Are capitalism and democracy compatible?

by Ken Melvin

Are capitalism and democracy compatible?

 Both Capitalism and Democracy are complicated, complex concepts with varying interpretations.

Beginning with a working definition of democracy:

Democracy — A government formed of representatives popularly elected by the enfranchised citizenry of the governed entity.

    • Webster’s a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections.

In a true democracy, with as few exceptions as possible, every citizen over a certain age would be eligible to vote, all eligible would vote, and all of their votes would be equal. In the 2016 election only 61.4% of adult U.S. citizens (137.5 million) cast ballots, Trump won the electoral college vote 304 (57%) to 227 (43%) even though he received slightly less than half (46% to 48% for Clinton) of the votes cast. So, by any measure, it wasn’t even close to being a democratic result. This wasn’t by accident.

Putting aside for a while: all the unscrupulous things done in the 2016 election to sway opinion, all efforts to make voting inordinately difficult for some, all the hacking into computers by Russia, all the involvement of the likes of Wikileaks and Cambridge Analytica, the nefarious role of Facebook and other social media, the tons of dark and not so dark money, … ; it was the extremely skewed electoral college vote that determined the winner. How can you have a democratic outcome when South Dakota with less than one-million citizens has 3 electoral votes and California with almost forty-million (40 times SD’s population) has 55 (only 18 times as many electoral votes)? SD residents have one electoral vote per 300,000 resident and CA one vote per 727,000; a 2.2 to 1 ratio of inequality. Essentially the same could be said of ND, ID, WY, MT, AK, NM, KS, NB, NV, AR, MS, NH, VT, ME, and WV; their votes for president are worth more than the votes of voters in populous states and twice as much as the votes of the voters in the more populous states. States electors are allotted per Article II, Section 1, Clause 2 of the US constitution.


The US Senate is even less democratic. South Dakotans get one senator per half million citizens while Californians only get one per twenty million; a ratio of forty to one. Many of the Nation’s current ills are attributable to this most undemocratic imbalance, an imbalance that led to a US Supreme court with a majority of Justices who do not represent a majority of Americans; don’t even represent the law.

It wasn’t that the founding fathers didn’t understand democracy, made a mistake, …, these were they who omitted women and blacks but wanted slaves to count as 2/3 person for the purpose of representation, i.e., they didn’t want the votes of white women and slaves to count and they wanted the votes of white males slave owners to have many time more clout than the votes of white males in non-slave holding states. Their model for ‘democracy’ was based more on the now long gone economic models for colonialism and slavery.

From our earliest days, Gerrymandering has been a favorite scheme for making some votes worth more than others. By redistricting so that Party A’s voters are divided into several districts and Party B’s voters hold an insurmountable majority within any given district, gerrymandering can determine an election’s outcome. Party B’s voter’s votes count and Party A’s voter’s votes don’t. The majority Party B can make it so that only their votes count; and Party A may come to understand that their voting is not even worthwhile. Today, as in 1780, Gerrymandering, a consequence of the US Constitution allowing state legislatures to draw district boundaries, jiggers elections from the local to the presidential.

Today, Republican since the Civil Rights Legislation of the 1960s led to Reagan in the 1980s, never having been too keen on democracy from the start, legislators from the former slave states want to limit those counted for purposes of representation in states like California, Illinois, New York, … while using such as the Gerrymander and voter restriction to limit political opposition in their own states, while, yet again, retaining those disenfranchised for purposes of representation.

These same legislators have succeeded in stacking the US Supreme Court with privileged white male ideologues opposed to the provisions of the 1965 Voting rights Act meant to make the vote more democratic. Today, the most venal Mitch McConnell, born and raised until 14 in Alabama and Georgia, now representing the small, backward state of Kentucky with 8 electoral votes, controls all appointments to the Federal Bench.

These same legislators, along with the likes of Roger Ailes, Lee Atwater, Newt Gingrich, Frank Luntz, and Karl Rove, turned national politics into the art of character assassination. If you don’t have a policy, don’t understand the issues, don’t like the facts, can’t compete otherwise, …, denigrate the opposition; Fox News will be there for you. Not so much democratic — more like war.

The dark money attack on democracy, much facilitated by the ‘Citizen’s United’ decision by the US Court of Ideologues, is funded by the likes of the Koch brothers, Sheldon Adelson, the Mercers, … (there is, of course, dark money on the left, but little evidence that any of it goes towards suppressing the vote).

The Russian interference involving: Wikileaks, Cambridge Analytica, Facebook, the Mercers, Steve Bannon, … is the latest form of assault on democracy. Putin, who detests democracy, sought to discredit democracy and weaken the US. Wikileaks and Cambridge Analytica abetted those efforts using the amoral Facebook, Google, and Twitter. Putin, spending only a few $million on cyber warfare, abetted by the aforementioned, did more damage to the US, the EU, and NATO than he could have with several $trillion spent on a war which he would have lost. No matter however long it takes the world to figure it out, henceforth, conventional warfare will be obsolete.

