The idea that democracy and capitalism go together is a relatively recent phenomenon. The pairing don’t really go together: How much control do you have at your job? Over the development of your city? Over a political process responsive only to the greed of the one percent?
Early capitalists and their publicists believed political democracy was an outright impediment. Adam Smith and another influential classical economist, David Ricardo, among many others, opposed universal suffrage. Ricardo was prepared to extend suffrage only “to that part of them [the people] which cannot be supposed to have an interest in overturning the right to property.” Smith’s reluctance seemed to be rooted in his honest assessment of how few are able to enjoy that right to property: “For one very rich man, there must be at least five hundred poor, who are often driven by want, and prompted by envy, to invade his possessions.”
Not long afterward, the influential British politician and writer Thomas Babington Macaulay said universal suffrage would be “the end of property and thus of all civilization.” (“Property” refers to the means of production, not personal possessions.)
Along U.S. Highway 20/26/93, west of Arco, Idaho (Photo by Pete Dolack)
Because capitalism is an impersonal system, it does not require that members of the dominant capitalist class actually hold political posts, although frequently they do. It is enough that the political structure that is a byproduct of the ideologies of capitalists’ institutions, corporations, remain in place, and that capitalists exert decisive influence over a society’s other institutions.
The modern state itself is a creation of the rise of capitalism and the need of industrialists and financiers for a structure to provide protection for investments and to settle disputes among themselves. These features are wrapped tightly in nationalism, with continual references to a given nation’s mythologies, to bind working people tighter to the system. Capitalism also requires a literate, educated population, in contrast to earlier systems, and a literate, educated populace is more inclined and more able to agitate for its interests.
Self-interest in expanding the vote
There is more communication — this, too, is a necessity for the increased commerce of capitalism — and if the people of one nation wrest a gain from their rulers, people in other nations will know about it, and will struggle to get it for themselves as well. Further, in the early days of capitalism, its development was seldom in a straight line; sometimes there could be an incremental expansion of the voting franchise because one bloc of capitalists believed the new voters would vote for their party.
Once the vote is made available to more citizens, pressure builds from below to further extend the vote; moreover, the creation of a modern working class brings together masses of people, enabling the creation of mass movements that can organize struggles for more democratic rights. Social media has proven to be a powerful tool for democracy activists, although by itself it can’t substitute for real-world organizing and a physical presence at key locations.
Capitalists intended to establish democracy only for themselves, but the spaces and contradictions contained within the political systems created to stabilize the functioning of capitalism (including institutions to adjudicate conflicts among the capitalists and mechanisms for selecting political leadership in the absence of an absolute monarchy or the continued ascendency of a static landed aristocracy) enabled their workers to wrest some of that democracy for themselves. None of that came easy — untold lives were snuffed out and untold blood was shed, and even in cases when a struggle has been bloodless, many advances required decades of dedicated activism to accomplish. The process is called “struggle” for a reason.
Summing up an essay in New Left Review on the development of voting rights across the world, Göran Therborn wrote:
“Democracy developed neither out of the positive tendencies of capitalism, nor as a historical accident, but out of the contradictions of capitalism. Bourgeois democracy has been viable at all only because of the elasticity and expansive capacity of capitalism, which were grossly underestimated by classical liberals and Marxists alike.”
Not endlessly expansive, however. Hard-won political rights are not only circumscribed by the immense power concentrated in the hands of corporate institutions and the class that controls those institutions, but those rights end at the entrance to the place of work.
A democratic lack of control?
If one class of people has the ability to bend the political process to benefit itself; arrogates to itself an unlimited right to accumulate at the expense of everybody else and at the expense of future generations; has the right to dictate in the workplaces, controlling employees’ lives; and can call on the state to enforce all these privileges with force, if necessary, then how much freedom do the rest of us really have? If one developer has the right to chop down a forest to build a shopping center that the community does not need or the right to build high-rise luxury towers that force out others who already lived there because one individual can earn a profit, and the community has no recourse, is this state of affairs truly democratic?
If a capitalist decides it would be profitable to move the factory to a low-wage country and thousands are put out of work as a result, is it not capital that actually possesses freedom? If enterprises were collectively run and/or under community control, would people vote to send their jobs to a low-wage haven thousands of miles away?
