The Dearing Dialogue

There is a curious relationship between democracy and market-capitalism.  On the one hand, they appear to support each other, whereas on the other hand, they appear to alter and confine each other.  This essay will examine that relationship under the assumption that these two concepts are inherently opposed to each other when examined under constraints of human necessity.  However, the ability for a society to find a balance between these concepts is dependent upon that society’s level of political culture.

Man is ultimately a biological creature with biological needs.  The need for food, shelter, and procreation brings man into a relationship with other men and women in order to provide the necessary resources for survival.  As Hannah Arendt aptly describes, man is not born free, nor equal, but is subject to the constraints of the human condition[i]. In the state of nature, this consists of a daily struggle in which only the strong survive.  To escape this predicament, man enters into a relationship; a society to ensure the survival of all members, strong or weak. 

Market-capitalism is premised on the promotion of self interest.  Democracy is based on the promotion of majority interests in society.  Karl Polyani suggests that market capitalism is “entirely unnatural” in a society; that economics were traditionally embedded within the social construct of society so as to justify one’s position within that social hierarchy[ii].  Throughout most of history, man’s needs were met through “reciprocity and redistribution”, which ensured society’s continuation and prevented winner-take-all transactions that could alter the existing social structure[iii].  Under conditions of economic distress, members of a community could look towards the existing political culture to reestablish equilibrium in society.  In such tribal societies, a balance of democracy and economics existed.  Economics were based on redistribution of goods, not an individualized capitalist system that prevented redistribution in order to justify profits.

Without equilibrium, market-capitalism will run contrary to democratic ideals.  A market-capitalist system must be balanced by a democratic form of government to ensure the reigns of capitalism are controlled by society.  Market-capitalism, as described by Marx, transforms traditionally social transactions (labor, money, materials) into commodities that lose their value over time[iv].  That labor provides nothing more to the worker but wages.  Under a pure market system, society would be as Marx describes, squeezing greater quantities of labor out of fewer workers until the costs are as minimal as possible.[v]  Looking at the historical Greek polis, slave labor was justified and used as a commodity, while the slaves were separated from the framework of the polis.  But, balanced with an all-encompassing democracy, market-capitalism is controlled and compelled to consider the interests of all in society.

Like the Greek polis, the birth of the United States forced difficult questions upon the founders of our republic.  Preaching equality of all people in their Declaration of Independence, the founders overlooked the dilemma of slavery, gave in to market forces, and ultimately wrote slavery into our Constitution.  By doing so, the slave class took on the burdens of necessity for male, white, propertied elites. Slaves were property, and property was a market force held outside the reigns of the limited “democratic” government.  By creating a structure where half of society was overlooked, market capitalism ran its course without the constraints of an impoverished class demanding representation or justice.  Thus democracy for all was set aside for the interests of a market-capitalist system.  It would ultimately require progress in the political culture of the United States for it to find equilibrium between market-capitalism and democracy.  As Larry Diamond alludes, the level of a political culture often determines the “status, strength, or stability” of a democracy.[vi]

The equilibrium we enjoy in the United States is constantly in jeopardy.  Markets are controlled by large corporations which are not reigned in by democratic governance.  Corporations are generally run as authoritarian regimes.  Equally dangerous is the role corporations play in public demands like a free press, electoral equality, and the environment.  Corporations are willing to buy legislation from candidates willing to sell it while the public often remains unaware or apathetic due to corporate control of the media and overall cynicism.  The level of political culture will ultimately decide whether democracy or markets will find their balance.

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