Capitalism vs democracy

Written on May 3, 2007 by Max Oliva in Development

J.Pozuelo-Monfort, MSc candidate in economic development at LSE
Jaime PM.jpg
In an ideal world capitalism and democracy would be meant to coexist. Theoretically the only economic model able to survive the carnage of the first half of the XX century that left behind socialism, stands out paradoxically as the single alternative to both democratic and non democratic governments across the world, with a few populist exceptions arising in Latin America.
An economic model, that of capitalism, with different reencarnations, with different implementations. An economic model that has become purely mathematical arising from the recently decesed economist from the University of Chicago and Nobel Prize winner Milton Friedmann. An economic model based on the so-called neoliberal principles of the Washington consensus, led by center-right governments and architected by the International Economic Institution across the world, that impose elimination of tariffs and austere fiscal policies that only work on paper, on the paper of the economists of the University of Chicago.
Capitalism is not a steady concept, capitalism does not operate according to predetermined underlying assumptions. There is in actuality a universe of capitalisms covering a wide spectrum of varieties, from more liberal to more social, from less state intervention to more, from a purely economic focus to a broader social intent. Capitalism is in the end like any other species in constant evolution, like any other species, which strongest specimen will survive. Only when the economic actors that determine capitalism’s fate take action, will we become witnesses of a redefined capitalism, able to sustain society over time based on ethics, sustainability and global justice.


Gibran Armijo May 29, 2007 - 2:15 pm

Could you expand more on the title “Capitalism vs. Democracy”? Since I agree on the evolution aspects mentioned, but you only applied them to capitalism and democracy was left behind in the title and the first line.
I believe that Democracy also requires a shift… but backwards.
We are applying democracy (in its different manifestations throughout countries) in an ideal way: assuming that we are all equal. I believe this is a miss-interpretation of the fact that we all have the same rights, but that doesn’t mean that we all have the same developed capacities, abilities, experiences… unfortunately we all haven’t been provided with the same opportunities for education, cultural expansion, work and a healthy, nurturing environment to help us grow, expand and uplift ourselves and those that surround us.
That translates to giving the same responsibility to a criminal drug addict (on one extreme) as to a PhD. in Philosophy and Economics (the other extreme), on deciding the best strategy to guide society to constantly better itself. When millions of poor and illiterate are under the malleable influence of not-so-altruistic interests, their vote can easily be manipulated through false promises, campaigns and the constant bombing of the media. Each has the same right to provide his input based on his reality, but the vote of those on the “bad” extreme should have lesser weight than those on the “good” extreme, where these should have a higher weight than “average”.
This is what I call a “Weighed Democracy”*.
I believe that if there were a way to assign a vote-weight to individuals based on desired measurable aspects, such as education, social responsibility, spirituality or moral values, proved track of ethics, etc. vs. undesired ones like a criminal record, illiteracy, proven corruption, etc. this would better reflect where we as a society want to lay responsibility on deciding the future of all of us. Under this “weighed democracy” there would have to also exist the means to update such individual weights so each person could evolve. In an ideal society everybody would have the same weight.
I believe we aren’t at such state of democracy, we have to undertake the huge task of building a more balanced society. The presence of millions on the “bad” end should be a constant reminder that things haven’t been done right. A “weighed democracy” might be a sour medicine to swallow but it would be a clear and objective reflection of the current state of society as well as another indicator if we are moving in the right direction.
* This is actually already under use in the United States and elsewhere but in the opposite direction: each state is represented by a fixed number of senators no matter the size of the state or the population it has, therefore each senator has the “same” weighed vote. If a senator is from a state with 1,000,000 citizens and another from a state with 500,000 the vote that the representative for the the first case has actually 50% weight compared to those from the second state. Their vote is actually deluded if their representative comes from a large or populated state. My idea suggests inverting this situation, but taking into account the demographic aspects of the citizens in each state.

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