Ideological Struggles: Is Capitalist Democracy a Fraud?

Editor’s Note: Capitalist democracy is an oxymoron.  Capitalism and democracy are intrinsically antithetical. The concept has been entertained (and believed by many) only thanks to constant propaganda, especially in the US, the world’s most heavily self-propagandized nation. Now even establishment voices, like Meyerson, are questioning this fraud. Along with Meyerson’s take on this issue, we also offer a decidedly leftwing analysis by the editors of LIBCOM.ORG, representing a libertarian strain of communism.—PG


The growing tension between capitalism and democracy

Do capitalism and democracy conflict? Does each weaken the other?

To the American ear, these questions sound bizarre. Capitalism and democracy are bound together like Siamese twins, are they not? That was our mantra during the Cold War, when it was abundantly (!)  clear that communism and democracy were incompatible. After the Cold War ended, though, things grew murkier. Recall that virtually every U.S. chief executive and every U.S. president (two Bushes and one Clinton, in particular) told us that bringing capitalism to China would democratize China.

It hasn’t quite worked out that way.

Over the past year, in fact, capitalism has fairly rolled over democracy. Nowhere is this more apparent than in Europe, where financial institutions and large investors have gone to war under the banner of austerity, and governments of nations with not-very-productive or overextended economies have found that they could not satisfy those demands and still cling to power. The elected governments of Greece and Italy have been deposed; financial technocrats are now at the helm of both nations. With interest rates on Spanish bonds rising sharply in recent weeks, Spain’s socialist government was unseated last weekend by a center-right party that has offered no solutions to that country’s growing crisis. Now the Sarkozy government in France is threatened by rising interest rates on its bonds. It’s as though the markets throughout Europe have had enough with this democratic sovereignty nonsense.

Lest you think I exaggerate, consider the interview that Alex Stubb, the minister of Europe for Finland’s right-wing government, gave to the Financial Times last weekend. The six euro-zone nations with AAA credit ratings, said Stubb, should have greater say in Europe’s economic affairs than the other 11 euro members. The political rights of Southern and Eastern Europe would be subordinated, essentially, to those of Germany and Scandinavia — or to credit rating agencies, which are threatening to downgrade France (thereby reducing the number of decision-making euro nations from six to five).

What Stubb is proposing, and what the markets are doing, is, in essence, extending to the realm of once-equally-sovereign nations the one-dollar-one-vote principle that our Supreme Court enshrined in its Citizens United decision last year. The requirement that one must own property to vote — abolished in this nation in the early 1800s by the Jacksonian Democrats — has been resurrected by powerful financial institutions and their political allies. To the nations of the European currency union, the “property” they need to secure their right to vote is a proper credit rating.

Yet this all seems very strange. The idea that there’s a conflict between our economic and political systems is hard to accept, and not just in the United States. In Europe, too, it has been assumed that democracy and capitalism (at least, European social capitalism) go together. That’s largely because both systems thrived in apparent harmony for the three decades that followed World War II. Profits rose even as wages increased and social benefits expanded. But what if that 30-year peace was the exception to the more common state of conflict between markets and the people?

That’s the argument Wolfgang Streeck, the managing director of the Max Planck Institute for the Study of Societies, makes in the September-October issue of New Left Review. Streeck contends that, since the mid-1970s, governments have had to stretch to meet the conflicting demands of each system. In the ’70s, governments pursued inflationary policies to help workers whose wages had abruptly stopped rising. In the ’80s, governments, led by Ronald Reagan and Margaret Thatcher, tipped the other way by raising interest rates and unemployment and helping to break unions. In the ’90s, a fatal compromise was struck: To compensate for stagnating incomes, private debt soared, with homeowners and consumers relying on credit extended by deregulated financial institutions. Public debt contracted (the United States had balanced budgets in the late 1990s). In the wake of the collapse of 2008, that dynamic has been reversed: Governments everywhere assumed the debt that their citizens could no longer take on by deficit-spending to counteract the Great Recession.

Now, the markets are striking back. Napoleon couldn’t conquer all of Europe, but Standard & Poor’s may yet. Conflicts between capitalism and democracy are breaking out all over. And Europeans — and even Americans — may soon have to face a question they have not contemplated in a very long time, if ever: Which side are they on?

Harold Meyerson writes a weekly political column that appears on Wednesdays on the Washington Post (a 1% owned and controlled publication) and contributes to the PostPartisan blog. Meyerson is also executive editor of The American Prospect, a liberal magazine based in Washington. A Los Angeles native, Meyerson was the executive editor of the L.A. Weekly from 1989 to 2001 and hosted the weekly show “Real Politics” on radio station KCRW, the L.A. area’s leading NPR affiliate, from 1991 to 1995. He is the author of “ Who Put the Rainbow in the Wizard of Oz?” (1995), a biography of Broadway lyricist Yip Harburg.

Capitalist Democracy: The Illusion of Choice

Libertarian communist critique of representative democracy. Produced by Organise! in response to 2010 Australian election.

Supporters of capitalist democracy generally claim that it is the best—if not the only—way of organising a free society. Capitalist democracy provides the conditions, they claim, under which each of us can determine the course of our own destiny and enjoy all the benefits in terms of creative autonomy and individual self-development that accrue to a truly free people.

They say that freedom is something we enjoy as a result of choosing those political representatives whose policies best reflect the dictates of our own conscience to make laws on our behalf. We achieve the common good, they say, by compelling all to respect the laws, which are applied equally to all without fear or favour.

These claims are myths. The fact that many of us commonly confuse these myths with facts changes nothing, since the truth of an idea is not determined by the number of people who believe it.

