Democracy And Free Markets: Is That All?

Introduction by Richard Farson

Welcome to our new conference on market capitalism and its effect on the future of democracy. We are pleased to have recruited longtime friend of WBSI and ILF Fellow Douglass Carmichael to lead us in this most important exploration. Doug is a psychoanalyst, writer, consultant, and social critic, who has been studying political systems most of his life, and thinking about and writing about this particular issue for some time. This will be an opportunity for us to examine our own and challenge each other’s basic assumptions, those deeper and less visible ways of thinking that shape our political philosophies. Under Doug's capable leadership (he is an old hand in this medium) and in this critical process, perhaps we will invent variations on the theme of democracy that will inspire others, and lead us all to a better life. Doug plans some new and different ways of exploring these questions, so I know we are in for a very interesting time of it. So a warm welcome to you, Doug.

History & Origins by (Douglass Carmichael)

Main Topic: Democracy And Markets: Is That All?

The main hypothesis is, democracies tend towards tyrannies by becoming one-party states, and markets tend towards monopoly business dominance, and these two tend to work increasingly in unison, with the same enemies, as they are increasingly successful in monopolization.

I take Mussolini to be the best historical example of what we are up against, in the alliance of state and corporations, and am made cautious by Spengler’s speculation that late empires of necessity need of Caesars, because a sign of weakness encourages others to tear them apart from outside and inside. The US is a weak late empire.

In the last century the basic problem: how to integrate technology, capital, people, status—led to attempted solutions like socialism, and fascism. The solutions failed and the problem is still with us. "Free markets" and "representative democracy" are in many ways just another form of state-corporate administration and also might fail.

The Iraq intervention and the slow decline (not cyclic) of the American economy are symptoms of these we need to understand.

Given this picture, we need—to keep our optimism alive—alternatives.

I start with the following sense of things, neither complete nor in any particular order.

Democracy is way under-defined. We all talk about it with appreciation, but what is it? Until the middle of the 19th century it was a negative word, coming from Plato and meaning tyranny of the mob over the elites, the rich. It came to have a positive meaning through the idea of "representative democracy". The activity of elites since has been to use "democracy" in the representative sense, which means really control through press, public opinion, and status where the reps are chosen by the leadership and offered as choices to the people. Bush-Gore and the definition of Nader as not a legitimate candidate was a good example. The Bush offering of "democracy" for Iraq, so long as it is not majority Shiite or even "faith based", shows that "democracy" is an instrument of hegemony, not demos. The contradictions are intense, and those who speak warmly of democracy tend to leave out the messy questions about the needed infrastructure of governance that let’s people’s debate become operational structures over real issues.

What I call "the democracy project" appeals to those who want the full development of the humanity of each person, not just for a few. It is a rich and rewarding and difficult agenda. Here is why. In the beginning, say 10,000 years ago (origin myth alert) the chief of a band of humans was the strongest/smartest. As these small societies became larger, councils developed, and with them the distribution of power – the beginning of democratization. The great struggle from prehistoric times right up to the 18th and 19th centuries was the struggle between kings and parliaments for power. The next phase in the struggle was to extend the sovereignty, the capacity for self rule, from the parliaments out to a broader franchise. This democratization was always slowed enough to maintain a balance between the center and the new participants, except when it broke under stress as in the French Revolution (which led to Napoleon for reasons that may be repeating in the US now).

As participation was distributed outward to more people, the issue of how to maintain governance was always present and ‘solved’ by trying to adapt old institutions. The very name "politics" is an attempt to hold on to the face-to-face culture of governance in Athens, despite the loss of the fundamental of face-to-face to huge regional states. But full "democratization’ has been limited by the absence of theory which honored the ‘empowerment of everybody’ with the needs of governance.

It is amazing that we are still reliant on Locke and Hobbes. We are still in this dilemma and have not solved it, and as a result, the "democracy project" is held up, or even lost. The danger is that we will lose the freedom and human growth that we probably all have felt was part of the promise of "democracy", and end up with a democracy that is disguised fascism.

Markets are not free. Markets used to be village events of free exchange until richer farmers (speaking of the England, but it is typical) took them over for trade outside the villages.

