"But at least capitalism is free and democratic, isn't it?"

Capitalism cannot simply be tamed if freedom and democracy are to be fully realized. it has to be overcome

Translation note: This article was originally published in the American left-wing magazine "Jacobin"; Liusan was authorized to translate it. For details, please contact Liusan's volunteer translation team.

"But at least capitalism is free and democratic, isn't it?" It may seem so, but true freedom and democracy are not compatible with capitalism.

In the United States, many people take for granted that freedom and democracy are inseparable from capitalism. Milton Friedman even claims in his book Capitalism and Freedom that capitalism is a necessary condition for both.

It is true that the emergence and spread of capitalism simultaneously brought with it a great expansion of individual liberty and, ultimately, a popular struggle for more democratic forms of political organization. So, to assert that capitalism is fundamentally a hindrance to freedom and democracy sounds very strange to many people.

To say that capitalism limits the flourishing of these values is not to say that capitalism is already in any way antithetical to liberty and democracy. Rather, capitalism, through its most fundamental programming, creates simultaneously serious deficits in democracy and freedom that it cannot bridge. Capitalism has facilitated the emergence of certain limited forms of democracy and freedom, but it has also imposed a low ceiling on the further realization of democracy and freedom.

At the heart of these values is self-determination: the belief that people should be able to determine the conditions of their own lives to the fullest possible extent.

When a person's actions affect only himself, he should be able to take part in the action without asking permission from anyone else. This is the context of freedom. But when an action affects the lives of others, those others should have a say in the action. This is the context of democracy. In both contexts, the overriding concern is that people retain as much control as possible over the lifestyles they will lead.

In practice, almost every choice one person makes has some effect on others. It is impossible for everyone to contribute to every decision that concerns them, and any social system that upholds such comprehensive democratic practices will place an unbearable burden on people. What we need, therefore, is a set of rules that can distinguish problems of liberty from problems of democracy. In our society, such distinctions are often drawn with reference to the boundaries of the public and private spheres.

This boundary between public and private is not natural or spontaneous; it is created and maintained by social processes. The work involved in these procedures is complex and often contentious.

The state enforces certain boundaries between public and private while preserving or dissolving others as social norms. Often the boundaries between public and private are still blurred. In a fully democratic society, these boundaries are themselves subject to democratic deliberation.

Capitalism constructs boundaries between the public and private spheres in ways that limit the realization of genuine individual liberty and diminish meaningful democracy. This is evident in five aspects.

1. "Work or starve" is not freedom

Capitalism is based on the private accumulation of wealth and the pursuit of returns through the market. The economic inequality created by these "private" activities is inherent in capitalism and creates inequality at the level of what the philosopher Philip van Parish called "true freedom".

Whatever freedom we mean must include the ability to say "no." A rich man can freely decide not to work for wages; a poor man without independent means of livelihood cannot so easily.

But the value of freedom is much more than that. It's also the ability to take positive action on one's own life plan—not just choosing an answer, but choosing the question itself. Children of wealthy parents can take unpaid internships to advance their careers; children of poor parents cannot.

In this sense, capitalism deprives many people of true freedom. Poverty in an affluent society exists because of the direct equivalence between material resources and the resources needed for self-determination.

2. The capitalist decides

The division of the public and private spheres in capitalism excludes important decisions that affect many people from democratic control. Perhaps the most fundamental right that accompanies private ownership of capital is the ability to invest or divest strictly based on self-interest.

It is a private matter for a large company to move production from one place to another, even if it will have a major impact on the lives of everyone in both places. Although it has been argued that the concentration of power in private hands is necessary for the efficient allocation of resources, the exclusion of such decisions from democratic control undoubtedly greatly reduces the self-determination of all but the owners of capital.

3. Nine to five is a dictatorship

Capitalist firms are allowed to organize in a dictatorship of the workplace. An important part of a business owner's power is the right to tell employees what to do. This is the basis of the employment contract: the job applicant agrees to follow the employer's orders in exchange for a salary.

Of course, an employer is free to give workers a great deal of autonomy, and in many cases this is the profit-maximizing way of organizing work. But such autonomy is given or retained according to the owner's preference. Without a strong concept of self-determination, autonomy depends on the individual preferences of elites.

Defenders of capitalism might reply that a worker who doesn't like his boss's rules can always quit. But since workers fundamentally lack independent means of earning a living, if they resign they will have to find new jobs, and at the level of possible jobs at capitalist corporations, they will still be subject to the dictatorship of their bosses .

4. Government must serve the interests of private capitalists

Private control over major investment decisions creates constant pressure on public authorities to set rules in favor of capitalist interests. The threat of divestment and capital flows is always in the background of public policy discussions. Therefore, no matter what ideological leanings politicians have, they have to worry about maintaining a "good business environment."

Democratic values are hollow as long as a certain class of citizens is superior to all others.

5. Elites control the political system

Ultimately, the wealthy have more access to political power than others. This is true in all capitalist democracies; although in some countries the inequality of political power based on wealth is much greater than in others.

The specific mechanisms for this access to power are diverse: contributions to political campaigns; funding lobbying efforts; elite social networks of various kinds; and outright bribery and other forms of corruption.

In the United States, not only wealthy individuals, but even capitalist conglomerates face no meaningful restrictions on their ability to mobilize private resources for political ends. This differential access to political power invalidates the most basic principles of democracy.

These consequences are peculiar to the economic system of capitalism. That doesn't mean they won't find relief in capitalist society. At various times and places, many policies have been enacted to compensate for capitalism's distortions of freedom and democracy.

Public constraints can be imposed on private investment by weakening rigid boundaries between public and private; a strong public sector and active forms of state investment can reduce the threat of capital flows; restrictions on the use of private wealth in elections, and Public financial support of political campaigns can reduce the privilege of the wealthy to gain political power; labor laws can increase workers' collective power in the political arena and workplace; and a variety of welfare policies can increase the real liberties of those without access to private wealth .

When the political conditions are right, the anti-democratic and liberty-defying features of capitalism can be mitigated, but not eliminated. Taming capitalism in this way has been a central goal of the policies advocated by socialists in capitalist economies around the world.

But capitalism cannot just be tamed if freedom and democracy are to be fully realized. It has to be overcome.

Text / Erik Olin Wright
Translation / YZ