John Keane — Capitalism and Democracy

Like I've been saying, capitalism and democracy are antithetical. This is equivalent to saying "economic liberalism" and "political liberalism"  in place of "capitalism" and "democracy."

The only way that economic liberalism and political liberalism have been compatible historically is in bourgeois liberalism, in which only the bourgeoisie (ownership) class) are considered to count.

According to defenders of the ‘free market’, more than a few of whom are dogmatic market fundamentalists, political democracy is an unwanted parasite on the body of economic growth. Democracy whips up unrealistic public passions and fantasies. It distorts and paralyses the spirit and substance of rational calculations upon which markets functionally depend; understood as government based on majority rule, democracy is said to be profoundly at odds with free competition, individual liberty and the rule of law. What is therefore required is ‘democratic pessimism’ and (Friedrich von Hayek’s famous thesis) the restriction of majority-rule democracy in favour of ‘austerity’ (cutbacks and restructuring of state spending) and limited constitutional government (‘demarchy’ ) whose job is to protect and nurture ‘free markets’ protected by the rule of law.

Other scholars, political commentators, policy makers and politicians stake out the contrary view. They maintain that since markets are never ‘naturally’ free but always, in one way or another, the creature of laws and governing institutions, market failures and market ‘externalities’ require political correction. Well-designed political interventions that draw democratic strength from popular consent are needed to redistribute income and wealth, to repair environmental damage caused by markets and to breathe new life into the old ideals of equality, freedom and solidarity of citizens.…

The Conversation
Capitalism and Democracy [part one]
John Keane | Professor of Politics, University of Sydney