Why Capitalism Is in Constant Conflict With Democracy

Yves here. Even though the elements of this explanation of why the monied are hostile to democracy will be familiar to readers, it’s a tidy, high level recap. And you can always send this to your conservative friends to get them worked up.

However, I regard this piece as naive in its depiction of Democrats. As Thomas Frank has chronicled at length, the Democrats have become the party of the professional/managerial class, aka the top 10%, and they don’t like the poor any more than the Republicans do. Witness how Obama went to the opening of an Amazon factory, despite the fact that Amazon had recently been publicized for having up to 100 degree temperatures in its then un-airconditioned warehouses, and declared them to be good middle class jobs. The top 10% also typically needs servants in the form of nannies, and failure to make payroll tax payments when the help is full time is widespread. Readers can no doubt provide numerous details about how the party played dirty tricks during the primaries to hurt Sanders’ chances of success. And let us not forget the point Lambert regularly makes: if the Democrats really wanted to represent working people, voter registration would be an ongoing activity.

By Richard D. Wolff, professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor in the Graduate Program in International Affairs of the New School University, in New York. Wolff’s weekly show, “Economic Update,” is syndicated by more than 100 radio stations and goes to 55 million TV receivers via Free Speech TV. His two recent books with Democracy at Work are Understanding Marxism and Understanding Socialism, both available at democracyatwork.info. Produced by Economy for All, a project of the Independent Media Institute

The capitalist economic system has always had a big problem with politics in societies with universal suffrage. Anticipating that, most capitalists opposed and long resisted extending suffrage beyond the rich who possessed capital. Only mass pressures from below forced repeated extensions of voting rights until universal suffrage was achieved—at least legally. To this day, capitalists develop and apply all sorts of legal and illegal mechanisms to limit and constrain suffrage. Among those committed to conserving capitalism, fear of universal suffrage runs deep. Trump and his Republicans exemplify and act on that fear as the 2020 election looms.

The problem arises from capitalism’s basic nature. The capitalists who own and operate business enterprises—employers as a group—comprise a small social minority. In contrast, employees and their families are the social majority. The employer minority clearly dominates the micro-economy inside each enterprise. In capitalist corporations, the major shareholders and the board of directors they select make all the key decisions including distribution of the enterprise’s net revenues.

Their decisions allocate large portions of those net revenues to themselves as shareholders’ dividends and top managers’ executive pay packages. Their incomes and wealth thus accumulate faster than the social averages. In privately held capitalist enterprises their owners and top managers behave similarly and enjoy a similar set of privileges. Unequally distributed income and wealth in modern societies flow chiefly from the internal organization of capitalist enterprises. The owners and their top managers then use their disproportionate wealth to shape and control the macro-economy and the politics interwoven with it.

However, universal suffrage makes it possible for employees to undo capitalism’s underlying economic inequalities by political means when, for example, majorities win elections. Employees can elect politicians whose legislative, executive, and judicial decisions effectively reverse capitalism’s economic results. Tax, minimum wage, and government spending laws can redistribute income and wealth in many different ways. If redistribution is not how majorities choose to end unacceptable levels of inequality, they can take other steps. Majorities might, for example, vote to transition enterprises’ internal organizations from capitalist hierarchies to democratic cooperatives. Enterprises’ net revenues would then be distributed not by the minorities atop capitalist hierarchies but instead by democratic decisions of all employees, each with one vote. The multiple levels of inequality typical of capitalism would disappear.

Capitalism’s ongoing political problem has been how best to prevent employees from forming just such political majorities. During its recurring times of special difficulty (periodic crashes, wars, conflicts between monopolized and competitive industries, pandemics), capitalism’s political problem intensifies and broadens. It becomes how best to prevent employees’ political majorities from ending capitalism altogether and moving society to an alternative economic system.

