As all great 1^st grade history books state, the United States of America formally separated from England on July 4^th, 1776. To set out to describe why they had so chosen to rebel against the Crown, Thomas Jefferson famously wrote:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

We so often hear the first little bit, but, for the sake of brevity, intentionally omit the larger aspects and in so doing, ignore the intent. In this short paragraph, Jefferson explains that the position of those in the newly created United States of America is that the legitimacy of government comes from consent of its citizens rather than dynastic inheritance or military might. Basically, America considers democracy (representative democracy) the more justifiable governmental model. Included in this understanding is that a democratic government can more easily provide for, amongst other things, the establishment and consecration of rights (specifically life, liberty, and happiness) as well as protect everyone’s safety and happiness.

The Founding Fathers did not envision a radical democracy, in which all members would be able to vote on policies and laws, however. Instead, a republican system, which would consist of representatives elected by popular vote of the franchised, (which at that time was confined to rich, white, landowning men) was instituted to maintain the aristocracy that had already solidified itself in America. Following England’s lead, the movement from a mercantile and agrarian economy to industry and capitalism had already begun by the late 18^th century. It is an irony of history that the same year as the Declaration of Independence was penned, so to was Adam Smith’s Capitalist bible, Wealth of Nations. Smith’s main position is that the goal of capitalism is freedom from involvement by government (meaning monastic) interference. In so doing, each individual would be allowed to participate in the economy equally, similar to their equality in voting.

America was simply on the cutting edge of the movement of history. The tide was shifting; the world was rocked by Bourgeois revolutions from America to France. These revolutions sought to delegitimize the ruling monarchy and set forth the principles of economic and political freedom embodied in Capitalism and Democracy, respectfully. However, as the principle of democracy was to be held back by the institution of republican governance, so to was the economic freedom anticipated by Capitalism. Instead, wealth remained in the hands of the few, and although the conditions for the entire society rose (as is expected with industrialization) the divergence between the haves and have-nots continued, and still continues, to rise.

The Fabled Link Between Democracy and Capitalism

Political scientists and politicians alike have sought to show the connection between democracy and capitalism, suggesting basically as I have above. However, the principle of democracy espoused by Americans is rhetorical only, as what stands for “democracy” is really aristocratic, republicanism rather than democracy in the true sense of the word. Capitalism also suffers from a disconnect between the rhetorical and idealistic vision of what it should be and should do, and what it is and what it does. What comes from this is that, in reality, the two are diametrically opposed. Capitalism is inherently and inevitably an authoritarian system, wherein the activities of business and the macro-economy itself is controlled by one or a few wealthy elite (in short, the wealthy class) who make decisions based on their own whims and desires (under the guise of “market conditions”) without consent of the governed. Democracy, on the other hand, depends on and demands the participation and input of those involved from the bottom up.

Therefore, America suffers from dual personality syndrome in that it promotes democracy and capitalism together as ideals and not for what they really are. As a result, the interests of these two opposed principles finds each road-blocked by the inevitable competition between them. As the will of people attempts to be instituted by its representatives in government, the will and power of the capitalist is often opposed to those actions, thereby creating conflict and leading to the stagnation of economic activity. More of the wealth that could be used in research or production is funneled into the coffers of representatives, making the process even less democratic. This has been the history of the United States for the last 30 years at the least.

Compare this dilemma to The People’s Republic of China. Ruled by the authoritarian and Stalinist Chinese Communist Party (CPC) the political arena is devoid of democracy in any real sense. Having dismantled the long arm of the overwhelming command economy of Chairman Mao, China has adopted what it calls ‘Socialism with Chinese Characteristics” which simply means regulated capitalism. The CCP controls the commanding heights of the economy, but has allowed private companies both from China and around the world to engage in economic competition in domestic and world markets. A result of this has been the subjugation of Chinese workers.

Without the battle between the will of the people and the will of the capitalist elite, China is able to make major decisions quickly, like a business, as the decision is not debated. This ability to adapt and coordinate economic activity, combined with massive public investment in infrastructure leading to rapid industrialization (which is little more than an example of the former) has lead to massive growth in the Chinese Economy. Ironically, as many American politicians argue that our government should be run like a business, they need only take the lead from the Chinese Communist Party!

China does not have dual personalities; its politics and economy are authoritarian systems where important decisions are left to unelected “experts”. Although this may be repugnant to those of us who believe in democracy, one cannot discount its economic success. The reason is simple, when your political-economy is in lock step with itself; it greases the wheels of production and allows for increased economic growth. When, like in America, they constantly compete; the result is stagnation and endless debate.

The Decision

This simple truth leads us to the fact that we need to choose which personality we will adopt. We can use the Chinese Model and accept the diminished freedom as a trade-off for increased economic activity and growth, or we can chose to accept democracy in our politics and our economy. For many, this seems awkward at best and unworkable at worst. How can an economy be run like a democracy?

Sadly, no real road map can be given. Unlike top-down systems as in China, democratic activity will allow for the decisions of the people to orient the economy how they wish.

In short, a democratic society would involve the people in neighborhoods, cities, workplaces and the like making decisions based on the principle of one person, one vote. For many, this seems impossible or cumbersome and is complicated by fears of mob rule or the elitist concern about those who are not well-educated voting. However, democracy would not force anyone to vote, but would allow for everyone to do so equally thereby allowing all voices and ideas to be heard and voted on.

There are several businesses operating under capitalism that abide by the principles of workplace democracy, and, on average, are more productive than their authoritarian cousins. Therefore, any contestation that this idea is untenable is incorrect, and most likely simply reflects the interests of the ruling capitalist elite. It may often be said that wrestling the economy as a whole from the grips of the powerful few is contrary to freedom itself. However, as I have shown, the very basis by which the elite have gained and managed to control their mini-empires is by limiting freedom in the workplace. Therefore, democratizing the workplace is in fact promoting freedom not limiting it.

The choice is ours to make. The oppressed and disenfranchised masses of workers are really in control of the productive forces, but allow the activity of such to be dictated by “Herr owner”. Therefore, it is up to you, friends, to come together and make your workplace, your neighborhoods and your life, a democracy. In so doing, you will finally be truly free.