To What Extent Do Markets Pose a Threat to Democracy - Term Paper Example

To what extent do markets pose a threat to democracy? Social market strategies offer a third way between the systems οf the competitive market and the state Under capitalism, businesses are not structured to be fully accountable to their constituencies and surrounding communities, nor are they self-regulating, nor are they chartered to operate in the public interest. Capitalist enterprises are driven by the laws οf the competitive market to maximize profit while leaving the social and environmental ravages οf market economics to the state. It is government that is left with the task οf regulating or coping with environmental destruction, corporate monopolies, consumer exploitation, deserted cities, unemployment, cycles οf inflation and recession, speculation, corporate debt, and maldistributed wealth -- all in addition to its responsibilities in the areas οf national defense, protection οf property and civil rights, infrastructure maintenance, and education. While accepting that both the state and market perform indispensable functions in a dynamic society, social market strategies seek to expand and create new social sectors that belong to neither the competitive market nor the regulative state systems. Producer cooperatives take labor out οf the market by removing corporate shares from the stock market and maintaining local worker ownership; community land trusts take land out οf the market and place it under local democratic controls to serve the economic or cultural needs οf communities; community finance corporations take democratic control over capital to finance cooperative firms, make investments in areas οf social need, and fight the redlining policies οf conventional banks. (Bruyn 1-7) To struggle for economic democracy is not to presume that social market strategies would work on a large scale if they were imposed next year on a political culture unprepared for them. The social vision οf economic democracy can only take shape over the course οf several decades, as hard-won social gains and the cultivation οf cooperative habits and knowledge build the groundwork for a better society. Such a project does not call for large-scale investments in any particular economic model; it does not rest upon illusions about human nature; it does not envision a transformed humanity. Niebuhrs epigrammatic justification οf democracy will suffice for economic democracy: The human capacity for justice makes democracy possible, but the human inclination to injustice makes democracy necessary. Niebuhr did not deny that the human capacity for fairness is often moved by genuine feelings οf compassion and solidarity, but to him it was evident that all such feelings are mixed in human nature with more selfish motives. The crucial point was that democracy is necessary precisely because virtually everyone is selfish. Because human beings are so easily corrupted by the attainment οf power, Niebuhr argued, democracy is necessary as a restraint on greed and the human proclivity to dominate others. By the time he wrote the book that elaborated this argument, Niebuhr was no longer inclined to press the argument as a case for economic democracy. The Children οf Light and the Children οf Darkness was written in 1944, several years after Niebuhr gave up on Marxism and only a few years before he formally rejected Christian socialism. During these few years, when he tentatively held out for a socialism stripped οf its Marxist illusions, he did not explore the possibilities οf a politics that democratized and decentralized economic power. For Niebuhr, socialism meant economic nationalization, state economic planning, and production for use. To him, there were only three serious possibilities: free market capitalism, state socialism, and New Deal liberalism. Throughout the 1930s, while Americas welfare state was being constructed, Niebuhr ridiculed and denounced it with unqualified contempt. A decade later, having renounced his Marxism, he made his peace with Roosevelts liberal reformism and accepted the liberal dichotomy between politics and economics. Realism compared liberal capitalism not with a fantasized democratic socialist alternative, but with existing historical alternatives. Neoconservatives reply that the time has come to give up on the social Christian commitment to economic democracy. Robert Benne proclaims, for example, that "Christian ethicists should rather turn their attention to the possibilities for justice within liberal capitalism." Niebuhrs neoconservative orphans have been especially insistent that the death οf Communism bears fatal implications for contemporary Christian ethics. Max Stackhouse and Dennis McCann argue that it was a mistake for Christian ethicists to commit modern Christianity to a politics οf democracy, human rights, and democratic socialism, because "the future will not bring what contemporary theology said it would and should." (Stackhouse 44-47) In their view, the verdict οf history has come down not only against the Communist mistake, but against even the forms οf democratic socialism that militantly opposed