To solve capitalism’s political problem, capitalists as a small social minority must craft alliances with other social groups. Those alliances must be strong enough to defuse, deter, or destroy any and all emerging employee majorities that might threaten capitalists’ interests or their systems’ survival. The smaller or weaker the capitalist minorities are, the more the key alliance they form and rely upon is with the military. In many parts of the world, capitalism is secured by a military dictatorship that targets and destroys emerging movements for anti-capitalist change among employees or among non-capitalist sectors. Even where capitalists are a relatively large, well-established minority, if their social dominance is threatened, say by a large anti-capitalist movement from below, alliance with a military dictatorship may be a last resort survival mechanism. When such alliances culminate in mergers of capitalists and the state apparatus, fascism has arrived.

During capitalism’s non-extreme moments, when not threatened by imminent social explosions, its basic political problem remains. Capitalists must block employee majorities from undoing the workings and results of the capitalist economic system and especially its characteristic distributions of income, wealth, power, and culture. To that end capitalists seek portions of the employee class to ally with, to disconnect from other, fellow employees. They usually work with and use political parties to form and sustain such alliances.

In the words of the great Marxist theorist Antonio Gramsci, the capitalists use their allied political party to form a “political bloc” with portions of the employee class and possible others outside the capitalist economy. That bloc must be strong enough to thwart the anti-capitalist goals of movements among the employee class. Ideally, for capitalists, their bloc should rule the society—be the hegemonic power—by controlling mass media, winning elections, producing parliamentary majorities, and disseminating an ideology in schools and beyond that justifies capitalism. Capitalist hegemony would then keep anti-capitalist impulses disorganized or unable to build a social movement into a counter-hegemonic bloc strong enough to challenge capitalism’s hegemony.

Trump illustrates the current conditions for capitalist hegemony. First and foremost, his government lavishly funds and celebrates the military. Secondly, he delivered to corporations and the rich a huge 2017 tax cut despite their having enjoyed several prior decades of wealth redistribution upward to them. Thirdly, he keeps deregulating capitalist enterprises and markets. To sustain his government’s largesse to its capitalist patrons, he notoriously cultivates traditional alliances with portions of the employee class. The Republican Party that Trump inherited and took over had let those lapse. They had weakened and led to dangerous political losses. They had to be rebuilt and strengthened or else the Republican Party could no longer be the means for capitalists to craft and organizationally sustain a hegemonic bloc. The GOP would then likely fade away, leaving the Democratic Party for the capitalists to ally with and use for such a hegemonic bloc.

Capitalists have switched hegemonic allies and agents between the two major parties repeatedly in U.S. history. Just as the Republican Party let its alliances with sections of the employee class lapse, opening the space for Trump, so too did the Democratic Party with its traditional allies. That opened space for Bernie Sanders, Alexandria Ocasio-Cortez, and the progressives. To revive and rebuild the Republican Party as a hegemonic ally with U.S. capitalists, Trump had to give a good bit more to Christian fundamentalists, white supremacists, anti-immigration forces, chauvinists (and anti-foreigners), law-and-order enthusiasts, and gun lovers than the old GOP establishment did. That is why and how he defeated that establishment. For historical reasons, Clinton, Obama, and the old Democratic Party establishment survived yet again despite giving little to their employee class allies (workers, unions, African Americans, Latinx, women, students, academics, and the unemployed). They kept control of the party, blocked Sanders and the growing progressive challenge, and won the popular vote in 2016. They lost the election.

Capitalists prefer to use the Republicans as their hegemonic partner because the Republicans more reliably and regularly deliver what capitalists want than the Democrats do. But if and when the Republican bloc of alliances weakens or otherwise functions inadequately as a hegemonic partner, U.S. capitalists will shift to the Democrats. They will accept less favorable policies, at least for a while, if they gain a solid hegemonic partner in return. Were Trump’s alliances with portions of the employee class to weaken or dissolve, U.S. capitalists will go with the Biden-Clinton-Obama Democrats instead. If needed, they would also go with the progressives, as they did in the 1930s with Franklin Delano Roosevelt.

Trump repeatedly aims to strengthen his alliances with the more than a third of American employees who seem to approve of his regime, no matter the offense given to others. He counts on that being enough for most capitalists to stay with the Republicans. After all, most capitalists prefer Republicans; his regime strongly supported the military and corporate profiteering. Only Trump’s and the Republicans’ colossal failures to prepare for or contain both the pandemic and the capitalism-caused economic crash could shift voter sentiment to elect Democrats. So Trump and the Republicans concentrate on denying those failures and distracting public attention from them. The Democratic Party establishment aims to persuade capitalists that a Biden regime will better manage the pandemic and crash, deliver a larger mass base to support capitalism, and only marginally reform its inequalities.

