Does (Modern) Capitalism Help Ensure Democracy?



So recently I was pondering an interesting question which came to my mind during an economics lecture.

In accordance with economic theory, the ultimate goal of the firm is profit maximization.

In order to accomplish this, firms will try to sell as many of a good or service as possible to as many consumers as they can, purchasing at the highest price possible.

Additionally, people are more likely to consume more when they are happy.

Does this mean that corporations have incentive to ensure that as many people as possible are happy (as in democratic societies, for the most part, the populous is found to be happiest)?


Well the short answer is no, capitalism and subsequent capital accumulation errodes democracy, both political and economic, through corruption, extraction of surplus value from workers, limiting their ability to vote in politicians that represent them as well as their ability to supposedly “vote with their dollars.”

Consumption doesn’t equate to happiness. Corporations spend enournous quantities of money to make consumers make irrational decisions when purchasing goods, in addition to building “life spans” into their products. The profit motive leads businesses to deceive consumers and to provide them with as low quality and finite a good or service as possible.

Capitalism helps itself, which is to say hierarchy and autocracy seek to preserve itself. It is antithetical to democracy.


But isn’t the whole ability to influence democracy an incentive for corporations to want to preserve a democratic system?


Well aside from the fact that corporate influence on democratic systems shifts it towards oligarchy and away from democracy, corporations have a vested interest in reducing the representation of the people. This is because the peoples’ interests are those of social programs and public policies that provide cost efficient goods and services to a majority of the populous. Corporations benefit from privatization and policies that permit inordinate capital accumulation and exploitation of workers as well as the environment. Corporate interests are opposed to the interests of the general populous, and will therefore work to eradicate any influence ordinary people have over the political process. While they may try to disguise these oligarchies as democracies, you need only look at the non-existent representation of the people and the rule of the rich to see this. The US is a prime example of such.

And while communist autocracies may not be favorable to corporations, fascist autocracies are capitalist, and will often enact policies of privatization and state capitalism that would be beneficial to corporations as well. Both liberal “democracies” and totalitarian fascist states, that is to say, essentially any ideology on the right, will be favorable for corporations to maintain.


To further your point, the issue is not neccessarily the motive of self-interest, that’s inevitable, the issue is the lack of accountability of corporations. In the corporate world, unethical behavior yields rewards. We need to curb that


Really mate? Ignoring the debate over whether the USSR was even socialist, it had achieved basic living conditions that put much of Europe in the 50s and 60s to literal Shame. The USSR had forced much of Europe to become social democracies as a concession to their workers, things like universal healthcare becoming extremely common in the 50s-60s in Europe and almost in the USA was in direct response against the USSRs healthcare system which had achieved universal coverage. Considering that 40 million Americans literally are going hungry, that 30k+ Die yearly due to lack of healthcare, that open sewers and slums are a reality in parts of the USA, that many Americans in 20 years will be unemployed due to no fault of their own with literally nothing to protect them, and they have the largest prison population on the planet both in population and proportion(you are less likely to go to prison in China or even North Korea then the USA) I dunno man even as a left communist I’d be seriously considering the USSR as better to corporate America to many poor people today


breathes in

Freedom of speech!


Don’t get me wrong, I do believe that the social services and living condition provided by the USSR and other state socialist countries far exceeds the quality of systems in capitalist systems by far. The access to basic necessities made enournous strides for ordinary citizens, and like you said, even with less resources, the collective organization of distribution put the privatized systejsbof distribution in places like the US to shame. However, the good done by the initial social services and good that came with collectivization was degraded with time, as workers were forced to accept undemocratic control in the workplace, leadership became complacent, more and more money went to military spending, and not to mention the exporting of food to pursue industrialization while people went hungry all took away from this good. This is in addition to the crushing of anarchists by the USSR. Please correct me if I have misconceptions about these facts however. The USSR has services that served the general populous, but a government that was not run or influenced by the general populous. I will give the USSR credit where it’s due, but l don’t think it’s unfair to say it’s policies became were authoritarian and moved away from socialism as time went on.


Is that necessarily true in every case?


I would say overwhelmingly so. If a service is non-profit, then the cost will be substantially less than if it were for-profit. Public services mean that essentially anyone who needs said good or service will receive such at a reasonably low net cost or contribution to society (taxes or mutual aid). While there may be some consumer goods that some people might want individually, a large portion of the wealth most people generate goes to their needs.


That is perhaps true, but one issue is that humans have historically been shown to be self-motivated, rather than altruism-motivated. Instead of attempting to change human nature we should seek to drive it in a direction which ultimately helps the people at large. In other words, a system whereby it is in the best interest of the individual to be generous and selfless, preferably without compromising individual freedoms


Well I would argue that egalitarian systems do work with human nature. Fairly equal wealth and status ensures greater transparency and accountability, as well as general societal cohesion and altruistic tendencies, seeing as you would be much closer to your neighbor in socioeconomic status. Even with self interest, it works with human nature. People, having relatively similar interests since they have roughly similar material needs and are equal constitutents of the workplace, the actions they take for their personal benefit should in theory also benefit most other citizens, at least in terms of policy and programs to help the general populous. And even with selfishness, since people can’t exercise great structural power and violence over one another, it is substantially more difficult to successfully take from and assert yourself over one another. While you could theoretically rise in influence over the organization of an inditution or group of people, you would rise to said position by serving the needs of the people well, as your position would be given to you through a very democratic process.


I’m a leftcom, you are preaching to the choir on its failures


These are all true, however the conflict between anarchists and the USSR was more complicated then the ussr merely crushing them. Apparently (this isn’t something I read up myself) free territory associates had made a habit of raiding the ussr, as well as being in direct conflict with them during the Russian civil war (trotsky and shiet)


Ok, fair point.


I see, I was unaware of such. Thank you for bringing this fact to my attention.


Fun fact: right now the SDF has created a liberal socialist state. It’s very similar to the CNT-FAI, though a bit less far to the left since they have to moderate themselves somewhat in order to receive western support. Still, awesome. I think this really helps the argument for libertarian leftists.