"Free" is a very obscure word, originating in "not in bondage or control from outside’. It was a word used in mediaeval England to describe a quality felt within a family, not including its live-in servants. Such a concept is subtle and doesn’t reduce easily to "free" in the modern sense, yet its meaning still pervades our romance with the idea of free. Free is useless in a swamp or to Crusoe on his Island (but note Shakespeare’s Tempest). It is an anticipation of a good way of being with others. "Free" if reduced to private property or atomization in the market is not what the word hints at.

Globalization seems to mean concentration of economic and military power in a few places -- fewer all the time.

Capitalism means the ability of money to fructify, but for whom? Capitalism without government constraints seems to lead to monopoly. Yet without government charters, capital, with its need for risk management and contracts, could not work.

The role of private property extended to corporations, with state charters that are meaningless, is a quagmire of interesting and obscure ideas and feelings. The philosophy, mostly from Locke, that puts liberty as an extension of property, is also under-theorized. Use has always been ahead of concept in these areas.

Mussolini started with social concerns but quickly embraced Italian corporations in what became simply fascism: the embrace in mutual aims of the state and the business community. Is this what is happening in the US? A one party corporate-state enterprise without meaningful dissent?

Collapse of complex societies. Joseph Taintor wrote a book with this title. Basically the argument is that as societies grow more complex, they spend an increasing percentage of GDP on infrastructure and there comes a time when infrastructure costs use up all the productive margin of society which then (with a short time of unbearable borrowing) collapses. Our increased costs of security, prisons, wars, and technology all hint at this process. Add in health care and environmental remediation efforts, and we can see that we have a number of cost curves rising faster than GDP.

Thus we need an alternative image of the future if we are to expand, or even maintain, the openness and quality of lives we want. I believe that sustainability, entrepreneurial spirit (unlike Bush’s support for old style industry), a vigorous exploration of new technologies, local and regional initiatives, and much more education, provide the beginning of a realistic alternative. We would need much more fairness, getting most of the people out of jail, and much faster courts. Local cultures and economies, in the context of a global commons that is a guarantor of non military solutions would be what we work for. Truly let a thousand flowers bloom, jive with differences, and appreciate the civilization moves made by others, and be fulfilled by creating local projects.

Enough to get us started. Remember the basic idea – democracy and markets tend towards monopoly. True? And if so, what do we do?

Douglass: Thanks for opening this conference by offering us a wide range of issues and ideas to think about. Since I am neither an economist nor a political scientist, I am entitled to be simplistic about your primary question. We are here because centralized economies and non-democratic systems of governments failed miserably! They offered no solutions, or hope. The funny thing is that, there are still governments that believe they can make tyranny and centralized economies work. But, I am slipping into the subject of our previous discussion. There is no room for offering new ideas, regeneration, and self-organization to a higher level of development and complexity in such systems, if they are left to their own device.

Democracies and market economies have a great propensity for monopolization of power, and centralization of capital and means of production. But, they also have a great tendency for allowing small enterprises to grow, and differentiate into more complex organizations. It is true that Microsoft has monopolized the market for personal computers. But, we have to remember that it started as a very small company. This would not and could happen in dictatorships, and centralized economies. Also, for every Microsoft, we have hundreds of smaller software companies incorporating every year and becoming viable enterprises. Democracies and market economies allow for differentiation, and self-organization of start-ups into new and more complex entities.

1. In recent years I've pretty much given up use of the term "democracy" and replaced it with the concept of "government with the consent of the governed". Perhaps this is just a knee-jerk reflex from misuse of "democratic" in the names of autocratic societies. But I wonder, at times, if "consent" isn't the more important idea.

2. If one were to take literally the prescriptions of many economists, one might conclude that the objective of macro-economic management is job creation. When you stop to think about it, isn't that absurd? In the days of the "great depression" we called it "make work", but recognized it as a temporary expedient -- government doing what is better done by enterprise. But I have to wonder about the underlying goal for life. Is it really to do more work?

Douglass Carmichael) Ray, we are all amateurs at this, in the best sense - love of the chase after some wisdom. I meant it when I said this kind of learning has been painful for me.

The consent idea misses me. When did I ever consent? I chose not to pick up arms in revolt -- out of fear, being hopelessly out of range, and circumspection - but consent -- I can't even find the local county council. I have always liked the idea of mixed constitution: the one, the few and the many (Plato and Aristotle). That government is a balance of monarchy (president), aristocracy (house and senate) and democracy. Vitality and low-level abuse come from checks and balances. I sense we are losing the checks and balances through rationalization of the system. I am not sure how this works, but I feel it. It seems to me to be greased by technology and its unifying force and the press and its alignment with market and power.