For the progressives inside and outside the Democratic Party, a major choice looms. Many have felt it. On the one hand, progressives may access power as the most attractive hegemonic allies for capitalists. By sharpening rather than soft-pedaling social criticisms, progressives may give capitalist employers stronger hegemonic alliances with employees than the traditional Democratic establishment can or dares to offer. That is roughly what Trump did in displacing the traditional establishment of the Republican Party. On the other hand, progressives will be tempted by their own growth to break from the two-party alternation that keeps capitalism hegemonic. Instead, progressives could then open up U.S. politics so that the public would have greater free choice: an anti-capitalist and pro-socialist party competing against the two traditional pro-capitalist parties.

Capitalism’s political problem arose from its intrinsically undemocratic juxtaposition of an employer minority and an employee majority. The contradictions of that structure clashed with universal suffrage. Endless political maneuvers around hegemonic blocs with alternative sections of the employees allowed capitalism to survive. However, eventually those contradictions would exceed the capacity of hegemonic maneuvers to contain and control them. A pandemic combined with a major economic crash may provoke and enable progressives to make the break, change U.S. politics, and realize the long-overdue social changes.

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  1. Ignacio

    Within this simple but effective framing of the politics of capitalism, there might be some among the 1% that might realise that with another term of Trumpism the fragile equilibrium could break apart with the help of the epidemic. Conversely, among the progressives there might be some preferring this outcome as the only way to a truly progressive uprising while Biden would consolidate the status quo. This is not pretty.

    1. philnc

      Not sure exactly what Wolff is trying to say here. What’s the end game? Do the “progressives” continue to try pushing the Democrats, and any capitalist alliance, left? Or do they break free to form an anti-capitalist workers party? There’s nothing here to give the reader a clue as to what the wiser course would be.

      The socialist professors of my youth in the 70s showed little interest in electoralism, openly asserting it couldn’t resolve the contradictions in the system. That was at the height of the socio-economic shift that had brought vast numbers of Americans into the “middle class” through home ownership and higher wages. This process had been ongoing in both the private and, importantly, public sectors. The street battles now going on between protestors and police were in large part enabled by bringing the police into a propertied group of workers that self-identified as middle class — even though their power relationship to the managerial and capital owning classes didn’t justify that label.

      We’re beginning to hear more talk about mutual aid networks and worker strikes/boycotts, with serious efforts to get the former off the ground in many places. Under the circumstances, it’s in some ways disappointing that there’s so little discussion about the experience of the 1905 revolution, when workers and a middle class overturned the existing system. From Mike Duncan, not a socialist but a good popularizer of real history (Revolutions podcast, episode 10.37: The General Strike, that time everyone stayed home): https://www.revolutionspodcast.com/2020/03/1037-the-general-strike.html

  2. GramSci

    As Louis Brandeis might have said (how we miss you, Louie), you can have one person one vote or one dollar one vote. You can run the country like a democracy or like a business, but you can’t have both.

  3. orlbucfan

    Wasn’t it Brandeis who also made the observation that paying taxes was the cost of having a civilized society? That comment really resonated with me.

  4. Sound of the Suburbs

    My friend owns and runs a small company that he built up.
    In this small company, where he is on site and plays an active, leading role, he knows all his staff are important.
    That’s why he employed them in the first place.

    He wants a well oiled machine that runs well.
    There may be big cogs and small cogs, but this machine needs all those cogs turning together.
    He doesn’t want good people to leave, as he knows getting a good replacement is easier said than done. He will pay a good rate for good people to keep them.
    He tries to keep them happy and organises occasional social events for the staff so they feel valued.
    The last thing he wants is for his staff to think he is just using them, or that he is taking advantage of them.
    This is his money machine and he wants it to run in the best way it possibly can.

