http://www.countercurrents.org/zizek240412.htm

Touche...

@charles: wow, thanks for the link. Definately worth reading twice. Thanks---peace

So what Zizek seems to be saying is that we cant incorporate our idea of political democracy into the workplace effectively because this form of political democracy is itself controlled by the capitalist...this does seem to be the case. I look back at the radical gains made by labor in the 1930's before unionization really took off. In the 1940's it appears that unionization, while it appeared to be a big step forward for workers, actually made the labor movement easier to control by the capitalists. All the capitalists had to do was control the leadership of the unions and they could settle labor disputes for crumbs. This was not the case for those who engaged in sit-ins and lockouts of the previous decade. The leaders of the AFL and CIO seemed all too quick to condemn strikes and settle for the lowest of contracts against their own constituents wishes....and they still do to this day.

I believe we don't have democracy in any corner of the world, though there are numberless martyrs in its name and people who may swear by it. A well known philosopher has put it very succinctly that by holding elections people are deluded that they are involved in governance. However, to earn wealth sufficient enough for one's family or for those in need is not bad. But, when individualism becomes motivating force of capitalism, there is concentration of wealth in few hands and misery for the rest. Even for his individual easy life, father on unemployment allowance injects HIV infected blood to his son or parents to serve debt without compromising their comforts kill their two children. If nations driven by such people who believe in amassing wealth may do everything even may compromise with the extinction of human race. Capitalism in itself is not bad if it is for welfare, it may be dangerous in any political system if driven by individualistic worldview, however, it has more chance to flourish unrestricted in democracy than in other systems where there are checks and bounds in place.

El capitalismo defiende la lógica de la propiedad privada como principio fundamental. Como correlato, defiende la lógica del consumo, como forma individual de usufructo. La democracia defiende la lógica del la construcción colectiva, de la extensión de los derechos a todos los ciudadanos. Claramente son lógicas, visiones de mundo diferentes. Al ofrecer la idea de que el capitalismo convive con la democracia, se instaura una esquizofrenia societal. Una ilusión compartida. Es un mecanismo simple. Sustentado a través de la manipulación sistemática del discurso. Solamente cuando el sistema político y el sistema económico en la misma sociedad hablen la misma lengua, la lengua de los derechos compartidos, será posible saber lo que es democracia. Por ahora solo tenemos oligarquías governando un mercado capitalista.

"Capitalism defends the logic of private property as a fundamental principle. As a corollary, defends the logic of consumption, such as usufruct individually. Democracy defends the logic of the collective construction of the extension of rights to all citizens. Clearly they are logical, different worldviews. By offering the idea that capitalism coexist with democracy, societal institution of schizophrenia. A shared illusion. It is a simple mechanism. Sustained through systematic manipulation of the speech. Only when the political system and economic system in the same society speak the same language, the language of rights shares will be possible to know what democracy is. For now we only have a market oligarchies governing a capitalist market." ---Just a translation so others can read...thanks, Edilberto, for your comment

Thanks Jason.

Perhaps the best book on the topic: http://www.amazon.com/Capitalist-Development-Democracy-Dietrich-Rueschemeyer/dp/0226731448

Kuhn has described how science evolves though phases of normal science leading to internal crisis triggering a paradigm shift and back to normal science. The crisis phase last until a new paradigm is proposed.

In the social sphere right now there seem to be a global crisis but there is nothing looking like a of new paradigm.

The current distribution of capital in the world now is:

50% of capital in the hand of 1% richest

1% of capital in the hand of 50% poorest

49% of capital in the hand of 49% the rest of us

This is the core cause of the global social crisis right now and it is why every year as much people dies than

during the entire period of the second world war. They dye from the problems (lack of food, lack of medication, civil wars, etc) directly or indirectly caused for and by the concentration of the capital.

There is a direct correlation between capital distribution and democracy.

Thanks for the comments folks.

Definitely can not say that direct correlation between democrcy and capitalism. Present capitalism can lead to better democracy depends on who carry the nation.

At times the concepts democracy seems to me to be meaningless unless is situated within context. It appears to me that the concept of democracy is rooted in the notion of fairness and choice/or free will. While democracy tend to focus on question about the legitimacy of of political; capitalism seems relate to the question about what would be considered as fair distribution of resources and/privilege. The proponents of free market seem to use the notion of democracy to justify the capitalism. As social scientist our on these concepts relates to the effect they have on health and wellbeing of society. We know that social justice is a foundation principle for good society. Therefore, democracy that is based on social justice principle is likely to be at odds with capitalism. Because capitalism is a system that thrives on inequalities.

Mr. Weese, How--on what empirical grounds--do you claim that the US labor movement was somehow co-opted by "capitalists" in the 1940s--or '50s or '60s? The post-war growth in per-capita income enormously benefited labor, and a major reason for this was union bargaining power with your "capitalists".

I'd say that the power of the workers was at its greatest when they acted collectively to strike independent of consolidated representation. Many times these independent strikes fizzled out or were crushed by the National Guard, police, etc. but it provided the motivation for concessions. Would the employers have offered these crumbs had this threat of general strikes not have existed as a precursor? When labor organized via reps. in the AFL CIO gains were made, this is true. But we will never know what might have been had many of the workers been able to stand their ground and not capitulate to union reps who made decisions for them which often went against the will of the workers themselves. Many of the gains of workers were made in opposition to their own leadership.

Http://eh.net/encyclopedia/article/friedman.unions.us

"The quarter century after 1950 formed a ‘golden age' for American unions. Established unions found a secure place at the bargaining table with America's leading firms in such industries as autos, steel, trucking, and chemicals. Contracts were periodically negotiated providing for the exchange of good wages for cooperative workplace relations. Rules were negotiated providing a system of civil authority at work, with negotiated regulations for promotion and layoffs, and procedures giving workers opportunities to voice grievances before neutral arbitrators. Wages rose steadily, by over 2 percent per year and union workers earned a comfortable 20 percent more than nonunion workers of similar age, experience and education. Wages grew faster in Europe but American wages were higher and growth was rapid enough to narrow the gap between rich and poor, and between management salaries and worker wages. Unions also won a growing list of benefit programs, medical and dental insurance, paid holidays and vacations, supplemental unemployment insurance, and pensions. Competition for workers forced many nonunion employers to match the benefit packages won by unions, but unionized employers provided benefits worth over 60 percent more than were given nonunion workers (Freeman and Medoff, 1984; Hirsch and Addison, 1986)." From the encyclopedia article referenced earlier.

No doubt conditions improved. I wouldnt argue against that. But this was, in my view a result of increased productivity rather than a shift in power. All boats can rise while rising at disproportionate rates.

I'm interested in your idea that capitalism can be quantified as the inverse of the amount of regulation facing the market. But how will you quantify regulation? One way would be to count the lines of law, both statute (primary legislation) and decree (executive 'regulations'), which in some way affect the conduct of business. A good working approximation might be the total amount of statute and decree law altogether, as most of it affects business one way or another. Be sure to include a line-count of the rules of any regulatory bodies to which particular kinds of businesses must by law belong. This is a special kind of decree law which could be overlooked.

My instinct is that such a count will show that the advanced Western democracies (US, UK etc.) are the most regulated and therefore, by your definition, the least capitalist countries in the world. I don't mean to gainsay your definition at all: just to point out that it may lead to some interesting and unexpected conclusions. Certainly in my country (UK) there has been an exponential explosion in the amount of law, starting (despite her rhetoric) in the time of Thatcher and continuing ever since. English barrister Harry Potter noted it in his recent BBC4 documentary The Strange Case of the Law, calling it 'legislative diarrhoea' . UK usually follows US, so I suspect things may be similar there since Reagan, though I could be wrong. Ignore the rhetoric. Count the lines.

A more conventional quantifier of capitalism that might give very different results would be the proportion of the economy in private (non-state) hands by some measure. Perhaps you could use a combination of methods.

Thank you for a challenging idea!

The question struck me as I was listening to some of the right wing politicians speak during a TEA Party gathering (I live in U.S). I kept hearing rhetoric about freedom, liberty, prosperity and they were saying that the means to this end is a "free market" laisse-fair form of political economy. I know this is an old debate. Here in the states our previous president Bush following Reagan and Bush Sr. managed to deregulate large swaths of the economy, especially the finance sector that subsequently triggered the recession. I see these things going on and meanwhile I see billions being spent to "manufacture consent" through the media. With capital narrowing down the choice of leadership to 2 parties...I've got to say that I'm worried. My gut tells me that the more regulation there exists on the capitalists the more democracy would increase for the masses and vice versa.

