Capitalism Versus Democracy

capitalism-skirt-350Powerful advocates of unfettered U. S. capitalism are subverting our democracy and quality of life. Evidence of this is all around. A few months ago on his TV show Bill Moyers said to Joyce Appleby (UCLA emeritus professor, former president of the American Historical Association, and author of The Relentless Revolution: A History of Capitalism): “Some of us believe that the defining issue of our time is the relationship between capitalism and democracy. What do you think about that?” She responded: “I think it is. . . . Capitalism really is amoral. . . . Democracy is moral. It has a sense of the well-being of the whole. So I think there is that tension.”

In her book on capitalism, Appleby also states that “democracy and capitalism . . . generate values that are often in conflict,” but she also recognizes that different countries “have elaborated their own variants of capitalism.” And she thinks of capitalism as more than just an economic system, but also “a cultural system rooted in economic practices that rotate around the imperative of private investors to turn a profit.”

In this essay we are primarily concerned with the U.S. variation of capitalism. And although we shall regard it as primarily an economic system, it also has social and cultural consequences. Its tycoons and supporters have been the main advocates and beneficiaries of industrialism and technological advancement, and since the late nineteenth century they have championed a capitalist consumer culture that has had significant repercussions on all aspects of our lives and environment. Our present variant of capitalism is not the only type possible, but it is the predominant socio-political reality with which we must deal.

A month after talking with Appleby, Moyers interviewed John Nichols and Robert McChesney, frequent contributors to The Nation and authors of Dollarocracy: How the Money and Media Election Complex is Destroying America. Consider the following exchange between Moyers and McChesney, who also wrote Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy.


 Moyers: Isn’t that . . . capitalism as it’s presently functioning, the core cause of the decline and almost fall of journalism?

 McChesney: Well, of democracy, actually. I think the broader tension is between capitalism and democracy because there’s been a tension in the United States really from the beginning. But especially since the Industrial Revolution and the great industrial fortunes began in the Gilded Age.

McChesney then proceeds to mention some of the historic U.S. battles between capitalism and democracy. But he thinks that today the capitalists are on top. And some of the most powerful of them believe that “we need to basically have a really weak democracy” for them to flourish. He adds that “we’re really in the classic moment we were in in the Progressive era, the New Deal and the 1960s [e.g., when President Lyndon Johnson established Medicare], where people have to come together and assert the popular power to say, we need policies in the governing system that works for us, not just for them.”

McChesney’s references to historic battles between the forces of capitalism and democracy provide this historian (as I am by profession) the opportunity to clarify and elaborate upon these clashes.

Historical Background: Industrial Revolution, Gilded Age, Progressivism, and Resistance

Most of us have grown up to think of the Industrial Revolution as a positive development. And regardless of what the exact connection is between industrialization and the broadening of the right to vote, that right did spread to more people after the Industrial Revolution first began in late 18th century England.

Nevertheless, a number of writers and thinkers have influenced my belief that industrialization and the capitalists who were its main driving force were hostile in many ways to democracy. And many of the capitalists were indifferent to the common good, the improvement of which should be the main goal of democratic politics.

Charles Dickens in novels such as Hard Times and Karl Marx in works such as Das Kapital depicted many of the horrors of early capitalism. Take, for example, this passage from Marx, citing a British factory inspector’s report which quoted a father who said: “That boy of mine when he was 7 years old I used to carry him on my back to and fro through the snow, and he used to have 16 hours [of work] a day . . . I have often knelt down to feed him as he stood by the machine, for he could not leave it or stop.”

Raymond Williams’ Culture and Society: 1780-1950 (online version here) analyzes various thinkers’ reaction to the Industrial Revolution. He concludes that in British thought throughout this long period “the development of the idea of culture has . . . been a criticism of what has been called the bourgeois idea of society.” He quotes many writers, some of whom were also critics of democracy.

One of them is the poet T. S. Eliot, who in 1939 wrote: “We are being made aware that the organization of society on the principle of private profit [the basic tenant of capitalism] . . . is leading both to the deformation of humanity by unregulated industrialism, and to the exhaustion of natural resources, and that a good deal of our material progress is a progress for which succeeding generations may have to pay dearly. And Eliot criticized “the steady influence which operates silently in any mass society organized for profit for the depression of standards and culture. The increasing organization of advertisement and propaganda—or the influencing of masses of men by any means except their intelligence—is all against them.”

