Is capitalism a threat to democracy?

Simple answer: No.

More nuanced answer: not exactly. Not Capitalism per-se anyway. But clearly you can see an unhealthy degree of commingling of big government and big business, in a way that is damaging to society at large. But to my mind:

a. that's corruption, not capitalism

b. that's an argument against big government, not an argument against capitalism

I, for one, am looking forward to the nuanced, subtle discussion that will ensue here.

For the love of all that is holy, please don't comment unless you've read the article and want to discuss what it is trying to say.

"Is freedom a threat to democracy?" is another way to word the headline.

An article with a title like this, people are only responding to the question (which is rhetorical anyway). The OP submission has only been up 1 hour at the time of this comment and the vast majority of the 100+ comments here are addressing only the title question or reactions to it. None mention Polanyi and few discuss the author's most salient points at the end of the article.

Capitalism and free market are two things. I wished people would be more specific with words. Many things happened together so things were conflated.

The core idea of capitalism is that ownership of companies is based on invested capital not people.

Also see https://en.wikipedia.org/wiki/East_India_Company

I think it's better to discuss individual things like private property, capital ownership of companies, monopolies, free markets, consumerism, imperialism (along the lines of Standard Fruit Company) etc. on their own merit, not throwing everything on one pile - even if things interact, influence and lead to each other.

For anyone who doesn't have time to read the whole article, the conclusion is pretty much "No, as long as we have a strong social safety net."

IE capitalism with some elements of socialism to preserve individual liberties and dignities when economies slow down. Which sounds reasonable to me as a capitalist but also as a human being.

According to many economists, yes.

Capitalism does not appear to have a stable mode with a low Gini coefficient. Power that derives from wealth becomes concentrated, which is clearly anti-democratic.

Democracy is only viable as a decision-making process in societies where everyone is more or less equal. When people gain power at the expense of others, the result is that the system may remain nominally democratic, but becomes more and more of a plutocracy.

In Marx's view, the abuse of the 99% by the 1% would inevitably lead to revolution, violent or otherwise. He then tried to come up with a method of economic organization that could be fair and stable after that revolution. It's not clear that this method has ever worked on a scale larger than a kibbutz or cooperative, but it's also clear that most families are run as communes, though this is rarely discussed.

Somewhere in the trek from startup partnership to corporation there is a shift from commune-like organization to dictatorial/plutocratic organization. I don't know if anyone has done an organized study.

Anti free market hit piece disguised as an article using questionable interpretation of history. This is propaganda for the middle and upper class.

"Is the freedom to choose what to Sell and what to Purchase a threat to the freedom to choose political leadership?"

No.

In fact, you cannot have the one without the other.

I'd answer this question by asking another: Is it profitable to destroy democracy? If so, someone is going to try it. That doesn't mean capitalism is any less compatible with democracy than socialism or any other system. But if we value democracy we need to defend against economic forces that threaten it.

The fact that lobbying/bribes are legal in the USA is a bigger threat to democracy. Companies being considered people whenever it's convenient is not really helping either.

Yes it is but that's a moot point. Democracy is also a threat to capitalism and if we don't have the right check and balances in place democracy is a threat to minorities.

As the saying go, democracy is the worst kind of system besides all the other systems.

No system is perfect but a democracy based on capitalism is as good as we know how to make a system because it handles "irrational agents" fairly well.

The right way to approach this is to look at how is capitalism a threat to democracy and then make sure we have the proper mechanisms to deal with that.

Would I get downvoted if I said democracy is a mere target a country can only use as it's goal? What I am saying is, there is no truly democratic country. To my best knowledge, in every supposed democratic country there are groups or individuals that yield far greater power than the average citizen when it comes to influence over the political process.

Imperialism has feudals,communism has party members, totalitarianism has oligarchs (and friends of the leadership) where as democracy has the 1% and their cronies.

Corruption is not an ideology but a moral and ethical failure. One can maintain an uncorrupt conscious a character of integrity (when it comes to politics at least) regardless of the system of government.

Money,power and a sense of security are all deceptively corrupting vices. Corruption is prevalent in any government that tolerates people who have failed to overcome those vices as politicians and public officials.

It's not capitalism or lack of it that is corrupting but rather a society that tolerates what it knows to be vile and filth in exchange for a bigger picture or in pessimistic complacency towards the ruling class.

A good book that demonstrates how hyper-capitalism is inconsistent with Democratic rule is The Shock Doctrine by Naomi Klein.

Short answer: No.

