The title of this post today is actually a trick question. That’s because democracy is a political system and capitalism is an economic system. They’re apples and oranges. Capitalism can operate in almost any political system—monarchy, oligarchy, fascism, communism, or democracy. Democracy can likewise operate in almost any economic system—planned systems, market systems, public systems, or private systems, though some economic frameworks are more conducive to government of the people, by the people, and for the people than others. When capitalism, a system that gives economic power to those who own capital, or wealth, rises above democracy, a system that gives political power equally to all the people, the two systems begin to clash and we’ve got trouble.
Arguably, the main reason our government is broken, which many people now believe, is because we are not treating it like a democracy, the way our political system was designed to operate. Instead, we are treating it and expecting it to behave like an economic scheme, where the acquisition of money is the main objective of its operation. That actually signals a break to our system, because the purpose of our particular government is to serve the people, not the corporate structure and not wealth per se. As a result, the people’s wants, needs, and desires fall by the wayside in favor of political decisions that favor capitalism over democracy.
And that, in a nutshell, is why the rich are getting richer, the poor are getting poorer, and the middle class is diminishing in size and clout.
To better understand how we got ourselves in this mess in the first place, we must look at the history of the economic development of our country. At the birth of our nation, we were primarily an agrarian society, with slavery driving production in the large plantations of the south, and smaller, independently owned farms driving it in the north. As a decidedly undemocratic institution, slavery would have to end, one way or another. By the Civil War, 87 years later (Lincoln’s “four score and seven years ago”), the north was undergoing an Industrial Revolution that would become the dominant driving force for more than a hundred years. The hoarded wealth and political power of the industrialists in the aftermath of the War Between the States, in what came to be known as the Robber Baron era, would prove to be another undemocratic trend and came to an end with the help of both Roosevelt presidencies. Theodore, a Republican, closed the book on monopolies, and Franklin, a Democrat, regulated the banking industry, worked with labor unions to empower workers through collective bargaining, and put millions to work building the infrastructure of a modern country. Then, in the late twentieth century, as manufacturing started being moved abroad to developing countries, where labor was cheaper and environmental regulations next to nil, the US economy converted once again, driven more now by consumer spending, real estate and financial speculation, with both agriculture and manufacturing diminishing in their portion of the Gross Domestic Product or GDP.
The one common theme in all these economic eras is how control of the wealth has been held by the owners of the means of production (whether land, factories, or banks) and not those who produced the profits (through work). The idea that this situation is unfair is nothing new and has been resisted throughout our history as an expanding democracy. Abraham Lincoln addressed it himself in his first message to Congress in 1861 at the dawning of industry’s prominence: “Labor is prior to and independent of capital,” he said. “Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
The idea that labor should be superior to capital is a very different view from the one currently being expressed by the term “job creators” when referring to the owner class. The view that labor, workers, ordinary Americans, should be considered prior to and independent of capital, in fact, superior to capital, is not just rarely expressed today, it’s shouted down as radical leftist, anti-capitalist ideology.
Let’s take a moment here to remember and enjoy the fact that Lincoln was a Republican, the first to be president and still considered the best of them.
One thing—besides slavery—that was different during Lincoln’s time is that more regular people were self-employed. Lincoln noted at that time, “A large majority … neither work for others nor have others working for them. In most of the Southern States a majority … are neither slaves nor masters, while in the Northern States a large majority are neither hirers nor hired. Men, with their families—wives, sons, and daughters—work for themselves on their farms, in their houses, and their shops, taking the whole product to themselves and asking no favors of [capital or laborers]” That fact alone helped to keep them independent of capital. Today, we might call it living “off the grid”; not so easy to do anymore. But Lincoln, as if predicting the future’s private business owner and the upper-middle class, which does not identify with labor, though they work, added, “It is not forgotten that a considerable number of persons mingle their own labor with capital; that is, they labor with their own hands and also buy or hire others to labor for them … No principle stated is disturbed by the existence of this mixed class.” In other words, the fact that work creates profits is the higher truth, whether profits create jobs or not. People, he might have said, over profits.
