On global capitalism and the survival of democracy

In the new millennium, the proliferation of financial assets, with  unstable economic growth, has given way to widespread to precarious jobs, income gaps and weaker welfare programs. The same policies that have obliterated social services and kept labour cheap have supported the expansion of short-termism and new global business models in the context of deregulated capitalism.

Besides, the onset of the 21st century represents a new political age  overwhelmed by the violation of democratic ideals of political equality and social peace. Indeed,  democracy has been allowing for election to office but not to power (Madi, 2015). And, as a consequence, policy makers might give priority to their sponsors instead of the needs of citizens – decent work and income equality.

In truth, the current trends in  global capital accumulation and production have shaped a scenario where unemployment, job instability and fragile conditions of social protection increased (Stiglitz, 2011). First, labour-saving technologies have reduced the demand for many middle-class, blue-collar jobs. Second, globalization has created a global marketplace, confronting expensive unskilled workers with cheap unskilled workers overseas and favouring outsourcing practices. Third, social changes have also played a role in the labor market changes, such as the decline of unions. Four, political decisions are influenced by the top 1% who favor policies that increase income inequality.

All these trends do reveal issues of current power, politics and economics in a social context where democratic institutions are being threatened.

Taking into account the overall  economic, social and political evidence in Western countries, Robert Kuttner, in his recent book Can Democracy Survive Global Capitalism?  (2018, WW Norton), highlights that since the 1970s the globalization of capital has affected the very foundation of a healthy democracy. While analysing the consequences of this trend, he warns:

“If democracy cannot harness capitalism, it runs the risk of subverting itself and giving way to neo-fascist regimes that will pretend to manage the market but more often ally themselves with corporations and substitute ultra-nationalist symbols and scapegoats for reform.”

Indeed, this book calls for a deep examination of current power, politics and economics in a social context where democratic institutions are being threatened:

Do current trends of social inequality and economic instability stimulate disillusioned voters to support populism? Is the alliance of global finance and far-right parties inevitable?  Is it possible to build new conventions to make capitalism serve democracy?

Answering these questions  not only involves critical thinking on the failures of economic policies in the light of current  political challenges  but also  calls for a reflection on the alternatives to the reversal of the decline of democracy in the West.

 

 

References

Robert Kuttner, Can Democracy Survive Global Capitalism?,   WW Norton, 2018.

Lima, G. & Madi, M.A. , Capital and Justice, WEA Books, 2016.

Madi, M. A.,  “2016: Promises and Problems”, WEA Pedagogy Blog, December 29, 2015
https://weapedagogy.wordpress.com/2015/12/29/2016-promises-and-problems

Stiglitz, J.,  “Of the 1%, by the 1%, for the 1%”. Vanity Fair Magazine, April 30, 2011.
http://www.vanityfair.com/news/2011/05/top-one-percent-201105.

 

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2 comments
  1. ““If democracy cannot harness capitalism, it runs the risk of subverting itself…” (Kuttner).
    “…decisions are influenced by the top 1% who favor policies that increase income inequality.” (Madi)

    Where We Went Wrong…
    Even “The Maestro” admitted, after 50 years…”The system is FLAWED.”

    . What is the “basic flaw” ? Why is that flaw not understood ?
    Frederick Soddy answered these questions,
    “So elaborately has the real nature of this ridiculous proceeding been surrounded with confusion by some of the cleverest and most skillful advocates the world has ever known, that it still is something of a mystery to ordinary people, who hold their heads and confess they are ” unable to understand finance “. It is not intended that they should.”
    Most economists just don’t get it.
    BANKS CAN NOT CREATE REAL MONEY.

    Excerpt from “The Role Of Money”,Frederick Soddy,(1934)
    “The Monetary System Impedes the Flow.
    Since, in all monetary civilizations, it is money that alone
    can effect the exchange of wealth and the continuous flow of goods and services
    throughout the nation, money has become the life-blood of
    the community, and for each individual a veritable licence to live at all.
    The monetary system is the distributory mechanism, and this reading of
    history therefore supports up to the hilt the conclusions of those who have made a special study
    of what our monetary system has become. It is the primary and infinitely most important source
    of all our present social and international unrest
    and for the failure, hitherto, of democracy.”

    Preface “The Role Of Money”

    “It was recognized in Athens and Sparta ten centuries before the birth of Christ that one
    of the most vital prerogatives of the State was the sole right to issue money. How curious that
    the unique quality of this prerogative is only now being re-discovered. The” money-power ” which
    has been able to overshadow ostensibly responsible government, is not the power of the merely ultrarich, but is nothing more nor less than a new technique designed to create and destroy money
    by adding and withdrawing figures in bank ledgers, without the slightest concern for the interests of
    the community or the real role that money ought to perform therein.
    The more profound students of money and, more recently, a very few historians have realized
    the enormous significance of this money power or technique, and its key position in shaping the
    course of world events through the ages. In this book the mode of approach and the philosophy
    of money is expounded in the light of a group of new doctrines, to which the name ergosophy is
    collectively given, which regard economics, sociology, and history with the eye of the engineer
    rather than with that of the humanist. It is concerned less with the details of particular schemes
    of monetary reform that have been advocated than with the general principles to which, in the
    author’s opinion, every monetary system must at long last conform, if it is to fulfil its proper role
    as the distributive mechanism of society. To allow it to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government.

    . What is the “basic flaw” ?
    Why is that flaw not understood ?
    Soddy answered these questions,
    “So elaborately has the real nature of this ridiculous proceeding been surrounded with confusion by some of the cleverest and most skillful advocates the world has ever known, that it still is something of a mystery to ordinary people, who hold their heads and confess they are ” unable to understand finance “. It is not intended that they should.”

    “Capitalism is the “best” system to date devised by mankind. As it is administrated is where the “flaw” is manifested. If capitalism used its Central Bank properly,that is for the betterment of the individual while at the same time the betterment of the entire group, with equality and justice for all, capitalism could be one of the greatest achievements of mankind.

    AN HONEST CENTRAL BANK (GUARDIAN) THAT BORROWERS MONEY ( Interest free) FROM ITS LAWFUL OWNERS, LENDS IT AND CHARGES A SERVICE FEE (Tax) TO SECURE AN INCOME STREAM TO TURN OVER TO CONGRESS TO USE FOR THE BETTERMENT OF ALL.

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