Are Democracy & Capitalism
Currently, we are hearing a great deal of discussion (and handwringing and pearl-clutching) about the possibility of “losing democracy” because of the 2024 election. It could well be true --- certainly if Donald Trump wins, he seems intent on instituting a “President-for-Life” position. There is no doubt we should all be concerned but I’d like to examine how, exactly, we find ourselves in this position as 2023 winds down. Anything as momentous as the world’s oldest democracy expiring is certainly a topic worth scrutinizing, particularly through the lens of history. With that in mind, I headed back to re-read Jared Diamond’s Pulitzer Prize winning Guns, Germs, and Steel: The Fates of Human Societies (W.W. Norton & Co., 1997) --- believing I’d be able to uncover how “democracies” came to be. And that’s where I recognized the deep incongruity between genuine democracy (a political idea) and capitalism (an economic system). This led me to question whether that political idea and that economic system can really co-exist. And here’s where it led.
In Diamond’s brilliant book (highly recommended reading!) he traces the development of human societies and uses a term which I believe is most appropriate for this analysis. As human organizations moved from bands to tribes to chiefdoms to states the structure of society became more and more complex, particularly in terms of Government and Economy. Diamond’s view is that “states” are “centralized governed nonegalitarian societies” and:
At best, they do good by providing expensive services impossible to contract
for on an individual basis. At worst, they function unabashedly as kleptocracies,
transferring net wealth from commoners to upper classes. (p. 276)
“Expensive services,” of course, are items like public highways, water systems, power grids, postal services, et al. Clearly, a good government provides those needs to its citizens. When we combine the political organization (“the state”) with capitalism (how the economy operates), however, we move into the realm of what Diamond describes as a “complex kleptocracy” and I would contend that by 2023 we have reached a national reckoning for the society we have been developing since 1607.
If you remember your 11th grade United States history timeline, 1607 marks the first British settlement in North America, at Jamestown, Virginia. The colony was not settled to establish democratic roots on the continent --- it was founded for one simple reason: to make money. It is important to note that, right from the start, the British colonies on the eastern seaboard of what was to become the United States of America were established to benefit English kleptocrats. By 1619, as you may recall, these Virginian colonists introduced two institutions that indelibly marked the eventual creation of the U.S.A.: a representative legislature (the House of Burgesses) and slavery (free labor to increase the wealth of kleptocrats --- not only in Britain but also in Virginia!). We should note here that the Virginia House of Burgesses was an elected legislature, but the representatives were only elected by white land-owning colonists, setting a precedent that would exist for, literally, centuries. I believe this foundational cornerstone society --- a society created for the sole purpose of making money --- has led to the situation we find ourselves in today.
If we continue down the timeline of U.S. history, focusing on political organization and economic development, we can clearly see how “democracy” and “capitalism” intertwine and co-exist, but only occasionally merge to serve “the greater good.” As regards the political organization, we live in a democratic republic and, from the start, it has been flawed. While the ideals professed in the Declaration of Independence and the Preamble to the Constitution are regularly cited as “proof” of American exceptionalism, the actual story is far from exceptional. While those founding documents claim “all men are created equal” and they hoped to “form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity” we know that, in 1776 and 1788, respectively, we were a new nation that enslaved half a million people and systematically eliminated the Native population while denying the vote to women and non-land-holding citizens. It should also be noted that a current problem we deal with every four years --- the Electoral College --- has more and more shown itself to be a rather undemocratic way to choose a President. Two of our last four Presidents have lost the popular vote but, due to the vagaries of the Electoral College, have won the Executive position. In fact, many of the compromises written into the Constitution were agreed to so that the Union could be created, despite the clear contradiction between the ideals (“all men are created equal,” “establish Justice . . . promote the general Welfare”) and a society which protected the institution of slavery --- because of its economic value! Both of our Founding documents were created by white, wealthy land-owning men --- many of whom (North and South) were directly profiting from slave labor. That said, we more clearly see that the U.S. developed with this uneasy marriage of “democracy” and “capitalism” over the last 235 years.
At this point, revisiting Jared Diamond’s analysis of how a ruling elite maintains popular support is in order. According to Diamond, those at the top of the kleptocratic pyramid maintain their power by combining four characteristics.
3. Use the monopoly of force to promote happiness, by maintaining public order and curbing violence.
4. The remaining way for kleptocrats to gain public support is to construct an Ideology or religion justifying kleptocracy. (bold, mine)
If we look at each of these characteristics, we can see that, over time, the U.S. government achieved each particularly because it catered to the desires of the nation’s capitalist elite. As the United States grew to be a world power over the 19th century, we see that government policies danced to the capitalist piper more often than not. Even after a monstrous Civil War, Blacks were quickly denied any significant rights (particularly in the South but the North was almost equally racist, just in more covert ways), women still couldn’t vote, workers and immigrants were wage-slaves, and the Native population was all but eradicated. Prior to the Civil War our “democracy” was more than “influenced” by Southern planters and Northern merchants. Our “Manifest Destiny” moving West was predicated on how that territory could be capitalized. Nonetheless, the bulk of the voting (white, male) population was kept “happy” enough (Diamond’s 2nd characteristic) and kept in line enough (research the government’s violent reactions to “slave revolts” and “labor disputes “in the first and second halves of the 19th century)so that the desires of the kleptocrats became the policies of government conduct.
As the 20th century emerged, we had a moment of “progressivism” with a trove of laws designed to protect workers and the general populace (hour & wages laws, child-labor laws, health and safety laws, etc.) culminating in women “winning” the right to vote in 1920. Of course, there was also rampant apartheid, a World War, and, in the ‘20’s, careening economic malfeasance resulting from the collaboration of government and elite capitalists. So, while there was an illusion of the nation becoming more democratic, the reality was far different. The Stock Market Crash of 1929 led to another progressive shift when Franklin Roosevelt was elected in 1932. His introduction of the “3-R’s” (Relief, Recovery, Reform) did promote some of Diamond’s second characteristic (“make the masses happy by redistributing much of the tribute (taxes) in popular ways”) and in his 1936 Democratic nominating convention acceptance speech he noted that the U.S. economy had become one of “privileged enterprise, not free enterprise.” He directly addressed those he decried as “economic royalists” and stated:
It was natural and perhaps human that the privileged princes of these
new economic dynasties, thirsting for power, reached out for control
over Government itself. They created a new despotism and wrapped
it in the robes of legal sanction. In its service new mercenaries sought
to regiment the people, their labor, and their property. And as a result
the average man once more confronts the problem that faced the
World War II superseded The New Deal, of course, and the result of that war amplified the belief that the U.S. was not only the “arsenal of Democracy” but also was the leader of the “Free World” against totalitarian, Communist aggression.
And that leads to the final chapter of this story.