One of the strongest modern critics of the Industrial Revolution and capitalism is Wendell Berry. In a book of essays, he wrote: “The industrial revolution has thus made universal the colonial principle that has proved to be ruinous beyond measure: the assumption that it is permissible to ruin one place or culture for the sake of another.” And in another of the book’s essays: “The great enemy of freedom is the alignment of political power with wealth. This alignment destroys the commonwealth—that is, the natural wealth of localities and the local economies of household, neighborhood, and community—and so destroys democracy, of which the commonwealth is the foundation and practical means.” About the capitalist global economy, he says, it “does not exist to help communities and localities of the globe. It exists to siphon the wealth of those communities and places into a few bank accounts.”

More recently, in his 2012 Jefferson Lecture, he stated:

Now the two great aims of industrialism—replacement of people by technology and concentration of wealth into the hands of a small plutocracy—seem close to fulfillment. . . . Corporate industrialism itself has exposed the falsehood that it . . . ever has given precedence to the common good. No amount of fiddling with capitalism to regulate and humanize it . . . can for long disguise this failure. The evidences of it are everywhere: eroded, wasted, or degraded soils . . . whole landscapes defaced, gouged, flooded, or blown up; pollution of the whole atmosphere and of the water cycle . . . thoughtless squandering of fossil fuels and fossil waters, of mineable minerals and ores; natural health and beauty replaced by a heartless and sickening ugliness. Perhaps its greatest success is an astounding increase in the destructiveness, and therefore the profitability, of war.

In his interview with Moyers, McChesney also mentions the Gilded Age. Mark Twain and his co-author, Charles Dudley Warner, bestowed this description on the post-Civil War period in their 1873 novel, The Gilded Age. This work satirized the toxic effects of crony capitalism on American democracy.  In the following decade, Twain said to the Knights of Labor, an early union: “Who are the oppressors? The few: the king, the capitalist, and a handful of other overseers and superintendents. Who are the oppressed? The many: the nations of the earth; the valuable personages; the workers; they that Make the bread that the soft-handed and idle eat.” (See here and here on Twain’s social criticism and its relevance for today). Henry Adams also depicted the negative effects of capitalism on democracy during this same period in his Democracy: An American Novel (1880).

A majority of major writers in the Progressive Era (1890-1914) and throughout the remainder of the first half of the twentieth century shared the view of Twain and Henry Adams that capitalism was a corrupting influence on American democracy and life in general. The Progressives were a diverse lot that included Muckraking journalists like Lincoln Steffens, politicians like Theodore Roosevelt, and helpers of the poor like Hull House founder Jane Addams. They believed that capitalism had to be constrained and supplemented in order to serve the public good. They pressured Congress to pass anti-trust and other legislation such as the Meat Inspection Act, the Pure Food and Drug Act, and the Employer’s Liability Act. They also advocated social legislation such as the prohibition of child labor, improvements of women’s working conditions, and comprehensive social insurance for sickness, unemployment, and old-age poverty. (For more on writers and Progressivism see here).

Throughout the remainder of the 20th century and into the 21st, like-minded individuals continued working to serve the common good by constraining capitalism. For example, many of Franklin Roosevelt’s New Deal Policies reflect such attempts. But capitalist corporations and their supporters fought hard to resist constraints. In 1992, William Greider’s Who Will Tell the People: The Betrayal of American Democracy depicted the successes of American corporations in resisting democratic restraints.

Corporations exist to pursue their own profit maximization, not the collective aspirations of the society.  They are commanded by a hierarchy of managers, not by democratic deliberation. . . . Hundreds of these large corporate political organizations are now astride the democratic landscape, organizing the ideas and agendas, financing electoral politics and overwhelming the competing voices of other, less well-endowed organizations and citizens.

Greider also asserted that “American democracy is in much deeper trouble than most people wish to acknowledge. Behind the reassuring facade, the regular election contests and so forth, the substantive meaning of self-government has been hollowed out. What exists behind the formal shell is a systemic breakdown of the shared civic values we call democracy.”

Exactly two decades later, in 2012, Robert Reich wrote in Beyond Outrage: What Has Gone Wrong with Our Economy and Our Democracy, and How to Fix It, “I have never been as concerned as I am now about the future of our democracy, the corrupting effects of big money in our politics . . . and the accumulation of wealth and power at the very top.”

Historical Background: The Socialist Challenge and Welfare State

In 1889 British socialist Sidney Webb wrote, “The mainstream which has borne European society toward socialism during the past one hundred years is the irresistible progress of democracy.” He believed that “the inevitable outcome of democracy is the control by the people themselves, not only of their own political organization but, through that, also of the main instruments of wealth production; the gradual substitution of organized cooperation for the anarchy of the competitive struggle.”