    Most people do work for small firms and these are pretty good on the whole, when you get to the big multi-nationals, it’s a different story.
    This probably why the capitalist system does get such widespread support, as it does work pretty well for them.

    Even my friend’s firm could have turned out differently.
    He had created a nice little earner and could have left it to other people to run, while he enjoyed most of the spoils.
    He would then be running it a distance, and those interpersonal relationships wouldn’t matter that much. He had created a cash cow for him to milk as he pleased.

    1. SlimjimSeattle

      One can only hope that his exit plan includes provisions to keep control of that company in local hands.

    2. Barbara

      Until I got my master’s degree in computer science, I worked for small family firms and my experience is what you describe. Not only did the employer work to keep his staff – because he knew he needed them – he also didn’t like firing people. He knew all of his employees families and he knew how a family would suffer if the employee lost his job. (Also, he didn’t have smooth-talking agents to do the firing for him.) So he worked with a difficult employee to bring the employee along so he wouldn’t have to fire him.

      Unfortunately, small firms, at the time, didn’t have the need for their own computer people; they used consultant groups who put computers and software together for them.

      So, I had to move on to working for corporations. What a difference. I had a real love/hate experience working for corps and glad when I was able to retire.

  5. Mike

    (sigh) – To me, the three pillars of capitalist political economy are: 1) corporations and banking, 2) the military, and 3) religious organizations (distinction made vs. religious belief in itself).

    All three are top-down command structures. All three are disciplinary systems based upon following orders (or moral commandments). All three have found their most comforting homes in capitalist systems. This includes both politically liberal and dictator-driven systems. Capitalism is at home among that range of authorities. Religious organizations may feel more at home within dictatorships that are right-wing since they get more support if the particular religion is supreme (90% or more of nation of one faith).

    Where is there any room for democracy in any of the above? I allow for some broadening of decision-making within the systems here, but that is not democracy as we understand it. Wolff comes across as an old-line Stalinist political economist who presents socialism when it is under discussion, but presents going along with Democrats when the “threat level” rises- read about the Third Period politics of the Comintern and you see it alive here. There is not enough of a “Left” that is sharp in its understanding of our total system to make a dent in the above. That is where doctrinaires like Wolff fail me – and you, too.

    1. Darthbobber

      Most prod denominations don’t really fit the top down model that well. Most churches are run by elected lay boards and when they need to replace a pastor they interview applicants and hire the one most congenial to their preferences.

      Then you have the ones that are effectively small businesses in which the congregation are effectively the preacher’s customers.

      1. Mike

        Yeah, Protestants and their 50,000 factions – guess I forgot about them as independent orgs. However, the major idea here is that they all demand you listen to the Bible and God as the ultimate final arbiter of moral decisions, including voting and social issues. That “problem” leaves democracy right out as a factor.
        And, as a reminder, I did say “I allow for some broadening of decision-making within the systems”- the choosing of officers does not change the authority structure, just the person(s) in charge with delegated powers. Many of those churches can also be excommunicated should they wander too far off the reservation.

        1. Anonymous

          Yeah, Protestants and their 50,000 factions …

          The assumption being that God needs a hierarchy to work through?

          I would think that hierarchies are more useful to Satan than God.

    2. RBHoughton

      Cannot agree with you there Mike. The basis to capitalist political economy is theft. It has been like that for ten millennia since the robbers descended on the sown at Jericho and required those diligent people to build stone stores to keep their grain.

  6. jefemt

    Sole proprietor might be only ‘pure form’ of business ownership that works in a Republic?

    Coops/ employee owned/ managed if one MUST scale up?

    Fun business story that was covered in detail by Inc. magazine, and later a book by one of the main actors—
    Springfield Remanufacturing- Springfield, MO
    The Great Game of Business– by Jack Stack

  7. David

    In spite of the title, this article is really just about the US, and so it doesn’t really set out the wider relationship between capitalism and democracy properly.