If the political system is so dominated by corporate power — the concentrated power of industrialists and financiers — that a politician at the national level who might genuinely wish to give working people a better break can’t because that corporate power is decisive, or that a politician at the local level might want to make the local factory owner do a little more for the community or simply pay a fair amount of taxes can’t because to push the idea would lead to the factory owner closing the factory and sending many townspeople to the unemployment office, then can this system said to be democratic?
Men and women have the vote, and have constitutionally guaranteed rights — lives were sacrificed to gain these rights. But if there is such a concentration of power that most elementary decisions are taken by a small number of people — either big capitalists or politicians acting on their behalf or under their influence — then the rights enshrined in a constitution are mere shells. Democracy is formal, and cannot be more than formal without democracy extending to all spheres of life. That is impossible under capitalism because concentrated economic power is leveraged into power over the political, cultural, social and educational life of a nation, and that power, as wielded by capital, will be tightened at home and expanded abroad due to the impetus to expand.
Capitalism is an impersonal system, and the competition that drives it inevitably leads to this dynamic, regardless of which personality is where. The world has not reached its present state by accident, and although it does not guarantee any particular capitalist a permanent place at the top, it does guarantee extreme inequality and the immiseration of the many (working people) for the benefit of the few (industrialists and financiers). No reform can wish that away.
Systemic Disorder 
It’s great to know that we are guaranteed-voting-slaves! Tubularsock believes that it is that concept that brought about the entrepreneurial invention of the Molotov cocktail.
A very informative post as usual SD and Tubularsock feels you hit the nail on the head.
Now, Tubularsock needs to open up that Molotov cocktail factory. Damn the workers!
Your Molotov cocktail workers will have the choice of voting for two corporate parties, and then you won’t have to worry about those pesky safety regulations any more. Boom!
Well, actually, I think that democracy and capitalism do go together. I read your post and let it bubble for awhile in my mind and that thought occurred to me just now. I think you would agree with me that the much-touted “democracy” of the ancient Greeks wasn’t democracy as we understand the word today – it was democracy for the elite, not for the general population. I’m sure the slaves who powered the galley oars had no say in their jobs, much like workers today. If democracy means having some say over how we live our lives, very few people, historically or in the present, have had much to say about that. Prior to the invention of capitalism in the 14th century, people’s actions were restricted by pretty rigid social structures. Those structures governed every aspect of the behavior of the members of the social groups in question. The rise of capitalism, with its emphasis on individuals striving for wealth at the expense of their peers, destroyed those rigid social structures and no doubt led to the invention of democracy as we understand it today. With no rules that governed behavior, individuals took it upon themselves to demand their rights. Of course, this did not occur overnight – it took centuries, which mirrors the rise of democracy. Are we better off for this happening? Burkean conservatives would disagree while market liberals, as Chet Bowers calls them, would agree.
I’ve recently been reading a little bit about Edmund Burke, who is often claimed to be the father of modern conservatism. Which conservatism that is depends on how the word is defined, though. He is certainly not the father of those who subscribe to the Austrian school of economics or those who claim to be libertarians. Nor is he the father of the rabid right-wing of the Republican party. However, I do think that Wendell Berry would feel right at home in a Burkean world.
I read with interest your statements that Adam Smith and David Ricardo opposed universal suffrage: so did Burke. So how is it that Smith and Ricardo are among the Austrian School’s heroes?
To return to my provocative opening sentence: is it possible that the entire Modernist project is a result of the rise of capitalism? If so, you’ve written a brilliant post, because you have hinted at the idea that, once again, we need to look at capitalism as the key to unlocking so many misunderstood phenomena that swamp our ability to understand the Atrocity of the Day. Marx’ ideas regarding the relationship between the base and the superstructure gain new depth once we consider the idea that democracy and capitalism do indeed go together.
Democracy for the ancient Greeks was meant only for elites, just as the the original concept of post-revolutionary democracy in the U.S. did. Smith and Ricardo were of their day; I would take their writings on the topic to be quite typical of their time and class.
