Is political democracy compatible with capitalist economies?
Thanks,
Matt.
[Sent via email]
Hi Matt,
This is a complex question that hinges on subjective definitions of democracy. Democracy literally means “people rule,” derived from the ancient Athenian concept of demokratia. The basic definition is straightforward but the practice has varied wildly along with popular conceptions that are serpentine, at best.
For example, ancient Athenians would dismiss elected representatives as non-democratic and oligarchic by nature. Athens had a direct democratic system that filled bureaucratic posts by lottery and passed laws with an assembly open to all citizens. On the surface, this appears even more in the spirit of “people rule” than what we have today. But when we adjust for the exclusivity of Athenian citizenship, only about 25% of the population was enfranchised since women, slaves and foreigners were forbidden from political participation. For older and more inclusive examples of “people rule” we could look to the consensus-based decision making among many tribal societies.
Democratic models antiquity and beyond only takes us so far, however. The argument could be made that “purer” forms of democracy which developed in the context of a tribe or city-state are simply not compatible in a modern world of teeming metropolises and complex nation-states. There is merit to this argument from a historical materialist perspective.
Consensus-based decision making is a logical outgrowth of highly interdependent individuals that hunted, gathered and sheltered as small communities. Cohesion and cooperation between members was the best guarantor of productivity and individual survival. In antiquity, on the other hand, the exploitation of slave labour was the productive basis that made a caste of citizens in the polis possible. This economic dependency on slavery elevated the role of military conquest and contributed to the confinement of women to the domestic sphere. Citizenship in the classical world was inextricably linked with military service and politics became the sole domain of a kind of warrior caste.
What these historical examples illustrate are models of democracy that arose from economic practicality rather than lofty idealism. The same is true of modern democratic forms, which were spawned by a nascent bourgeois class looking to wrest control of government from the European aristocracy of the 17th and 18th centuries. This is why property qualifications were an important feature of early voting rights across the West, just as military service was an important feature of citizenship in antiquity. Capitalism favours commercial expansion and classical slave economies favoured military conquest, and this is reflected in the democratic forms that each system produced.
A unique aspect of industrial capitalism is the massive leap in productive capacity and potential. This has largely made material scarcity artificial and wholly dependent on access to money as the medium of consumption. Because of this, class struggle within capitalism has produced some benefits for the restive masses, including universal suffrage and a basic social safety net.
Whereas strict parameters used to be put around those who can vote, it is now a case of parameters around those who can feasibly win office and pass legislation. Liberal governments all over the world are managed by financial elites with the ability to fund political campaigns, media networks, lobbyists and public debt. Capitalist democracies therefore achieve the appearance of popular legitimacy through multiparty elections but the actual governing process is nonetheless channelled by elite class interests.
Is democracy compatible with capitalism? If throwing a ballot every few years into a system subordinated to moneyed interests is the working definition of democracy, then yes—democracy is not only compatible with capitalism, it is capitalism’s “best possible shell,” as Lenin wrote.1 On the other hand, if we were to define democracy as “people rule” with popular decision making that extended from the workplace up to specific line-item national legislation, then capitalism is completely antithetical to it. Outside of tribal society, direct democracy is an unrealized ideal that awaits a radical economic transformation to give it shape.
The concept of civilizational decline has been a staple of the far-right at least since the rise of fascism in Europe a century ago. While the right has always fixed its consternation with fast moving cultural changes and the erosion of “traditional values,” they are ideologically incapable of linking their grievances to the capitalist economic system that constantly revolutionizes our way of life.1 But the first quarter of the 21st century has had the experience of successive wars and economic crises and political realignments against the backdrop of a rising China. The anti-capitalist left has therefore embraced the decline narrative, given the extraordinary challenges of environmental deterioration and affordability amidst a rising concentration of wealth and power into the hands of an elite western oligarchy. Throw in the demoralizing Epstein revelations and a rupture to the political order by a berserk President Trump and even western liberals are acknowledging decline.
