“In a democracy, the people get the government they deserve.”
(Someone – arguably, Alexis de Tocqueville – said something very much like that a long time ago.)
If that’s true, citizens in a democracy also get the national economy they deserve. Because in many parts of the West, certainly in the U.S., the two are intertwined.
That makes for, “Democratic Capitalism” — where, literally, the people have voice in how their economy evolves.
(Dictionary: “de-mos, noun – – – the common people of an ancient Greek state
. the populace as a political unit, especially in a democracy.)
(“It’s name is public opinion. It is held in reverence. It settles everything. Some think of it is the voice of God “- …
“The public is the only critic whose opinion means anything at all.” – Mark Twain)
You may say, what kind of voice? It varies in degree and impact.
“Democratic” because in this system, many constituencies have degrees and varieties of “voice”. Among them: shareholders, employees, consumers, communities and the free-press media.
Most important of all, in a democratic republic — where citizens can exercise their voice by choosing their government representatives — voters have voice.
And what of “capitalism” — that is, the economic system that has lifted many millions of people around the world to higher standards of living and quality of life? This “mixed-economy” system that oscillates around achieving citizens’ wealth and a social safety net?
For sure, capitalism is not on its death-bed, despite many rumors of its demise (channel Mark Twain again). This weekend, The Washington Post presented the latest diagnosis:“The end of capitalism as we know it?”
Rather, in all of its imperfections capitalism is once again adapting to an epic stage of global socio-economic-political evolution.
Recall a few earlier stages of this evolution in the U.S.:
Circa 1900 – “Robber Barons”; “Muckrakers”; a resulting wave of anti-trust, food safety and other government regulations.
Nineteen Thirties – Depression; The New Deal; systemic new financial regulations, strengthened labor rights, public welfare programs.
Nineteen Seventies – Major new issue attacks on companies, capitalism; Ralph Nader (auto safety), Rachel Carson (environment); President Richard Nixon establishes the U.S. Environmental Protection Agency.
Today, even some leading capitalists have noted, with empathy, serious socio-economic issues within the system. A good example: This from Howard Marks, Co-Chairman of Oak Street, a leading investment management firm:
“… In the last 10-20 years, the rising economic tide had stopped filling all boats … [and] economic trends contributed to increases in economic inequality. These developments were largely behind the rise of populism.
“… business should do all it can to arrest the trend toward stagnant and unequal incomes … not just to be fair or generous , but to assure perpetuation of the systems that got us here.
“Capitalism is the most dependable route to prosperity. And it has to be responsible capitalism”. “Rising: Capitalists Voices in support of help for the Middle Class”
“Reforming Capitalism” — in whatever degree –is, of course, a complex and long-term matter. In a democracy, it’s ultimately a political issue, i.e. voters’ preferences manifested by their elected representatives. Space here precludes an in-depth analysis of related factors such as money in politics, the rural-urban division of power, voter suppression/voter registration drives and taxation in the U.S. system.
But one crucial element is clear: Americans must do better at voter turnout.
In 2016 the U.S. trailed most of its peers among highly developed, democratic states, in the Organization for Economic Cooperation and Development (OECD), placing 26th in turnout out of 32 states reporting. “U.S. trails most developed countries on voter turnout”
In the 2016 U.S. presidential election, about 56% of the voting age population cast ballots. In the 2018 midterm election, 49% of eligible voters participated in the election.
Historic global, national and local issues (remember Queens, New York vs. Amazon?) are now at stake.
Not the least of them: The need to re-address the future of capitalism.
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Adapted from “Capitalism Under Fire. Is Corporate Social Responsibility a New Business Model?” , Manhattan College Alumni Association Financial Services Advisory Council, Harvard Club, New York City, April 11, 2019