The nature of Capitalism is contrary to that of democracy. Democracy departs from the equality of man-kind but Capitalism has a logic of survival of the fittest. Moreover, capitalism gives extensive power to the "Big Capital" and "liberate" it from the political interference. Politics is the domain, which can be democratic, and in which all people have -or should have- equal "democratic" rights.

Paul Samuelson, for me, has reached the point: we must not make any confusion between free market and political freedom. We've got some experiences of a radical creed on free market and political authoritarianism - Hayek was very fond of Pinochet's regime - and there are examples of democracy with a regulated economy, e. g., in Scandinavia. There is not any experience, however, of democracy in communist countries.

Babak -- yours may do as a casual opinion but not as a thought-through academic position.

Why should one suppose that "departing from the equality of mankind" and having "a logic of the survival of the fittest" are in any way contradictory? I agree with your critique of capitalism, but it applies to democracy just as much. It's naive to think otherwise.

Bill Gates has more money than me. That's down to millions of freely and equally made individual spending decisions. That's capitalism. For capitalist purposes, Gates is fitter than me.

Barak Obama has more power than me. That's down to millions of freely and equally made voting decisions. That's democracy. For democratic purposes, Obama is fitter than me.

In both cases a large part of fitness is the ability to get the attention of the masses. People's 'free' votes and 'free' spending decisions are made with very limited information, and control of that information gives a large measure of control over the votes or the spending decisions. This is not the result of any conspiracy. It's just a fact of life. There isn't time for people to consider more than a few alternatives.

Is democracy necessarily a good thing at all? As Plato pointed out, you still have a class of rulers making all the decisions: but those rulers have to waste time and energy managing the desires of an irrational and wilful beast (the masses). Churchill's answer -- that all the alternatives are even worse -- is hardly a ringing endorsement. I guess there's something to be said for gaining a periodic token popular consent to government, but it's no panacea.

The relationship between capitalism and democracy can be discussed, in my point of view, without discussing if democracy is good or not, if capitalism is good or not. For these positions, in a weberian point of view, what is good, what is bad, although valid, do not belong to scientifical speech; they are inhabitants of the world of political thought - in the highest sense, I must say -.

@Ricardo: So what arguments can we make if we adhere to a scientific analysis of the two? That is what I'd like to do. Break down both, democracy and capitalism and see how they interact in relation to each other.

As my current research is focused on state-sponsored capitalism, for example capitalism with Chinese characteristics, I am very interested in how the term capitalism is used and abused as there is a huge difference between a regulated market economy, of which we have many examples, i.e. the G7, and Adam Smith's laissez-faire capitalism, of which we have no real world examples. The closest we can observe to laissez-faire capitalism is perhaps narco-capitalism, i.e. a narco-state or narco-economy that operates well outside the law or indeed by the law of the jungle where only the fittest survive.

It is for this reason that I like to avoid the 19th century term capitalism that is loaded with political connotations, i.e. the opposite of communism according to Karl Marx, and instead use the term market economy. The market economy, whether primarily in private hands or largely guided and regulated by government, i.e. state-owned or controlled firms in strategic industries, has beaten the command and control economy even though some successful market economies, i.e. China, are controlled by communist governments and are not social-democracies.

Personally, I believe that a social-democracy and a regulated market economy are preferable - the greatest good for the greatest number - than a command and control economy under single party rule whether that is one communist party or an autocracy. However, the recent economic success of countries like China, which is based on the lessons learned by state-sponsored capitalism, e.g. Singapore, Japan, S. Korea and even France, has certainly given the critics of western-style capitalism the ammunition to attack what they (incorrectly) see as laissez-faire capitalism. And they point to the Great Recession, the global financial crisis in 2008/09, and ongoing EU debt crisis as proof of the failings of capitalism.

This ignores the major causes of the financial crisis, which were global financial imbalances caused by unsustainable current account deficits and central bank currency manipulation to remain export competitive. As all the markets affected by the financial crisis are heavily regulated one can say that the global financial crisis was both 'a market failure', but also 'the failure of government interference in the market', i.e. government-backed Freddie Mac and Fannie Mae were at the epicenter of the subprime mortgage crisis as implied guarantees became explicit guarantees once their financial viability threatened to cause financial contagion to the rest of the banking system.

However, I like to think about it like this:

Physical Reality > Economic Consequences > Social Reaction > Political Response > New Reality > Unintended Consequences > Feedback Loops > Etcetera

If the market economy exists in a social-democracy, then voters will put pressure on politicians to fix the supposed short-comings of capitalism, e.g. the perception of unfairness or unequal outcomes. This is mainly achieved through regulation. However, in a single party state, either an autocracy or in a communist country, the catalyst for change is more likely to come from social unrest than from the ballet box (assuming elections are not free and fair and are simply a rubber stamp for the political elite to hide behind). In a one party state change can be through regulation as well, but often the political elite will instead try to buy-off the citizenry rather than undertake serious economic reforms that may threaten the ruling elite’s hold over the economy and therefore power.

I hope my research into state-sponsored capitalism will help the debate as to the proper role of the government in regulating the market economy; again for the greatest good for the greatest number. It is not my intention to debate whether a social-democracy is better than a one party state. That is ideology and not economics. But, as I like to say, you can have any society you want, including a cradle to grave welfare state, but only if you have the economy to pay for it.

@William: thanks for the response. I dont want to hold on to any ideologically based definition of capitalism. I want to look at this question simply (or perhaps not so simply) as an objective and scientific analysis of the two (capitalism and democracy). You mention the dynamic between the "market economy" and "social democracy". By this do you mean capitalism vs. political democracy? You mention that in a single party state like China that unrest is the catalyst...what about a two party state like the U.S.? Many believe that both parties here are economically as different as Bud and Bud-lite. Do you think that the rubber stamp analogy applies to states with more than one party if both these parties are funded by the same sources. You mention the "political elite" does this category include the economic elite? In the U.S. it seems that our two party system are both influenced by waring factions of the same economic elite. It seems to me that our "captains of industry" are the only ones in control and that the gov. serves simply as puppets to private/corporate interests...they seem to play the role of "servants" to these entities as well as whipping-boys and scapegoats when things take a turn for the worse. You mention gov. intervention in Fanny and Freddie as a leading cause for the mortgage crisis...do you think that the political elite acted completely on their own initiative or were they influenced by private interests of corps., banks, and those in the finance sector?

Physical Reality->Economic consequences-> Social reaction

| |

of the rich/powerful of society at large

(minority rule) (majority rule)

-->Political action, but politicians must decide whether the money of the minority is more crucial to their careers/campaigns than existing popular support. And since enough money can literally reshape public opinion there is a calculation that takes place. -->new reality...etc.

@ Gareth,

I did not say that democracy is a good thing. It can only bee good when the ruling majority respects the rights of the minority (opposition). Therefore there should be limitation of freedom in democracy in order to make it a good thing.

But please do not compare governments with companies (or politics with capitalism, in a more abstract sense). People can control, or at least influence politics. But capital is footloose. It goes from one country to other and enslaves people. It demands looser labor rights, in order to bring investment and job opportunity. But they are free to go to places with cheaper labor. And all these companies (or multinationals) behave as strong political actors, and influence lives of millions, or even billions of people, without being controlled or even influenced by governments, let alone directly by people.

Do you folks think that if labor were as free as capital to circulate that maybe this would result in higher levels of democracy?

Jason, I do not want to get into trouble here, and talking politics always seems to upset someone. However, the United States is a two-party power sharing agreement and not a true multi-party democracy. This increases the power of lobbyists and special interest groups that can promise to deliver blocks of votes, i.e. teachers or unions or both, or punish any politician that does not tow the party line, i.e. NRA.

I use the term political elite, but in a theocracy it could be a religious elite. In general, these are the elite that make the most important political decisions like the Communist Party of China or lawmakers in US Congress. In the USA, they may be heavily influenced by the business lobby, but also afraid of electoral defeat. There is no denying that money influences politics. The business lobby may have influence over lawmakers, but they cannot pass laws. However, all businesses in America are subject to the laws of the USA. Laws like Sarbanes-Oxley are unpopular with business because of the high cost of compliance. If business really controlled politics they would not pass such laws.

