Capitalism Vs Democracy Essay Research Paper Capitalism

Capitalism Vs. Democracy Essay, Research Paper

Capitalism and Democracy From the really morning of intelligent human interaction to the present twenty-four hours, the construct of capitalist economy has dominated the manner we trade goods andAcquire wealth. Except for the necessity of a simple communist society inPre-modern times, or the baronial humanistic impression of a socialist society, The free market has ever been the most efficient manner to run the economyonce the most basic demands of life have been satisfied. Merely during thelast several hundred old ages has the thought of a modern democracy beendeveloped and applied through the modern province. These two constructs arethought by some to be interrelated, but modern-day critics of theliberal signifier of democracy seek to divide the two impressions of capitalismand democracy. However, when analyzing the grounds of the relation ofthe two, allow us non utilize the altered constructs or versions of theseterms, but instead analyse them by their base significances as we have come tounderstand them. After this analysis of the footings and a resultingstipulation of what their base significances are, critics may state that anyfurther analysis of the relationship between the two footings would betainted by their supposed definitions. The job with this is thatwithout a common frame of mention between the two, no comparing wouldbe logically possible without sing an infinite scope of possiblemeanings. With this proficient affair aside, the analysis will continuewith an probe into statements both for and against the separationof the two footings, and so an rating of the true nature ofcapitalism relationship with democracy. Specifically the freemarket economic system ordering the actions of any democratic government. After thistask of rating is complete, the statement will reason withillustrating how capitalist economy will really take to a more broad signifier ofdemocracy. The first measure of this probe is to do some effort to accomplish a common frame of mention between the two footings. Literally, democracy isthe regulation of the people. Specifically, it is the organisation in topographic point toallow people of a specified country, through organized elections, to givetheir unforced sentiment on who they want to stand for them in authorities, or what they want authorities to make for them. The underlyingpresupposition is that authorities will ever obey the bid of themajority of electors. There are many restrictions to democracy, such as thefact that people can merely vote YEA or NEA on a specific subject country, thusproducing a duality of picks that may non needfully offer asolution to a job. Besides, people must go forth most determinations to thepeople they elect, since they have adequate clip to continuallyvote. However, the focal point of this work is non to dig into this country ofcontroversy, but instead to take this apprehension of democracy as thestipulated definition for this work. One critical differentiation must bemade sing Berger & A ; rsquos apprehension of the term, and that is thatthe term democracy does non include all the civil and human rightsassociated with broad democracy. Similarly, by capitalist economy, this work will non utilize any other intension of the term other than depicting the free market economic system, where at that place isprivate ownership of belongings, and the economic freedom to purchase, sell, or trade with whomsoever you chose. The critical component of the term is thatthere is limited authorities in topographic point to implement contracts and to providea safe trading environment. Another specific intending given to capitalismis by Friedman, who describes capitalist economy as economic cooperation, whereboth parties are profiting from the trade, provided that the trade isvoluntary and informed on both sides. The following measure in the probe is to analyze some of the argumentsthat capitalist economy is separate from democracy. Dryzek argued that anindividual & A ; rsquos consumer penchants were decently expressed in the economic system, while the same individuals politicalpreferences were expressed in politics3. This position indicates thatthe capitalist economic system is a separate entity form the democratic politicalsystem, because these are two different establishments into which anindividual can province his or her penchants, depending on whether theyare economically or politically motivated. On the other manus, history hasgiven many illustrations of how a individual & A ; rsquos economic penchants have beenstated in the political forum, such as vote for a politician that haspromised to cut down revenue enhancements or to set up free trade between two states.That same individual could merely show those penchants in the politicalforum, because they entirely would hold no power to alter the construction ofthe economic system such that it would look advantageous to take down revenue enhancements or mark afree trade understanding. On the same note, a individual could show theirpolitical beliefs in the economic system, by no longer selling their labor tothe house who employs them, possibly because they support a particularpolitical party of which the laborer is non fond. If that labourerprovided a service that the employer could non happen elsewhere, so theemployer would turn up, therefore saying a political belief in the economicsphere of influence. The point illustrated here is that the two conceptsof democracy ( political relations ) and capitalist economy ( economic system ) are non as independentof one another as Dryzek may reason in that illustration. As Schumpeter argues, the association of capitalist economy and democracy ispurely coinciding, and that there are no necessary linkages between thetwo4. The support for this place comes from his belief that democracyis possible under both capitalist economy and socialism, but that a socialdemocracy would non be a broad democracy5, but logic dictates that thisinterpretation is wrong on two counts. The first being the fact thatdemocracy ( as we have come to understand it ) entails that the bulk ofthe people will acquire what they want, and if there is a pick to be madebetween economic adversity through socialism, and economic prosperity forthe bulk through capitalist economy, so the bulk will take to haveprosperity over adversity, because it is common sense. This simple examplepresupposes the historical world of socialism being economicallyinefficient and holding a lower criterion of life than capitalist economy, aswell as the voting public being rational in that they will take whatoffers them the most material wealth as opposed