Capitalism and real democracy never had much to do with one another. In contrast, formal voting in elections has worked nicely for capitalism. After all, elections have rarely posed, let alone decided, the question of capitalism: whether voters prefer it or an alternative economic system. Capitalists have successfully kept elections focused elsewhere, on non-systemic questions and choices. That success enabled them first to equate democracy with elections and then to celebrate elections in capitalist countries as proof of their democracy. Of course, even elections were and are allowed only outside capitalist enterprises. Democratic elections inside them — where employees are the majority — never happen.
Real democracy means that important decisions affecting people's lives are made genuinely and equally by the affected people. The capitalist organization of enterprises thus directly contradicts real democracy. Inside the corporations that dominate modern capitalism, a tiny minority — major shareholders and the boards of directors they elect — make key decisions affecting those below them in the corporate hierarchy, the employees. That tiny minority decides what products the corporation will produce, what technologies will be used, where production will occur, and how the corporation's net revenues will be distributed. The majority is affected, often profoundly, by all those decisions, but it does not participate in making them.
Inside typical modern capitalist corporations, real (as well as electoral) democracy is excluded. Societies that celebrate commitment to democracy and justify government policies (including wars) as promoting democracy also exclude democracy from their workplaces. That stark contradiction raises serious problems. Consciously or unconsciously, workers there sense, feel, and express dissatisfactions reflecting that contradiction.
For example, workers sense disrespect descending from corporations' commanding heights. They often feel that their capacities and creativities are unrecognized, unused, and/or devalued. Expressions of such feelings include absenteeism, interpersonal tensions, and job-related dysfunctions (alcoholism, insubordination, pilfering, etc.). The exclusion of democracy from workplaces often provokes workers' resentments and resistances that reduce productivity and profits. Corporations have long responded by hiring multiple layers of costly workplace supervisors and providing big budgets for them. Those corporate expenditures are among the wasteful costs of capitalism: sums deflected from investment, economic growth, technical progress, and other preferable social uses.
Elections outside the workplace stand in an ambivalent relation to capitalism's exclusion of real democracy inside. On the one hand, elections distract people from their conscious and unconscious upsets with working conditions. Elections focus instead on political candidates, parties, and alternative policies around issues other than capitalism versus alternative economic systems and other than their respective working conditions. That is why supporters of capitalism appreciate elections. Well-controlled elections do not question, let alone threaten, capitalism. On the other hand, they always carry a risk, the potential to make big problems for capitalism.
Workers denied democracy on the job may conclude that such crucial problems as inadequate wages, job security, and benefits flow from and are sustained by that denial. Given capitalism's celebratory equation of democracy with elections, workers may then turn toward elections as a way to respond to democracy's absence from the workplace. Knowing they comprise the voting majority, workers may see elections as the way to change their economic conditions. Electoral politics may become their route to undo the consequences of a capitalist economic system. The majority could make the issue of choosing between capitalist and democratic workplace organizations a ballot decision. Workers could use elections outside enterprises to finally bring elections and real democracy inside them. Conventional electoral politics leaves that possibility open, a perpetual risk to worry capitalists.
Among solutions found for this problem, capitalists fund candidates and parties in and between election campaigns. In return, elected officials support their funders' desires, especially concerning what is and what is not presented for voters to decide. Capitalist enterprises also fund think tanks, academic programs, mass media, and public relations campaigns that shape public opinion to favor capitalism. In the last half-century, another solution has emerged: keeping the state on the defensive not only ideologically but also financially by means of budget deficits and debts.
For example (thanks to Doug Korty for this point), the total deficits of the federal government from 1950 to 2009 were $6.6 trillion. During those years, three Republican presidents (Bush 1, Reagan, and Bush 2) accounted for over 92 percent of those deficits. All the other presidents (Truman, Eisenhower, Kennedy, Johnson, Nixon/Ford, Carter, and Clinton) combined accounted for 12 percent. The three deficit-happy Republican presidents were the most conservative and subservient to major capitalist interests. They all increased spending (chiefly for military and counter-crisis purposes) while cutting taxes (especially for corporations and the richest individuals). Such policies forced huge federal deficits and rapid national debt hikes. By his administration's huge stimulus outlays and costly wars without offsetting tax increases, Obama also ran very large deficits and boosted the national debt.
The predictable ideological storms followed: (1) federal deficits and debts were defined as the urgent problems, and (2) austerity programs to cut government spending were the appropriate solution. Republicans and Democrats played their predictable roles arguing over the pace, size, and targets of austerity. All their arguments kept the issue of capitalism off the agenda for popular and political debate despite that system's crisis.
When conventional solutions fail and ever more people begin to question, challenge, and oppose capitalism, capitalists generally support police and military repression. In extreme situations, they end electoral democracy by means of military coup, dictatorship or otherwise. However, ending electoral democracy usually provokes anxiety even among the capitalists who support it. They worry that ending electoral democracy provokes social criticism and systemic opposition that can expand to include an undemocratic production system. They do not wish to lose a key benefit of properly controlled elections: distracting workers away from the issue of capitalism per se. Such elections are the cheapest and least dangerous way to secure the distance that capitalism keeps between itself and real democracy.
Richard D. Wolff is Professor Emeritus at the University of Massachusetts in Amherst and also a Visiting Professor at the Graduate Program in International Affairs of the New School University in New York. He is the author of New Departures in Marxian Theory (Routledge, 2006) among many other publications. Visit Wolff's Web site at www.rdwolff.com, and order a copy of his new book Democracy at Work: A Cure for Capitalism. His work is also featured on the new website: www.democracyatwork.info. His weekly radio program, "Economic Update," broadcasts on several Pacifica Network stations including WBAI in New York City and KPFA in San Francisco. It is archived on rdwolff.com.