    Remember that wealth and power were originally based on ownership of land, and the rents that came from it. If you didn’t own land, or (much later) live off investments, you needed to work for somebody who did, to have a reasonable life. Capitalism – which Marx rightly identified as revolutionary – upset this power structure by enabling individuals to become wealthy without having to use the patronage networks. Soon, those who had succeeded, and those who served them (lawyers, journalists) began to demand a share of political power, and democracy was their chosen mechanism, because it undermined the original principle of power being inherited. The rest was political conflict, violence, revolutions and civil wars in many countries. But the kind of democracy the capitalists wanted was strictly limited, and essentially amounted to their own enfranchisement In many countries they eventually coexisted happily enough with the old aristocratic system, and the two frequently made common cause against the idea of expanding democracy to ordinary people.
    As the article correctly says, in most countries the rich and powerful have had to seek allies elsewhere in order that their parties should stay in power electorally, but the US case, which is discussed here, is very special, if not unique. In most countries, there are several right-wing parties, and their adherents are not necessarily drawn by narrow economic arguments alone, but by social and cultural factors as well. This produces enough of a community of interests that parties dominated by the rich and powerful get to stay in power much of the time.

    But the article confuses capitalism with the current economic system, and employers with capitalists. In fact, the current economic system everywhere is far from capitalist in the traditional sense of entrepreneurs seeking investment opportunities for capital. Most of the major economic forces today(Banks, finance, outfits like Google and Facebook) produce nothing and don’t really invest anything either: they are parasites that suck out a percentage of the economic activity that is obliged to pass through them, and defend their established position. They resemble the tax farmers and monopoly holders of the age of aristocratic rule. A genuinely capitalist society, of course, would be one where patterns of wealth and power were constantly changing as companies rose and fell. It’s this confusion that leads the author to invoke connections with the military. It’s safe to say that the military has historically disliked capitalism, because it identifies with continuity and established power, not with ever-changing nouveaux-riches. Where the military has played a role in politics, it has been to safeguard traditional power structures, often in tandem with the Church and the aristocracy – the foundation of regimes like Franco’s and Pétain’s, and those in Latin America. Its leaders do, of course, identify with elites rather than the people, and with employers rather than employees, but that’s because they support traditional power elites, not because they are ideologically committed capitalists.
    Finally, not all employers and wealthy, and not all wealthy people are employers, so the main distinction in the article breaks down straight away. A short walk from where I’m typing this, is a community full of “capitalists”, mostly employing between three and ten staff, running shops, restaurants and small services, and performing valuable roles in the community. Ironically, they are probably more “capitalist” than someone like Bezos, because they have personally borrowed money from the bank to invest in their businesses (some of which, by the way, nearly went under, unlike Amazon). The real distinction is not between employers and employees, therefore, but between the Parasite Class and those who serve them on the one hand, and ordinary people on the other. The former used to hold out some possibility of rewards to the latter in return for their votes: now they don’t bother. As. result, ordinary people are moving their political support elsewhere, or just not voting.

    1. Ignacio

      Yet if the view in the article is very much simplified and even if capitalism is not the best choice of a word to describe the struggle for power by the powerful, and even if the discussion is US-centered there is an idea embedded in the article that I appreciate as a truth applicable at least in most Western democracies: the powerful in these democracies will always and fiercely oppose any candidate or government with a progressive agenda no matter how timid it is. As an example Unions have been domesticated in most Western countries by ’employers’. Worse, employment has been widely substituted by subcontracting. An euphemism for no labor rights.

      The political formula in countries other than the US sometimes but not frequently allow for some progressives to reach influential positions. But these are not given the slightest chance to survive politically and will suffer a public scrutiny that their conservative peers never face unless when they are proven utterly corrupt which is not that frequent because they are given plenty of margin compared with progressives.

      Since a relatively progressive government was formed less than a year ago in Spain the attacks have been constant and the epidemic has been exploited politically in the most treacherous way. I think the political Covid-asdociated dirty wars have been taken in Spain to extremes that haven’t been seen elsewhere. Just because progressives.

      1. David

        You’re right of course, and these things have long been true, and need to be repeated often. I just thought the article addressed the issue in a way that was not particularly helpful. In the end, it’s not really a systemic problem , because it’s possible to imagine a notionally “capitalist” society (ie with the capitalist mode of production) which was a better place to live in. The Society of my youth, for example. The real issue is people, laws, politics, and the immense and unstable concentrations of power that the interaction of these things produces. I’m far from being a fan of capitalism, but it doesn’t have to be inimical to democracy if it’s carefully controlled. The real issue is concentrations of power.

