August 6, 2024
Fans of
capitalism like to say it is democratic or that it supports democracy. Some
have stretched language so far as to literally equate capitalism with
democracy, using the terms interchangeably. No matter how many times that is
repeated, it is simply not true and never was. Indeed, it is much more accurate
to say that capitalism and democracy are opposites. To see why, you have only
to look at capitalism as a production system where employees enter into a
relationship with employers, where a few people are the boss, and most people
simply work doing what they are told to do. That relationship is not
democratic; it is autocratic.
When you cross
the threshold into a workplace (e.g., a factory, an office, or a store), you
leave whatever democracy might exist outside. You enter a workplace from which
democracy is excluded. Are the majority—the employees—making the decisions that
affect their lives? The answer is an unambiguous no. Whoever runs the
enterprise in a capitalist system (owner[s] or a board of directors) makes all
the key decisions: what the enterprise produces, what technology it uses, where
production takes place, and what to do with enterprise profits. The employees
are excluded from making those decisions but must live with the consequences,
which affect them deeply. The employees must either accept the effects of their
employers’ decisions or quit their jobs to work somewhere else (most likely
organized in the same undemocratic way).
The employer is
an autocrat within a capitalist enterprise, like a king in a monarchy. Over the
past few centuries, monarchies were largely “overthrown” and replaced by
representative, electoral “democracies.” But kings remained. They merely
changed their location and their titles. They moved from political positions in
government to economic positions inside capitalist enterprises. Instead of
kings, they are called bosses or owners or CEOs. There they sit, atop the
capitalist enterprise, exercising many king-like powers, unaccountable to those
over whom they reign.
Democracy has
been kept out of capitalist enterprise for centuries. Many other institutions
in societies where capitalist enterprises prevail—government agencies,
universities and colleges, religions, and charities—are equally autocratic.
Their internal relationships often copy or mirror the employer/employee
relationship inside capitalist enterprises. Those institutions try thereby to
“function in a businesslike manner.”
The
anti-democratic organization of capitalist firms also conveys to employees that
their input is not genuinely welcomed or sought by their bosses. Employees thus
mostly resign themselves to their powerless position relative to the CEO at
their workplace. They also expect the same in their relationships with
political leaders, the CEOs’ counterparts in government. Their inability to
participate in running their workplaces trains citizens to presume and accept
the same in relation to running their residential communities. Employers become
top political officials (and vice versa) in part because they are used to being
“in charge.” Political parties and government bureaucracies mirror capitalist
enterprises by being run autocratically while constantly describing themselves
as democratic.
Most adults
experience working at least eight hours for five or more days per week in
capitalist workplaces, under the power and authority of their employer. The
undemocratic reality of the capitalist workplace leaves its complex,
multilayered impacts on all who collaborate there, part time and full time.
Capitalism’s problem with democracy—that the two basically contradict one
another—shapes many people’s lives. Elon Musk, Jeff Bezos, and the Walton
family (descendants of Walmart’s founder), along with a handful of other major
shareholders, decide how to spend hundreds of billions. The decisions of a few
hundred billionaires bring economic development, industries, and enterprises to
some regions and lead to the economic decline of other regions. The many billions
of people affected by those spending decisions are excluded from participating
in making them. Those countless people lack the economic and social power
wielded by a tiny, unelected, obscenely wealthy minority of people. That is the
opposite of democracy.
Employers as a
class, often led by major shareholders and the CEOs they enrich, also use their
wealth to buy (they would prefer to say “donate” to) political parties,
candidates, and campaigns. The rich have always understood that universal or
even widespread suffrage risks a nonwealthy majority voting to undo society’s
wealth inequality. So, the rich seek control of existing forms of democracy to
make sure they do not become a real democracy in the sense of enabling the
employee majority to outvote the employer minority.
The enormous
surpluses appropriated by “big business” employers—usually corporations—allow
them to reward their upper-level executives lavishly. These executives,
technically also “employees,” use corporate wealth and power to influence
politics. Their goals are to reproduce the capitalist system and thus the
favors and rewards it gives them. Capitalists and their top employees make the
political system depend on their money more than it depends on the people’s
votes.
How does
capitalism make the major political parties and candidates dependent on
donations from employers and the rich? Politicians need vast sums of money to
win by dominating the media as part of costly campaigns. They find willing
donors by supporting policies that benefit capitalism as a whole, or else
particular industries, regions, and enterprises. Sometimes, the donors find the
politicians. Employers hire lobbyists—people who work full time, all year
round, to influence the candidates that get elected. Employers fund “think
tanks” to produce and spread reports on every current social issue. The purpose
of those reports is to build general support for what the funders want. In
these and other ways, employers and those they enrich shape the political system
to work for them.
Most employees
have no comparable wealth or power. To exert real political power requires
massive organization to activate, combine, and mobilize employees so their
numbers can add up to real strength. That happens rarely and with great
difficulty. Moreover, in the U.S., the political system has been shaped over
the decades to leave only two major parties. Both of them loudly and
proudlyendorse and support capitalism. They collaborate to make it very
difficult for any third party to gain a foothold, and for any anti-capitalist
political party to emerge. The U.S. endlessly repeats its commitment to maximum
freedom of choice for its citizens, but it excludes political parties from that
commitment.
Democracy is
about “one person, one vote”—the notion that we all have an equal say in the
decisions that affect us. That is not what we have now. Going into a voting
booth once or twice a year and picking a candidate is a very different level of
influence than that of the Rockefeller family or George Soros. When they want
to influence people, they use their money. That’s not democracy.
In capitalism,
democracy is unacceptable because it threatens the unequally distributed wealth
of the minority with a majority vote. With or without formal institutions of
democracy (such as elections with universal suffrage), capitalism undermines
genuine democracy because employers control production, surplus value, and that
surplus value’s distributions. For capitalism’s leaders, democracy is what they
say, not what they do.
This adapted
excerpt from Richard D. Wolff’s book Understanding Capitalism (Democracy at
Work, 2024) was produced by Economy for All, a project of the Independent Media
Institute.
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