On economics and jobs. The dual purpose of an economy is to meet needs and distribute income. We are losing. We have unmet needs and overworked poor. Most companies seem more interested in selling to other companies than to "citizens". In fact, unmet needs are, I think, one of the real hopes for a revitalized economy.

To quibble on words. Even speaking of the economy or the government seems to me the wrong choice. We are each part of many economies, and mine are not yours. We are each part of many governments. Goethe (that long ago) said that the value of travel was less when there were national newspapers, because there was no local news and everyone had the same stories. I noticed that with Iraq the best reporting -- my opinion -- came from reporters with the most personal experience and were not embedded (gad the jokes they must have suffered!), people like Robert Fisk of the Independent and the four or five Guardian reporters with daily on-the-ground reports, and Christopher in Back to Iraq.

In Venice last summer I felt that the selling of the church through its art was amazing, not because of the use, but because of what was being sold - a vital view of life that was rich and complex, touching on birth, marriage and death. The image in the modern market is much more narrow and thin. I am not fully in that tradition but admire its fulsomeness and wonder how we might do it better.

If they wanted more for themselves, they could do extra work, for us or for others, and get paid for it.

Tribal systems work something like this, I think. There are entitlements and responsibilities, and beyond that -- well, that's where the great capitalistic system comes into play.

We should be able to provide a minimal level of security and well-being for everyone, and require that everyone contribute to that. Most of us want more than that, and that's fine—let's get out and work for it. But when the system focuses on the creation of work, then I think it's absurd—fundamentally!

History & Origins

Quoting:

The typical male baboon career trajectory is to fight your way to the top while building some good coalitional skills. When you're relatively high-ranking and if you're going to stay up there, you switch from physical prowess to psychological intimidation and social skills. But eventually it catches up with you and you finally get into a key fight and get killed or crippled or are utterly defeated and you crash way down. However, every decade you'll get some guy who's fought his way up, and six months into his ascendancy suddenly decides, "Who needs this?" and voluntarily walks away from it. They seem to have some sort of epiphanal mid-life crisis and go on to spend the rest of their lives hanging out with infants and forming social attachments with females. Ten years ago the evolutionary community would have had a derisive response to this, saying that while this may be terrific, it's not a very successful adaptive strategy because this guy is walking away from the competitive world of maximizing his reproductive success. Now, however, genetic studies are beginning to show that these guys out-re produce the slash-and-burn competitive guys, because they last for years afterward without getting seriously injured and form this female affiliate. This is what happened to Benjamin, my bozo of a baboon, who during his brief ascendancy became a jerk. A terribly unlikely civil war had broken out in the troop and it was in the aftermath of every plausible candidate having been done in that he actually managed to stumble into the alpha position for about and was as incompetent as he could be.

From

http://www.edge.org/3rd_culture/sapolsky03/sapolsky_print.html

'By having separated the arts of the clothier and the tanner, we are the better supplied with shoes and with cloth.'4 Nothing very contentious here, and Mr. Smith was due very soon to bestow great notoriety on this idea. But Ferguson immediately proceeds to the heart of the matter, the point at which the division of labor really acquires crucial implications for society. The next sentences read: 'But to separate the arts which form the citizen and the statesmen, the arts of policy and war, is an attempt to dismember the human character, and to destroy those very arts which we mean to improve. By this separation, we in effect deprive a free people of what is necessary for their safety; or we prepare a defense against invasion from abroad, which gives a prospect of usurpation, and threatens the establishment of military government at home.'

I'd cite two books:

The Rise and Decline of the State by MarticVan Creveld, deep and scholarly

and Empire by Hartd and Nervi, flamboyant, illogical, and interesting.

Quoting from Empire:

I don't read into these stories a case for your belief that all the democracies "tend" toward fascist perdition. A stronger case could be made for the tendency to bounce-back, and beyond Europe for the dynamic spread of democratic contagion.