        1. lcn

          Taken to its inevitable outcome, capitalist system concentrates power because it concentrates wealth. It’s almost impossible to regulate wealth because it finds a way to buy political power.

          In its early stages, capitalism was celebrated because it filled the void left by the feudal system. We are now in its latter stage where our corporate and financial masters have taken the roles and lifestyles of kings and barons of yore.

          It’s feudalism deja vu all over again.

        2. Fritzi

          Our very notion of private property originates in the bloodthirsty, hypermilitaristic gangsterstate of ancient Rome, that also had probably the first predecessors of the modern business corporation, with joint stock, limited liability, the works.

          The rise of early modern capitalism depended on the resurgence of roman law and It’s various legal fictions, and the violent suppression of the populace that was largely opposed to this because they knew how much Roman law favored the rich and powerful.

          The rise of coercive state power and capitalism went hand im hand, while during the middle ages there was comparatively little concentration of coercive power.

          Medieval, feudal states did not have a standing, professionalized military and did not undertake vast wars of conquest, capitalist states did.

          And before they ever had standing, “national” armies, they depended on private, for profit armies of mercenaries that again were run basically as business corporations.

          Well, at least outside the heavily militarized, imperialistic Italian City States that were largely responsible for introducing (proto) capitalism to the rest of Europe.

          These City States practiced essentially an earlier, smaller scale version of the later european, capitalist colonialism that eventually engulfed the entire planet.

          And the first western and central european mega capitalists that had learned the tricks of the trade from the Italians and taken IT to an entirely new level long predated almost all standing militaries and most modern state structures as well.

          The Fuggers predated absolutism (and helped finance it’s rise) and mercantilism and the existence of the modern state as a legal entity independent of the person of the monarch.

          It may well be that capitalists later supported the rise of democracy because democracies were easier and safer to subvert, manipulative, blackmail and corrupt than Monarchies, and indeed capitalists are largely responsible for the modern state as a legal fiction outside the person of the monarch coming into existence at all.

          But to deny that capitalism was joined at the hip to state power, largely both created and also was created by state power, and strove (successfully, and with a the tools of military coercion and aggression) for political dominance and monopoly, centuries before the bourgoise revolutions, is nonsense.

          There was never a capitalism innocent of this, never a pure and ideal capitalism and nobody ever really strove to bring it into existence either.

    2. Jeremy Grimm

      I agree that the people who start and operate small business ventures are far more “capitalist” than someone like Bezos. Between the Corona Pandemic and the ongoing squeeze of Cartels like Amazon controlling access to the market — small and medium businesses are being driven to bankruptcy. In my opinion the US CARES Act was designed to put money into the hands of the Cartels so they could destroy or absorb what will remain of small and medium businesses while they consolidate and merge bigger business.

      However, those small ventures that do somehow manage to survive will have a large cohort of the unemployed from which to select their employees. They will have tremendous leverage over their employees. In addition to giant Cartels we may see a fair number of small businesses run as small businesses were run in the 1930s. The owners may fit nicely to the stereotypes of a petite bourgeoisie class.

      So — post Corona — we could end up with an economy of a Petite Bourgeoisie class squeezed from above by the Parasite Class. I am not sure what might happen to the professional managerial class. Their position will be more precarious than ever. I also wonder what fate awaits the Haute Bourgeoisie. Anybody not a member of the above can just go die.

      Wolff builds his politics around a glowing memory of the Democratic Party. The Democratic Party he is imagining was long gone somewhere around the time of Truman. The vote hardly matter if both parties support the Parasite Class.

