Can Democracy Survive Global Capitalism?

A Book Review

Prolific author Robert Kuttner sets out to blast “capitalism.” The problem is that if you define terms in particular ways, you can prove just about anything you want to.

Kuttner does this masterfully, most importantly by mischaracterizing the very idea of capitalism. “Some have argued that capitalism promotes democracy, because of common norms of transparency, rule of law, and free competition—for markets, for ideas, for votes.” Well, yes, that’s exactly what we think of. Thank you!

Except Kuttner is only using that definition to explain that’s not what he means.

When he writes “capitalism,” he means “corporatism,” the process by which big companies coopt the power of government. Then he damns the capitalism he’s defined.

“Western capitalists have enriched and propped up third-world despots who crush local democracy,” he notes. “Hitler had a nice understanding with German corporations and bankers,” Kuttner writes, while “Communist China works hand in glove with its capitalist business partners to destroy free trade unions and to preserve the political monopoly of the Party.”

So, Nazi Germany and Communist China are united because both were/are “capitalist”? Well, in that case, I guess I oppose capitalism, too, whatever it is.

In the real world, dictators hate capitalism.

It tends to empower regular people at the expense of the government. If a country has a growing economy, driven by capitalism, it is far more likely to move toward democracy. Meanwhile, non-democratic governments are more likely to be autocratic than democratic. There may be examples to the contrary. But if China and Hitler are your examples of capitalism, then you oppose a capitalism that doesn’t really exist.

To bring the argument into the current moment, Kuttner notes that while some corporations are “standing up for immigrants and saluting the happy rainbow of identity politics,” they are also “lining up to back Trump’s program of gutting taxes and regulation.” Later he notes that all companies “have been happy with the dismantling of regulation.” And that may be true. But how is “regulation” an example of “democracy”?

At least in the U.S., regulators tend to be bureaucrats, hired by other bureaucrats to issue rulings the rest of us must obey. An important story of the 21st Century is that Congress (democratically elected) is giving its power away to bureaucratic regulators. That’s what happened in Dodd-Frank and under Obamacare. They aren’t laws in the democratic sense. They are frameworks that lawmakers use to set guidelines. The bureaucrats at HHS, Treasury and other departments fill in the important details. This sort of lawmaking is many things; it is not democratic.

Kuttner also expresses a very narrow view of where the country may go. “Anger against market excess can go right, toward fascism, or can energize a progressive left that anchors a decent economy,” he writes. Oh. Those are the sole choices? “Good” progressivism, or “bad” fascism. It would seem the real world presents a much greater continuum.

Also, let’s push back on the idea that conservatism is “fascist.” This is a common trope used by lazy people who assume “fascism” must be the opposite of “communism.” And since “communism” is on the left, “fascism” must be on the right.

More often, communism and fascism sit right next to each other. On a clock, they’d be 11:59 and 12:01, not 9:00 and 3:00. Communists and fascists both offer government control of the means of production. The fact that they’re so close is why they’re such bitter enemies. Capitalism, by giving regular people control, is a threat to both communism and fascism.

What Kuttner gets right is the collapse of the Democratic left. Democrats have plenty of money, because influential individuals including Eric Schmidt and Tom Steyer are willing to bankroll the party.

But the rich donors have nothing in common with the common man, and no common touch. “Any party that wants to vocally champion the rights of transgender people to choose their own bathrooms had better also redouble its efforts on behalf of wage-earning people generally,” Kuttner writes, “or it will be entrusted by the voters to do neither.” Trump’s victory, predicted.

Kuttner notes a big problem: “Just twenty counties, with only 2 percent of the U.S. population, accounted for half of all the new business growth in the economy” after 2010, he writes. But his proposals for spreading the wealth are less than inspiring: He wants more welfare.

Even here, he cheats by taking Bill Clinton to task for signing welfare reform. “When unemployment subsequently rose sharply in the great recession, the new, block-granted welfare substitute helped only about 10 percent of needy people.” Its predecessor had helped more than half. Well, okay. But welfare reform put more people to work. Aren’t those people who had jobs between 1996 and 2008 better off than if they’d been on welfare all that time?

In the end, the answer to “Can Democracy Survive Global Capitalism?” is yes. But only if we understand what capitalism is, and then use it to increase freedom and grow the economy.

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