Democracy vs. capitalism

This post is the first of a series in which I try to work out some of my feelings about democracy and capitalism. I wrote a post on May 22 of last year, which said some of what I think. It's bad form, I guess, to quote oneself, so I shan't, but, in that post, I outlined the basic conflict I see between the two systems.

I want to go further here and start to think about how we resolve those conflicts. Let me discuss it through the medium of the issue of offshoring jobs.

Offshoring is vitally important, not only for the effects it has already had, but for the future potential. I don't want to discuss comparative advantage here, but that idea, which is thought to allow maximum (and efficient) production in all nations, may no longer hold. With the triumph of technologies that eliminate borders, there may be nothing left (at least someday) for Americans to trade - not without a serious diminution of living standards in the U.S. There are other effects, like the lowering of prices, which factor in on the positive side, but I'm not writing about that here. I'm merely trying to show that offshoring is an important issue.

Unemployment insurance is a matter that we do not trust to the capitalist system, that is, we do not assume that companies will lay people off, but support them for a certain length of time. Because it is a social goal not to allow people to go without that support, the democratic system kicks in and provides for this insurance (which it does by taxing the capitalist system, i.e., making it less efficient).

Offshoring, however, of much greater potential import for restructuring the way we live, is left totally within the capitalist sector. Yes, I know there were some ineffectual Congressional hearings, and it flared as a campaign issue in 2004, however briefly, but polticians have steered clear of any real action.

Companies get to decide what industries, professions, jobs will be handed over to other countries. If that means that a town is without its source of livelihood, or a family is without a means of making a living, that's how change goes - at least you can pay a dollar less for that sweater down at Wal-Mart. But democracy keeps its hands off the issue.

I know that Ronald Reagan had a lot to do with this. His dislike of government (in all matters except his personal living style and providing arms illegally) has become the accepted norm, which means that, despite his stated intent, he hurt democracy to the benefit of capitalism.

For we are all complicit in allowing certain issues to fall outside of the purview of our elected representatives, and to be under the control of our decidedly unelected CEOs. (Offshoring is not the only such example; our energy policy, such as it is, seems to be driven far more by the desires of capitalists than by the needs of the people.) But what is the end result of this division (drivers' licenses to the democratic system, job policy to the capitalist)? It's not simply that business items fall into capitalism, because these items cross all lines in our society.

And how do we restrike this balance before everything important is handled by those who want to make money, not those who wish to fulfill larger social goals?