to an agreement thatoffers them small material wealth. On the same note, Berger argues thatall democracies are capitalist, no democracies are socialist, but manycapitalist societies are non democratic6. These illustrations represent merely a really little per centum of the argumentsthat support the claim that the constructs of capitalist economy and democracy arenot related, but their counterarguments make back up the impression thatcapitalism and democracy are per se linked. To farther theanalysis of why capitalist economy and democracy are linked, the followingexamples will supply the cogent evidence of their immediate relationship, as wellas the ability of those illustrations to stand up to an honorable defense mechanism. To get down this scrutiny into the relationship between capitalist economy anddemocracy, Friedman suggests that it is non possible to uncouple the twobecause history indicates that capitalist economy is a necessary status forfreedom, but non a sufficient status in itself7. This begs thequestion of how freedom can be related to democracy when Friedman himselfdoes non like to compare the two. His grounds for non desiring to equatethe two are non the concern of this work, so for the intents of thisargument, I must utilize logic to link the two. Common sense itselfdictates that a rational person would take freedom over an absenceof freedom, so if a democracy is made up of a bulk that have the samenotion of reason, so the bulk would vote for a province offreedom, hence Friedman & A ; rsquos usage of the word freedom in this casemight moderately be construed as democracy. To reason from the other side, the word freedom could be linked to democracy in that those who are freewould have democracy as their signifier of authorities, because to hold totalfreedom would be anarchy, which would include freedom to restrict thefreedom of others, and the following logical measure down is democracy, which atleast provides for a restriction on this degree freedom that could possiblyrestrict the freedom of others, if the bulk are rational and insistthat the actions of those who would restrict freedom be restrainedthemselves. The statement is dizzying at best, but the logic is necessaryto continue the account of how capitalist economy is necessary for ademocracy to work, but it is non the lone component that is needed. Toprove the first portion of this statement is right, viz. the demand forcapitalism to be in topographic point to hold a democratic system of authorities, onemust expression at what capitalist economy provides to do a working democracypossible. One of the things that capitalism provides to do democracypossible is the richness necessary maximise free clip, or morespecifically, to let people to concentrate on other affairs of interestafter their basic demands for endurance have been met. This free clip couldbe used educating one & A ; rsquos self, looking into political jobs, aswell as going a member of a involvement group to coerce authorities. Atthe following degree, it gives the person the capital necessary to givefinancial support to the groups to which he or she belonged, so theycould jointly raise support through lobbying or the mass media fortheir cause. On the 3rd degree, the behavior of supplying financialsupport to those groups that represent the person & A ; rsquos political

beliefs, can be transferred to the behavior of supplying money to groupsthat best represent his or her economic involvements, and that is where theconnection is made, and where democracy and capitalist economy intertwine witheach other. The initial counte

r argument to this is that this arrangement has lead toa mass society , whereby humankind is experiencing a radicaldehumanization of life, and that humankind is losing out on the personalhuman contact that help us treat each other better, not as objects to bebought or sold8. The first primary counterargument would state thatbecause of this relationship, capitalism and democracy are to beconsidered separate from each other because the are studied in terms ofone another in this instance. However, the prevailing notion is thatbecause you must have capitalism to provide the affluence necessary todevote time to democracy, they are essentially linked. The second primarycounterargument would illustrate the fact that even if the economicsystem was poor, and even with a failed form of capitalism, the peoplewould still vote, and there could still be democracy. But what kind ofdemocracy would that be, with people living hand to mouth and not havingthe time to study long term solutions instead of quick-fixes. So to havea working democracy one must have free time, and to have free time onemust have some degree of affluence, and history has shown that capitalistsocieties are more affluent than non-capitalist societies, therefore onemust have capitalism to have a democracy that works. The second part ofthe initial premise that capitalism is not the only detail needed to havea democracy is obvious, because there must be a host of other factors,but it not relevant to this work, because it argues neither for noragainst a direct connection between capitalism and democracy. There is another important piece of evidence regarding the directconnection between capitalism and democracy in that capitalism must havea government in place that will carry out the function of enforcingcontracts, securing private property rights, and issuing and controllingthe value of currency9,10. This is the position that both Dryzek andFriedman take on the issue. Some would argue that any type of state couldperform this administrative function, and this is true up to a point.Fascist Italy, Spain, and Germany were not politically democratic by thesense of the term in use by this paper, but they all had privateenterprise, which is a form of capitalism11. What they did not have was ainstitutionalized limitation on government that only democracy couldprovide12. This limitation on government is precisely what purecapitalism needs to be effective. It relies on the government to performthese administrative functions as illustrated above, but not to involveitself any further. The reason being that if the market is not allowed torun free, then by definition it is not operating efficiently, andtherefore not providing maximum wealth to the majority of the population,and if government were to go too far then the majority would restrict itsintervention. That relationship described above is another example of howcapitalism and democracy are linked. At this point the interconnectedness of capitalism and democracy has beenestablished and the counterarguments to this refuted. What has yet to beexplored is the real nature of the relationship, which will