Monday, August 8, 2011

Capitalism vs Democracy

This article in the Globe & Mail about the ongoing debt crisis in the USA and Europe caught my attention. Not because it offered any interesting or unique insight into the origins or solution to the present debt crisis facing western capitalist nations. What was interesting was the matter-of-fact assumption that democracy was a hindrance to the ability of capitalism's profitability and growth to be restored. As Konrad Yakabuski sees it, western political institutions are "dysfunctional" because populations don't want to see their living standards hammered in order to pay for a debt crisis that has been caused by the failures of the system and the attempts to overcome those failures by rewarding the wealthiest and most corrupt members of society.

European leaders are similarly hamstrung by dysfunctional political systems. Their attempts to contain the euro-zone debt crisis have repeatedly come up short because the measures needed to comfort financial markets exceed the tolerance of voters.

In reality it's not the political system that is dysfunctional per se. It's failure is a result of the fact that capitalism is failing. The pressure that this crisis creates demands one of two responses - abolish capitalism or see not just pundits imply the need for a curtailment of democracy - but see it implemented in practice.


thwap said...

When austerity cannot be implemented because it exceeds the tolerance of voters, ... that's bad and the voters have to trashed.

When social policy cannot be implemented because it exceeds the tolerance of parasitical investors and central bankers, ... this is good and we should listen to the investors and bankers.

Shawn Whitney said...

Exactly. What's astounding is how brazenly pundits and politicos are beginning to state this.

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