For a century afterward, socialism existed in two main varieties: democratic socialism, as has existed at different times in many western European countries, and socialism of the communist variety, as occurred in the Union of Soviet Socialist Republics (USSR). As compared to capitalists, democratic socialists wished to create greater economic equality by regulating the economy in behalf of the entire population and exercising more government ownership or direction over at least some aspects of the economy.

Since democracy is a form of government in which citizens, at least theoretically, exercise ultimate power, democratic socialists have often claimed that democracy fits better with socialism than with capitalism because the former provides more “people-power” over the economic aspects of society.

The 1908 U.S. Socialist Party platform called for many reforms and initiatives that only came years, sometimes decades, later such as a graduated income tax, greater restrictions on child labor, granting women voting equality with men, Public Works projects to employ unemployed workers (similar to what occurred during Franklin Roosevelt’s New Deal), and compulsory insurance against unemployment, illness, accident, invalidism, old age, and death.

Someone who was present at the 1908 convention where this platform was presented was poet and later Lincoln biographer Carl Sandburg, who as a young man was a socialist. He later thought that the 1960 Democratic platform was “a very good imitation” of the 1908 Socialist one.

In western Europe, democratic socialists have been in power or shared it in various countries for varying periods of time from the 1920s until the present. At the end of the 20th century this was the case in 13 of the 15 states of the European Union. Of course, such socialists have had their own problems, such as too much bureaucracy and too little encouragement and support of individual initiative. But the excessive American fear of “socialism” and the labeling as such of programs like Social Security, Medicare, and the Affordable Care Act (ACA, aka “Obamacare”)—all of which occurred when they were introduced—is sheer nonsense. Our national phobia about socialism led us to enact the ACA rather than a more rational single-payer system like the ones that exist in Canada and many European countries.

It is worth noting that the Foreword to Dollarocracy is written by the only self-acknowledged democratic socialist in the United States Senate, Bernie Sanders of Vermont. I almost wrote “self-proclaimed,” but he has served in Congress for more than two decades as an “Independent,” and admits to being a democratic socialist, but does not trumpet it. Among Sanders’ chief worries are widening U. S. inequality, excessive corporate powers and influence over the political process, and the decline of tough, independent journalism—“an information void has developed. And it is being filled by political advertising and public relations spin.”

After World War II the so-called “welfare state” came into existence, first in England and then in some other European countries. It was sort of a hybrid between capitalism and socialism. In such states, governments exercised more powers to insure that all its citizens could count on basic subsistence when needed during sickness, unemployment, and old age. Especially notable was the British National Health Service Act of 1946, which made everyone eligible for free medical services.

The first major effective challenge to the welfare state came from Margaret Thatcher after her election as British prime minister in 1979. She succeeded in dismantling at least portions of it, which she characterized in her memoirs as “a centralizing, managerial, bureaucratic, interventionist government” that “jammed a finger in every pie.” She privatized (sold off) government-owned industries such as British Telecom, British Airways, and British Gas. And she claimed that under her leadership Britain “was the first country to reverse the onward march of socialism.” During the 1980s, she and Ronald Reagan became ideological soul mates in their attempts to roll back welfare-state policies.

In the quarter century since the Thatcher-Reagan years, proponents and opponents of the welfare state have engaged in a continual tug of war, with first one side gaining ground, then the other. But neither capitalism nor democratic socialism has existed in any pure form. In most of the world there are “mixed economies,” neither purely capitalistic nor socialistic but combining some degree of private ownership and government economic controls. Even the U. S. State Department in 2001 declared that though “the United States is often described as a ‘capitalist’ economy,” it “is perhaps better described as a ‘mixed’ economy, with government playing an important role along with private enterprise.

What Should We Do?

Given the threat that advocates of unfettered capitalism will continue to subvert our democracy, what should we do? First, we must recommit ourselves to the proper goal of politics: fostering the common good. As I have written previously, leading thinkers from Aristotle to modern times have recognized this as our proper aim. Only by continually focusing on this end, as opposed, for example, to some other like Machiavelli’s target of gaining and retaining power, can we hope to do much good.

Secondly, we must think broadly and holistically. Although as individual citizens, we might dedicate ourselves to just one or a few issues, we must recognize that improving the common good requires a multi-pronged approach—cultural, economic, political, and social. Cultural comes first because using the word as anthropologists do, it includes the other dimensions. It embraces the whole way of life of a group (e.g., our nation), including its physical and mental activities. Since I have dealt with championing a progressive culture in a recent essay, I will simply refer readers to it.