However, in some countries the political elite also get their hands on the economic levers of the country as well. In Russia it is not uncommon for a sitting politician to also be the head of a state-run company, while also enjoying immunity from criminal prosecution. That is not unique to Russia; I just use it as an example.

In light of my research into state-sponsored capitalism I see this as one of the dangers or downsides due to conflicts of interest between politics and economics. It can lead to corruption as well as a misallocation of capital as state-owned or controlled companies get favored access to bank loans, while smaller firms are denied credit. The threat of expropriation by the government for the benefit of their friends of those in power is also a risk in these countries with the judiciary often in the pocket of favored business interests that are backed by the government.

In general, I call it BIC Syndrome - bureaucracy, incompetence and corruption. In my opinion, they are self-reinforcing with bureaucracy and incompetence ultimately leading to corruption. For example, having to pay bribes to get permits approved quickly instead of waiting for years while they languish at the bottom of the pile in some clerk's office. This may seem relatively harmless, but they can lead of a pattern of bribe giving and taking that leads to bigger corruption with more serious, criminal and even deadly consequences such as when shoddy materials are used and a bridge or a building collapses killing people.

Corruption can be measured, or at least estimated, using such tools as the corruption perception index by Transparency International, or the number of days needed to start a new business as a proxy for bureaucracy. Incompetence is harder to measure. We all recognize it when we see it, but measuring it is harder. Some would say that FEMA's response to Hurricane Katerina was an example of incompetence. Others may not agree with that assessment.

However, recent power cuts in India that left 340 million and then 600 million people without electricity is an example of incompetence, but it is also a result of years of under-investment, lack of planning, government bureaucracy and wide-spread corruption. Rather than being a market failure, under-investment and lack of planning by the government are examples of incompetence when the expected need for reliable power goes unmet. So although I can find examples of incompetence, I do not have a precise measure for it.

In terms of laws and regulations it is important to also look at enforcement of those rules. If laws and regulations are not uniformly enforced then they can be abused to punish those economic interests that are not aligned with the government and their friends. This might include taking back valuable oil and gas leases once they are developed for so-called environmental violations, and then giving those leases to another company closer to the government. Or it may be selectively prosecuting company executives for alleged fraud and money laundering crimes in order to seize control of the company and its assets. Often these executives can sit in jail for years before they are even put on trial much less found guilty. Ultimately, guilt or innocence is secondary to those in power if their aim is to get control of valuable assets for themselves or their friends.

I am not saying that cannot happen in a market economy with a social democracy, obviously we can find examples of the abuse of power everywhere, but the more autocratic the government, and the more control the government has over the economy through state-owned or controlled companies, then the more room there is for the political elite to game the system in their favor.

For example, it is estimated that corruption in Germany for public projects is circa six percent of the value of the project. Whereas in Russia it may be as high as 30-percent. Both numbers are too high, but there is a big difference between six and 30-percent. Not surprisingly more bridges and buildings collapse in Russia than in Germany, and Germany is lower on the corruptions perception index than is Russia.

For further reading on such issues I can recommend the book, Why Nations Fail, The Origins of Power, Prosperity and Poverty.

Prof. Jason Weese, I do believe that there is no exact correspondence between capitalism and democracy, although they can live together. Again: Pinochet's regime was a good example of a radical capitalism without democracy, democracy was born associated to slavery in Ancient Greece and there's no example of a communist economy with a democratic political regime, although Louis Blanc - the famous Blanqui - is appointed as one of the pioneers in using the expression "Social and Democratic State". This is not the proper forum for discussing politics - I do agree with Prof. Dahmer -, but just for trying to understand facts and concepts built around them, following Spinoza's and Weber's advice. Samuelson's Introduction to Economic Analysis, for me, has put the problem in its right terms.

"Jason Weese · 29.79 · State University of New York College at Cortland

Do you folks think that if labor were as free as capital to circulate that maybe this would result in higher levels of democracy?"

Yes. Because the people's sovereignty would be enhanced.

Sorry Babak, but I have to disagree. Being an economic migrant for most of my life, having lived, worked and studied in a dozen countries, and more provinces/states/cities within those countries, I have to say, that although I take an interest in local government, I am not enfranchised. I am affected by local economic conditions, salaries and taxation, but I adapt or leave in kind of a push, pull kind of way.

Much the way, I would imagine, as migrants have always pulled up stakes and moved to look for work and a better way of life. Restrictions of such movement by government are a relatively new development. My grandparents were relatively free to move from Europe to Canada, or Europe to America, or from America to Canada without many restrictions. That is no longer possible to the same extent.

However, that is a developed world perspective, as I understand that in the developing world there is a lot of migration, not least of all due to civil war, security concerns, and natural disasters including droughts and famine. One can say that the modern state is making labor mobility between sovereign states more difficult and not less. Although perhaps between states in the same country with the same language and the same culture it is somewhat easier.

Perhaps there are studies on this, but I would imagine that locals who are tied economically and physically to a certain geographical area are more likely to exercise their democratic rights than economic migrants. Although, in Canada the main political parties do go out of their way to court new immigrants. However, in Germany the large Turkish minority (2.7m), for example, do not feel enfranchised, and 45-percent feel closer to Turkey than Germany. That is altough the first Turkish guest workers arrived in Germany in 1960 and Germany is a much wealthier land. Is it politics, or language or culture? I do not know.

My country has been colonized by Portuguese, and some parts of its territory were taken from Spanish crown (I live in one of them). As Gregory Peck's character in the great William Wyler's western said, "I live in a big country", where there are developed areas (I live in one of them) and less developed areas. Well, in the process of extinction of slavery, many people from Europe and Asia came here to work in agriculture - mainly Italians, Germans, Arabs and Japaneses -. Foreign migration, to us, has not been a great problem. But there's a great need of policies on inner migration, for people, due to situations of misery, unemployment, violence, hunger, used to come from the country to the cities, from underdeveloped areas to developed areas. Some governments here have treated it as a "police question", others as a "charity question", other ones have created, beside assistencialistic programs, policies on "First Employment" and of fixing man in the country. Inside a country there are not migrations control, for it would be against the right of locomotion of all citizens through all national territory. But there's no necessary relationship between free locomotion of people and democracy (migrations occurred during Militar Dictatorship - 1964-1985 - with a great intensity).

@ William,

Sorry , I did a mistake you are right. I had to say, democracy was enhanced if capital was not footloose. Circulation of labor force does not solve the problem much. It may even be beneficial for the capitalists.

Hi Babak, labor mobility is generally good the economy, too, if workers are willing to move to where the employment is or where they can earn more. High pockets of unemployment usually cause social and budget problems for local governments, while high unemployment itself will not necessarily attract firms to set up where wages are lower due to high unemployment, i.e. Greece where economic uncertainty is inhibiting inward investment by foreign firms.

Interestingly, a friend of mine was asked to do some due dilligence for a factory in Poland. It was staffed with 2000 union employees. He said, normally he would run such a factory with that level of output with 200 employees. So, of course, his firm had no interest to acquire the factory in Poland knowing the political and local opposition to laying off up to 90-percent of the workforce to remain financially viable.

It is much better for them economically and from a public image point of view to start a new factory somewhere where those new jobs would be welcome rather than being villainised for laying-off workers. Not to mention the cost to lay-off employees and union opposition.

'Do democracy and capitalism share a positive correlation?' I can easily reverse your question and ask whether there might be an internal contradiction between capitalism and democracy. Capitalism sets focus on the individual power, motivation and ability to make free choices and finally to accumulate wealth. We know that 'wealth' despite all the principles we have adhered to and considered to be fundamental, wealth still might find its ways to corrupt the political power.

Therefore we have now in the EU implemented new rules on transparent lobbying (if they actually can be enforced, it's a different issue). The need to supervise the possibility of interference with the legislative and/or executive power is a confession of the risk awareness.

Just the opposite, democracy sets its focus on the collective and tries to imagine that we the individuals belonging to a collective have a common will and that the voting rights in their totality can give expression to this common will.

Does the free will of the individual have a potential to clash with the interest of the majority of individuals in a collective? Obviously, it does. Does the capitalism empower the individual to have an influence on setting the political agenda? Yes, it does, but it takes time to achieve a position of power.