Communism. Socialism is dead, and with its death lies the end οf modern theologys attempt to give it a human face. For neoconservatives, the project that remains for Christian social ethics is to apply the chastening lessons οf Niebuhrian realism to the economic order. Neoconservatives such as Novak disavow the social Christian project οf breaking down existing concentrations οf economic power. Though Niebuhr failed to press his political realism into a critique οf social democratic economics, Novak believes that neoconservatism completes this essential Niebuhrian task by breaking entirely with the liberal Christian tradition οf economic democracy: Niebuhr did not give much attention to economic issues. Precisely in Niebuhrs neglect, I found my own vocation. Surely, I thought, the next generation οf Niebuhrians ought to push some οf Niebuhrs deeper insights into the one major area he neglected. Novaks assumption οf this neglected task has drawn him deeply into the American political Right, where, in the 1980s, he became a Reagan supporter and a chief mythologist οf American capitalism. To apply Niebuhrs realism to the economic realm, he claims, is to relinquish the social Christian dream οf democratizing economic power. Neoconservative realism insists that the values and legitimizing principles οf democracy are pertinent only to the political sphere. To face up to modernity is to exclude democratic tests οf legitimacy, equality, and accountability from the economic realm. Realism emphasizes wealth creation and, for the most part, allows the market to take care οf distribution. Believing that economic power is not to be subjected to democratic tests, it accepts the hegemony οf corporate monopoly capitalism. It finds no fault with the outcomes οf free market economics, which include Americas existing maldistribution οf wealth. With the dissolution οf the only serious alternative to capitalist society, neo-conservatives argue, it is time for modern Christianity to face up to modernity in the economic realm. (Novak 39-42) Having insisted for decades that their vision οf social and economic democracy has nothing to do with Communism, however, it would be strange indeed if Christian ethicists now concluded that the dissolution οf Communism somehow discredits their social vision. The ravages οf imperialism, structural dependency, maldistribution οf wealth, and environmental destruction are no less devastating with the triumph οf capitalism. The demise οf the perverted form οf socialism that once competed with capitalist democracy for world power has done little to alleviate the conditions that originally gave rise to Christian socialism. Christian ethicists have pressed the case for social and economic democracy for the past century because their commitments to distributive justice and their resistance to the all-commodifying logic οf capitalism compelled them to seek an alternative to capitalist democracy. To call this entire project a mistake is to resign progressive Christianity to a politics οf the status quo that sacralizes the privileges οf the well-born and the fortunate. It is to pretend that concentrations οf economic power can be ignored without undermining political democracy and harming the poor and vulnerable. Nevertheless, the Christian socialist tradition has been flawed in crucial respects. For most οf the past century, and especially in recent years, much οf the literature on Christian socialism has featured a dreamy utopian air that only vaguely defines its subject and only rarely addresses the political and economic problems associated with economic democracy. Theologians have typically endorsed or promoted economic democracy with virtually no consideration οf the economic problems or trade-offs that social democratic strategies present. Few modern or postmodern theologians have taken on the questions οf economic efficiency, organization, or growth; they have not even matched Rauschenbuschs attempts to discuss the economics or structure οf cooperative ownership. By failing to describe the kind οf socialism that they endorse, many Christian ethicists have left the mistaken impression that Christianity is compatible with any kind οf socialism. Gutierrez repeatedly calls liberationism a socialist project, for example, declaring that the political goal οf liberation theology must be to create a society "in which private ownership οf the means οf production is eliminated." He explains that a just society can be created "only by installing a political power at the service οf the great popular majorities," but his writings never penetrate beyond scattered slogans about "eliminating the private appropriation οf wealth." Though he is quite precise in describing the ideologies and social systems that he opposes, Gutierrez resorts to vagueness in describing the alternative that liberation theology promotes. Like most liberationists, he thus fails to discuss the relationship between democracy and socialism, or to explain how the mistakes οf Communist revolutions can be avoided, or to distinguish between different types οf socialism, or to address the problems associated with creating socialist economies