You can't have political freedom without economic freedom.

This is interestign article, but sadly I must say that I have some very large problmes with it. The article is to large to go threw all the historical details.

I would argue the article is very nice example of what is sometimes called history as popular myth. Many historical periods or events have many different interpretations and one is favored depending on politics. This piece nicely collects all of these and makes a nice overall story out of it that then perfectly leads into the politcal system favored by all non-communist modern leftist, scandinavian capitalism. How could anybody disagree with this logical chain?

On thing that bugs me is that recessions are only blamed at those in power during the recession, while ignoring structural problems that existed before. It all only went bad in 1973, before that it was awesome, nothing happened before is responsable for the problems.

Also calling the economy of the 60s 'Keynsian' is just a slightly strange leftists phrase that is not really used by econnomists. Keynsianism has perticular technical defnition, it does not mean big government with regulation. Many this about this version of the 60s and how the left loves to call it 'Golden Age Capitalism' and then follows it up with 'but it was actually Socialism, look at the marginal tax rate'. This is a highly stylised version of events works thanks to selective selection of metrics.

Most economist agree that the Great Depression was caused by central bank mismangment. We know know this quite well, and people like R. G. Hawtrey (worlds most well known economsit back then) prediced the Great Deflation pretty exactly, with the correct explaition that we still use today. It had nothing to do with free markets, or the evil small government polices of the 20s. Much the same argument could be made about 2008.

Again, one can not take account of the whole article in single comment, but I would just point out that there are many different interpretations of these events. One could easly turn it around and tell a equally convincing story with the opposite point.

No! At least not in the sense that its alternatives are.

Democracy is a threat to capitalism.

https://www.amazon.com/dp/B000FC0ZB2/ref=dp-kindle-redirect?...

Basically, it explores how democracy and rule of law are fundamentally not reconcilable, especially when ethnic/religious tensions are inflamed. If an ethnic immigrant minority somehow gets influence (economic or political) people get rapidly irritated. Look at Jews and Chinese. The tyranny of the majority is not compatible with the rule of existing laws, when the existing laws can be changed with the majority.

Jonah Goldberg has a good take on this in his new book.[1] His basic theory is that capitalism and democracy is not self-perpetuating (kind of like gains at the gym). Societies constantly have to defend and justify it in the face of new challenges and humans' innate tendency toward tribalism.

[1] https://www.weeklystandard.com/adam-keiper/in-suicide-of-the...

Are there any capitalist systems that don't tend towards hierarchical structures? Corporations are hierarchical to a great degree, but what would a system look like that incorporated the benefits of democracy into a capitalist entity?

In a democracy, people are in theory given a level playing field through voting that means that Bill Gates's vote is just as valuable as anyone else's.

In capitalism, people are given the ability to create value to their fullest extent. A single individual could find him or herself creating value outstripping that of thousands of people. Even on small teams, there are great deviations in contributed value. Capitalism is highly volatile, and I would argue the stronger and more natural system as compared to democracy.

Both democracy and capitalism are capable of generating evil and tyranny. The intent of democracy is to create a foundation for a stable society in situ. I think it's very possible to create a democracy that does not progress. On the other hand, capitalism is innately progressive via market competition and trade.

Technological progress and social progress seem to have an odd dance. The goal of technological progress is to create more fit capitalist entities which compete better in markets, but individual consumers are the end route fitness function. The goal of social progress is to elevate the standard of living for individuals, but it might not be easy to prove that democracy is the best known system for raising that standard of living, because so much of one's standard of living is defined by technological progress.

I would argue that capitalism is a more natural system than democracy, and thus more durable. A healthy democracy is an artificial system of good, and a perfect democracy cannot exist in the real world. Again and again, democracy has shown itself flimsy during difficult times.

The problem is of cause that capitalism is a fiction that have never existed in the real world, with the "movement" that calls itself capitalist being captured by the mercantilist it was supposed to oppose as soon as it started.

And mercantilism which is what most economist is promoting as capitalism is basically feudalism by economic means and as such pretty much inconsistent with democracy the second you have a zero sum economy(which the west will for the foreseeable future be facing), especially when you remember that feudalism rose out of the concept of hereditary property not divine right(that came much later) as most textbooks state.

Weather capitalism is compatible with the real world is a much bigger question that few economist dare to ask because the last one to do so ended up founding communism as a response to the complete failure of Smiths actual ideals to survive in the real world.

Tldr;

The premises of the article is that the free market is to cruel for a democracy and that when it demands a sacrifice to greate people will tend to vote for populists

There is nothing in the article concerning corruption or propoganda.