Democracy seen as one person, one vote is meaningless to my eyes. Democracy that can ensure equality of opportunity would be preferable for the common good of the collective and of each individual member of the collective. Next questions to answer are: Do we actually have capitalism? Do we actually have democracy today?

I keep on repeating, please do not mix the theoretical box of concepts with the reflections of these ideals in the reality. Not only that the idealist gets a very cold shower each time when he/she steps out of the cosy armchair of the library, but I assert that political philosophy is a separate science all together. Philosophy is about thinking, not about acting.

If Marx work had been understood as philosophy and not as propaganda, his thinking would have better use for us today. Trying to implement philosophy into reality leads always to failure. Unfortunately, the best thinkers are not the best doers and the opposite. To think thoroughly a certain phenomenon requires considering the weight of each step that you take. To act in real time requires to jump over the mental barriers and assume the risk of doing it.

There are two parts in Marx's work that I can distinguish: when he describes historical facts, when he narrates facts contemporaries to him, the "descriptive" part, as I do call it, he's very precise. I do not like the "prescritive part", when he wants to say what should be done. Schumpeter admired Marx's work, and it can be seen in his Capitalism, socialism, democracy, with four great chapters on aspects of Marx's thinking.

Not even Einstein had been right about everything, about all the theories that he had produced. However I am grateful that he dared to ask these questions in the first place. The same is true about Marx, he asked some intriguing questions and provided some answers, not all of them valid. The questions on the other hand are still there, waiting for a better answer.

I do agree with Prof. Emanuela: if the therapy showed no results it does not mean that the problem does not exist, but only that the therapy did not fit. That's the main reason for not "erasing anyone from the photograph", but reading and thinking about the questions.

Written in 1971 to the U.S. Chamber of Commerce, the Lewis Powell Memo was a blueprint for corporate domination of American Democracy. (the link below)

Lewis Powell considered that corporate interests could gain by using the judicial system to their advantage, yet to make the judiciary more sympathetic to business interests, he knew corporations would have to plan and engage in a long-term, multi-dimensional strategy. The blueprint attached below is interesting and it deserves some attention.

It seems like the relation between the corporative capitalism and the democracy is a competitive one. An ideal society must maintain a balance between the economic freedoms and political rights such as the right to democracy. The balancing of rights is achieved via the judicial system. What do you think about the possibility of the corporations to control the judicial? is it a real threat or is it just another episode of the conspiratorial theory?

In 1971, many countries in Latin America were installing dictatorships friendly to USA, because of the fear of the growing influence of USSR. Political rights, in most of them - Brazil included -, were pratically suppressed, although economic policy was directed on strengthening corporations. Besides, there were many State enterprises created during such a period. USA was at war in Vietnam, at that times. All that is said in order to put the Lewis Powell's text in the context it was written. Answering the question, I do not like any possibility of a Judge with any kind of parciality, for corporations or for unions or for church. Balancing of rights must have as reference the Law - perhaps it would be better to our colleagues of English language say "Act", that is the word that usually translates "lex", "loi", "legge", "ley", "lei", for "Law" is the translation of "ius", "droit", "diritto", "derecho", "direito" -, not business convenience. The answer if such a situation could be a real threat depends on the kind of Justices we've got in each country.

@William: I understand your friends situation in Poland. But you have to understand that local unions act based on a national perspective. They actually lobby against the free market application of labor power. If labor were free to circulate then, according to the "free" market ideology, they would be superfluous (at least on the national scale). If labor power were free to move about on the world market with the ease of capital and commodities it would adjust to the movements of capital, or so it seems to me. Hence, you would see no preference for domestic labor but for a commensurate wage with the capital/surplus value/profit that is being produced by this labor.

@Jason Weese, it is a great subject.

It all depends on what we understand by "democracy" in 21-st century. Democracy and capitalism work together but in the context of lack of education, democracy has a bizarre correlation with capitalism.

The uneducated are prone to serve the financial interest as consuming (most often in excess) products, services, natural resources. The decisions of masses are most often the result of a profound "brain washing" processes / campaigns that fructifies much more in uneducated mediums.

Capitalism grows (in numbers only) based on market's vote (from election process to the very buying decisions of products). The welfare of society, in time it goes down as the natural resources deplete. In a long run, the "capitalism with its capital" suffers. Therefore, apparently the lack of education fuels a positive correlation, but in a long run it is a negative correlation.

Dear members, please let me know if I made myself understood at this early morning vacation time ;-).

regards,

Adrian Toader-Williams

thanks for the post Adrian...I've considered the idea of "manufacturing consent" of the governed and I've come to the same conclusion re: education. But education has a universal adapter on it. Some use it to make more convincing, or convoluted, arguments as apologists for the disparity between capitalism and democracy.

I often ask questions not because I am completely lost and I don't sense any answer, but because I accept the limitation of my understanding. I know that by playing tennis with a wall, I will not become a good tennis player. In the same way, by introspection, by exploring my own thoughts, I can't get too far. I need to interact with other people's thoughts in order to understand my own. I try to interact with all kind of thoughts, I expose myself fearless. In this manner, I have discovered Sam Harris and his theory on the absence of free will.

Basically, he says that our actions are not based on free will, but on genes and past experiences, that we can not control our thoughts, before we have them. It is a deep sense of predetermination in his theory. However he underlines that even if your thinking is predetermined to a very large extent, he does not say that you should just sit in an armchair and wait for things to be done. The determinism and fatalism are not synonymous.

From my own life experience I can tell that the most unsatisfied people are the ones sitting in the armchair, watching the TV and blaming all the others for their unhappiness. Neither capitalism nor democracy can do something about it. People who expect to be raised from the armchair, because they deserve a better life, because they work hard during the week and they go to church every Sunday, these people are not able to feel happiness, to ever be satisfied with their lives.

Sam Harris says that a puppet is free as long as it loves its strings. If the puppet felt that it were possible to control these strings, it would also experience freedom. Being in control brings in a sense of freedom, self-satisfaction and even happiness.

We don't have free will, but we have will power and can make choices. The ones who feel comfortable with this idea of being an open dynamic system, and be able to make choices and assume the risks, these type of people are perfectly fit to live in capitalism. Capitalism is a mind frame and your own open system of genes and experiences can be more or less compatible with this frame.

The dark side of capitalism, in my opinion is not related to social inequity, to the fact that some people are extremely rich and other very poor. It must be understood that the poor can not fully be blamed for being poor and the rich can not be praised for being rich. There is a huge amount of luck involved. (good genes, a propitious social background, a good childhood) The dark side of capitalism is the consumerism the idea that the needs we have are unlimited and all of them can be satisfied by the free markets. The complete dissolution of the out-of-market social relations is not desirable.

The dark side of communism is related to the fact that it does not admit that we are different and are equipped with an unique genetic material, each of us. To erase the opportunity to express this uniqueness is as immoral as blaming the poor for being poor. The real antidote against the social inequity is not social equity (which is an utopia) but equality of opportunity.

Neither capitalism, nor communism live up to this promise to provide for equality of opportunity and it's not surprise that democracy is based on the same type of simplified understanding of reality: that numbers can by themselves guarantee a more equitable society.

Sitting in an armchair, being completely unhappy with the world around is an event arising at the end of a long row of choices out of a predetermined set of options. The thought, 'what could I have done differently' is an unproductive type of thought. What shall I do next? I can never in this life be completely detached, I can not be released from my genes, from my past experience, but I still have a chance to turn around and change the direction, I can still move and accumulate new experiences.

Can we imagine a better form of democracy? Can we imagine an economic system better than the present one? In my thinking, the future is a product of common imagination empowered by a strong sense of direction and it's a matter of being connected with the present moment. The past exists in us materially, either we want it or not.

http://www.youtube.com/watch?v=pCofmZlC72g&feature=related

@ Jason, I used the Polish example not as being pro-union or anti-union, but to support my argument that high unemployment or low wages by themselves will not attract new firms per se. This is why workers must be willing to relocate to where they can find work in order the economy to function better.

I could have used Spain as an example as well. Ask this basic question, how can a market economy with free movement of labor have 25-percent unemployment and 50-percent youth unemployment?