    3. VietnamVet

      This post proves that the truth is out there. Yes, there cannot be true capitalism when multi-national monopolist corporations own politicians and pay the revolving door technocrats. Likewise, there is no democracy in the sense of debate and choosing a candidate that reflects majority opinion. Yes, there are vestiges of constitutional law and order left in the West. But Donald Trump was only elected because of the ruling Elite’s incompetence and arrogance. The globalists, once he was elected, tried their damnedst to get him to resign but have failed to date. This ongoing conflict and the coronavirus pandemic have destroyed the Western Empire. Joe Biden is another Hubert Hoover or worse. Neither candidate can restore democracy, control the pandemic, end the economic depression, or keep the 50 States unified. If there are any 22nd century historians to write about the fall of the Free World, the victor of the bitter 2020 election will be described as the Last Elected American President.

  8. William Hunter Duncan

    I assume that is how the Capitalists are trying to cultivate BLM and Progressives generally, creating professional/managerial jobs for the college educated, while the bottom 30% of all races are left to swim with the sharks? And maybe too then we get a flood of “Latinx” immigrants to weaken wages and benefits further?

    Republicans with their miserly non stimulus apparently assume corporations, banks and gov actively want to crush most Americans like an occupied and oppressed people.

    Dems get that they can make peace with the Capitalists and maintain neoliberalism indefinitely.

  9. Will

    Democracy is mob rule. Democracy does not allow exceptionalism. Democracy devolves quickly into jealous marxism in one form or another with one name or another. Politicians appeal to the worst human desires. Those desires become worse as theology and philosophy are removed from society.

    Capitalism used to mean the freedom to own your own labor and land and the freedom to sell it as you please, without sharing it with useless nobles who took it to subsidize their lifestyles, vanity projects and useless foreign wars. Capitalism has been corrupted into crony capitalism, corporate welfare, and revenue for the bloated bureaucracy all sold to the people in a grand bargain of commercialized overconsumption.

    Until you have citizens united by nothing, with no greater purpose, focused on nothing but consuming more plastic tchotchkes and fast food even if their harder working more disciplined neighbors have to pay for them.

    A great society needs classical education, a vibrant religious community, limited and mostly local government, low taxes and no welfare state. A great society cannot exist in nations made up of hundreds of millions of citizens.

  10. Alex

    The strategy of playing a portion of employees against the rest of them can also be applied to the capitalist class.

    I’ve read Ober’s book about the Athenian democracy and his answer to the question ‘how Athens managed to maintain a democracy for 200 years without it being overthrown by the aristocracy’ was that the system was set in a way that the elite were always in the state of internal competition for public positions and honours, and so wasn’t able to come to the power as a group and destroy democratic institutions (I’m simplifying as there was a brief period of oligarchy following the Spartan conquest but other than that the point holds).

    1. hunkerdown

      They know that one already. They may not be smarter, but they run the game, and they have enough of a working OODA loop to deny us the resources we need to destroy their system.

      Americans are basically brainwashed into playing kiddie games for head pats from their masters, while lying to themselves and others that such is not the case.

  11. Anthony K Wikrent

    Marxism is so tiresome. Where has it succeeded? Most of the critiques leveled at capitalism by Wolff could also be made against China, Cuba, the former USSR and the states in the Soviet bloc, etc., etc. History shows that it really does not matter what form of economic organization a society adopts — there always emerges some form of authoritarian hierarchy. Marx is useful for providing a handful of metrics of unequal economic relations, but not very useful for explaining why this is a problem that also afflicts societies that are not capitalist. For that, you need the analysis of Thorstein Veblen, who grounded his work in anthropological and social analysis of “pre-historic” “primitive” societies. That grounding enabled Veblen to develop some real gems of analysis, such as modern business management being the manifestation of barbaric traits of force and fraud.

    That also makes Veblen much more entertaining to read than the typical marxist literature.

    1. Fireship

      “Where has it succeeded?”

      Marxism is an analysis of capitalism, not a blueprint for Utopia. What is tiresome is that this point has to be constantly made to people who cannot be bothered to acquaint themselves with very basic topics one is likely to encounter on a blog such as this. If you want more “entertaining” fare, I am sure the internet can provide. Here are some Marxist-Socialist jokes to get you started:


      1. skippy

        The examples given above are all state capitalism, so I don’t understand his Marx [tm] reference segueing into Veblen, not that I have issues with either when presented in the right context.

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