Democracy and Capitalism Democracy is the process by which we get ourselves organized to perform capitalism. One imagines that in early times, human activity soon divided itself into two parts, again involving the substantive and the procedural: what we wish to do with our bodies each day and how we will collectively organize ourselves to do it. Capitalism is today's version of the what and democracy is the how.
"The what' and' the how' collaborate to an extent, then battle each other. Democracy and capitalism are like a lion and a bull pulling a sled together. The bond holding the substantive in balance to the procedural is always a fragile one. In our system of laws, this balance creates justice. Our most thoughtful judges know what the public does not, that substantive without procedural justice, for example, the lynching of a guilty man, is not justice. The converse is also true: careful process is not justice if it does not lead to a fair result. Means and ends, roads and endings, must be in harmony with each other.
Democracy is a consensual hallucination of people concerned with how to divide opportunity fairly. Our Constitution guarantees "life, liberty, and the pursuit of happiness", not happiness itself, which cannot be guaranteed to anyone. It makes a tremendous difference to know that in our country you have a shot, at least, at being president or Rockefeller. A Martian visiting earth would not be able to see democracy. It is intangible, a rulebook we have agreed to which says that no-one shall be denied opportunity, freedom of speech, or the due process of the laws. The Constitution does not say that "all men are equal"; it says we are all "created equal". This is the same thing I just said: we each have our shot. Some will come at it with more on the ball than others. If society is not hanging around our neck like an anvil and we are honest with ourselves, we will be content. "In the long run," said Thoreau, "men hit only what they aim at. Therefore, though they should fail immediately, they had better aim at something high."
But the substantive corrupts the procedural, when the love of things corrupts the spirit of fairness. An old story tells of three men who share one eye by passing it back and forth among themselves. Democracy is a process for ensuring that each gets an equal session with the eye. Capitalism fosters a desire to keep the eye and not share it. A rulebook, as I have said else where is an end in itself, not a means. It is intended, optimistically, to work for ever, not until we have reached a particular goal. The world does not come to an end when the nine billion names of God are uttered. Freedom of speech is not over when we have uttered a certain thing. Democracy as a rulebook is not intended to operate only until a particular individual or class has enough money.
Every rulebook involves tolerance, which is a form of letting go. Under the free speech rulebook, I must tolerate the speech I despise, and not ask the government to crush it; in the democracy of the three eyeless men, I must give back the eye when my turn is over. The pathology of capitalism is that it eventually encourages disregard of the democracy rulebook, while giving the wealthiest individuals the power to warp or disregard the rules. Once you have money, there is no letting go any more. Can you imagine anyone saying, "I am rich enough, it is someone elses turn?"
Humans and rules do not go well together. This is a small, but powerfully important aspect of the human tragedy. For years, we tried to get the salespeople in my company to read the trade press. Finally, we announced that we would expect each to put leads from the trade press into our database, and suggested (as a guideline) that fourteen leads a month would be appropriate. Soon enough, the salespeople were falling over themselves to get their fourteen leads in; if the publication assigned for the month fell short, the salesperson would sabotage someone else by data basing the leads from his publication. The most amusing part was that they were still not reading the publications, just skimming them for names.
It is hard to govern the human heart with rules. Society can make rules which will make you participate in rituals honoring God, or avoid sex, or refrain from murdering your neighbor; but rules cannot make you love God, desire chastity, or honor your neighbor. The democracy rulebook, though it hovers above our laws (which are just a distorted reflection of it) has not succeeded in making humans cherish democracy, any more than most cherish freedom of speech. What the rulebook encourages, but the human heart does not understand or want, is the long term view. There is (unless we end our world) what the historian Charles Beard called "an immense range of time in front of us." J.B. Bury said in The Idea of Progress:
"The dark imminence of this unknown future in front of us, like a vague wall of mist, every instant receding, with all its indiscernible contents of world-wide change, soundless revolutions, silent reformations, undreamed ideas, new religions, must not be neglected, if we would grasp the unity of history in its highest sense....the unapparent future....bids us to consider the whole sequence up to the present moment as probably no more than the beginning of a social and psychical development, whereof the end is withdrawn from our view by countless millenniums to come."
But of the two animals pulling the sled, only democracy encourages us to take this view. It is a relentlessly cheerful discipline, telling us that if we all navigate the ship together, we will make some headway against the wind, and our children will make still more headway, and their children more still. In Beard's introduction to Bury's book, he wrote in 1931, "all men (and women) are theoretically equal before the law." Sixty-five years later, no-one would place such a parenthesis. It is a small difference, but profound, and symbolizes the optimism of democracy about incremental progress.
