Capitalism, Democracy, Socialism

These days in politics people throw around capitalism and democracy like they’re some kind of golden rule together making America Great.  No one talks about how these two social structures co-exist, how they influence each other or how they could work together for the benefit of all or work in opposition with no checks and balances.  Add in Socialism, another social structure in the news, and it’s hard to sort it all out.  Capitalism is praised as an open and free market economy, democracy is praised as a government of the people, and socialism is shadowed by accusations of communism and fascism.  The reality is these three systems intermingle creating America.

The common definition of capitalism is an economic system characterized by private and/or corporate ownership of capital goods. Capitalism like any other system goes through changes. In the early days of the industrial revolution here in the US capitalism grew in leaps and bounds consolidating wealth into the hands of a few with minimum State regulation. Then came The New Deal setting up social programs as unions flourished contradicting capitalist principles.  Today’s neoliberal capitalism has set in place an economic self-regulated system leaving the average American behind.

These policies of deregulation produced “Junk Bonds;” Union busting policies Reagan created leaving an anti-labor sentiment; the Enron scandal that took down Arthur Anderson one of the big five accounting firms; and the mortgage crash of 2008 creating what some call a corporate welfare state.  I call this period that we are in today capitalism unleashed, a time when corporations are more important than American citizens.  What we’ve gotten today from unregulated capitalism is income disparity, no labor protections, racism and sexism being acceptable and the media reporting the middle class suffers.  I say the working class suffers more. 

The impacts in a climate of non-regulated capitalism increases tension between our economic system, capitalism, and our political system, democracy.  Tensions between capitalism and democracy with their competing objectives have always existed.  While capitalism’s central goal for unregulated private ownership leads to money grabbing, democracy’s central goal of equal civil rights and pursuit of happiness for all gives people a sense of entitlement. The international norm that the best economy, capitalism, and the best political system, democracy work best together puzzles me.  What is the standard and expectations in both systems on regulating?  To me this is the key to an equitable system. For me the sentiment of good for “ALL” should be central.

Democrats are starting to counter this non-regulated capitalism.  Chuck Schumer and Bernie Sanders recently wrote an op-ed in the New York Times entitled, Limit Corporate Stock Buybacks. They reminisce about past years when “American corporations shared a belief that they had a duty not only to their shareholders but to their workers, their communities and the country which helped create the economic conditions.”  This abundance included everyone in the “New Deal” until the 1970’s.  What followed has been years of deregulating corporations, giving corporations the status of an individual when comes to political contributions, letting them take a pass on hiring undocumented immigrates and putting the blame on those immigrates not on the businesses that hire them and a lot more that would take pages to explain. 

We see ads by corporations show casing their social responsibility campaigns.  These Ads boast community giving programs, climate change policies, and policies promoting fair trade.  The only purpose for these social responsibility ads, is to increase the bottom line.  Look deeper into some of these corporations that have social responsibility campaigns and you will uncover unfair labor practices, wide spread sex and race discrimination, limited wage increases just to name a few. Face it none of us work in a democracy.  What would it look like if we worked in a democratic environment or at least where workers could be represented to negotiate wages and benefits? How can we justify living in what we consider a free democracy while we work in a capitalist economic system with now say?

Today, the argument in favor of fewer regulations and giving companies like Amazon huge tax breaks to open up shop at least in the media is to create jobs.  Tax breaks and lack of regulations harm the average person who get these jobs.  It may be true that economic growth stems from the private sector and that the private sector must be allowed to breath in order to produce.  This does not mean there should be no regulations or that the bulk of the private sector should be multinational corporations.  When I bicycled through Vietnam in the 90’s the government had just started letting people become small business entrepreneurs.  Many small privately-owned hotels opened up.  These hotels were far more comfortable and welcoming than any of the government run hotels. What I took away from this was that local small businesses not only sparked economic growth but also built a sense of community, something a chain store or multinational corporation just doesn’t do this as effectively.

Capitalism and Democracy don’t seem like compatible systems unless like every relationship there is some compromises but the compromises need to go both ways not just by the workers or the consumers.  My outlook is that if you work for someone making a lot of money who could not have made all that money without the workers, you, there should be some kind of obligation to make sure the workers are taken care of.  Is this socialism? Some people would say yes.  What this is, is the ultimate social responsibility of capitalism.  The people and the government need to stand up to corporations and not coward to their demands of no regulations at the expense of the American people.