Resting your case on Plato is even more dubious. The ancient Greeks hadn't seen anything like what we call democracy nowadays. Plato was just speculating about what he hadn't experienced, and rather cynically, too. You'll remember that he called democracy "a charming form of government, full of variety and disorder, dispensing a sort of equality to equals and unequals alike." Even a democracy thus described with a curl of the lip sounds preferable to the authoritarian regimes I've seen, and helped here and there to destroy, in my lifetime.

And of course Plato and Aristotle couldn't even imagine the information revolution, the spread of knowledge, in our time. They couldn't even imagine women sitting down, let alone speaking up, in their seminars. The ancient Greeks, and especially Aristotle, are wonderful mentors even in the 21st century for HOW to think; but they are not so useful as guides about WHAT to think. We've got to do that for ourselves.

Part of the problem is, we use the word "democracy" to describe what we have now. It us a very mixed form of government, not at all democratic in the sense of individuals govern and decide, but a complex balance of types. (Plato would approve, and would I, and look for improvements), and we lose it, and certainly can't improve it [it is in decline in the US] if we don't name it accurately.

Harlan, how can we learn to think if we pass off the past as unworthy? Being smart about how the present is different requires that we understand how the past was - and to my mind, with increasing reading, the similarities are more powerful, not less. The fact that the constitution is based on old testament covenant culture, that parliaments spring from the college of cardinals, that the founding fathers knew that we needed to be an empire in order to keep from an implosion and corruption within. For an extraordinary book, see Pock, The Machiavellian Moment; Florentine Political Thought and the Atlantic Republican Tradition.

Let’s look at the table of contents:

The Republic and its Fortune Florentine Political Thought from 1494 to 1530

From Bruni to Savonarola Fortune, Venice and Apocalypse

The Medicean Restoration A) Guicciardini and the Lesser Ottimati, 1512-1516

The Medicean Restoration B) Machiavelli’s Il Principe

Rome and Venice A) Machiavelli’s Disc or si and Arte della Guerra

Rome and Venice B) Guicciardini’s Dialogo and the Problem of Optimate Prudence

Giannotti and Contarini Venice as Concept and as Myth

The Problem of English Machiavellianism Modes of Civic Consciousness before the Civil War 333

The Anglicization of the Republic A) Mixed Constitution, Saint and Citizen

The Anglicization of the Republic B) Court, Country and Standing Army

Neo-Machiavellian Political Economy The Augustan Debate over Land, Trade and Credit

The Eighteenth-Century Debate Virtue, Passion and Commerce

The Americanization of Virtue Corruption, Constitution and Frontier

And near the last paragraph:

"In the beginning," Locke had written—inadvertently earning his place as a prophet of the new apocalypse—"all the world was America"; and if in the end all the world should be America again, the mission of a chosen people would have been fulfilled. Virtue and commerce, liberty and culture, republic and history would have rendered their partnership perpetual by the only possible means—that of engaging all mankind perpetually in it; and in so doing would have attained to that blend of millennium and Utopia which was the come of the early modern secularization of biblical prophecy.

And the last:

To a Christian it would appear that the primacy of politics was possible only on the blasphemous supposition that some civitas saecularis could be the civitas Dei. To a Greek it would appear, more simply still, that every human virtue had its excess, and that civic or political virtue was no exception. There is a freedom to decline moral absolutes; even those of the polis and History, even that of freedom when proposed as an absolute.

We ignore these histories against the model of the founding fathers who studied the world’s republics in great detail, and knew this literature: Machiavelli, Montesquieu, and the great codifiers of law.

In Western Europe, for the several centuries that preceded the founding of the USA, opportunity, liberty, justice and wealth were reserved for a very small group of people. At the top of that heap was the crown, at whose pleasure the nobility served. From the noble families came the traders, the lawyers, the church leaders, the doctors, etc. Law was by fiat and decree at the point of a sword bought with gold. If you were not born into that group you didn't have access to opportunity, liberty, justice or wealth.

The founding of America was an attempt to change that in a profound and lasting way. But there is absolutely nothing inherent in democracy (regardless of adjectives) or even in our current law to make it impossible for such a condition to recur.

Why would anyone assume that the ambitious and powerful would, as an act of kindness or social responsibility, hesitate to manipulate the system (which can be manipulated)? It is clearly to their advantage to do so, and if there is one single lesson that is indelibly written on history it is the fact that they are always ready, willing and able to do so. The biggest advantage to any form of democracy is that the citizens have, under law, the right to effect change - until they lose that right under law.