If there is one shibboleth of the West that deserves scrutiny at this moment in history, it is liberal democracy. Liberal democracy has been the veneer over western capitalism; a moral ornament obscuring the ransacking of colonies around the world and used to coordinate a unified western response to competition from emergent powers. This has not always been a bad thing—the alliance between liberal capitalist states and the Soviet Union was fruitful in tearing down Nazi Germany, for example.
In the period post-World War II, western liberal countries could lay claim to progressive achievements on the home front—such as civil rights, accessible education and affordable housing—even while supporting many heinousregimes abroad. Free speech and multiparty elections appeared as great strengths under a regime of centralized news media that gave citizens a common information platform, while high union membership in domestic manufacturing ensured a reasonable distribution of profits.
Today that regime has changed. Private sector unions have fallen off a cliff and the digital age has turned media consumption into a “Choose Your Own Adventure” story. In a dialectical reversal, yesterday’s free speech and partisan competition have become forces that propel their own demise: conspiratorial misinformation, foreign subversion, online mobs of neo-Nazis, unchecked corporate power, the ascent of dictatorial right-wing populists into office. While smartphone apps and AI models rush out like a waterfall, public infrastructure is achingly slow to build. In Canada it can take 41 years to cut the ribbon on a simple light rail transport—to say nothing of badly needed doctors, schools, energy generation and bridges. The refusal to scrutinize liberal democracy out of some fear that its only alternative is dictatorship must be admonished because capitalism has already put us on an openly authoritarian trajectory with accelerating speed. If the democratic veneer that the West has placed over its society is no longer compatible with the communications technology and global economic structure in existence today, then it is high time to say so.
Washington’s Warning
In his farewell address, the first president of the United States foresaw exactly why liberal democracy would cease to function. George Washington argued that partisanship would fragment the common interest into competing factions. A citizenry that identified with a political party rather than the country would lose its principles; they would fail to identify policies affecting the common interest and concern themselves only with gaining power at the next instance. Political parties turn society against itself and create countries within countries: “Thus the policy and will of one country are subjected to the policy and will of another.” In the partisan political environment, Washington said, jealousies prevail and a “spirit of revenge” takes over, clearing the way for “cunning, ambitious, and unprincipled men” to take over on the back of “foreign influence and corruption.”
“I’d rather be a Russian than a Democrat.” George Washington warned that partisan animosity would destroy national unity and invite the foreign subversion of national interests.
The body politic is now terminally ill with the viruses that Washington identified centuries ago. Liberal societies divided by political allegiance has turned the digital space into a playground for foreignactors. While weaker countries like Georgia and the Philippines are sites of proxy wars between East and West influence, the president of the United States openlyaccepts foreign bribes and Canadian separatists collaborate with agitators from the U.S. government. Elections have turned into sports matches where the politicians are the players, the voters are the fans and corporate CEOs own the teams.
The Brexit referendum was dominated by Britain’s wealthiest individuals and the OECD has already acknowledged that capital interests have saturated public discourse through industry-funded think tanks, lobbying and direct corporate political advertising. Representative government is powerless to reverse these trends because it is baked into the system; whoever holds power has necessarily benefitted from the existing framework or they wouldn’t be in office. Major reforms therefore hold little incentive but face massive pushback from an elite minority eager to retain its influence.
Contemporary liberal governance aligns with Washington’s description of “a frightful despotism” that negates the common interest in favour of permanent minority rule. In Canada, pollution reduction measures have been rolled back while oil companies have received billions in new subsidies—despite a two-thirds majority favouring clean energy and climate protection. A full three-quarters of Canadians give failing grades to their government in assisting with the cost of living crisis. The Canadian government does not possess the tools to meaningfully direct economic outcomes and the majority of people are plunged daily into the hazards of the market. Meanwhile, Canada’s central bank receives no input from labour or consumer stakeholders and the CEO-drenched Business Council of Canada has emerged as the prime minister’s top advisor.
