A Failing Point of Democracy

Kevster

Hi,

I have the feeling that one of Democracy's failing points is the fact that the rich appear to get richer, while the poor get poorer (Essentially, the 'wealth-divide' just keeps on growing). Has anyone else noticed this at all? I began thinking about this today after I read that sales of sports / luxury cars have actually increased here from last year's sales, whilst sales of other 'regular' cars has decreased.

Kevin

suckslikeafox

Maybe so, but try having a democratic system where this doesnt happen. Its impossible

turgon

Kevster wrote: »

I have the feeling that one of Democracy's failing points is the fact that the rich appear to get richer, while the poor get poorer (Essentially, the 'wealth-divide' just keeps on growing). Has anyone else noticed this at all? I began thinking about this today after I read that sales of sports / luxury cars have actually increased here from last year's sales, whilst sales of other 'regular' cars has decreased.

But why to attribute this occurrence to democracy?

Kevster

... ...Because I fail to see where else it happens. If you know of any place, then please tell me.

Wait, actually, I guess it happens just about everywhere; and in every form of government. Perhaps greed is just a natural human attribute then.

Kevin

dresden8

Indeed, the scum rises to the top in any system.

brianthebard

turgon wrote: »

But why to attribute this occurrence to democracy?

agreed.Your problem is capitalism op,not democracy per se.Although i would suggest democracy is the best facilitator of capitalism.

Thomas_S_Hunterson

brianthebard wrote: »

agreed.Your problem is capitalism op,not democracy per se.Although i would suggest democracy is the best facilitator of capitalism.

No the root problem is greed and ambition. Capitalism is built on top of these human traits.

There is no system that is free of greed and ambition as they are intrinsic to humans.

brianthebard

In cuba greed is not rewarded.In china greed can lead to the death penalty.Just two examples.As for ambition,i can only assume you chose a suitably vague word for the purpose of avoiding debate.Charities are ambitious,doctors are ambitious-its neither good nor bad.

Thomas_S_Hunterson

brianthebard wrote: »

In cuba greed is not rewarded.In china greed can lead to the death penalty. Just two examples.

That's not the reality of the situation. Both countries have very rich people and vast majority of very poor people, and are both ideologically communist funnily enough. Your point is flawed. I'm not talking about ideology, I'm talking about the reality of life.

No society will come out and openly reward greed. That's not what I'm saying. But at the end of the day, we're all human. We're all animals. We're all greedy. We do things for our own end. And greed comes into all of our decisions.

brianthebard

I am also talking about the reality of life.Your point is flawed,you only have to look as far as M. O'Leary and his massive wage increase,and look at how people in ah thought it was great.It has very little to do with animal instincts,people of many creeds and ideologies have been successful in conquering greed.Many people were never greedy to begin with,all of which doesn't matter because we are talking macro systems,not individual drives.You're just mudding the debate.

dresden8

brianthebard wrote: »

.In china greed can lead to the death penalty.

WTF?

http://www.chinadaily.com.cn/china/2008-07/25/content_6875231.htm

I don't think these guys are living in fear of the Red Guards.

Lots of links if one cares to look.

Kama

Yes, the wealth divide is growing, but attributing it to 'That's Capitalism!' or assuming its a result of innate human greed doesn't explain this, nor does it appear to be specific to democracies.

We can look at regimes where inequality is lower, through democratic process, or through its lack. Growing rates of inequality go back a fair bit further than the rise of capitalism; feudal elites appropriated a large chunk of wealth, as did the builders of the Pyramids, for example. Even fossil records of pre-agrarian tribes often show a significant skew in ownership possession...its a much smaller cake back then, but 'twas not an evenly divided one.

Even though there has always been inequality, throwing ones hands up in despair, or saying its inevitable or natural, just doesn't cut it. There's ways of running a society that have a greater degree of inequality (the Anglo-Neoliberal model) or less (such as the market-socialist welfare states). And rather than natural and inevitable, these differences tend to arise from ideology and human social choice.

I'd agree with brian that democracy has been a useful supplement to capitalism; however the Chinese model of capitalism is definitely providing some 'competition' >.<

Kevster

Thanks for all of the insight guys. I'm just a depressed young man and am always looking for answers.

Kevin

CtrlSource

Ah but it is caused by Capitalism though. The reason why it's linked to Democracy is because Capitalist systems tend to thrive mostly in democratic countries.

Elitist countries like Saudi Arabia operate a form of protected Capitalism, but they're not democracies.