in poor, largely preindustrialized societies. Like Marx, his writings on political economy are consumed with his critique οf capitalism. The parallel should be instructive, for it was precisely Marxs vagueness and utopianism with regard to the socialist alternative that allowed generations οf totalitarians to call themselves Marxists? Christian socialists have typically sought to avoid this mistake by dissociating themselves from nondemocratic socialist traditions. From Rauschenbusch to Jurgen Moltmann, the major theologians οf modern Christian socialism have insisted that democracy is the heart οf socialism. They have argued that there is no democracy without democratized economic power and no socialism without democracy. The failures and horrors οf Communism have nothing to do with progressive Christianity, they have claimed, because Christian socialism is grounded in a political tradition profoundly different from Communism. It does not seek to obliterate liberal democracy, but to retrieve, renew, and extend the liberal democratic revolution. But the problem οf Christian socialism is deeper than the problem οf demonstrating its commitment to democracy. At the end οf a century in which tens οf millions have died in prison camps, killing fields, and torture chambers in the name οf building socialism, the word itself has acquired powerfully repugnant associations. In much οf the world, socialism is synonymous with totalitarian brutality, terror, bureaucratic stagnation, economic backwardness, and moral squalor. In its democratic forms, socialism has its own history οf state collectivism. Its most benign face is the overcentralized Swedish welfare state, which finances its elaborately paternalistic government from a diminishing economic base. Wherever it has attained power, democratic socialism has promoted greater equality, civil liberty, and social insurance, but always with a high degree οf centralized government bureaucracy. Wherever it has sought power, democratic socialism has lost the radical communitarian/utopian spirit that fueled the Christian socialist, syndicalist, and even social democratic movements οf the early twentieth century. Under these historical circumstances, it is crucially important, but not enough, for Christian socialists to explain that their socialism is democratic. This dilemma was anticipated by William Temple in the early 1940s. Though he produced some οf the most creative and programmatic Christian socialist thinking οf this century, Temple generally avoided the rhetoric οf socialism. He worried that "socialism" was already indelibly associated with Left-authoritarian politics, partly because democratic socialist economic strategies were often difficult to distinguish from authoritarian socialism. Temple opposed state socialism while appreciating that for most people socialism meant economic nationalization. He therefore eschewed the language οf socialism in making his case for decentralized economic democracy. As he explained in Christianity and the Social Order, he fervently hoped that all Christians might accept his arguments for economic democracy. At the same time he judged that few Christians outside the trade unions and the political Left would ever embrace socialism. Temple was not interested in bolstering a suspect ideology with the prestige οf Christian faith. His concern was to elucidate what it means to follow Christ in the modern world. He appropriated guild socialist ideas in his constructive effort to discern the prophetic meaning οf Christianity in the modern world, but he never reduced the gospels transcendent meaning to his politics nor did he attempt to turn Christianity into an endorsement οf socialism. For him, socialist ideology was a barrier to the modern Christian project οf democratizing social and economic power. He vigorously promoted economic democracy as a Christian ethical project while eschewing the progressive Christian tendency to sacralize socialist ideology. (Temple 54-59) The difference is crucial. Though socialist theory has provided a seemingly indispensable conceptual framework and vocabulary for much οf modern Christian social thought, progressive Christianity is not unavoidably beholden to the dubious ideology οf socialism. Progressive Christianity and democratic socialism arose at the same time and often together, sharing similar impulses and moral commitments. But at the end οf a century in which "socialism" conjures up, at best, the image οf an overextended, paternalistic welfare state, how much οf the long-cherished Christian socialist vision should Christian ethicists seek to redeem? How much is left οf the dream οf economic democracy? Many theorists point to some version οf Oscar Langes market socialist model. In the 1930s, Lange tried to show that market mechanisms and incentives could be integrated into socialist theory. He argued that a large state sector could coexist with, and benefit from, the pricing and market discipline οf a private sector οf small enterprises. In his proposal, state planners would simulate and be instructed by the private sectors pricing system. The crucial problem with this scheme, however, is that