How Capitalism Undermines Democracy

But this has, uh, become a big issue today w- that people are very concerned about how stable democracy is in the, you know, modern capitalist world.

Yep.

You know, the question about the relationship between capitalism and democracy is, I think, absolutely central, and the left historically has had it as one of the central questions that it takes up, but it's also the right.

Uh, if you look at Milton Friedman's book Capitalism and Freedom, which is one of the classics of the modern neoliberal culture, Friedman made a very strong argument, in many ways was kind of echoing certain kinds of Marxist arguments, where he says capitalism is not only consistent with democracy, but it's the best possible system for democracy.

Hmm.

And he was contrasting it with state socialism, with the Soviet Union.

And, you know, he's making the case which, when you compare liberal democracies with the Soviet Union, it's a easy case to make, that when you have a state-controlled economy where the government plans authoritatively, telling producers what to make, how much to make, and directly or indirectly telling labor where to work, when to work, you can't have democracy in such a system.

Because basic choices are being directly controlled by the government.

So y- and he contrasts that with the free market, and he makes the argument that free choice in the market is easily translated into free choice in politics.

Mm-hmm.

So it becomes a defense of capitalism not just as being an efficient system, but also the system that maximally promotes freedom.

Right.

So then do you agree with Friedman that capitalism is the ideal economic system to promote democracy?

No, I, I, I think it is not, and if it were, we wouldn't have to be anti-capitalist.

[laughs] So as people who, uh, try to promote greater freedoms and greater democracy, we are also anti-capitalist.

It means that we are pointing to some kind of flaws in capitalism that systematically undermine democratic aspirations and democratic values.

Hmm.

On the other hand, it is correct to say that capitalism did lay the foundations for democracy.

So we have to examine both of these things.

Let's start with how capitalism might have laid the foundations for democracy, and then go to why, nevertheless, there are significant tensions between the capitalist economy and democratic politics.

Yeah.

So then how did capitalism lay the foundation for democracy?

Well, to understand that, it's useful to look at what preceded capitalism when there wasn't any democracy, and why the economic system that preceded capitalism made democracy a non-starter.

Hmm.

And that system in Europe, and much of the non-European world, was called feudalism.