Political Economy and Democracy

American Capitalism and American Democracy have always gone hand in hand for the entire history of the United States since it’s founding, and many say one cannot exist without the other. Many people today commonly associate Capitalism with Democracy when asked about the United States in general. But this statement is inherently flawed; capitalism is based on profits for the few while democracy is based on rights for many. So how can such a contradictory statement be good for the society as a whole? First we must dissect what both Capitalism and Democracy really mean in order to perform a noteworthy analysis.

The current economic system in place for the United States as many people know is capitalism. Commonly capitalism is known as an economic system in which all or most of the means of production are privately owned and operated, usually through employing wage labor and for profits, and in the investment of capital and the production, distribution, and prices of commodities (goods and services) are determined mainly in a free market. Democracy, as defined by Katznelson, Kesselman, and Draper is, “A situation in which all members of a community have roughly equal chances to influence the outcomes of decisions that affect them, in proportion to the importance of these decisions in their lives.” By nature these two statements conflict in that those who own the means to produce goods and services have disproportionate power to ordinary citizens, while democracy states that these ordinary citizens should have a say in how a company is run, because it affects them as well.

Corporations are the best example of capitalism in action. The main objective of a business or corporation is to ultimately make a profit, which then can be used to make investments which leads to even more profits. Essentially, the private owners in charge determine the future of that company and everyone who works there. Today, with the majority of the globe running under these mighty corporations, a sense of classism amongst the populace evolves. According to Dale Weaver and Nicky Gonzalez Yuen in the article, “Divided We Fall: A Primer on Classism in America,” “…classism robs people of ownership or control of the tools to make a living on their own, forcing them to work for the rich people who do own the means by which people might support themselves.” Classism takes a large portion of the value of these people’s work and the owning class reaps all the benefits. Because capitalism is inherently competitive, elimination of business competitors is usually one goal of thriving or developing company. While one way to do this is to create superior products at lower prices, many times a business will just buy out the other and eliminate the competition. This results in what is called a monopoly, where one business is the only one that can produce a certain good. This results in workers having no other choice but to work under this monopoly and is subject to its wages and benefits, or lack thereof, because there is no competition in that particular field. Once again, the owning class reaps the benefits and the working class is at a disadvantage.

Today what is known as Corporate Capitalism has taken the world in its grasp and shows no signs of letting go. Production becomes concentrated and control becomes centralized in control of the few. With so much power in the hands of a small portion of the population, the high amount of concentration leads to “… the growing imbalance between public and private power in our society.” These corporation giants have so much wealth they can practically buy influence with political officials, through lobbying and campaigning and any monetary trouble they find themselves in they simply buy their way out. Essentially corporations have greater control over the government than the people, due to the influence and vast resources they possess.

The largest corporate giant today, Wal-mart, has so much monetary backing and profits, they can essential set up shop in any small town with a competitive sector and wipe them out. These small businesses simply don’t have the money or resources to compete with the giant. In the film “Wal-mart: The High Cost of Low Price,” small businesses are getting wiped out by the giant and then are forced to work for the same company that just closed them down. Wages and benefits for those workers are kept as low as legally possible, because the reason why Wal-mart is so profitable is that all they care about is their bottom line. They want to have the best profits possible at the expense of workers, taxpayers, and communities. For example, millions of dollars are spent by the corporation for security cameras and personnel to monitor customers and prevent theft, but protection for the consumers themselves against theft, they pay nothing because it would cause profit loss.

Capitalism is often described as a “system