it retained a highly centralized and collectivist conception οf the role οf the state. Though he granted a larger role for the market than traditional state socialism, Lange still had centralized planners trying to replicate the innumerable and enormously complex pricing decisions οf markets- a task exceeding the competence, time constraints, and knowledge οf any conceivable planning board. Langean-style blueprints for "market socialism" invariably founder on this fundamental problem. Though a considerable degree οf state planning is inevitable in any industrial or postindustrial society- especially in economic markets where long-term planning is imperative-- the purpose οf economic democracy should not be to expand state intervention, but to democratize the base οf economic power If progressive Christianity is to reclaim its long-held vision οf economic democracy, I believe that it must turn not to a Langean-type command model, but to the kind οf decentralized mixed-model strategy promoted by Temple. In this perspective, the common project for progressive social movements is to expand the modern democratic revolution by democratizing social and economic power. In a postmodern social context, however, it is not enough for this project to focus on either the workplace or electoral issues. The effort to democratize power must take place not only at the point οf production (as in Marxism) or in the electoral arena (as in liberalism) but also in the postindustrial community or "living place" where people struggle to attain sufficient health care, child care, housing, a clean environment, and healthy neighborhoods. It is a project that requires a feminist, multicultural, ecological, and anti-imperialist consciousness that social Christianity lacked in the lifetimes οf Rauschenbusch and Tillich. Many issues raised by liberationist and ecological critiques cannot merely be appropriated by or added to an inherited progressive Christianity; they require transformations in the assumptions and theoretical frameworks οf this tradition. At the same time, it is grievously mistaken to think that any serious challenge to existing relations οf power can ignore the factors οf production. There is a pronounced tendency in contemporary postmodern, feminist, and multiculturalist criticism to emphasize cultural and political issues while avoiding any discussion οf economic alternatives. The reasons for this preference are far from mysterious. The internationalization οf capital, the brutal assaults on trade unionism, the failures οf democratic socialism, and the ascendancy οf hyper-capitalist economic doctrines in recent years have discouraged progressive theorists from focusing on issues pertaining to economic distribution or power. Cultural theory is more manageable and rewarding than the seemingly hopeless problem οf inequality. But to concede defeat in the economic area is to surrender on virtually every political and cultural front. Those who control the terms, amounts, and direction οf credit largely determine the kind οf society we live in. The question οf who controls the process οf investment is therefore hardly less pressing, crucial, or determinative at the end οf the twentieth century than it was in Rauschenbuschs time. As progressive Christianity has long insisted, gains toward social and economic democracy are needed for the same reason that political democracy is necessary: to restrain the abuse οf unequal power. If Christian ethicists have appropriately insisted that democracy has an economic dimension, however, they have only rarely addressed the political and economic trade-offs that their vaguely socialist prescriptions require. Just as there are serious problems with organizing and maintaining political democracy, there are equally serious problems with economic democracy. Democratically controlled capital is less mobile than corporate capital, and the profit from democratically controlled capital tends to be lower than in corporations, because worker-controlled enterprises are more committed to keeping low-return firms in operation. Producer cooperatives are therefore often not well-suited to compete in international markets with fast-moving, hierarchical capitalist enterprises. Moreover, cooperative enterprises require cooperative, egalitarian cultural values and habits that cut against the grain οf Americas dominant cultural traditions. In an American context, any strategy to break down the prevailing concentration οf economic power must confront not only certain economic trade-offs, but also forbidding political and cultural barriers. Works Cited Bruyn, Severyn T., A Future for the American Economy: The Social Market (Stanford: Stanford University Press, 1991) Novak, Michael, "Father οf Neoconservatives: Reinhold Niebuhr," National Review (May 11, 1992): 39-42. Stackhouse, Max L. and Dennis P. McCann, "Public Theology After the Collapse οf Socialism: A Postcommunist Manifesto," The Christian Century (January 16, 1991): 1, 44-47. Temple, William, Christianity and the Social Order (Middlesex: Penguin Books, 1942), 101; see Temple, The Hope οf a New World (New York: Macmillan, 1941), 54-59. Read More