Capitalism takes the opposite tack. Capitalism is inherently pessimistic or nihilistic. It is always, "things are about to fall apart, so let me take mine now," or "I will take mine, and the rest will take care of themselves."
Democracy denies the Hobbesian war of all against all, and capitalism, pretending to prophecy it, creates it and enshrines it at the center of our pantheon, as the true, the human, the only way to live. Lincoln said, "A house divided against its self cannot stand." When I told a colleague of mine, the head of another division of my company, that it was not healthy for our two divisions to savage each other, chasing the same business, when we could be working cooperatively to win and maintain twice as many clients, he smirked and said, "Haven't you ever heard of coopetition?" The idea is as savage as the word.
Imagine how we respond to the tragedy of the commons under the rulebooks of democracy and capitalism. We are, you and I and some others, the residents of a village which adjoins a commons where we all graze our sheep. Under the democracy rulebook, we meet as the village council; our concern is how to preserve the commons for our children's children. All right, shift paradigms: we are now under the capitalist rulebook, meeting as the board of directors of the Intercontinental Sheep-Grazing Company. Our discussion, abruptly, is about how to maximize shareholder value, by extracting every last possible dollar from the commons this fiscal period. Our grandchildren are nowhere in the conversation; they are not shareholders. Under the separation of powers implied by the two rulebooks, we are relieved of the necessity of thinking about the future, because it is someone else's job.
Our democracy creates equality of opportunity, so that every child growing up in our village can dream of being a sheep magnate. But any ambitious youngster, perceiving the differences between the two rulebooks, will prefer to give his allegiance to capitalism, because it offers quicker personal progress than democracy. Democracy preaches incremental change, but capitalism offers overnight transformation, the opportunity to sell something a day after you bought it for ten times what you paid. Cooperation is the key feature of democracy, but capitalism is usually thought of (it need not be) as a zero-sum game in which, if I have more, it is because you have less. Versions of capitalism, like the one I believe in, in which we all grow together, are less interesting to the ambitious, because they too closely resemble democracy.
Humans are complex organisms, full of contradictory impulses, operating simultaneously on multiple levels. I shake your hand, I grin at you, but my grin is a baring of teeth, I do not like you. I do not like you, but I am not a hypocrite and do not wish you harm; I am ashamed of myself for my aggression; I sincerely want to overcome my anger and work together with you. This is the letting go which democracy encourages. Under the democratic system, nothing is all mine or all yours; the rulebook says I am to overcome my rage, and try and share with you, as children are requested to share toys in the sandbox, for if we work together, at least a little good will come of it.
Capitalism gives me a starker view of the world. I am a noun and the things and even people around me are all objects; what can I pick, pluck, mine, farm, manufacture, sell; who can I employ, buy from, sell to, sell, convince, exploit? The military metaphor, which is unfamiliar and unwelcome in democratic discourse ("Dewey Smashes Truman" or "Dewey Destroys Truman" would not have been an acceptable headline) is still the norm in capitalist speech, where products (as I said a year ago in a piece on Microsoft) are often designed not with reference to the constituency which needs them, but in order to "kill" other products (as in "Blackbird is Microsoft's Java killer"). In the Godfather series, capitalist speech is tweaked and teased; "make him an offer he can't refuse" means holding a gun to someone's head; "it's only business" is a plea to a prospective murder victim not to take being slain personally.
While the democratic rulebook exists in large part to clear the field, as we said at the outset, for the practices of capitalism, the capitalist rulebook returns the favor by authorizing its followers to behave as if democracy did not exist. It is true that a business can almost never be conducted as a democracy, for the very reason that it exists to seize a profit from the world; one would not any more ask the employees of a large company to vote on a new office, product line or acquisition, than ask the GI's to vote on the conduct of the Battle of the Bulge. But there is a difference between refraining from conducting a business as a democracy, and refusing to acknowledge that the business itself is a citizen of a larger democracy, or at least that it is a permanent resident of one. As a citizen or resident, a business should share the values of the community in which it resides, which means that its urge for profit must be balanced by other considerations.
Instead of making twenty, and stripping the land, it will make ten or fifteen, and repair the land. But such philosophies are almost never imposed on businesses by themselves, because businessmen think that this kind of thinking is somehow ludicrous and foreign.