Capitalism and Democratic Ideals: Opposites Attracting or a Match Made in Heaven?

Democracy and capitalism are inescapably intertwined in the minds of most Americans, to the point that many question whether democracy could even exist if it didn’t also have an economic system based on free enterprise. It seems like such a natural part of modern day socioeconomic, but is it really? Or is like most other ideas that “seem” natural to us: hollow at its core? Is it really necessary that a democracy work within a capitalist mode of economic thought in order to succeed? Or is the situation in reality one in which capitalism actually places obstacles to real democratic rule? Are the admirable qualities that exist in a truly democratic government in direct opposition to the undeniably selfish ambitions that lie at the heart of capitalism? Will the two systems will forever be destined to remain at odds with each other?

A good argument in favor of the position that democratic government is inextricably linked to capitalism is the widespread belief that it is the political system that controls the economic system. But does it really? Is capitalism really nothing more than a chosen component of democracy, or have countries remained rooted in democratic systems because capitalist power brokers benefit the most from that particular system? And if democracy only thrives because of the power brokers produced by capitalism, then how can one make the argument that democracy fulfills its ideals of equality?

Capitalism is typically defined as an economic system based on private ownership in which market forces such as supply and demand determine price and profit. Unfortunately, the nuances of capitalism aren’t contained within that definition and it is these nuances that lead one to question whether it is an economic system that serves the interests of democracy. The nuances of capitalism that affect the course of democracy revolve around the power of capital itself. If it is accepted that part of the definition of democracy includes representative governors elected by the people, then a question immediately must be raised. Who are these representatives and how are they elected? In the current American system, the pool of those eligible for election is becoming increasingly smaller. The reason has to do with the cost of getting elected. As the cost of a candidacy increases, so does the power of those who can contribute the most to these candidates.

Corruption is an unavoidable component of any political or economic system. There is no such thing as a universally viable economic system that is inherently corruptible. Capitalism and socialism could both theoretically work without the taint of corruption. The reason that neither ever has is due to the human factor. Human beings have needs that require currency and sometimes the easiest way to acquire that extra currency is through corrupt practices. While no economic system is in itself corrupt, they all contain practices which promote corruption.

The fact that capitalism has led democracy in the United States to the point where only a select few can ever dream of being elected to positions of power is not proof that the economic system is a hindrance to the political system. After all, there is no evidence to suggest that simply because someone has the economic basis to get elected that he will not then act in the best interests of those whom he is representing. What is far more disturbing is how the electoral process mirrors the governmental process. The ability to get elected to a representative position requires financial backing, and the more of the populace the position represents, the more backing is necessary. In other words, it takes more money to get elected Senator than to get elected to the House of Representatives. Likewise, it takes more money to get elected Governor of California than Governor of Wyoming. The influence of those providing this capital does not end with the closing of the last precinct, however. Once elected to an office in a democratic country, the influence of capitalism not only continues, but often grows more intense.

Technically, those voted into office are beholden only to their constituents; to those citizens they will now represent who voted them into office. In other words, the representative from the first Congressional district of Oklahoma is expected to put the needs of those residents in his district above the needs of the residents of the second Congressional district of Nebraska. Likewise, the two Senators from Virginia are expected to put the needs of the residents of their state above the needs of the residents of Oregon. This is the very essence of representative democracy. In this way, the residents of all districts and all states can be assured an equal say based in the management of the nation at large based upon their particular needs. It is through this insular protection of narrow interests that Jeffersonian democracy, in which the will of the majority is held in check by the needs of the minority, is allowed to flourish. In theory, it is almost perfect.

In practice, however, the finest aspects of Jeffersonian democracy have become captive to the even more localized and narrow needs of capitalist interests. Capitalism and democracy are indeed inescapably intertwined, though not in the way commonly thought, as a necessary symbiotic creature. The political system of democracy does not, in modern day America, drive the economic system of capitalism. Perhaps it started out that way, but the situation has reversed. Today, democracy is being guided by the not-so-invisible hand of capitalist self-interest. The American political system of democracy, along with its concepts of equality and the ability to be fairly represented in the decision making process, has been thoroughly corrupted by the pervasive and detrimental influence of capitalism.