Average world wages in Purchasing Power Parity dollars

Link: http://www.bbc.co.uk/news/magazine-17543356

Basically, from this chart we see that average wages in Spain (and Greece) are still quite high despite high unemployment. This market failure is because wages are sticky for the employed despite high unemployment, i.e. a two-tiered labor market, but also due to labor market restrictions such as local, national and EU regulations and laws that inhibit job creation. Laws that make it difficult to lay-off or fire workers often have the perverse incentive of not hiring workers full-time in the first place.

Otherwise firms would move to Spain where there is a surplus of labor and/or unemployed Spanish workers would become self-employed if there were low barriers to entry and exit of new firms. However, in the case of labor unrest, and in some case violence linked to strikes, i.e. Spanish miners, new firms, and especially foreign firms, are unlikely to commit capital in an unstable environment.

This applies to Greece as well due to the EU debt crisis and the threat of a Greek exit from the EMU. There is too much economic uncertainty, wages are still too high to make Greece attractive to would-be firms, and state-owned or controlled firms that need to be privatized have strong unions that would oppose needed re-structuring and lay-offs. Why bother? As I said, it is easier for firms to start-up a new company elsewhere, i.e. CEE, than to incur the cost of re-structuring an existing firm and laying-off workers.

As a result those unemployed who want to work often have to migrate abroad, i.e. Spanish workers to Latin America or Greeks to N. Europe, to find opportunity.

@emanuela: thanks for your contribution. I haven't read Sam Harris yet but will check him out soon.

@William: Thanks for your posts as well. Re: the Spain example: what I see here is the same. I'm not talking about just free circulation of labor within a state but universal free circulation of labor on the world market...the ability of a laborer in any given state to simply hop a flight to another state and offer his service (or commodity, whichever you prefer). It seems that if labor were free to do this that the market could better regulate the price of labor ie the wage. But for this to be possible, all states would have to open thier borders to the migration, to and from, of labor. Obviously I dont see this on the horizon. But it seems that all the protectionist responses of labor (unions) and gov. (policy) are an attempt to manipulate the wage or profit of labor and capital. If we, in the West, are predominately free market, these restrictions of the mobility/circulation of labor seem to be a glaring contradiction.

Yes of-course in the beginning to the mid stage when the state undergoes development stages. Once attaining the status as developed state, capitalistic society may result in severe competition, concentration of wealth, business tycoons and disguised monarchies and the relationship between democracy and capitalism becomes Hypocratic and negative too in real sense.

Doesn't anyone read Max Weber anymore.."The Protestant Ethic and the Spirit of Capitalism".. http://www.amazon.com/The-Protestant-Ethic-Spirit-Capitalism/product-reviews/1456328638/ref=cm_cr_dp_qt_hist_two?ie=UTF8&filterBy=addTwoStar&showViewpoints=0

Was Max Weber totally off the mark? Does global capitalism make his thesis incorrect? incomplete? Do origins have not very much to do with what is here today?

The main problem with this thesis is that capitalism as an observable reality exists independently of the ideology, on the other hand, democracy has simply never existed as an observable reality, only as an ideology. Elections are real, but elections are not democracy. I take it your concern is control of the means of production: capitalism--some privately own various means of production; democracy--collective control of state assets.

In a hunter-gatherer society, it is the environment that provides resources and those are appropriated via labour directly. The labourer owes no taxes, since there is no employer or government securing the productivity of his labour for him. Well, not on the face of it. Taxes are as inevitable in the simplest of human political and economic societies as they are anywhere else. Tribes typically have protocols for looking after sick and injured members. Yes, even hunter-gatherers have health insurance, but it is not free.

Let's look at a more obvious and better known example. No one seriously thinks the United States has either a democracy *or* a free market. The United States has elections, and it has share markets, but neither of those alone demonstrate democracy or a free market. There is far more evidence to the contrary than there is in favour of either democracy or free markets. Take health insurance for example. Did the American people want health insurance of the kind currently supported by legislation ten years ago? If so, why was it not in place if the American people run their own country? Do the American people actually want the current system of state managed health care that they have? Isn't the answer that we don't quite know and it probably depends on the person? The United States is not governed by its people, it is governed by candidates chosen by a duopoly of political parties.

When there is government, there is never a free market. Will we get QE3? Does the answer influence the market? Is the market free from external control? Certainly not! In fact, although the US is not a democracy (because the very concept is self-contradictory), the people do in fact influence markets through the medium of political parties, elections and appointments. And that is precisely what any sane person would want! Democracy as a valid and noble if unattainable ideal pushes for people (or their reprasentatives) ruling their own markets, intervening where they deem it to be in the public interest.

The best I can do to support the thesis of the OP is to suggest that where polity is rational, it probably tends in the direction of promoting the common good. So, in many but not all cases, it is most widely beneficial for buyers and sellers to set their own prices. Also, in many cases, the majority of the public will support government decisions made in their best interests. But it is absolutely essential to realise these are consequences of rationality and facts of life, not of correlations between arbitrary constructed systems. That's because the role of government is not essentially to give the people what they want but what they need. Governments need to be able to give the people what they need even when they don't want it. In a similar way, price setting by buyers and sellers is all very well but is another kind of duopoly. I really don't care if the logging industry has access to a fair and efficient market to satisfy supply and demand, if it is consuming my grandchildren's ration of oxygen. Most sensible people feel the same and about overfishing etc. Government needs to settle something here.

Government needs to be judicious where it intervenes in markets, but that's its job, irrespective of the views of a majority. The OP's question is excellent, and should be answered in the negative.

Evolution demonstrates anarchy is correlated with the law of the jungle--survival of the fittest. However, government of any kind--the rule of law--is precisely a matter of manipulating markets to protect the weak, which is why people are so very interested in it, from one side or the other.

Which came first, the chicken or the egg? The free market or the state? We have to travel to the beginning of human history in order to understand that the market has never been completely free. A free market would be a market without taxes, a market where the value of the currencies is decided also on a free market, a market where the price is decided exclusively by the demand and supply, who can meet freely, a market where the information is accessible in real time etc. This market has never existed. If the markets would be perfectly free, then the state intervention would not be an issue at all. The state intervention seems to be necessary if you look from a very narrow time perspective. We have an unsolvable demand for an indispensable product and the state must intervene by compensating the supplier. Why is the demand unsolvable? In a time projection, the current imbalance might come as a result of past state interventions on the same or on an adjacent/ vertical related market.

Let's give an example. I am a real estate owner and I plan to construct new flats. I must first decide who is my potential client. Shall I target the very rich, the middle class or the disadvantaged. Then in relation to this potential market, I will determine the need for housing and then I identify the solvable demand for tenant-owned flats and I determine how many flats I will be able to rent and at which price. Volume * Price = Sales. I will make my calculations in relation to the market opportunities and decide my business plan.

Besides the market assessment, the taxes and interest rates and currency rates and all these state control tools are very important variables in my business plan. What happens when the state grants subventions? Well I will introduce this new factor in my calculations. The very existence of the state intervention via subventions in this market has a great impact on the business decision. It is very easy to observe that the state intervention via taxes, will increase the rental price and therefore further state intervention will be necessary to make sure that the housing prices are maintained under control and not increased too much.

State intervention solves the imbalance on short term, but creates scope for new interventions in the future. Free markets as understood in the liberal theories are in fact dependent on state intervention. Why? The notion of state intervention is presupposed, something like a market without state intervention is a free market. We must pay attention to all the negative definitions, they tend to bring in more confusion than comprehension of a certain term.

Define things as what they are, instead of what they aren't. Keeping this rule in mind, what is a free market?

Back to the question: 'Do democracy and capitalism share a positive correlation?'. We have already understood that the great majority of countries are representative democracies and have adopted a form of state capitalism, where markets and state co-exist in a symbiotic relation.

Then I might ask, whether or not the symbiotic relation between the state and the market constitutes any form of threat against the democracy, as an ideal form of government. I can point out the first trap, the one of false choices.

http://politicalscience.uwo.ca/faculty/bousfield/bousfield2011.pdf

I also support this point of view. Symbiotic relationship between capitalism and democracy seeds a disguised monarchies at first phase and anarchies at the final stages.

Anarchy is a complex term. What do you mean by anarchy? Political and social disorder or a society without government?

