: the executive of the firm answering to a two-chamber parliament
  3. Conclusions: a reader's guide for reflection and debate about economic bicameralism

About Isabelle Ferreras

Isabelle Ferreras is a tenured fellow of the Belgian National Science Foundation, a professor of sociology at the Université Catholique de Louvain, Belgium, and a senior research associate of the Labor and Worklife Program, Harvard Law School, Massachusetts. A sociologist and political scientist by training, she is driven by the idea that the social sciences can make a difference. A sociologist (PhD Lou-vain 2004) and political scientist (MSc M.I.T. 2004) by training, Ferreras is driven by the conviction that ideas matter, and that they can make a difference in people’s life. This book is the keystone of her long-term research into the tensions between capitalism and democracy.