To be smart about the Western origins of our constitutional democracy is important. It was always intended to be governance through representatives (not "democracy in the sense of individuals govern and decide"). The corruption of our representative systems is indeed a major fly in our democratic ointment just now, as Kip has just illustrated. And some of the origins of our nonsystem (such as the notion of parliaments as a "college of cardinals" or the influence of Machiavelli in our political education) may even be part of our problem.

As we think now about an American future in which "everybody’s a minority," with growing immigration from other parts of the world, we're going to have to think harder about our non-European pasts, too, and amalgamate them with what we have learned from the ancient Greeks and the Renaissance Italians. Maybe a nobody-in-charge system can't be successfully governed by two-sided voting on many-sided issues. Maybe the arts and skills of consensus (which we can learn much about from our non-European pasts) will need to be much more central to our governance.

So I don't mean to "pass off the past as unworthy" merely to suggest that some pasts are not unworthy just because they're not where "we" came from.

Hasn't a general lack of access to opportunity, liberty, justice, etc. for the common person, been a hallmark of nearly every country and culture for most of the world's recorded history?

I find it difficult to sustain such optimism as your own, because I think that, in the end, the ethos of a society ultimately devolves to human nature. Unless the powerful within a society sincerely embrace and commit to virtue, compassion and principle then things will come to a bad end for all.

Someone once said "Success is ever the foeman to virtue".

What one sees depends, of course, upon where one looks, but it's hard to look anywhere these days without seeing that "success" has been elevated to the lofty height of an icon.

For example, the property and casualty insurance industry supports increases in automobile safety equipment and standards. The auto industry opposes legislation that requires them to increase the amount of safety equipment and comply with tougher standards. The American Medical Association and Insurance Industry want tort reform; the trial lawyers oppose it. The environmental lobbyists in California are a major reason why there have been so few power plants built in the state. Government Agencies in Nevada out spend most all other constituents on lobbyist, often trying to prevent what they consider to be the encroachment of private enterprise on to their turf. We are all aware of the influence of the NRA, which I might have to start supporting if Dick is right and we are going to end up in bloody conflict. Wal-Mart, as mentioned before has voter registration booths in their stores, in an attempt to empower that group, which supposedly would not be in the best interest of consolidating power for the privileged few.

Who are these privileged few? They don’t appear to speak with one voice; they only appear to be privileged because they have a voice. If they are not all moving in the same direction, if they have in fact competing agendas, how does this impact the model that seems to imply the inevitability of fascism?

We only have a history of democracy where as the examples given are of societies were democracy was a fairly new experiment and there was a long tradition of monarchy, feudalism, aristocracy, etc., a tradition of a strong man if you will.

Our national character seems to have a hefty dose of cynicism when it comes to government, the wealthy, and corporate America (part of the gun lobbyists rationale for keeping us all armed to the teeth, just ask the Michigan Militia). We admire the individual and the underdog. We continue to receive immigrants daily who are fleeing various forms of tyranny, even if it is just the tyranny of lack of opportunity. Let’s not forget the influential Jewish Lobby in this country. The number one money maker on the internet is pornography. The gun lobby alone has proven pretty durable and I would think an armed citizenry is somewhat in conflict with a fascist regime.

I have a hard time reconciling these characteristics and constituents with acceptance of a fascist regime.

There is a subtle line between "representative democracy" and "managed representative democracy."

The grassroots process of picking representatives seems hopelessly broken. I have recently been poking around both in republican and democratic planning process for 2004 and a public relations strategists are clearly in control and have very little interest in the integrity of the process.

So maybe we can agree that we do have managed representative democracy as the modern form of the Republic. I think we have used the form primarily driven by the desire to make ourselves wealthy. But we need to be careful about who we mean by "ourselves."

Harlan, I am fascinated by your suggestion about other cultures and traditions. I have followed fairly closely the discussion about the pre-Columbus native traditions but the idea that the Iroquois nation had much of an impact on the constitution is quite weak. Let the American is a pre-reformation culture. The presidency of Fox in Mexico hints at a growing political maturity along the lines of what we mean by "democracy." Have you some ideas about what the contributions might be from Asia?

The actual impact of the various waves of migration into the United States from different parts of the world do bring new issues to American politics.

Next Page

top