Is capitalism a threat to authoritarianism?

The Chinese Communist Party certainly was worried that capitalism would pose a threat. Turns out the Party is doing just fine.

"capitalism", i.e., a market-based economy is flexible and can be harnessed to serve whatever purposes a society desires.

So, no capitalism is not a threat to democracy, or communism for that matter.

Let's not forgot that capitalism is a recent invention. Kings and emperors were imposing their rule on their poor subjects without the help of free market economies for most of human history.

Right wing resurgence is back because the parties of the left forgot who gave birth to them - the working class. "Working class" is anachronistic now. The children of the working class became middle class. The new working class is now the middle class, increasingly being hollowed out.

What's to stop authoritarianism:

1. remove proportional voting. Coaltions allow parties to divide up the electorate. On the other hand, forcing parties to win 50%+1 of the vote forces parties to take broad-based policies that appeal to wide swathes of the electorate.

2. Invest in a social safety net. Education, healthcare and affordable housing promote social mobility, and more importantly, give peace of mind to those in the middle class who are afraid of losing the gains made by their parents.

3. Campaign finance reform. Its easier to turn out the vote and raise funding when parties turn to identity politics because nothing is more personal - and fires one up more - than appeal to one's identity.

Identity politics is cancer on democracy. Both left and right play the game and identity politics should be banned in a liberal (the John Stuart Mill kind) democracy.

4. Ban targeted political advertising. A liberal democracy needs a shared public space, and a discussion among all voters. Targeted political advertising breaks up that public space into millions of shards. Another option could be to force parties to post publicly all political adverts for everyone to see.

I ought, indeed, need to know what a party's policies are regarding pensioners or education even though I am neither a pensioner nor have children. Why? Because my taxes will be funding such items.

5. The left needs to be remember its origins. Sounds simple eh?

6. Finally, we need to drop the left-right way of identifying policies. It reduces policies which impact people and society into a basic for/against divisive manner. There is a better way.

Enough for today :)

Unchecked capitalism and barely regulated monopolies? Absolutely. But that's a less flashy headline.

I'm disappointed in this thread. Not the post itself, but the discussion, most of which seems 1) utterly divorced from the article, 2) largely (and on several sides) reduced to ideological rhetoric and axe-grinding, singularly both uninformed and uninformative, 3) voluable (approaching 200 comments as I write) and far more noise than signal.

It's about whaat I'd expect if you'd asked a diverse group of 1550s Europeans to civilly diiscuss Catholocism vs. Reformation.

(I've spent a fair bit of time researching the history of the notion of free speech. Among northern Europeans, there's generally been a specific carve-out against free speech to Papists, as they were frequently referred to....)

There are only four references to the key individual within the article, Karl Polanyi. Three of those reference the lack of reference to him. (I've just added a fifth reference, though also of a nonproductive meta-commentary.)

There are several likely reasons for this. One is that "capitalism" and "democracy" are themselves both poorly defined, and cultural shibboleths: signifiers of group affinity far more than semantically functional terms. I'd read economics myself ay uni and would have been pressed to give aa coherent definition until relatively recently. Even now, that's more by calling up a definition, or set of definitions, than something that comes readily to mind.

E.J. Mishan was a Chicago-trained, though very much not a Chicago-scool, economist of the 2nd half of the 20th century. He examined, and questioned, many fundamental precepts of economics, including the meaning and definitions of "free market". (Close to though not identical with "capitalism".)

Mishan notes that "free market" may refer to one or more of the following:

1. The private ownership of capital, or productiive (nonhuman) assets

2. The private management of economic enterprise

3. The decentralization of economic enterprise

4. Competitive enterprise

5. A price system

6. A market system

He also notes that these definitions my either rely on, or oppose, one another. E.g., pricate ownership (1) tends to centralisation, opposing decentralisation (3).

http://booksc.org/ireader/28521331

https://doi.org/10.1080/00213624.1975.11503319

Other authors, of late Naomi Wolf in Shock Doctrine, have pointed out the affinity of free-market advocates, Milton Friedman in particular, with authoritarian and genocidal dictators. Similar parallels were drawn in the 1930s with fascist Italy and Germany, and you can find similar sentiments in the works of J.S. Mill and Adam Smith.

But for discussion, HN can and should do far better.

It's not at all an academic argument but a critical issue being resolved right now; the preference for capitalism over democracy is openly argued and put into practice:

* You may recall Peter Thiel's argument that democracy and "freedom" (i.e., his freedom to act as a capitalist) are incompatible, and therefore we should limit the former. Thiel is close to the U.S. president, and his people are advisors in the White House and other branches.

https://www.cato-unbound.org/2009/04/13/peter-thiel/educatio...

* Also, the recent U.S. Secretary of State, as well as other members of the administration, openly said the U.S.'s foreign policy should prioritize "economic interests" over democracy and human rights.

https://abcnews.go.com/Politics/tillerson-pushing-human-righ...

* Finally, as much as HN doesn't like to discuss this issue, we also can't bury our heads in the sand: The nationalist and racist politics in the U.S. are also anti-democracy,[0] and by devaluing democracy they open the door to capitalism-over-democracy. Probably not coincidentally, the nationalists and the capitalism-over-democracy people (like Thiel and Tillerson; let's call them oligarchs) ally in the coalition that supports Trump and the GOP. For example, the GOP actively works the limit voting, the foundation of democracy, by people they don't like.

That coalition, of the nationalists/racists and the oligarchs, are a threat to democracy in the U.S. (and probably elsewhere). It's only an anecdote, but a wealthy person whom I had respected intellectually told me, 'I voted for Trump and I'd vote for him again - I'm a businessperson and business is good'. Their argument is implicitly framed around the idea that capitalism is all that matters.

And I'll add that it's very short-sighted: You only need to look around the world and see that democracy breeds economic prosperity like nothing else in the history of humanity. The democracies are all the wealthiest countries in the world; the corrupt oligarchies are all poorer, and had been for millennia before democracy. In fact, the wealth of corrupt oligarchies today comes from selling to wealthy democrats and profiting on the peaceful international order and world trade established by the democrats. The world of corrupt oligarchies (and monarchies, etc.), before democracy, was poorer by orders of magnitude.

...

[0] Why are nationalism and racism anti-democracy? The necessary foundation of democracy is universal human rights; for example the founders of the United States made it the basis of the Declaration of Independence: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights ... That to secure these rights, Governments are instituted among Men". On a practical basis, if the other person doesn't have rights then neither do you; if it's ok for someone to take away their vote then why shouldn't they take away yours? Nationalism and racism say that rights are not universal at all, but that they depend on nationality and race.

Of course it is! That's like asking, is monarchy a threat to democracy? Capitalist corporations are basically just little kingdoms.

Democracy is a threat to capitalism.

Capitalism - no. Greed and lust for money - yes.

for all it's ills, capitalism is very anti-fragile in the sense that regions that that fail (perhaps even because of capitalism) become cannibalized and therefore stabilized by the greater system.

It may not provide much security for individuals, but it is very effective at self-perpetuating the scheme.

The subtitle:

> The idea that authoritarianism attracts workers harmed by the free market, which emerged when the Nazis were in power, has been making a comeback.

Makes me disappointed for the state of discourse that occurs today. The article itself is better than the subtitle made me infer - ending essentially with a nuanced 'No'.

But these transparent attempts to make you form an emotional response to an issue by eliciting images of Nazi Germany I find borderline disrespectful.

Unregulated capitalism, perhaps. However, I don't think the US has capitalism (well-regulated or otherwise) today.

Today we have a system where gains are privatized, losses are socialized, and market-participants can coerce their elected officials to tilt the market in their favor. This is not capitalism.

No, but greed is.

> Basically there are two solutions,” Polanyi wrote in 1935. “The extension of the democratic principle from politics to economics, or the abolition of the democratic ‘political sphere’ altogether.” In other words, socialism or fascism.

This article is predicated on using democracy as a synonym for constitutional representation, which it isn't.

Democracy literally means rule by the people: majority rule. If you can't get married because you're gay, that is democracy at work: the majority doesn't like some aspect of your life, and that's that.

Democracy can be de facto a form of fascism.

This reads like an onion article. I'll take free market capitalism and any government over socialism. These people represent a kind of "democracy" that wants to threaten Capitalism, which is the real danger.

Seizing the means of the people to rebel is the real tyranny

Capitalism isn't a threat to democracy since the main distribution of power is by capitalist elite rule with democratic institutions constrained by capitalist economic power structure, and has been for the whole history of modern democratic political institutions.

The article might more properly ask the question “is capitalism with fig-leaf democracy inherently unstable”?

The only way to fix democracy is to make voting mandatory, but the elites in power have no motive to change the system. In fact they have all the reason to keep the status-quo. The current version of democracy is a treat to democracy itself.