“Democracy and Capitalism are like two persons bound in a tempestuous marriage that is riven by conflict and yet endures because neither partner wishes to separate from the other.”
- Robert Dahl
The economist, Friedrich August von Hayek, once suggested that Democracy can only possibly exist within a Capitalist system of the economy. I’d suggest Mr Hayek is contradicting himself with that statement, because by definition, he is offering no room for choice. Democracy exists for the benefit of Capitalism, or…..for the benefit of Capitalism. That isn’t Democracy.
The contrast between the ideals of a Democratic State and the ideals of Capitalism are in fact, so far removed from each other, they come very very close to being entirely incompatible. That very incompatibility is obvious. It isn’t about immigrants flooding the border, it isn’t about National identity or race, or too much public spending, it isn’t about freedom of choice (the freedom to choose whether to watch X-Factor or Strictly Come Dancing, is a pathetically blinded excuse for the word “Freedom“…you have no real choice), it isn’t about Communism vs Capitalism, all of those points are just a smoke screen employed by politicians who are acquiescing to the needs of big business.
My (perhaps naive understanding of Democracy), is that the key institutions that govern our lives, along with the people who are empowered to make the big decisions that ultimately affect our lives, must be accountable to the people. And yet, this Western ideal of Democracy has the opposite affect. If anything, they seem to be in conflict with each other, sometimes quite violently.
On the one hand, we exercise our right to vote in free and fair elections, by choosing a leader who has very little control over our lives. On the other hand, the key institutions of our society (or what I’d define as key institutions) are further and further privatised; and so power over such institutions is therefore concentrated into little Centralised States of their own, known as “Corporations”, in which the CEO has little or no desire to advance or protect the common good, of Humanity. Similarly, the CEO is not accountable to the people, he/she is accountable to the shareholders only. And since shares (and property – the key to Capitalism – in general) is so very limited, it stands to reason that not everyone can participate in it. Those who do participate in the race for property, lose out, to only one winner. It’s competition, a race to the finish. Those who win “deserve” it. Those who lose, well, tough. The majority therefore, lose out. Which i’m pretty sure anyone will tell you, is massively undemocratic.
In fact, a CEO accountable to share holders, is the exact opposite of Democracy, because the majority, have no say. We are therefore, controlled by Corporate interests, with absolutely no direct accountability to the people. This is ultimately proven to be the case, given that it has taken many many years under Capitalist rule, for the vast majority of workers to be paid a decent wage…..and even then, Business had to be forced, by the Government, to pay a wage greater than just enough to keep the worker alive. The Confederation of British Industry opposed the Minimum Wage. As did the Conservative Party. Which brings me neatly onto my next point.
It is no coincidence that as Markets grow ever more free, political parties become ever more right winged in terms of their economic policies. The Thatcher Government destroyed the power of the Unions in the ’80s, and privatised key institutions such as British Gas with the Gas Act of 1986. This of course lead to huge price increases implemented by people who run British Gas (Centrica) and have no direct accountability, other than to share holders. In July 2008 Centrica announced it’s Gas prices would raise by a record 35% and it’s Electricity prices by a record 26%. It blamed the rise on soaring wholesale energy prices. In May 2009, it then cut those prices, both by 10%. That’s still a huge increase in Gas and Electricity prices. Robert Hammond, a Gas and Electricity consumer expert working for Consumer Focus, said of the cuts: “We would have expected much bigger reductions considering that wholesale gas and electricity prices are half what they were at their peak last year“. Between winter 2007 and winter 2008, the number of deaths caused by fuel poverty (20 years after privatisation set out to free up the markets, to flourish wondrously) rose by 7%….. the biggest increase, since records began.
Arguably the most powerful institutions in the World; Banks. For years, banks had campaigned against regulation. They wanted total autonomy. They were in control of our money, they were using our money for their risky and ultimately hellish investments and bets, but they wanted us to be as far away from our money, and ultimate power as possible. Whilst they had our money, and our homes under their control, the guys at the top were enriching themselves (and continue to do so) despite actually losing our money, and our homes. Those people were not democratically elected. Damn right they should be heavily regulated now. The public sector then bailed out the excesses of Capitalism, and now the public sector is going to pay for it, through tax cuts for the rich, and public service cuts for those less wealthy. Why is no one fighting this? Those banks that received public funds, should pay a huge share of their profits, back into the public system.
Perhaps the key principle of democracy – rule by the people, for the people – apparently doesn’t apply to such powerful and essential institutions, such as Banking. But does apply, to when our rubbish bins get collected. Society is a little bit backward.
My point being, that democratically elected Governments of the past, have worked tirelessly to pass key institutions – that existed to protect the people and to provide a safety net, to the people – to very centralised, very concentrated, very greedy private hands, whose jobs rely solely on how much money they make for their shareholders, not at all for how pleased the majority of the public is with the work they are doing. It is only a matter of times, before the World’s water supplies, change from “The Pacific Ocean”, to “Microsoft Ocean”, in which you have to pay an extortionate price to swim in. Or “GE Spring” in which it’ll cost you to drink from, despite the Spring being a natural resource, that no one has the right to own. You may think this is an extreme example, of Democracy being eroded by Capitalist interest, but the World Bank recently adopted a policy of complete Water privatisation across the World, leading to Corporations (again, unelected, having no desire to serve the public good) such as “Monsanto” collecting a net income, of around $68,000,000 last year alone.
Ironically, democratically elected governments, pursuing Capitalist reform of their market place, are helping to almost overthrow the democratic order of power, and place it in the hands of untouchable Kings, in charge of their own little Corporate Nation, free to use whomever they wish, without fear of rebellion. Much like the Kingdoms of old, these Corporations concentrate Wealth at the top of the hierarchy; proven quite self evident with the fact that 33.4% of the total Wealth of the USA in 2001, was owned by 1% of the population. Whilst the bottom 40% of the population of the USA in 2001, owned 0.3% of the Wealth. What good is “Wealth creation” if it doesn’t trickle down? The argument that Democracy has aided Capitalism is weak at best, it thrives on the notion that in all Capitalist States, sporting Democracy as their rule of the land, the GDP has risen sharply. This, is often cited as proof of the two’s compatibility. Of course, it only works if you measure the Wealth of a Nation by the concentrated wealth of the people at the top. If you chose to focus on the plush lifestyles of those at the top, whilst choosing to ignore the miserable conditions of those at the bottom, then yes, Capitalism and Democracy are very much compatible. Which in turn, means you are focusing on the minority rather than the majority, and so by that very logic, your thought pattern, is undemocratic.
What then happens, and it’s the logical next step in the Capitalisation of the World, is that business interests infect the very heart of Government. They become influential characters behind the scenes, and so private money is pumped into political parties, via campaign contributions, in return for favours that aid the wealth and power of Corporations. As pointed out in the my previous blog entry, The Director of Communications and Planning for the Conservative Party, was once the chief editor of the News Of The World…….owned by Rupert Murdoch…..who is currently on a rampage against media regulation in the UK……. of which it just so happens that David Cameron has agreed to ditch the media regulator Ofcom, if he were to become the next Prime Minister of Great Britain. Given that he is accountable to the public, shouldn’t Cameron be asking us if that’s what we want first? Rather than catering to the needs of a businessman? By that very logic, the Businessman’s vote, is more important than the votes of you and I, and therefore, again, Capitalism promotes undemocratic principles.
Perhaps the old Conservative mantra that “less government interference in private affairs” is necessary for the advancement and freedom of society, should be twisted and turned into “less private interference in government affairs” is necessary for the justice, security, and fairness of humanity in the future. I’ll go with that one.