While capitalist democracy appears to offer us choice—choice being the cornerstone of our freedom—the fact is that the choices it offers are not meaningful ones. Since capitalist democracy provides us with meaningless choices, it also provides us with the illusion of choice, and thus the illusion of freedom.

Consider the following facts:

1. Capitalist society is class society. Despite the claims made by the most powerful people in our society—who, we might add, have vested interests in doing so—the unity of the nation-state is an illusory one, because capitalist society is divided into economic classes. On the one hand we have those who own and control social resources, and who enjoy the economic and social privileges that accompanies such ownership and control, and on the other those who lack such ownership and control and are obliged by the circumstances of their birth to sell their labour for a wage, which is generally most of us.

2. Exploitation is inherent to class society. The foundation of meaningful freedom is economic independence, and economic independence on a social level derives from the ability of each of us to control the fruits of our labour. This is a basic human right. In capitalist society the propertied classes own and control the tools of production, the places where we work and the things we work with, which means that those of us who don’t own and control the tools of production are forced to work for those who do. Needless to say, this situation deprives us of our economic independence and forces us into a position of submission and subservience.

But it gets worse. The capitalist class generates profits from the wage system by paying workers less in wages than the value of the product of our labour, which they take for themselves. This is exploitation, period, and any sort of exploitation is inconceivable in a free society, because as long as one person can be exploited none of us are free. The only difference between chattel slaves and wage workers is that the former were owned, whereas the latter are rented. Seen in the cold hard light of day, wage labour is really wage-slavery.

Suffice it to say that the economic and social privileges that the propertied classes enjoy in our society depends for their existence on the denial of elementary human rights to the vast majority of society.

3. The exploitation inherent to capitalist society is protected by the state. The denial of the basic human right of economic independence to the working class is protected by the institutionalied violence of the state, by the police, military and judiciary. The primary function of the state is to protect and defend the social and economic privileges of the propertied classes. It is an institution of class domination which lords over the whole of society and imposes economic dependence and servitude on the great mass of humanity in the service of an opulent minority.

(Some will argue in the defense of the state that it 1) maintains order and 2) protects us from violent crime. To this we pose the counter-arguments as follows: 1) what sort of order and in whose interests, and 2) that being ‘protected’ against ‘crime’ by the state is like being ‘protected’ against ‘crime’ by the mafia, and that as the state bequeaths its ‘protection’ to the working classes, facilitating the theft of the wealth it produces, so too does it perpetuate crime in the name of stopping it. Since the system of deterrence has failed to stop violent crime, we suggest alternative strategies such as addressing the causes).

4. The primary function of the state as a defender of privilege and injustice is reflected in capitalist law. The character of the state as an institution of class domination and the nature of its basic function (to protect the privileges of the propertied classes from the rest of us) forms the basis of capitalist law. The golden rule is that those with the gold make the rules. The basic fraud behind the doctrine of equality before the law, the foundation for capitalist democracy, derives then from the fact that the laws are made by and for the rich.

The fact then that, in applying the same law to all, capitalist law has overcome the arbitrariness of kingly despotism is ultimately irrelevant for those of us in a state of economic servitude, since the law itself is unjust; being grounded as it is in the protection of elite privilege and the perpetuation of the master-slave relationship at the core of the wage system, it perpetuates the arbitrary rule—the despotism—of a class.

5. Capitalist democracy operates within the paradigm of capitalist law and underwrites its injustices. When we go to the voting booth at election time we choose between candidates from within an ideological spectrum that takes the legitimacy of class rule and wage-slavery as a given. No discussion may be entered into on the subject—all sides, whether left or right, agree that the propertied class may exploit the working class and that the master-slave relationship that characterises the wage system is proper and just.

Thus we can’t vote out wage-slavery. We can’t vote out the extraordinary extremes of wealth and poverty that the capitalist system produces. We can’t vote out the sacrifice of every ethical, moral, social, environmental and humanitarian consideration to the holy gospel of profit. We can’t vote out the system that fulfills human needs only as long as the human beings involved have enough money to pay. We can’t vote out patriarchy and institutionalised racism. We can’t vote out the imperialist wars that the West is waging in Iraq and Afghanistan to control the flow of oil in the name of fighting the sort of terrorism that it perpetuates. We can’t vote out corporations, private tyrannies with internally autocratic decision-making structures whose global reach renders the governments of individual nation-states obsolete as well as illegitimate. We can only vote for the carrot from the left or the stick from the right—either way, wage-slavery continues.

Considering all of the above facts, it is impossible to make any conclusion other than that in providing us with candidates who are essentially the same insofar as they share a consensus regarding the legitimacy of wage-slavery, capitalist democracy provides us with false choices, and thus the illusion of choice, and thus the illusion of freedom. It is only possible to conclude that the regime of capitalist democracy and its two-party circus act where we vote for Tweedledum’s stick when we get sick of voting for Tweedledee’s carrot and vice versa, signifies the permanent deferral of meaningful freedom for anyone who isn’t a beneficiary of exploited labour.

Capitalist democracy will always disappoint because it is of, by and for the ruling class. We must learn to take responsibility for our own freedom and let go of our childish faith in leaders and in being told how to think and act. We must learn to think and act for ourselves individually as well as socially. We must create the facts of a better future in the here and now through community and workplace organising on a cooperative and non-heirarchical basis, in such a way that connects our goal of meaningful freedom with the means that we use to achieve it. Only in this way do we have any hope of overcoming the injustices of capitalist democracy and creating a brighter future for everyone.


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