Democracy’s guiding attribute is its faithful attention to the public’s will. Although not specifically dedicated to the expressing the will of the majority at all times in all cases, it is a system sold on the utilitarian basis of doing that which is in the best interest of the most people. Because it is simply not feasible to have every decision voted upon by a mass population, the job of governance is done through elected representatives who are then expected to abide by the will of their constituents. The specter of re-election faces every official and it is hoped that this unspoken threat will be enough to ensure his first allegiance to local needs and desires. In turn, this attention to local issues is designed to address the needs of the majority while allowing the minority an adequate voice in the process. Unfortunately, that is simply not how the system now works.

The fact is that majority rule is applicable in a significantly small portion of the issues and decisions that are raised in a democracy. The reason this is important is because if majority rule is a primary component of democracy, then clearly any economic system that poses a threat to that cornerstone must come under suspicion. Capitalism is a system dedicated not to providing an equal distribution of wealth to as many people as possible, or ensuring a better quality of life to the majority of people, but rather to creating the greatest possible profit for the small minority of the population that own a company. Democracies under the capitalist system derive economic growth from business growth, and therefore all political decisions by necessity put the potential business advantage ahead of every other consideration. This methodology has led to the inevitable outcome of the needs of the majority being subjugated to the needs of the few; in a word, the business owner. When this abuse of power is centralized down to a specific lawmaker’s desires, it is known as pork, but no single piece of legislation that passes through the US Congress is free from the taint of this process. Whether it is legislation that targets almost two million dollars for an exotic pet research project in California (HR 2673), or billions of dollars dedicated to the currently needless idea of putting a man on Mars, the democratic process has become the dog that is wagged by the tail of corporate self-interest. This system doesn’t necessarily ensure that political decisions will be made which are not in the interests of ensuring equality for the populace, but neither does it offer any method whereby equality or betterment of life can be ensured at the expense of profits for the capitalist owners.

The counter to this argument is that the business owner must exploit the democratic system in order to ensure the best possible conditions for his industry to flourish. The pro-capitalist claim revolves around the concept that democracy can only flourish in an atmosphere of individual freedom, and capitalism is the only economic system that can deliver on that promise. As opposed to socialism, in which private ownership of property is unknown and the benefits of business are shared equally, capitalism is the only system that actually encourages business growth by extending the dangling carrot of profit. In a system in which everything is owned collectively, this impetus toward individual ambition is curtailed. Capitalism promises that those who work the hardest, come up with the most exciting ideas, and create innovative products will benefit more than anyone in a system such as socialism which seemingly hinders individual ambition by promising no more return on their investment than anyone else.

This commitment to individualism is reflected through the legislative process in which those with the greatest ambition to improve the economic growth of the country at large are rewarded with legislation. Ultimately, the capitalist argument goes, the owner can operate a profitable business that will eventually benefit the majority by providing low cost items at the very worst, and will make available products that will improve the quality of life for the majority at best. An argument for capitalism benefitting democracy can go so far as to make the claim that it is the only economic system that can provide for the democratic values of equality because only capitalism is free from overly intrusive governmental regulation, and only capitalism alone can provide the invention and innovation that produces products that closes the gap between the upper and lower classes

On those occasions when capitalism provides equality and a better standard of living, however, it is completely incidental to creating profit. The capitalist system cannot succeed without creating false needs once all real needs have been met. Because the economic system needs to continually recreate itself, and because the political representatives cannot hope to get elected without the financial backing of the industry titans in control, it is disingenuousness to argue that the business owners are the ones at the mercy of the political system, much less that the system works because ultimately it is the majority who benefit. If the capitalist owners were truly concerned about narrowing the gap between the rich and the poor and improving the lives of the multitudes, then why not use the extensive influence they carry in American politics to request the passage of the shockingly low figure of only 75 billion dollars per year it would take to ensure food, education and shelter for every child in America who needs it?

The answer is simple. Capitalist owners control the system of democracy because the system has reached a point where representation can only be achieved by those with the financial backing to win expensive elections. As a result, the equality of representation promised by the idea of democracy has been banished, and the vast majority of constituents are disenfranchised from the policymaking decisions. Once these representatives are elected, they become indebted not to the voters, but to the monied interests who subsidized their campaigns. Since the democratic process is at the mercy of capitalist influence that is driven by only profit, the ideals of providing equality and improving the quality of life for all have been irrevocably hindered.

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