But generally, the main weakness of Capitalism (the only weakness, i would contend) is that the wealth divide seems to worsen as the country gets richer

Kevster

I find that different people define 'capitalism' in different ways. In my opinion, it refers to cultures that allow corporations to grow to enormous size and gain significant 'pulling power' in the process.

Am I right?

Kevin

Belfast

Democracy is a way of electing goverments.
It is not directly linked to any one economic system.
The poor getting poorer and the rich getting richer has more to to with economics that Democratic elections.

DadaKopf

The root cause is power. Every human relationship involves a power struggle, whether it's friends of lovers to entire societies.

Capitalism is a 'social relation', therefore it is a particular form of power relation.

Under capitalism, in whatever guise, without restraints the general tendency is for those who own capital to accumulate ever greater wealth; those who labour are marginalised economically and politically. The 'middle-class' is charged with professional and managerial roles that play a role in movements of exploitation and liberation by capitalists and labourers. That's the basic scheme; the reality is more complicated.

Without something regulating the extremes of this power dynamic, bad stuff happens. Such inequality is necessarily equated with 'democracy'; look at former and existing dictatorial regimes in Latin America; America is a democracy and is one of the most unequal rich countries; Sweden has more democracy but much less inequality.

Democracy is, in a way, a by-word for social contest and struggle by competing groups/interests. It comes in many forms. At base, the issue, as always, is power in whatever form.

Democracy is a way of electing goverments.

That's a procedural way to see democracy - a minimal way, and unhelpful in my opinion. Instead, it's better to see it as as a means to create a horizontal distribution of power rather than a vertical one. Equality, not hierarchy. In theory, democracy offers a mechanism to resolve social struggles peacefully, which (should be) in everyone's interests.

turgon

brianthebard wrote: »

In cuba greed is not rewarded.In china greed can lead to the death penalty.

Well lets not beat about the bush - one cannot claim Cuba and China to be communist. All they are are authoritarian systems of government. Governments that use their power to further their thirst for money. I doubt many people in the Chinese politburo live anywhere near the poverty line, same with Cuba. Contrast this with the typical Chinese person.

Kevster wrote: »

I find that different people define 'capitalism' in different ways. In my opinion, it refers to cultures that allow corporations to grow to enormous size and gain significant 'pulling power' in the process

That would be a highly cynical way of looking at it. See This article. Its basically where people have the freedom to set up their own business.

DadaKopf

That would be a highly cynical way of looking at it.

I wouldn't see that as cynical. Any observation of capitalism, whether that person is on the left or the right, admits that capitalism tends towards accumulating greater and greater profit and enters crisis phases after a phase of overaccumulation when there is nowhere to put extra cash, or that cash dries up. There are social and politica consequences arising from this.

Only incorrect thing in that quote is that corporations are only one organisational form of many operating in the capitalist market economy.

turgon

DadaKopf wrote: »

I wouldn't see that as cynical. Any observation of capitalism...

Kevster wasnt making an observation - he was offering a complete definition.

Stabshauptmann

Kevster wrote: »

I find that different people define 'capitalism' in different ways. In my opinion, it refers to cultures that allow corporations to grow to enormous size and gain significant 'pulling power' in the process.

Am I right?

Kevin

No, its an economic system. It is not really a culture.

The basics are thus:
The means of production are owned by private persons
Everything has a price, and that price should be determined by market forces.

You're making a lot of observations and trying to link them to democracy, which you havent justified. And the growth of dominant corporations/ monopolies isnt necessarily a result of capitalism, capitalism* predicts a state of competition.

Edit *Pure Capitalism, which doesnt exist outside of theory. There are no pure capitalist economies in the world

turgon

Kaptain Redeye wrote: »

Edit *Pure Capitalism, which doesnt exist outside of theory. There are no pure capitalist economies in the world

Because a level of governmental control needs to exist - to subsidize cost-intensive schemes, to regulate private industry and in general to have a goal other then money ie what is best for the people.

DadaKopf

No, its an economic system. It is not really a culture.

Well, political sociologists talk of a 'culture-ideology' of capitalism. This makes sense. They're bound up in each other.

You're making a lot of observations and trying to link them to democracy, which you havent justified. And the growth of dominant corporations/ monopolies isnt necessarily a result of capitalism, capitalism* predicts a state of competition.

Well, there's one clear historical trajectory in European history: the rise of merchant power, capitalism, the bourgeoisie, nationalism and contemporary capitalism are connected with the emergence of (such that it is) European republican democracy. Not the same everywhere (there are no rules), but it's one of those things that marks the development of European culture. Western European, anyway.

Stabshauptmann

turgon wrote: »

Because a level of governmental control needs to exist - to subsidize cost-intensive schemes, to regulate private industry and in general to have a goal other then money ie what is best for the people.