With powerful enemies like these, democracy’s survival, even in a weakened form, is a constant struggle.

Now, a working definition of Capitalism:

Capitalism — An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision; and by prices, production, and the distribution of goods that are determined mainly by competition in a free market (an economy operating by free competition).

Capital is a measure of the wealth, the total valuation of assets, held by an entity. These assets may include money, property, skills, knowledge, … For the purposes of this discussion: capital is the wealth, whether in money or property, owned or employed in business by an individual, firm, corporation, etc., i.e., both figuratively and literally, capital is at the root of capitalism. In a capitalistic economy, those who control capital exercise significant control over the economy. Neither capitalist nor capitalism is necessarily concerned about equality, human rights, …, or democracy. While a capitalist might or might not have morals; capitalism, per se, is amoral.

Capitalism as we know it is relatively new; a product of the industrial age, appearing in its first forms in the early 18th century. Of late, capitalist investors and financiers have usurped the power that industrialists such as Carnegie, Rockefeller, Ford, Getty, … once held. Today’s tech industry titans like Gates, Zuckerberg, Ellison, …, are the modern counterpart of these industrialists in terms of wealth gained through entrepreneurship. Though powerful, they don’t control the nation’s railroads, manufacturing, energy, …, the very economy of the nation, the way the industrial age titans did. Democracy, merely a phrase, imposed little constraint on the likes of Rockefeller, Carnegie, …; they owned enough legislators to keep the government at bay. It was the rise of labor unions that first brought democracy to bear on the ‘Gilded Age’ economy by addressing the issues of inequality, working hours, … Then populism, a close cousin to democracy, led to the Progressive Era and Teddy Roosevelt. Roosevelt said that he felt his ‘Trust-Busting’ saved the nation from revolution. Maybe. It almost certainly saved capitalism from itself. Under Teddy Roosevelt the government began to rein in the excesses of capitalism and speak to ‘We the People’ democracy.

Democracy has a history of gaining strength in times of crisis. The ‘Gilded Age’ graphically exposed the inequities, the harshness, of capitalistic economies; prompting the rise of labor unions and populism. The Great Depression brought further exposure of capitalism’s failures. Franklin Roosevelt’s ‘socialist’ programs like Public Works Programs and Social Security again saved capitalism from the dustbin.

Just to be clear, despite the rhetoric, neither Capitalists nor Capitalism really like ‘Free Markets’. By innate instinct, they will always move to limit competition. Without competition, capitalism doesn’t work. For markets to work well, they must be regulated; a task that falls to the government. Strange symbiosis.

It wasn’t just markets that needed to be regulated. The Gilded Age led to populism which gave way to The Progressive Era. The Progressive Era gave us the Pure Food and Drug Act (1906) for preventing the manufacture, sale, or transportation of adulterated or misbranded or poisonous or deleterious foods, drugs, medicines, and liquors, and for regulating traffic therein, and for other purposes (Thanks Upton Sinclair). The Progressive Era gave the nation Workmen’s Compensation, national Health and Safety Regulations for the work place, … ; the beginnings for beginning consumer protection laws, … These were all restrictions on capitalism meant to benefit ‘We the People’, i.e., they were democratic.

Today, in this Age of Technology, the capitalist class is represented by Mutual Fund managers, Investment Bankers, Hedge Funds managers, …; by people who have never ran a railroad, a steel plant, a textile plant, a food processing plant, …, yet claim to know best when it comes to the economy. They, with a little help from a lot of economists and politicians, and a know-nothing news reading media, were those who successfully ushered in the off-shoring of production and the opening of Globalization. Capital, is mobile, always seeks the cheapest labor and resources. ‘We the People’ weren’t so mobile; millions of jobs were lost, millions more had to settle for less pay, many homes were broken, many died from overdose, … The capitalists are in charge. In this age of technology, capitalists can look forward to the day when they no longer need labor.

How could this happen in a democracy? Elections were held; presidents, representatives and senators were sent to Washington, and yet the needs of ‘We the People ‘ were ignored in favor of the investors, the financiers, the mutual funds, …; the capitalists.

Capitalism has long since known how to manipulate politicians and governments; King Leopold had his own US Senators. But, the time-honored art of manipulating the body politic, once the purvey of the likes of Hearst and Pulitzer, and radio personalities, is now in the hands of: the most vile Fox News, the equally vile right-wing talk radio; and is now being rendered via amoral social media such as Facebook by the likes of Steve Bannon, and billionaires Robert and Rebekah Mercer. Bannon says it’s all about manipulating the media; meaning that you must control the media if you want to manipulate the body politic. For Fox News, this was an inside job. The Russians used the editorless Facebook to get their propaganda, sometimes via Fox, onto the likes of CNN, …, PBS, … Limbaugh does it for the money, his ego, and his love for golfing with capitalists. The Mercers, by way of the media, by way of Cambridge Analytica, Facebook, …, do it for themselves and fellow capitalists. The implication; you can manipulate public opinion. Capitalists know how to do media outreach. We see members of the body politic trying to do so with protests and such.