When majority opinion is fragmented between multiple elected parties, it is only economic elites who maintain consistent influence through successive governments. In the United States, this is especially true; studies analyzing popular opinion and political legislation have concluded that average Americans “have practically zero influence on government policy.”
On policy, Democrats, Independents and Republicans agree with each other far more often than not. Large majorities in the United States favour public health insurance, ending the embargo of Cuba, ending mass incarceration, avoiding confrontation with Iran and Venezuela, reducing military expenditures, cutting support for Israel and adopting a pro-Main Street economic approach. Yet this is ignored by administration after administration resulting in rock-bottom public trust in government. As little as 17% of Americans trust their government “to do what is right most of the time.”
A United States that was subordinated to the popular will of Americans would immediately be a gentler, more sustainable global power with an economy that doesn’t cannabilize its own people for profits. But a government anchored by popular opinion would hurt margins across multiple industries—which is a red line for the capitalist regime. Partisan competition therefore exists to exploit wedge issues and keep the democratic majority as far from power as possible.
Toward a People’s Democracy
In The State and Revolution, Lenin described liberal democracy as “the best possible political shell for capitalism” because it allows corporate oligarchs to establish their power “so securely, so firmly, that no change of persons, institutions or parties in the bourgeois democratic republic can shake it.”2 The western dictatorship of capital donned respectable attire for the purposes of winning hearts and minds during the Cold War. But since the dissolution of the Soviet Union it has shed its clothes once again.
Although the People’s Republic of China is derided in the mainstream as an authoritarian country, their decision-making process gathers more input from their citizens than most western countries do. Through online platforms, opinion polling, surveys, telephone hotlines and direct elections of local officials, the people of China give their local governments long lists of actionable items and provide guidance to the strategic Five Year Plans that have modernized their country at warp speed. This does not mean many aspects of the Chinese political system would be palatable to western society but it does expose the arbitrary criteria by which one country is deemed “democratic” while another is smeared as “authoritarian.” After all, if the “democratic” label can apply to a country that grants its citizens zero input in legislation and locks up more of its own people than any other in history, what good is the label?
The object of liberal democracy represents a major barrier to class consciousness, even among the left. A misplaced faith in this unworkable system has led to disastrous outcomes for the economic security of western workers; for the debt loads of governments; for slums of the Global South; for the biosphere. This is not a world designed by the democratic majority. To earn the label of democracy, the West must rethink the utility of career politicians making decisions on behalf of the population. Corporate influence must be ruthlessly suppressed and a public sector economy servile to the material wants and needs of the democratic majority must be constructed. With the commanding heights of the economy under public control, fertile ground for cooperative enterprises can finally be laid.
If a one party state is a bridge too far, we should consider alternative power structures that could exalt the great mass of working people over special interest groups. For example, power could be vested to non-partisan people’s assemblies chosen by lot. Such assemblies would supervise the bureaucracy and hire expert panels that implement the laws and economic plans determined by direct referenda. It is this, direct democracy, that reconciles the people with their government instead of alienating them from it.
Contrary to the musings of thinkers like John Stuart Mill, the “tyranny of the majority” is not a historical reality. Every tyranny in history has rested on minority power and the forfeiture of rights to elites. Capital interests have co-opted the democratic title and deformed the concept beyond recognition. But liberal government must be viewed as an enemy in the struggle against elite power. As Marx and Engels said, “the first step in the revolution by the working class is to raise the proletariat to the position of ruling class, to win the battle of democracy.”3 As things now stand, that “battle of democracy” has yet to begin.
Thanks for reading!
Footnotes:
Recalling Karl Marx and Friedrich Engels in The Communist Manifesto (Arcturus Publishing, 2017): 37. “Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones.” ↩︎
Vladimir Lenin, “The State and Revolution” in Essential Works of Lenin: “What Is To Be Done? And Other Writings (CreateSpace, 2012): 382-3. ↩︎