A society without law, on the other hand, I don't think that it is ever possible to achieve, in the absence of state government, a system of private enforcement have to be introduced and alternative coercitive solutions must be created (a society without government must be one of civilized people based on cooperation and mutual interest, it still looks like an utopia now-a-days).

Chaos as a social reality is never sustainable either, chaos tends to be transformed into authoritarianism or radicalism in any shape or form. In this sense anarchy can only be a phase of transition towards a more dominant form of state.

About the monarchy in disguise, well I don't know exactly what you mean. Probably you want to describe a form of oligarchic system. But the system is in fact much more complex than monarchy or oligarchy. In these systems, you know the name of the dominant person or you can identify exactly the persons who have the power.

The system of domination today is institutional and relational, not a personal one. Therefore the central problems are not related to who is in power, but about how can we control power and prevent abuse/misuse of power?

You are ideally true. But if you critically and deeply analyse the situation in dominant powers, few personalities are dictating the truths and if such trend continues, the Chaos followed by anarchies is not far away.

An utopian society of individuals who enjoy complete freedom without government, this is a society of responsible people and I would like to live long enough to experience it. Anarchy in this sense, it is not about lawlessness, but about a completely non-violent society. It is vital to understand that freedom is not a matter of chaos, but one of responsibility.

In very simple words, even if I have the possibility to exercise my freedom in a violent way, I choose not to do so, firstly because I am a responsible person and secondly because I expect to be treated in the same way. If people could respect these very simple commands: No violence, no discrimination, mutual respect and sincere cooperation, we could know what freedom is about. Freedom means to permanently take care not of your own freedom, but to preserve the freedom of everyone else.

Let's have another go. Rephrasing the question shows the problems.

Jason makes himself clear, saying: "By capitalism I mean the degree to which the 'free market' is left unfettered by regulation."

So, the question is: "Given that governments regulate markets to greater or lesser extents, and assuming democracy is a feature of government that we can have more of or less of, do democracy and regulation correlate *negatively*."

Can we have a simple linear scale of democracy? Perhaps. Could that be measured by quantifying degree of regulation of markets? I really don't think so. If deregulation of markets is the most economically productive approach, I can imagine Communist China adopting it for economic reasons, while retaining communist political ideology in regard to decision making and social issues and ideals.

An unregulated market is an example of lack of government (anarchy), not of democracy. Anarchy can be responsible in many places. A politically appointed hospital administrator would be wise to listen to doctors before making decisions. Democracy, is just one of many forms of tyranny: the tyranny of the majority. The only way to avoid tyranny is to avoid government. But there is still a kind of tyranny even then: the law of the jungle were our inequalities are naked and exposed.

The whole point of government is making things equally nice for people who are by nature not equal. Everyone knows this, but for some reason no one says it. I wonder why? ;)

Thanks for all the comments folks, you've given me much to think about on this topic. All your thoughts are welcome and thanks again for sharing---weese

@Emanuela: I just checked out the Powell memo. I'd heard of it before but never actually read it. It seems more than a bit disturbing. I dont know, am I reading too much into it? It was written the same year he was appointed to the Supreme Court by Nixon...so much for impartiality and dispassionate justice. Seems he had an influence on what would later be the Citizens United case. I dont know, what do you think?

The text by Dan Bousfield, brought by Emanuela brings lots of questions on setting the agenda of discussions on democracy (it reminds me Lippmann's precious "Public opinion"), on the "strong" and the "weak" senses of the word "ideology", on the difficulties for any individual in observing the "patere legis quam feciste", always demmanded to any so-called "State of Right" - and it is demmanded, for a good working of the market, a "State of Right", to bring events to a greater margin of certainity -. All these questions bring, effectively, the role of the Law in putting violence into bearable limits, although it does not eliminate violence, and bringing to the context personality as something more than a role in the market. Prof. Ahmedani shows, in his comment, a situation where truth is not a question of fact, but a question of will, and it has little with democracy, although Plato has spoken, in his "Republic", Book III, of the "usfeful lies" to mantain social cohesion and, sometimes, even in a democratic regime fictions are necessary (e.g., nobody can say that ignores the Law in order to disobey it). On Professor Alistair Haines' question of capitalism and tyranny as inexorable realities, I'd like to discuss them more deeply in another post.

Not yet ...,

Products and services are more and more produced by international corporation own and managed by an international elite which "encourage" all the nation to remove all the obstacles to the internationalization of capitalism. If one activity can be relocalized into a country were labor is cheaper, it is done. There is no international democracy yet. State regulative boundaries are gradually removed and what can be decided by a democracy are gradually more and more constrained. Profits are less and less the results of production and more and more the result of speculation which gradually concentrate the bulk of the capital into reducing number of hands.

So the question of the correlation between democracy and capitalism cannot be look at at the level of the state anymore. The globalization of capitalism is gradually removing state freedom. We assist to the re-feudalization of the world under an international financial elite.

The time is ripe to think and re-think our options!

There are two illusions involved by the primitive liberal thinking:

- freedom honey trap

- win-win dealing.

I will refer to the second. Zero sum game is the main rule in a global economy. For me to be able to buy lots of cheap clothes in Sweden, some one in an unfavoured developing economy will be paid a low salary under low work protection conditions. This is the deal! In the western world, we have been used to see it as fair deal, as win-win. Her children need food, we need new clothes every season... win-win isn't it right? Or maybe not really, but what I can't see I do not need to think about. Or do I? (a propos of freedom, the only freedom of the textile worker in this factories is to work-survive)

My idea is that the globalisation of media made possible to SEE and THINK about the unseen part of the 'FAIR' deals. Now we have all the parts of the puzzle. The question is: Do we want to deal with the reality?

Globalisation in my view it's good per se, what it is missing is a common set of rules for all. If the workers will be better paid and their rights will be respected at a minimum acceptable level, the environmental protection would be considered etc I can guarantee that:

1. Less unnecessary stuff will be bought in our stores in the Western world

2. Not many factories will be transferred, less jobs will be outsourced towards the social dumping camps (lower salaries will still be a reality of course, just senseless exploitation will be abolished)

3. Our understanding of the world will be enhanced and maybe we have a chance to live a healthier life (based on the motto: less is more).

Think about that!

Not yet ..., in Albania

We don't know what exists and what does not exist in a general meaning, but only what we know or think that we know that exists within our cognitive field which is tightly connected with our sensorial capacity. Outside this field we can find 'nothing'.

The most trivial approach is that what ever exists outside our cognition does not exist (for us). The paradox is that in the moment that we touch the sphere of non-intuitive, extrasensorial realities, in the same time we bring them inside the cognitive field. They start to exist (even if they do not have a physical existence in our 3D world).

We do not have to go so long in order to discover such non-existent realities: democracy, justice, equality, freedom, ... They are ideals, as difficult to define accurately as the concept of 'nothing'. However nobody dares to say that democracy does not exist, it's only a political ideal with no correspondent in the physical world. The 'ghosts' live with us everyday. What people think that they know is the key for me because there I can place the limits of our understanding of the world.

Not yet ...

Capitalism is the opposite of democracy

I agree with professor Jossa. As I said before Capitalism and Democracy both depart from opposite logics. Democracy believes in equality of Human beings, while Capitalism defends the inequality between them and believes in the survival of the fittest.

Capitalism has been conceived differently by different generation of economists. The idea of a market is as old as humanity. The idea of a set of regulations/laws which make a market civilised is as old as the code of Hammurabi. The invention of money, a standard merchandise, has greatly facilitated the exchange of goods. The invention of finance (borrowing and interest ) has been good and bad. It created instability , extreme desequilibrium that lead to periodic economic crisis in the system of exchange. After each major economic crisis, some regulations are put in place in order to prevent them. One or two generation later, these regulations are removed in the name of free market and this lead to the next crisis.

Capitalism and democracy are not interchangeable, a country could have a free market economy but not a democratic system of government.

Capitalism = society with free market + finance + private capital

Now we have to define a relation of order on the set of capitalistic societies

Rc : the more concentrated is the capital and the more capitalapitalistic is a society

All societies on earth are capitalistic according to this definition

Democracy = equal participation into governance of society

The relation of order on the set of democratic societies

Rd : the more equal is the influence of individual on governance and the more democratic this society is

All societies on earth are democratic according to this definition

Given Si, the discrete set of all societies on earth. Lets number them in

an abitrary way.