That would be my opinion anyway

Sand

Capitalism exists anywhere the rights of individuals are enshrined and protected. This is clearly terrible and disgusting!

Kama

Sand, I presume you mean property rights are enshrined and protected?


I doubt the causal-historical knots are easily unwound, but whether capitalism develops free societies, free societies develop capitalist economies, or whether there is a greater degree of historical contingency to it all remains disputed. Capitalist development in the absence of liberty (in the conventional liberal-democratic Western sense) seems quite possible: vide China, post-Allende Chile, or Singapore. Sing is a fun one, since Freedom House tends to give it very high figures, but political liberty there is marginal at best; very market-oriented, highly repressive of dissent, procedurally democratic but functionally undemocratic.

Similarly a strong argument can be made that a significant motive force for political-democratic development took place against the forces and distributions resulting from capitalist social organization. Whether capitalism and democracy are happily symbiotic, antagonistic, or a obligate and antagonistic symbiosis is a sufficiently old chestnut to come up year after on intro politics courses, so I doubt anyone has a knock-down answer...


But to swing back to an earlier point, by way of this:

the rights of individuals are enshrined and protected.

An interesting trend in our current form of capitalism is the predominance of oligopolistic corporations, who qualify as individuals legally. This has been a core argument in any altermondialisme, and I believe is a tricky issue in economic theory. Free trade and market theory presupposes small actors with little market-making power, whereas the economy is largely dominated by large actors, often market-making, with a high proportion of intra-corporate trade, and significant political leverage, as for example with 'too big to fall' policies and government bailouts, and low policing, as with transfer pricing. So corporate dominance presents an immanent critique to free-traders, that I haven't seen satisfactorily answered.

(If one were cheeky, you could say that corporations are 'free riding' on the previous democratic gains of contra-systemic forces hehe...)

Sand

Sand, I presume you mean property rights are enshrined and protected?

Only in so far as property rights are a component of the rights of individuals.

but whether capitalism develops free societies, free societies develop capitalist economies, or whether there is a greater degree of historical contingency to it all remains disputed.

Id lean more to free societies developing capitalist economies [property rights being a component of individual rights], with economic development leading to additional pressure for a free society from the new, proto-middle class wanting to protect their new found status from political repression with a tolerable system of laws.

Capitalist development in the absence of liberty (in the conventional liberal-democratic Western sense) seems quite possible: vide China, post-Allende Chile, or Singapore.

It is possible for countries to become rich in the absence of liberty [ Most of the middle east is "rich" but it is far from free or capitalist], but not to become capitalist - China is rich, but any Chinese businessman who crosses the Chinese Communist Party will either be exiled or get a bullet in the back of the head. Same for any Russian businessman who crosses the Kremlin.

Without strong individual rights protected [ in practise as opposed to merely theory] in law against government oppression and a [fairly] free market states cannot be capitalist, practically by definition.

Free trade and market theory presupposes small actors with little market-making power, whereas the economy is largely dominated by large actors, often market-making, with a high proportion of intra-corporate trade, and significant political leverage, as for example with 'too big to fall' policies and government bailouts, and low policing, as with transfer pricing. So corporate dominance presents an immanent critique to free-traders, that I haven't seen satisfactorily answered.

Yes, there is the issue of a practical monopoly arising though market success [ Microsoft would be an example for desktop OS], but this is and should be regulated through competition laws - assuming these are being enforced adequately, and there any artificial barriers for entry are removed then theres not a lot more that can be done. Capitalism wouldnt claim to be perfect, just best.

There is the question of legislative process being influenced by corporations but those are more to do with political campaign financing and judgment on the right of the individual to petition their elected representitives or lobby for a political cause. If the money wasnt coming from corporations, it would simply come from directly from whatever feudal fief a party bureacrat had carved out for themselves and the corruption would remain.

Kama

So, would state capitalism be an oxymoron? How do you view the Sovereign Wealth Funds?

I'm at root a meliorist capitalist btw; I think changes in the rules could be sufficient. But I have definite issues with a lot of the current rules hehe...So I'm not arguing against capitalism per se; I'm pro-markets, but there's a lot of ways you can regulate or not a market system. There's not just one capitalism, I don't think. Side issue, meh.

If the money wasnt coming from corporations, it would simply come from directly from whatever feudal fief a party bureacrat had carved out for themselves and the corruption would remain.

So between the Scylla of McDonalds and the Charybdis of a Apparatchikstan, there is no third way? Seems a false dichotomy to my eye. Also there is an issue with bureaucrats being generally territorially bound, and hence subject to law and regulation, and corporations being partially extraterritorial, allowing abuse such as transfer pricing, tax evasion, etc.

