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Capitalism and Democracy
Corporate power may not always be a bad thing.
By Johanan Raatz
Perhaps we can make market failures and democratic failures cancel each other out.
This semester I’m taking a sociology class on corporate powers’ effects on society. The class shows how corporate power can produce negative side effects. The basic idea here is that in the process of producing goods, corporations subsume a disproportionate amount of power which frequently results in negative consequences.
Now I’m personally a “two cheers for capitalism” guy. I support capitalism because I believe it is theoretically and practically the best economic system, but it isn’t perfect. Frequently capitalism is abused by greedy people who don’t care about others.
As a compassionate conservative I have trouble with this. Though I oppose the Rawlsian style socialism popular in Europe on grounds that I believe people’s rights to private property should not be up for vote, I am not opposed to a basic safety net for fellow Americans who are having a hard time. That said I have also come to believe that corporate power is not always bad.
Allow me to explain why. I had this brilliant idea recently regarding corporate power. I realized that although greed is a human vice that will always exist, perhaps that problem can be made to cancel out other problems.
What problems do I have in mind here? This will slaughter a sacred cow, but the problems I have in mind are best defined as democratic failures. I hear it already: “You blasphemer! How dare you?!”
Calm down and let me explain. I define a democratic failure as an instance when the democratic process contradicts itself by undermining its republican foundations. It may be unpopular to point this out but this is because many of us are what Irving Kristol would refer to as idolaters of democratic machinery. Despite being a good model, democracy in its liberal form is not perfect. As the political philosopher Leo Strauss once stated: "just because we are friends of liberal democracy does not entitle us to be flatterers of liberal democracy." A true friend will point out his compatriots flaws, not blindly flatter him.
So what would be good examples of democratic failures? Let me give one. For the longest time the institution of slavery was democratically permitted despite being abominably anti-democratic. This example is interesting as you can analyze how this democratic failure worked and how it was resolved.
In a democracy the majority ultimately decide. So what happens when the majority decides to downgrade a minority to a not quite human level? In slavery, blacks were categorized as not quite people, and as such could not fully participate in the democracy.
This was thoroughly democratic though because the democracy as a whole defined them as not quite people. However, if they were given full status in the democracy they would have almost certainly been part of an abolitionist majority, but as blacks were not quite viewed as persons, abolitionism was a minority view.
Slavery was clearly democratic because the democratically defined majority was for it, and it was clearly undemocratic because the actual majority was opposed to it. That is a contradiction, however, and when a democracy contradicts itself it is by definition no longer a democracy. When this happens democracies must be fixed by wise statesmen.
How can statesmen do this? This is where corporate power comes in. A statesman could use corporate power as a leverage mechanism to cancel out the undemocratic wishes of the democracy.
Historically this is exactly what the statesman Abraham Lincoln did to save the Union and end slavery. Among other actions, his nationalizing of the railroad industry allowed him to leverage its corporate power to win the Civil War.
Another example would be the Iraq war. Ironically the democratic consensus opposes democracy in Iraq. This produces a quite literal contradiction. However, by leveraging the political process with the corporate power of those who want to be in Iraq for monetary gain, statesmen are capable of protecting democracy from its own contradictions.
At this point other wonderful possibilities come to mind. Perhaps if we could set corporations’ sights on Sudan we could fix the democratic process’s inadequate response to the genocide there. Perhaps by leveraging the interests of companies like Pamper’s, Huggies, or Gerber’s we can overcome democracy’s failure to properly address issues of prenatal justice. Perhaps we can make market failures and democratic failures cancel each other out.
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