Tag Archives: economics

The future of capitalist democracy

There are two very interesting posts out in the past few days on the connections between politics and the interests of business I touched upon in a previous post.

The first is by Philip Pilkington over at Naked Capitalism: it’s brilliant throughout (and it’s added to my already overburdened toread list), but the main piece is towards the end, when he analyses why raising public spending is such a taboo for the liberal capitalists:

…the business class – like any class – are concerned not with profits but with power; the former are merely a means to the latter. They sense that their power comes from their ability to invest as investment drives a capitalist economy. The less they invest and the more the state invests, the less social power they will have… they would much prefer to sit around idly doing nothing than give up some of their power.

(…)

Democratic capitalism, quite simply, is a self-destructive system. In the present crisis the business class has rejuvenated their profits through financial chicanery… (although) this is probably through the inflating of a commodities bubble and will likely not last long… we know from history that the business class will probably prefer to accept chronically low profits than they will the government moving in on their turf.

Thus it is likely that the West is heading for a long period of stagnation and decline. Is this due to capitalism? In a sense yes, but to put it in these terms is far too abstract. This has as much, if not more, to do with our political structures and the amount of power that the business class exercises in modern democracies.

The second is an interview to Lawrence Lessing in Rolling Stone, and it compounds the intrinsic problem presented above with the current state of politics and a specific meaning of corruption in the United States (and, I should add, to a perhaps lesser degree everywhere else in the world).

…the problem with our government is that we have a Congress that’s dependent upon funders. And that dependency leads congress to do things they otherwise wouldn’t be doing—spending time worried about bank swipe fees rather than unemployment or budget deficits. It also leads Americans to believe that congress is just bought, as the vast majority of Americans believe, which makes them cynical and less engaged, and therefore leaves the fox guarding the hen house. That’s not a corruption violating any federal law, that’s a corruption that I call “dependency corruption.”

(Ok, he had me at “dependency”.)

Both recommended throughout.

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