firstindicate the pessimistic notion that democracy is controlled bycapitalism, and conclude by illustrating the optimistic notion thatcapitalism will eventually lead to a better democracy. The best way to illustrate how capitalism can control democracy is thesimple premise that you must have capital to finance a successfulinterest group in a democracy. The need for this money and how it isobtained through capitalism has been explored previously in this work.What has not been explained is the next logical conclusion stemming fromthe need to have capital to run a successful interest group. That nextstep is that the interest group that has the most capital has the bestchance of influencing the democracy, whether it be through the media, orhiring an influential lobbyist, or some other means of convincing othersto vote for something that benefits another party. This coincides withSocial Darwinism in that the interest group that is the most able tosurvive, or has the greatest success, should get its way. This is no wayto run a democracy, because it detracts from the belief that democracy isthe rule of the people. This in turn leads us away from the stipulatedmeaning of the term democracy at the start of this work, in that thedecision to vote should be uncoerced and free. The crucial part of thisconcept is that this relationship between capitalism and democracyillustrated here represents a more realistic portrayal of how the twoconcepts relate to each other. Supporting this viewpoint is Berger, whobelieves that all democracy&rsquos true purpose is to obscure the realpower relations in society, which are determined and dominated by themembers of the capitalist class13, who can mobilize support for theirinitiatives through pooling of resources and the corresponding usecapital assets. Democracy is also forced to obey the demands of the capitalist marketthrough international investment. Capitalism forces democraticgovernments to seek out foreign investment by providing inducement forthat investment, whether they are corporate tax breaks or improved levelsof local infrastructure. If the governments choose not to comply withthese market pressures, then this will cause corresponding reduction intax revenue, which will in turn limit resources for government schemes.In addition, this will limit employment, which will also limit generallevels of income, and therefore jeopardize the popularity and legitimacyof a government14. Similarly, democratic attempts to control trade andcapital flows will result in international relocation of production,which will in turn force other nation-states to lower their corporate taxrates15. This is an example of how capitalism has a certain level ofcontrol over democracy. So now that the task of arguing against thedecoupling of capitalism and democracy is complete, the remainder of thiswork will concentrate on how capitalism relates to the liberal form ofdemocracy that exists today. What exists in tandem with this negative outlook of capitalism&rsquosrelationship with democracy, is a different angle of vison that seescapitalism leading to a better type of democracy where politicalparticipation is improved, and the features of the free market economylead to more human rights. An example of how this is applied in reality is in opposition toBerger&rsquos viewpoint that the best guarantor of human rights isdemocracy16. When one looks at the market economy, the cosmopolitan viewseems to be one of giant coronations that tyrannize the people of thatcountry in the pursuit of efficiency, with very little attention paid tohuman rights, but that is not true. One aspect of what these critics sayis true, specifically the fact that the corporations are all trying tomaximize returns on their investment. However, this will actually raisethe standard of living by eliminating the inefficiency of the welfarestate, and will give those who are not working the incentive to work. Forthose who work hard, the market rewards them with affluence. This managedto free the US and the UK from their economic problems in a movementknown as the New Right. Also, if there is an area of high unemployment,the corporation will see that situation as a cheap labour pool and willset up operations to exploit this. The down side is that these peoplehave no choice but to work for this company, the positive side is that inworking at their assigned task, they will have acquired skills andexperience they can use toward finding a job elsewhere. Also, withdemocracy alone bearing the responsibility of providing human rights, onemust take into account the tyranny of the majority. Where this line ofargument connects with human rights, is in the fact that capitalistsocieties in history have a higher standard of living than non-capitalistsocieties. The capitalist economy also serves the interest of human rights byprotecting the individual&rsquos interests. The buyer is protected fromthe seller, in that he or she has the choice to go to other sellers, andthe same protection is offered to the seller because he or she can go toother buyers. The same type of protection works for all economicrelationships, such as employee to employer, because of all the otheremployers for whom the employee can work (ceteris paribus). The marketdoes this task impersonally without the need for an all powerful state17.The market also reduces the number of issues upon which the governmentmust decide, therefore freeing up energy to pursue human rights, and notspend too much time and money trying to control the economy. The argument thus far has given a fair treatment of the arguments bothfor and against the decoupling of capitalism from democracy, as well asexplored the true nature of the relationship between the two concepts.Primarily the fact that capitalism facilitates the control of thedemocratic process, and that in the end, capitalism will lead to a moreliberal form of democracy. This argument has had to evaluate evidencefrom both sides, as well as attempt to build a common frame of referencein which the two concepts could be evaluated, while minimizing the riskthat any authors argument would be taken out of context. After all issaid and done, what really matters is that these two concepts havedominated the realm of political thought for hundreds of years, and whenunderstood in terms of each other, have served to guide the actions ofthe most powerful and influencing nation-states the world has ever seen.Perhaps the best way to end this brief treatment of capitalism anddemocracy is to cite Friedman&rsquos axiom which reads; “economic freedomis an indispensable means toward political freedom, and economic freedomis in itself a component of freedom broadly understood, so it is an endin itself”.