Rollins College

Democracy and Capitalism by Nikola Vuckovic

The connection between politics and the economy has always been strong. Through history we can see that they directly influence each other. Things are no different with the politics of today. Our beloved democracy is in this seemingly unbreakable but turbulent marriage with capitalism. This is the idea that was introduced by popular American political scientist Robert A. Dahl in his work “On Democracy.” And although there are bad sides of this marriage, I would have to agree with the fact that the democracy can only survive in the true market economy of capitalism.

It is not hard to come to this conclusion. As Dahl states in his book, through the history of modern democracy, it was only capitalist economic regimes that supported and sustained democratic institutions and norms. There is not a single example of democracy surviving in a nonmarket economy for a significant amount of time. This statistic is astonishing, and it almost sounds false, as if all those countries were doing something wrong all this time or maybe we missed something ourselves. But in the end, there are many reasons why this combination is the only one that sustains democracy.

One of the reasons is the fact that capitalism brings huge economic success. In this system, privately owned businesses and corporations are the backbone of the economy. They are free to make decisions that are only focused on the success of that company without having to consider the economic situation of the general population. This means that the people running those businesses have the ultimate incentive to grow and improve their companies and products, since they are the ones reaping the benefits of their own success. This is completely natural behavior; people work harder for themselves than they do for others. Dahl also comments on this. In his work he states that historically, these almost selfishly-ran corporations and personal systems tend to make the best economic decisions and lead to higher national wealth. So, you might ask, how does this wealth contribute to democracy?

Well, there are many consequences of wealth that are fertile soil for the growth of democracy. First, people are less likely to complain or revolutionize when their economic needs are satisfied. People like to be comfortable. If we just take the past 30 to 40 years and investigate all the companies and products that grew during this period as a result of free-range capitalism, it is almost crazy how they shaped our world today. Can you imagine America without iPhones, Amazon, social networks, streaming services and Google? Capitalism and competitive markets push the development of technology and, as we can tell from the past couple decades, the general masses enjoy it very much.  Capitalism doesn’t only make satisfied citizens, it also created a well-educated middle class, which in the words of Aristotle is “a natural ally of Democracy.” Capitalism allows for an increased flow of money into the educational system, especially in the private school system, which in eyes of the many, is highly superior. This highly educated middle class tends to support democratic institutions and hold high democratic values.

Another reason why capitalism is crucial is because of how other economic systems can be highly dangerous for democracy. The main idea behind nonmarket economies is that the government is the one in charge of all major economic decisions and resources. This leads to multiple issues that can harm democratic principles.  First, throughout history, governments don’t have a good track record of handling these tasks well. Dahl talks about this in his work.It is just too much for centralized government to put in the time and resources to successfully develop complex economic structure that will have growth in countries with big population and resources. This usually leads to demoralized workforce and unsatisfied general population. And as we concluded earlier, people like to be happy or they will try to change something. There is another, more dangerous, side-effect of centralized economy. It puts enormous power in the hands of the government and therefore in the hands of the leader. Dahl continues to say that it is incredibly hard for a person to resist this power and not to use it in their own interests. Even if by some miracle the person that is in charge manages to defy this temptation, the chances of his or her successor doing the same are slim to none. Now if we have this person that holds all this power, it is almost inevitable that the system will take turn to autocracy or communism, taking democracy completely out of the picture. So, do we want to risk this change in America?

And yes, it would be completely ignorant to say that capitalism is perfect. With this economic rise, globalization and development of technology, there is a growing gap in wealth in the United States. This automatically leads to political inequality since that is something that is related to economic equality. There will be people with huge amounts of money that can have bigger influences on the policy making than an average citizen. But I argue that economic equality will never be realistic and obtainable without jeopardizing the other pillars of democracy. Some people will always be willing to work harder than others and, accordingly, have more than others. In my opinion, capitalism is here to stay if we want democracy to stick around, too.

1 Comment

  1. Rachel Funk

    February 28, 2019 at 10:37 pm

    I appreciate the connections you made and the education you provided in this blog post, and I agree that economic development and prosperity are key to building stable democracies. However, as you mentioned in your final paragraph, I am concerned about the levels of wealth inequality made possible by unfettered capitalism and the deleterious effects that this can have on the overall health of democracy. Today, rising levels of wealth inequality have been associated with a shrinking middle class, widespread dissatisfaction with forms of democratic governance, and an uptick in the popularity of populist leaders. Just as President Franklin D. Roosevelt recognized the need for a New Deal that would provide relief for farmers, the unemployed, youth, and the elderly (the groups most disproportionally affected by the Great Depression), current levels of wealth disparity may mandate minor redistribution policies aimed at enfranchising groups who feel as if they have been left out of the American Dream and excluded from our country’s general economic growth. Even if complete economic equality is not realistic or attainable in our system, some action must be taken to alleviate deep feelings of agitation over wealth and income inequality in the United States. Otherwise, we run the risk of people turning away from democracy and instead turning to burgeoning autocrats who promise to better address their economic grievances.

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