A Capital Idea Part 116: Is Democratic Capitalism Possible?
A new way to frame the issue of capitalism versus socialism, and democracy versus authoritarianism just occured to me last night. I think all 4 might be possible: Democratic Socialism, Democratic Capitalism, Authoritarian Socialism, and Authoritarian Capitalism, as well as combinations of these. Since I am writing about "Capital Ideas," this seems a very relevant topic.
Democratic Socialism happens when people democratically elect a government which provides safety nets, social regulation and controls at least some of the means of production and distribution of goods, while being responsible to the will of the people and having the public good in mind. There are many nations which are primarily Democratic Socialist in nature, mostly the more successful nations currently, and many others which have well ensconced elements of Democratic Socialism whether they are labelled as such or denied, including the United States.
Authoritarian Socialism occurs when an unelected, autocratic government bureaucracy rigidly controls the means of production and distribution, and dictates rules and regulations to its peons, based upon the judgment of a small ruling class, without being sensitive to the desires of the non-ruling citizens. This is what is found in North Korea and perhaps Cuba and a few other nations currently, and what used to occur in Russia and the People's Republic of China before economic reforms changed the situation. (Economic reforms are said to be taking place even in Cuba now, however.)
Authoritarian Capitalism is what now occurs in the People's Republic of China. This is what happens when an autocratic, unelected government takes advantage of financial capitalistic opportunities to create huge, government run industries (which are in essence privately run by a small group of political and financial elites who run the government), or privately run industries at the behest and under the watchful eye of the government elites.
Democratic Capitalism is what the United States is supposed to have, and which many if not most Ameircan citizens delusionally believe exists in the United States. What we are led to believe happens in the United States, is that the public elects representatives who oversee an economic system of privately owned, capitalistic ventures, with minimal regulation and maximal opportunity for the enrichment of business owners. This is essentially what Republicans and other conservatives in the United States endorse. However, by its private nature, this form of capitalism inevitably leads to an erosion of democracy. This is what we are currently witnessing here in the United States, and this public versus private, 99% versus 1% struggle is the ideological battleground upon which the politically aware in the United States are fighting. The United States' government has long recognized the need for some elements of socialism, actually, which are well-established parts of our society, such as welfare, medicare, the right to form unions, and social security, but conservatives are trying to take even these away, in order to form what in their minds would be a truly Democratic Capitalist society, although if successful, this process would essentially strip the United States of whatever remaining democracy it possesses, leaving the nation in the hands of a few wealthy elites. In essence, the United States will have become an Authoritarian Capitalist, corporatist state, democratic in name only. This danger threatens not only the United States, but with financial globalism, the world at large.
I wish to suggest here that there is another form of capitalism, however, a public as opposed to private, form of capitalism. In this case, truly Democratic Capitalism is possible. The key issue is that of joint (or public) versus private ownership. Unions are an example of something in which there is joint, democratic participation and ownership of an organization, although it may be involved in capitalist ventures. Cooperatives are another example, and employee-owned businesses (such as the supermarket Winco of which I am fond) are another. These are not socialist in the sense of being government owned or run; they are clearly capitalist, even in a traditionally financial sense. When such practices dominate, at least the non-government sector of the economy, this would qualify as a Democratically Capitalist society.
I would add that there is yet another form of Democratic Captialism which is possible, although it overlaps with socialism. This is the most important form of capitalism, in which there is democratically run, public ownership of our capital, which is an essential element of what I have been advocating in these essays. In other words, the people -- not private banks -- should own our money supply. There should be a government run bank which regulates our money supply and other banking operations. In addition, there should be public ownership of those resources which we all share, such as natural resources. To an extent, there is public ownership of natural resources, but only those found on public lands, and some of these areas are at times bargained off to private interests. Public ownership of resources needs to be extended, not eroded.
The key point is that democracy is best -- especially educated democracy -- rather than authoritarian rule, and that private ownership or having government power held in the hands of a few -- the concentration of power -- is antithetical to democracy. I believe that in the future, the direction in which humanity needs to go, and ultimately will go, is a democratic one as historical trends suggest. Economically, it will involve elements of both Democratic Socialism and Democratic Capitalism, as well as the mixing of the two, so that socialism and public or jointly-run capitalism will become so intertwined that they will create their own sort of hybrid economic system, which will be stronger, more resilient, sustainable and adaptable than either system could be alone.