The family Di is the set of indexes such that

from the less democratic to the most democratic according to Rd.

vector D = Di for i = 1 to N

The family Ci is the set of indexes such that order the societies from the

less capitalist to the most capitalistic according to Rc

vector C = Ci for i = 1 to N

The question is : Do vector D correlate with vector C

"The question is : Do vector D correlate with vector C"

No. This correlation should be very weak and insignificant, if not negative at all!

"It is ridiculous in the extreme to ascribe to modern advanced capitalism … any affinity with 'democracy' or even 'freedom' (in any sense of the word)."

Max Weber, 1905

Democracy is a fuzzy concept meaning that many types of governance are covered under the same umbrella, while capitalism is a clear concept that can not be found as a practical application anywhere in the contemporary world. The capitalism as criticised by Marx and Engels does not exist today.

The story starts once the investment banking has become supra-dimensioned and impossible to control and the state intervention became necessary in order to avoid the economic collapse. One intervention led to another until what we experience now is a supra-dimensioned state trying to regain control over the financial markets. The tricky part is that the state remained national while the financial markets are global. Therefore the national states found themselves obliged to create new inter- and supranational institutions to be able to keep things under control. The regulations are more and more extensive. Under these conditions the idea of laissez-faire is no longer valid. The capitalism of free demand and free offer is no longer a reality, what we have instead is an institutional capitalism where freedom is kept under strict observation.

If the laissez-faire capitalism and democracy both were oriented towards a free society and idea of self-determination, the institutional capitalism can not allow too much freedom, because of the instability threat. The individual freedom is more and more limited and even if the electoral rights are a steady reality, the real fight takes place at a different level inaccessible to the large public. The fight is about who is to control the institutions.

The discussion can just go on and on, but I will conclude now that two aspects of the modern capitalism make it incompatible with the idea of democracy and freedom: its over-dimensioned institutionalism and its consumerism. The technological development is another factor that brings more tension. It has the potential to enhance democracy and force capitalism to re-organize itself. (in which direction? It is not yet clear.)

One of the papers I've wrote during my master in business law deals with the liberalisation of public transport by bus and train having Sweden as example. The big actors are still connected with the ex-state monopolies in France and Germany. This means that before the liberalisation there was just one state monopolist, the Swedish SJ and now we have a more complex structure. Deutsche Bahn, for instance has gained new markets in the EU. The states must keep the prices low and subsidise some of the unprofitable routes (services of general economic interest). We can see also that a part of our consumption is subsidised by the states directly or indirectly.

In the capitalism laissez-faire, an activity that it was not profitable could not exist. Apparently it seems right to intervene to help the poor. In reality the rich people take the part of the lion anyway and get richer on public money. It means that state money are invested to help the poor but an illegitimate form of profit goes to the rich people, leaving the poor even poorer.

In Sweden the games are going on at the sophisticated level of high political contacts and Gray public procurements. In less democratic countries the games are more obvious (in Romania for instance many private enterprises have simply plundered the ex state monopolies of all attractive assets; they are known under the name of tick firms). But even in Sweden at a lower level some municipal/regional subventions are misused in a manner similar with the exploitation of the public resources via tick firms. (one recent case is of a hockey club being financed by public money in a fully irresponsible manner; beyond the apparent 'naivete' of the people in charge there is always hiding some private interest)

The new capitalism preaches social-democracy but does something completely different. In this sense of being engaged in a disruptive discourse the capitalism has moved from laissez-faire to contre-faire. In this way both capitalism and social-democracy are disparaged (unfairly).

My answer is yes in global level, for Albania not yet

You know, our country was socialist country with dictature with out social-democracy

as lot of countries in Eat Europe

I beleive that democracy and capitalism wiil share a positive correlation in near future, but not yet now

Emanuela,

" supra-dimensioned state trying to regain control over the financial markets. "

I do not see this happening.

Every time I fill my car with gas, it reminds me that there is no competitions in the oil industry only a collusion to get the price at the highest level possible. Every time I pay banking fees, it reminds me that all the banks have a common interest and making the fees as high as they can. Each time I go voting, it reminds me that all the parties that can possibly be elected are custodian of the status quo.

This is exactly right, Louis! My saying was about the fact that in the EU we have strong nation-states, very prone to maintain the status-quo politically. On the other hand these states have to deal with a global economic reality. EU, exactly like WTO and other organizations are tools designed on this pursuit. Everything appears to be fine on the surface.

The actual freedom of the individual is diminished systematically, because extensive legislation has exactly this effect. More power is given to the nation-state to control details of our daily life and then the state may transfer it further to EU or other supra-state organizations. The structure is institutional and the people there are elected democratically. But the games are too complex to be followed at the citizen level. There is a lack of transparency and lack of pertinent information.

One of the first lessons of antitrust I've received in my life was about the oil OPEC cartel. Why this one remains unpunished? For two reasons at least. It's a cartel of nation states (not undertakings) and second there is no political will to cut off the dependency. They trade beyond the scenes and our interests are just dust in this process. Machiavelli is still with us in real politics, as opposed to discursive politics about the good intentions only.

In all the sectors of the economy the players end up to have a common interest to prevent other players to come in and to agree among themself about a price that maximize profits for them. We can even observe that in the illegal drugs cartel industry. Wars are rate, what dominate is collaboration toward this optimal profit.

@Emanuela Matei: "Democracy is a fuzzy concept meaning that many types of governance are covered under the same umbrella, while capitalism is a clear concept that can not be found as a practical application anywhere in the contemporary world. The capitalism as criticised by Marx and Engels does not exist today.

Democracy is a fuzzy concept? I feel it is pretty clear. The majority decides without obstruction where it wants to take itself. Here in the US I don't see "many types of governance...I see a single type: a republic, consisting of "representatives" who may or may not actually represent those who elected them. Throw in federalism, corporate money and the advertising that it can purchase and we have a huge problem that inevitably results in alienation and anti-politics. Most folks here know all too well that their will isn't being expressed and this is by design. Madison recognized democracy as being the "tyranny of the majority" and demanded that the "responsible men" should be the ones in power. The US Senate wasn't even an elected position originally and most power resided in them.

Also, I'd suggest that capitalism is not a "clear concept". Most of those corps. raning high on the Forbes 500 are flagrant corporate welfare recipients. It seems to me that if anything is a "clear concept" it is that within western capitalism socialism is reserved for the wealthy while free market principles and discipline are reserved for the working classes and the poor. As for Marx and Engels: I'd say that the grotesque features of the capitalist system didn't disappear...they were merely exported to the third world countries. For example: 1,400 Bangladesh workers being crushed to death...and another 500 burning to death in textile factories that supplied Walmart, GAP, JCPenny, etc. Out of sight is not out of mind. This sort of 19th Century horror does indeed exist today...even in the US: BP Horizon oil platform that killed eleven workers, the coal mine disasters that killed many miners at Massey Furgeson, the more recent chemical plant explosions etc.

Fuzzy means that the criteria to determine which state is democratic and which one is not are not clearly defined. People can not run the country foremost for practical reasons. All the EU countries have free elections which is a clear condition, but are these elections actually free. Is it possible to fraud or manipulate the result of 'free' elections on a smaller or larger scale? Who knows, what it's clear more and more it's that people elect between very similar choices and this means that the freedom of choice has low practical value. The absenteeism is a phenomenon and the public demonstration in the streets another one showing that free elections is just a de minimis rule. Other rights are in fact more important, the right to be informed, transparency, right to good administration. However there are lots of exceptions and lots of methods to circumvent the control and insight of the public.

Democracy is a conglomerate of different rights, freedoms, obligations, principles etc but none of them enjoys absolute protection.

USA has its model of democracy, Switzerland or France their own models, but this is a different story. (I don't see an immediate problem with that).

See Rueschemeyer, Stephens & Stephens, Capitalist Development and Democracy. University of Chicago Press, 1992.

In school the question of market vs state government is oversimplified, since free markets do not mean no regulation, but no state intervention that has as object or effect the distortion of free competition and the obstruction of cross-border trade. In general what we lawyers have in mind is nothing else than forms of discrimination on ground of nationality in the first hand. Secondly, discrimination between different forms of legal personality that a business can have. Thirdly equal opportunity and transparency.

