02 January 2010

Article: Fighting Capitalism and Democracy

"What has been, that will be; what has been done, that will be done. Nothing is new under the sun." – Qoheleth 1:9

The concluding paper in my volume "Anti-Democratic Thought", entitled "Fighting Capitalism and Democracy", was written in 2004, long before the global financial crisis set in. Surveying various bodies of theory and research (historical and empirical evidence, liberal and modernization theory, among them), the paper argues that democracy and capitalism are inextricably linked – and goes on to ask what this means for a politics of resistance.

The paper finds that capitalism can exist (for a lengthy period of time) without needing or leading to democracy. (Ultimately, though, every form of capitalism will lead to some form of democracy.) Democracy, on the other hand, cannot exist without capitalism. (The few cases in which democracy survived in not-yet-capitalist circumstances only confirm that rule – the reasons for the survival of democracy lie in circumstances outside the democracy-capitalism nexus.)

I didn't need the global financial crisis to realize this. However, the financial crisis most certainly has confirmed all my findings in that much earlier paper. Democratic governments everywhere have found it necessary to stabilize the capitalist economic system(s) without which these democracies would fail immediately. (Due, for example, to popular uprisings caused by economic distress of the population.)

My paper comes to some conclusions. If the basic assumptions of the paper have been reinforced by the financial crisis, so must have been the conclusions drawn from the linkage between capitalism and democracy: whoever wants to fight capitalism (like Islamist terrorists or the anti- and alter-globalization protesters we observed most recently at the Nato and G20 summits) must be prepared to fight democracy as well.

Here a summary of the argument:

Since the 1950s, political scientists, historians, sociologists, and economists have been attempting to prove scientifically common sense observations about an inherent linkage between capitalism and democracy ("Any causal glance at the world will show that poor countries tend to have authoritarian regimes, and wealthy countries democratic ones": Przeworski et al.: "Democracy and Development").

They built upon arguments presented in the literature that emerged in the wake of the Second World War and the independence of former colonies on the economic development of so-called underdeveloped or developing countries. Soon this body of literature led to the academic discipline of development studies and a scientific theory of development, usually called "modernization theory", which was of major influence in the 1950s and 60s and again, along with neo-liberalism, in the 1980s and 90s.

While many of the early authors of modernization theory were only concerned with the economic side of capitalist development, others such as Seymour Martin Lipset (1959 in his article "Some Social Requisites of Democracy") assumed that economic development – capitalism –, would lead to political development – democracy.

One year earlier than Lipset, in an often cited non-empirical study ("The Passing of Traditional Society"), Daniel Lerner had already proposed a causal sequence of urbanization leading to literacy and media growth, which in turn would lead to the development of institutions of participatory politics. Karl de Schweinitz ("Industrialization and Democracy") went on to claim that the process of causation runs from industrialization to political democracy and he linked this to people being "disciplined to the requirements of the industrial order" and therefore more willing to resolve conflicts, arising for example from the distribution of national income, peacefully.

De Schweinitz affirmed that this form of rationality would only develop "in a high-income economy", but not in a mere "subsistence economy". Samuel P. Huntington, an influential author of the second wave of modernization theory, argued that democratization will usually happen "at the middle levels of economic development. In poor countries democratization is unlikely; in rich countries it has already occurred" ("The Third Wave").

Processes associated with industrialization make it, in Huntington's eyes, more difficult for authoritarian regimes to control the population, not least because they promote the growth of an urban middle class.

With their writings authors of modernization theory prepared the theoretical foundations for numerous comparative and cross-cultural studies trying to establish correlations and the causal relationship between capitalism and democracy. The task is made more difficult by the fact that there is no agreement as to what constitutes either "capitalism" or "democracy" and the proper measures of both remain contested.

This as well as the application of a wide array of research designs did however not change the fundamental finding of such studies that democracy, at the national level, stands little chance of survival if not coupled to a capitalist economic system.

In my paper, I suggest that the few deviant cases in which a democratic constitution that predated capitalism did not fail were sustained by variables external to both capitalism and democracy.

While there is disagreement as to whether democratization is a linear or near-linear positive function of economic growth or a threshold phenomenon associated with a country (or its citizens) reaching a particular level of income, either accounts for the fact that capitalism can, and does, exist in countries without democracy.

Still others have argued that only in countries above a certain economic threshold democracy will not be overthrown once it has been introduced. Steady economic growth appears to mitigate the danger of failure of democracy even in circumstances in which such a threshold has not yet been reached. Democracy, in its turn, has been shown to stimulate further economic growth.

Before Francis Fukuyama proclaimed "The End of History" and that liberal democracy and capitalism might constitute the "end point of mankind's ideological evolution", only once in twenty years a major liberal author had bothered to write about the linkage of democracy to capitalism at all, and then, as Milton Friedman put it, "to keep options open until circumstances make change necessary [...], to keep them alive and available until the politically impossible becomes politically inevitable" ("Capitalism and Freedom").

Jeremy Bentham and James Mill had been the first though to become convinced, in the early nineteenth century, that far from destroying "property" the poor would let themselves be guided by the property-owning classes. Vladimir Lenin thus called democracy "the best possible political shell for capitalism". Capitalism, he concluded, could not be overcome by democratic means ("The State and Revolution").

Oswald Spengler put it succinctly: "In the form of democracy, money has won". It becomes effective, he said (often repeated since), by manufacturing public opinion and enslaving free will through the media and campaigning and the systemic corruption of all the people ("The Decline of the West").

Henry C. Simons, the first of many professors to turn the University of Chicago into a centre of so-called neo-liberal thought, took the "preservation of democratic institutions" to be one of the "objectives of economic policy" in the US in the face of communism and fascism ("A Positive Program for Laissez Faire").

Decades of economic growth under democracy as well as the welfare state, much despised by the Chicago school, further consolidated the capitalist economic system in the West by bestowing property and entitlements upon almost every citizen and thus muting fundamental opposition.

The notion that democracy is intrinsically linked to money, and democratic power is linked to material wealth, is as old as democracy itself. Athenian democracy excluded men who did not own property and Caesar, who brought the Roman Republic to its end, was the richest man of his time.

Wherever a form of democracy arose, be it the Italian city republics or the Swiss ur-cantons, preceding economic development and the introduction of "capitalist" modes of production can be detected. The American Revolution only took place, it appears, once there was a "capitalist" cause to fight for – the spoils of the New World. All Americans were united in their ardent desire for what Alexis de Tocqueville called "material well-being" ("Democracy in America").

Much of what has been written against an inherent linkage between capitalism and democracy appears, after the fall of communism, outdated. Socialists may still argue that the two are separable and that one can fight capitalism without harming democracy. However, while capitalist democracy continues, all attempts at socialist democracy collapsed at an early stage.

One cannot fight capitalism, it seems, and replace it with some non-liberal democracy because every form of democracy, if sustained long enough, will in turn give rise to some form of capitalism.

Factors associated with a capitalist economic system are among the necessary preconditions for a stable democracy.

This is the deeper meaning of the inextricable linkage of democracy to capitalism: whoever wants to fight capitalism must be prepared to fight democracy as well.

Being anti-capitalist one must be anti-democratic too.

Islamist terrorists have understood this.

The one who really means to fight the system must stand entirely outside of it.

> Read the full paper here:

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