But Smith, as I have noted before, tends to be cherry-picked. He acknowledged that capitalists have advantages over employees and believed that labor should be fairly compensated, for example. Smith also wrote at the dawn of the Industrial Revolution, before his ideas were put to the test of time. But by ignoring the inconvenient parts, Smith and Ricardo can be used by orthodox economists of the Austrian, Chicago and other schools for ideological purposes.
On your final point, there is no question that the dynamism of capitalism has created the modern world, nor that its flexibility has provided spaces for the rise of social movements that have expanded rights that did not exist, nor could exist, under feudalism. But those expansions of social spaces have come in the teeth of opposition of capitalists and come at high cost, and those spaces are limited and subject to shrinkage without ongoing movements.
If democracy is to apply to everybody, and to social decisions that affect communities in general, then a system more democratic than what is possible under capitalism will be necessary.
I understand the use of the word “capitalists” in your penultimate sentence, but I think opposition to the expansion of social spaces also comes from Burkean conservatives and, of course, religious traditionalists world-wide. Capitalists, because they are privileged and don’t want to share, act like Burkean conservatives sometimes, but not very often. I find it amusing to read how imaginative conservatives try to have their cake and eat it, too. They seem to think that capitalism can be reformed, but it can’t. The very forces that capitalism unleashed destroyed their world and yet these self-described “imaginative conservatives” somehow think that they can reclaim that world and keep capitalism, too.
I’m reading a book by John Gray, False Dawn, that is also very interesting. He was a key player in Thatcher’s reign but has capitulated and returned to his Burkean conservative roots. I find it fascinating that he, like the “imaginative conservatives” referenced in the above-linked article, finds support for his ideas in the works of Marx and Polanyi.
I was curious about the concept of “imaginative conservatives” and took a quick look at your link. The linked article laments that we live in “an age when both crony capitalism and the egalitarian spirit that seek to redistribute wealth are rampant” and condemns that “neither the ‘free-market’ capitalists nor the equalitarian mass of men are willing to accept prudent restraints upon their unbridled avarice.”
Well, that is surely a false equivalence. “Free-market capitalists” are running amuck but we critics of capitalism hardly possess similar power or access to the mass media or government. And I am quite at a loss to understand how wanting a more equal, fairer distribution of pay and resources across society constitutes “avarice,” but less “avarice” equal to the one percent. I suppose this is “imaginative” in a funhouse-mirror sort of way, without the fun.
Well, as I wrote, I found the article amusing. The contortions “imaginative conservatives” engage in to justify their beliefs is very interesting. They use Burke selectively, just as you said the Austrians and the Chicago schools use Smith and Ricardo selectively. And, of course, the “imaginative conservative” definition of capitalism differs significantly from Marx’ definition, which makes all the difference in the world.
What do you suggest that system would be? Does it have a name? It certainly can’t be Socialism, in which the government owns everything, including your ass. Capitalism is a thoroughly rotten system made by the elites, for the elites, and of the elites.
So what do you suggest?
Socialism is an economic system where capitalist relations of production have been transcended with a full democracy instituted whereby the industry and agriculture built up during capitalist stages of development are under popular control so that production is oriented toward meeting the needs of everyone instead of for personal profit by an individual owner. That does imply any particular form of ownership. My own view is that most enterprises would be in the hands of collectives owned by their workers, with certain key industries held in state hands but all of this under democratic, community control.
A brief description of some this can be found in my post, “There is no democracy without economic democracy.” As to the mistaken notion that socialism is when “the government owns everything,” that is nothing but propaganda capitalists throw at you to scare you with a bogey. The Soviet model (which is best characterized as a “post-capitalist bureaucratic state” and not as socialist) was a product of a badly undeveloped state with an absolutist (tsarist) political heritage struggling to survive in an extremely hostile world. The form of the Soviet Union had to do with this history, not what socialism is “supposed to be,” no matter what propagandists on either side of the Iron Curtain had to say.
So, what is the word, if we must have one, for the world of economic and political democracy that I sketch out in the link above? Socialism.
Okay. I happen to have a different name for it — Distributism, in which large corporations employing thousands of wage-slaves are replaced by worker owned cooperatives. An example of this would be the Mondragon Cooperative of Spain. It would also involve privately owned businesses (aka the “Mom and Pop” shop or family buinessess) and guilds of craftsmen.