The discourse of minimum state is a different one, in fact it's about the choice between private and state regulation and the preference for the first option. In my opinion the capitalism is not compatible with too much state intervention, because the good spirit of capitalism resonates with freedom, while the state over-controlling hand may imply the opposite.

There are so many aspects to discuss, but an essential point is that the marriage between the big state and the big multinational corporations has conducted to the deconstruction of social-democracy. This marriage destroys both the capitalist and the social-democratic/socialist ideals and not yet has been capable of proposing new ideals to adhere to. The slogans of being positive, flexible, adaptable, cautious, career-realist etc are just weak attempts to create a new culture.

One example about how the control of power and the influence over the legislative and administrative decisions are going on in the EU concerns the non-transparent lobbying. Everyone has a voice, but not everyone is heard.

http://www.publicserviceeurope.com/article/3631/the-murky-world-of-secretive-lobbying-in-brussels

Democracy by mean of representatives is not democracy. We are gradually learning the art of collaboration on a large scale but we are still very far from being able to run humanity affairs in that way. But our main problems is not one of system but one of the myths that have forged and are driving our Minds. When an individual get access to position of power it awakes these myths in certain ways. The Obama president is not the same as the idealistic young polititian.

Mythomania is a self-defence mechanism.

We are all in the river but swimming on the side is ealier because the mythic stream speed there is slow. The more an individual swim towards the center of the river the mythic pressure to act in a very specific way become almost irresistible. This pressure come from others but mostly from the dormant images that have been implanted into us during our life and which we are not consciously aware. Most of these images are inactive in normal situation but come a crisis, come a powerfull position and then they become activated and provided us their solution which are rarely the best.

Different indices on the quality of democracy (effective democracy of Ronald Inglehart, democracy barometer, freedom house index etc. )show that capitalism and democracy indeed seem to correlate in a certain way. That can be explained by the value of freedom and liberalism that is fundamental for both, democracy and capitalism. But that's not the whole truth: It depends on how one defines democracy. In the last decades, the term has become a kind of empty signifier in the public discourse, that's why it is important to distinguish between different concepts. Joseph Schumpeter (Capitalism, Socialism and Democracy, 1940). defined democracy as a mere method for the recruitment of political leaders. People should vote in elections, but not intervene during a legislation period. Taken this for serious, free elections are the only criteria for a democracy. The Polyarchy of Robert Dahl is more focused on liberal rights and political participation - thus liberalism and freedom are seen as important indicators for a democracy. In the concepts of social democracy, participatory democracy or inclusive democracy, the standards that have to be fulfilled are higher - in these theories, democracies have to allow for material equality, solidarity and equal participation of citizens. The equal chances of the citizens are of importance in these concepts. Thus, if we take the concept of inclusive or social democracy, then capitalism is not enough, then at least a social market economy with high social standards and equal chances (education system, material security etc.) is needed.

The successful social market democracies were all rich countries like Norway, Sweden and Germany. Lately we have witnessed some problems in the social democratic paradises, meaning that the resources allocated by the state to help the poor and the needy, in fact do not deal with the social problems in an effective manner. The poor becomes poorer and the rich richer. Examples from Sweden are the different tax advantages granted for the employment of the long time unemployed people or the personal income deduction for improvements/renovation of home residence houses. The statistic shows that almost none of the target beneficiary (unemployed people) has been actually employed in connection with or as a result of such a measure. The creation of new jobs (real jobs, not artificial jobs as means to obtain tax advantages) is a thorny problem.

My former professor of human geography who has dedicated all his life to this type of analyses told us that the slogan adopted is 'Capitalism for the poor and socialism for the rich'. This strategy had a very effective positive impact on the capacity of a country like Sweden to compete successfully on the global markets. The poor or the disadvantaged is forced into series of futile programs in order to satisfy the requirements for social assistance or other social benefits, while the rich man collects easy money to be used in different other purposes. In fact these measures incur a hidden type of quasi-subvention available to all already established economic actors.

This has been a success story for a while, however the old ideal of for ever and ever growing state is not an internal success on long term. It simply kills the spirit of competition and traders must be competitive people. Moreover, the people who collect the benefits have no special interest in finding new solutions and these people have an influence on the political decisions as well. Stagnation is not only a state of affairs, but also a state of mind. I believe that the US success story has been based on an actual competitive state of mind and I personally resonate better with this philosophy. However recent changes have endangered these ideals even in countries where the culture of competition is strong.

There is the technological revolution started on late nineties that require a change of the 'mind', a redefinition of social democracy, market democracy, etc an update is absolutely necessary. But as long as the people (including the needy and the poor) don't have an actual possibility to influence the political decision and the spirit of resistance is much stronger than the spirit of competition we are not yet capable of making the necessary changes. Part of the U.S. success story was the fact that it was feasible for a majority of people to make a complete social journey from the needy towards the wealthy (or at least well-to-do) in one life time! This is more social to me than all the classic socialist ideals.

How delightful that this discussion has sprung back to life at such a high level of quality. I would like to expand on Louis Brassard's point that "Democracy by mean[s] of representatives is not democracy," and Joseph Schumpeter's definition of democracy, mentioned by Markus Pausch, as a recruitment method for political leaders. I was not familiar with that, but it echoes Rousseau's observation that (to paraphrase) the English, with their notionally democratic institutions, may think they are free, but between general elections they are governed just like anyone else.

The Greek elements that make up the word 'democracy' translate as rule by the people. Not rule by the people's representatives, or with the people's formal consent, to which the modern notion reduces it. And certainly not to rule by the majority, which, as Madison pointed out, is just another form of tyranny. (Thanks to Jason for the attribution.) At best one can call the modern notion 'representative democracy' -- a milk-and-water version that doesn't come near the real thing. The only institution in Anglo-saxon common law governance that an ancient Athenian would recognise as democratic is the randomly selected jury. Most European countries don't even have that, and it has been under attack even in England.

An interesting case in point, where the approach to democracy is perhaps the closest now in existence, is Switzerland, with its armed population, cantonal assemblies and frequent referenda. Obviously for this to work requires a very high degree of social cohesion -- so high that many people, myself included, might find it suffocatingly conformist. So here is one point worth noting: democracy places a high level of responsibility and obligation on every citizen, higher perhaps than many would be willing to bear. I would not say that Anglo-saxon juries work well, any more than that ancient Athenian counterpart which condemned Socrates. The people were, and remain, too ignorant, lazy and irresponsible, easily swayed by fashion, prejudice and demagoguery. Nonetheless, they are preferable by far to any of the alternatives on offer.

As well as social cohesion, democracy, as opposed to mere 'representative democracy', seems to require a high degree of economic privilege. The Athenian citizen democracy depended on the labour of non-citizen slaves, the Swiss, arguably, as Jason pointed out yesterday, on a world economic system which exports poverty to non-Western countries. Optimistically, as a democrat, one might hope for a time when this apparently necessary supporting role could be taken on by machines instead of an underclass of people. But that seems at best some way off, at worst an impossible dream.

The Swiss example then suggests that democracy and capitalism could potentially share a positive correlation, but for now only in the rich part of capitalism's fractured world. However, there is no sign of this actually happening. If anything, as Emanuela Matei so rightly points out, all Western countries including Switzerland are steadily moving away from democracy, as citizens are micro-managed by an exponentially increasing volume of law, much of it entrenched by international agreements. There was a time when the rule of law could be regarded as the citizen's defence against an overmighty state. It still performs this role, but to an ever more limited degree. For the most part, the law has been captured by the state, and turned into an instrument of intrusion in the citizen's life.

Against this bleak assessment, one could mention the example of countries like Bolivia, Ecuador and Brazil, which are institutionally as distant from democracy as any notionally democratic country in the West, but where the citizens appear to have a higher level of political awareness and responsibility, a realistic distrust of the state, the police etc., and a willingness to take matters into their own hands outside of the formal institutions of the state, the unrest in Brazil being a current case in point. If this is the case, the reasons are partly historical: Latin America's recent experience of the sharp end of the Pax Americana; and economic: relative poverty means that the anaesthetic effect of consumerism is less. If there were to be an advance toward democracy in the world in the near future, these countries could be in a strong position to lead the way.

But I don't expect it. That kind of political awareness is too fragile, too uncoordinated (and can be coordinated only at the price of destroying it through demagoguery), and soon dissipates. Humanity may yet find a way to institutionalise democracy, but we have a long, long way to travel before then.