Capitalism wouldnt claim to be perfect, just best.

Hmm, usually the 'least worst' is trotted out. But best?
Best at? Wealth generation? Developing free societies? Everything?

Or, to properly problematise: Which capitalism works best, in your opinion? Does Nordic market-socialism work better than Anglo-American market-liberal? Singaporean State-Capitalist? And so forth.

brianthebard

An individual can exist and even thrive without owning property sand.

Kama

Just to be a bit devils advocate:

Howard Bloom has a nice article called In Praise of Consumerism: It Appeals to the Thoreau in You. Pleasantly idiosyncratic.

More on-topic, while its possible to survive without property, its very difficult to survive if the resources you need for basic biological reproduction are the property of another, which is a critique that goes from the enclosure of the commons to water riots in Latin America.

I'd be more in favour of the capitalist->democratic argument if alternate democratic systems weren't crushed so damn often, historically speaking.

Sand

So, would state capitalism be an oxymoron? How do you view the Sovereign Wealth Funds?

If the state gets involved to the point where its championing particular market participants [ including itself] then its no longer a free market, nor is it a tolerable system of justice so it cant be capitalist practically by definition. The military-industrial complex of most major states wouldnt be described as free markets.

Sovereign wealth funds are dangerous - markets have been freed up, liberated, the stifling influence of political elites weakened, the era of "ism's" over - and then suddenly regimes and party elites simply dump the misgotten wealth of entire states/regimes into an investment fund and go on a shopping trip and end up owning the means of production anyhow.

Its a problem as regimes and political elites act for their own interests, and unlike private investors theyre playing the game AND making the rules and can force corrupt, crony political results. Even fairly free governments like our own can be put under immense pressure by tiny minority groups - such as the union pressure in the Aer Lingus drama over the Shannon to Belfast switch. While its not an example of a SWF as such, it can show what happens - the governent takes OUR money, invests in a corporation, and when the corporation acts to protect OUR money, theres even a chance the government will instead use OUR money to represent the interests of some cronies in the union and in doing so aid their own electoral campaigns? Its OUR money. Not the TDs. Not the unions.

Let alone regimes like Russia, China, the Middle Eastern kingdoms and so on, which can reap the benefits of liberty and legal rights in the West whilst denying the same to their own peoples whose money theyre using for investment. The implications for personal freedoms when the economic assets are held by the state isnt hopeful.

How it can be dealt with - I am uncertain. State involvement is hardly the answer as state involvement is the problem. Hard to see how they can be restricted or regulated as they will be creating the rules.

So between the Scylla of McDonalds and the Charybdis of a Apparatchikstan, there is no third way? Seems a false dichotomy to my eye. Also there is an issue with bureaucrats being generally territorially bound, and hence subject to law and regulation, and corporations being partially extraterritorial, allowing abuse such as transfer pricing, tax evasion, etc.

Oh theres a lot of third ways, but they tend to be old mutton dressed up as new lamb - new powergrabs disguised as liberation. 21st century Socialism and so on.

Essentially the state is a tool - theoretically it should be a tool that serves the common needs of the individuals that comprise its population. Inherently it is prone to falling under the sway of either economic, social or political elites due to representative democracys tendancy to concentrate the mandate of many in the hands of a few. The safest course of action therefore is to ensure the rights of the individual, especially their property and economic rights are defended against the power of the state - so that the state, even if corrupted, has a limited ability to remove the freedom of individuals.

If the individual holds the economic assets, then the state must serve the individuals wishes and must listen to their demands - no taxation without representation.

If the state holds the economic assets, then the individual is a slave. Look at the curse of oil in the middle east and africa. The cheerful concept of being represented by a state that uses its supposed mandate to claim the economic assets to pay for the secret police and army to oppress you and ensure its continuning mandate doesnt appeal.

So, Id would rather err on the side of private corporations financing political campaigns - which can be limited by campaign finance legislation and audits - as opposed to handing the honeypot directly over to a party or bureacrat.

Hmm, usually the 'least worst' is trotted out. But best?

Is there a better system to deliver efficient outcomes [the state - or whatever entity might carry out the same function - obviously has a role in this, but as a neutral, not an involved party]? To reward and encourage innovation? To punish bigotry? To reward merit? To deliver fair outcomes?

When states get involved past a regulation/incentives point the result tends to be inefficiency, cronyism and the individual getting screwed.

An individual can exist and even thrive without owning property sand.

Sure, slaves can have long, happy lives whilst toiling away for their masters gain.