Thirdly, we need to embrace many, if not all of the reforms suggested in Dollarocracy. The books two authors (see above) devote their last chapter to such reforms, where they declare:

We make the case that what is necessary at this point in American history is not a specific reform but a great reform moment in which an array of amendments, laws, rules, and structural and social responses are initiated and implemented. Without a broad popular movement of historic dimensions, no functional reform will be possible.

Later on they add that we need not just one reform, but “rather a reform moment—every bit as bold, every bit as expansive as the Progressive Era, the New Deal era, the Great Society, and the upheavals of the 1960s.”

Contrary to some opinion, “the history of the right to vote in America” has not been a steady expansion, but “one of expansion and contraction.” The authors quote an essay that in turn quotes historian Eric Foner that “the more you enhance the power [of the people], the more [the powerful] want to make sure the right people vote” [bracketed material appears in the book]. Recent years have seen ample evidence of this as Republicans have taken various steps to reduce the number of likely Democrats who have been able to vote and/or reduce, by such means as gerrymandering, the significance of their vote.

Chief among the authors’ specific suggestions, explicit or implicit, are the following:

  • Pass an amendment to the Constitution to overturn the 2010 Citizens United Supreme Court ruling, which made possible the grossly exorbitant corporate spending that occurred to influence 2012 elections and referendums. Much of this spending was for negative ads. The authors quote President Obama’s words in 2012: “I think we need to seriously consider mobilizing a constitutional amendment process to overturn Citizens United (assuming the Supreme Court doesn’t revisit it). Even if the amendment process falls short, it can shine a spotlight of the super-PAC phenomenon and help apply pressure for change.” In the interview with Moyers, McChesney also notes that “16 states have already petitioned Congress to change the constitution along these lines,” and that the momentum “is spreading like wild fire without any news media coverage.”
  • Pass an amendment to the Constitution “that clearly protects an affirmative right to vote for every U.S. citizen.” At present, “globally, there are just eleven democracies that do not guarantee the right to vote in their constitutions. Remarkably, the United States is one of them.”
  • Pressure President Obama to use his executive powers to do more to constrain Dollarocracy, like signing “an executive order requiring government contractors to reveal political spending” and encourage “regulatory agencies such as the Federal Election Commission to use their authority to crack down on corporate campaign abuses.”
  • Push for public financing of political campaigns and “for dramatic increases in the funding of public and community media and for new funding initiatives and tax policies that will sustain journalism on broadcast, print, and digital platforms.” Most western European countries do much more in this regard. “Dozens of countries around the world have rules that require public and private broadcasters to make free time available to parties and candidates. . . . Countries that are ranked as more democratic than the United States subsidize media at rates as high as 50 to 1 (in the cases of some small countries, 75 to 1) over what is seen in the United States.”
  • Work for “strict privacy regulations for the Internet, with citizens having effective control over data collected from them as they are being stalked online by commercial interests, politicians, and national security agencies.”
  • Pressure Congress to pass The Disclose Act of 2013, which “aims to provide greater disclosure of outside spending unleashed by the Citizens United decision.”
  • Hold shorter, cheaper elections.
  • Establish something like a nonpartisan national election commission to review and make recommendations about improving our electoral process.

Although such proposals as these may be seem utopian in the present toxic political atmosphere of Washington, John Nichols told Moyers:  “Bob [McChesney] and I are probably as big a pair of optimists as you’ll ever meet. And the fact is that we have a great relief in what political theorists and political scientists refer to as critical junctures, points in history where things get to a level where something has to happen. That is the American story.” And the authors believe we have reached such a juncture now and that some large sweeping reform movement like occurred in the Progressive Era and with the New Deal can now occur. And McChesney added: “There’s this enormous movement that’s already taken place beneath the surface that’s not known. We see it all over the country. It’s part of our optimism.”

walter mossAlso a cause of optimism are the findings expressed in an essay recently found on this blog, Major Social Transformation Is a Lot Closer Than You May Realize.” The two authors of it often refer to the ideas of Bill Moyer (1933-2002). It seems that between the ideas of the deceased Bill Moyer and the constant efforts of the still-very-much-alive Bill Moyers, the progressive guests he interviews, and progressive activists throughout our nation, we do indeed have some grounds for optimism as we begin a new year.

Walter G. Moss 

Published by the LA Progressive on January 3, 2014
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About Walter G. Moss

Walter G. Moss is a professor emeritus of history at Eastern Michigan University. His most recent book is An Age of Progress?: Clashing Twentieth-Century Global Forces (2008). For a list of all his recent books and online publications, including many on Russian history and culture, go here: