Democracy and its economy

Democracy implies and requires a supporting economy lest it segue into an oligarchy or tyranny. That economy must insure that a society’s productivity is distributed in a reasonably equitable manner otherwise that productivity, usually expressed as wealth, will gravitate to those who are more successful at acquiring it. The process of acquiring wealth increasingly favors those who have wealth until the society devolves into one of the rich and the poor. Because wealth breeds power this means the wealthy will control the society and democracy will no longer exists. Thus a democratic society requires a reasonably equitable distribution of its productivity. Even at the beginning of our country Thomas Jefferson understood the threat a maldistibution of wealth posed to democracy. It was for this reason that he, in contrast to Hamilton, proposed a nation of independent farmers each with his own plot of land. Such a citizen would be more independent than one who worked for another in an industrial or commercial firm. We no longer have such a society. Agriculture itself has been industrialized and controlled by corporations that employ others to work the farms.

To preserve our democracy, if for no other reason, we must insure distribution of wealth sufficient to prevent domination by the wealthy. Being as our economy is a capitalistic one, we must determine whether it can be made into a democracy-supporting economy or not. Under FDR we had reasonable success in controlling wealth distribution by taxation and public works. Today Europeans are doing the same basically through taxation. If we look at wealth accumulation as a threat to democracy, perhaps we can finally get past the plethora of myths running from Horatio Alger to personal wealth as a measure of success. It is useful to note that even at the planetary level James Tobin has proposed, and stimulated a movement, to impose a tax on the immense amount and size of the daily transactions of the global stock and monetary markets. (See http://www.ceedweb.org/iirp/.) This money would be used to redress the radical monetary imbalance on this planet by relieving the abject poverty rampant in so much of the world and providing a stable base for societal development.

I suggest that the preservation and enhancement of democracy can be a unifying focus and rallying point for progressivism, which currently does not seem to have such a unifying concern. The call of democracy broke the power of kings; perhaps it is still powerful enough to break the power of corporations.

Bob Newhard