You say that Socialism is a bogeyman created by Capitalists, but every instance of men I have seen who have taken the name “Socialist” and attached it to their movements is that of a tyrant who is looking for a strong centralized government that runs everything. Under all these systems, private ownership of property is discouraged. It sounds like you don’t like the idea of private ownership of property and would rather see a collective state run by a strong bureaucratic government.
Am I wrong? Thanks for your answer, BTW.
Ed
Ed, I am afraid you are quite wrong. What I seek is a state of political and economic democracy. Without the latter, the former does not exist (as is the case under capitalism and also was the case under Soviet-style régimes.)
In my view, the economy should largely be in the hands of collectives — enterprises run and owned by the workers themselves, with input when appropriate by the surrounding community. Only a handful of critical industries (banking and energy, for example) should be in state hands, and those state enterprises should also be under democratic control. All enterprises would have to have “certificates” demonstrating their adherence to safety, labor, equal-opportunity and other laws, and groups independent of the government can be those who grant the certificates. Such groups would also have to have strong democratic accountability.
Your reduction of socialism to the bogey of tyrants and strong centralized governments is, to be frank, simplistic and at variance with the complex reality. Venezuela has a thriving democracy, elections far more honest and transparent that in the U.S., and a multitude of popular bodies for self-governance and moving the Bolivarian Revolution forward, not only organized from below but actively encouraged by the government, under Chávez and afterward.
For an understanding of the complex forces at work, and the grassroots movements that brought Chávez to power and propel the revolution forward, I would recommend reading the book We Created Chávez: A People’s History of the Venezuelan Revolution by George Ciccariello-Maher; you can read my review of it at this link.
Socialism is the rule of the people, capitalism is the rule of capital. That’s why the word has “social” in its name. Socialism has as many forms as the human imagination can create; there is no one form that has a monopoly on that word. If you like, we can coin a new word for a better world, but the capitalists and their publicists would only demonize the new word, too. I would like to suggest that we are better off studying content rather than being bogged down in inaccurate, out of date definitions.
Late eighteenth/ early nineteenth century UK was a police state, at least and particularly between 1816 and 1822 but really during the entire late Hanoverian period. The elites themselves began to dismantle it, because the measures needed to maintain a police state eventually start hitting people in the middle and on the top as well as in the bottom (that dynamic is a big part of the reason why apartheid was eventually abandoned in South Africa). Smith and Ricardo were actually on the left of the political spectrum at the time, at least the part represented in Parliament.
Between the Reform Act and World War I it would stretch things to say the UK was a democracy, but at least the government really did tend to leave people alone, and there was free thought and debate.
But yeah, you can’t really have a full on capitalist system without the boot. If you have an element of democracy, the capitalists have to accept some welfare measures and regulation. Even a liberal elitist society like Victorian era UK is not really to the capitalists take, the workers have options such as emigration and the Victorians did do some poverty relief and regulation.
Ed, thanks for the history. I think there are parallels to Bismarckian Germany. Late Prussia and early unified Germany applied plenty of police repression, yet the dramatic growth of the Social Democratic Party forced the government to grant concessions such the world’s first social security retirement system. Of course, the SPD gradually came to accept the reforms, concentrate on parliamentary work and believe they could reform their way to a socialist state, and that Germany’s junkers and bourgeoisie would just sit by and allow themselves to be supplanted. We know how that worked out.
David Graeber (in Debt: The First 5,000 years) defines capitalism as a gigantic credit/debt apparatus designed to pump maximum labor out of everyone to produce an ever expanding quantity of material goods. Police, prisons and state sanctioned slavery are essential tools in maximizing the heightened productivity necessary to finance a political system based on continual war.
Stuartbramhall makes a good point. The flip side is that capitalism can’t “do” contracting or steady state economies, it was designed to pull off the industrial revolution, and it did that successively, but the results are really, really bad if you ask it to do anything else.
Eventually world production must start to contract, either because of resource limitations, or because the human race will choke to death in the resulting pollution. As it turns out both are starting to happen.
Everything of human creation is temporary, including capitalism. But the future will be very ugly if we don’t change things sooner rather than later.