What about today? According to the US Bureau of Labor Statistics, the unincorporated self-employment rate was just 6.4 percent in 2015. That’s a far cry from Lincoln’s majority. What that means is our options are much more limited today; to make a living, most of us need a job. But somehow, we’ve got Lincoln’s view of which is which upside down and backwards. And that’s how capitalism has overrun democracy, made the rich richer, the poor poorer, and the middle class shrink like a trapped animal.
As long as capital sets itself above labor, claiming wealth’s superiority to work, and as long as our politicians give more power to the rich than the majority of people, labeling the former “job creators” rather than understanding the latter as “profit creators,” we will find ourselves practicing capitalism rather than democracy. Capitalism takes its power from profits, while democracy gets its power from people. As long as the very idea of profit is separated from people, capitalism has edged out democracy as the ruling system. In the strange reality of Citizens United, where the Supreme Court identified corporations as people, the very discussion about We the People’s place in a capitalist democracy has been silenced. They might as well have renamed capital, calling it labor, to silence working people once and for all.
Never mind questioning whether capitalism is the best system for a democracy, which is for another day, if we simply understood what Lincoln understood, that “profits” are created by people for their own needs as well as for the operation of small businesses, corporations, and investments, then we would know how to put the wellbeing of people above the creation of profits. We would know that whatever system we have—if we could only vote on that!—we are all in this together, with life being the only thing that matters ultimately. Not the life of corporations, but actual, organic, carbon-based, metabolizing or photosynthesizing life. That’s how we restore democracy to the forefront of our governing system—and let the economy serve us rather than forcing us to serve it.
What would that look like anyway, an economy that served us? We would have laws and regulations that protect and promote our livelihoods, our health, the health of the planet, the development of skills and processes or practices that further sustainability for generations into the future, and that level the playing field so that past abuses do not empower future wealth or power. And that’s just for starters. Since democracy is a political system and capitalism an economic structure, let’s say that democracy can be a process by which we organize ourselves to perform capitalism fairly. If the purpose of capitalism is to make money, then the purpose of a capitalist democracy might be to assure the acquisition of money is achieved through mutually beneficial and fair labor practices, which must recognize that people are valuable independent of capital, whether hired or hirer, and that all Americans who are eligible for employment are given the opportunity to prove themselves worthy of work without prejudice.
I know we keep saying it: fairness and equality are synonymous with democracy. The history of resistance to economic and political inequality and unfairness in this country has demonstrated that. And yet, here we are again. What we know—what Lincoln knew—is that without them, democracy will not survive the twenty-first century. In order for any democracy to work, the human tendency to conquer with greed and fear must also be resisted whenever it occurs in others as well as when it occurs in ourselves. Because greed, the desire for power and money, can so easily be exploited by politics, we must first recognize it in order to resist it. It could be as simple as electing only those politicians with absolutely democratic principles. But we tend not to recognize the temptation to take more than we need as greed in ourselves, and so we don’t see it in others. Because the love of things and money so easily corrupts the spirit of fairness and equality—in the hiring of employees, in paying a fair and equitable wage, in public office, in sports, in relationships, in looking at history, in looking toward the future—we might consider that capitalism has not only taken over our government but our very souls. We must resist that capitalistic tendency for greed in ourselves and in our politicians and instead foster the democratic tendency for fairness if we are to keep the two in proper relationship, with democracy our governing principle and capitalism serving its prosperity.
John Lyke, PhD, is a clinical psychologist and political writer. Kathryn Robyn is an editor and writer of books on the human condition. Together they are the authors of Political Straight Talk: A Prescription for Healing Our Broken System of Government (Bloomington, Indiana: iUniverse, 2016). They can be reached through their website lykeablebooks4u.com, where their regular blog also appears.