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Capitalism and Democracy - Part 1
Mark A. Goldman                                                                  Dated:  7/10/08


I have a degree in economics and an MBA in Finance both from respected schools.  You might say that my education in finance and economics celebrated capitalism.  And so did I for a long time.

Now, after more than 40 years of experience as citizen, financial professional, and participant in our economy, I have come to the conclusion that capitalism, as we know it, doesn’t work as advertised and is unsustainable. It doesn’t make most people rich; it makes most people poor. Most of the world exists under capitalist regimes and most of the world’s citizens are poor. In addition to that, the notion that capitalism and democracy are almost synonymous, which is what we were all taught to believe almost as a religion, is patently false. One look at China ought to disabuse anyone of that myth.

Capitalism and democracy are two different things: one is an economic system that supposedly describes a system by which goods and services can equitably and efficiently be distributed among participants, and the other is a political system that supposedly describes the method by which power can be equitably distributed among citizens in a manner that allows them to be self-governed. The two actually are at odds with one another. There’s nothing democratic about capitalism. It is only well executed propaganda that lures us into believing that one compliments the other. It’s nonsense. Left unchecked, capitalism leads to tyranny for workers.  And in America today, capitalism is essentially unchecked.

Dr. Michael Parenti, a well-known professor, lecturer and political scientist, says it best ( He points out that it is only a myth that the affluent middle class in America came about because of capitalism. In fact, the middle class in America became affluent only because a lot of brave people fought many long hard battles against America's capitalists. Now we’re not talking here about small entrepreneurs— the small mom and pop businesses that populate the American landscape. We’re talking about the large multinational corporations and their owners that control the lion's share of our financial wealth.

A hundred years ago in America capitalism was in its prime. Capitalists did not go into business with the idea of creating wealth for the middle class. As Parenti says, they went into business to create wealth for themselves. Capitalists are interested in labor only as a unit of production. They are very much interested in reducing the costs of production in order to improve profits. If you visited a factory in New York in the early 1900’s what you would find would be children working 18 hour shifts and women working in sweat shops in stifling and obnoxious unsafe conditions.

The middle class came about through blood and sacrifice after facing brutal opposition. It was the resistance to capitalism—a great class struggle—that gave rise to the middle class in America and a great many died or were brutalized in the process. It was the unions and citizen revolts that fought for child labor laws, women’s rights, workers rights, and civil rights. Injuries and death in coal mines and factories were epidemic and would still be so were it not for the brave men and women who fought for safety standards, employee benefits, and decent work hours and conditions.

Capitalists will and always have, taken every opportunity to reduce wages and externalize their costs by exploiting human and natural resources whenever possible, leaving poverty and pollution in its wake… sometimes to the point of human and environmental death. Capitalism makes capitalists rich at the expense of workers and society. American workers got zilch until our great grandparents struggled and demanded their share of the spoils.

Of course once capitalists were forced to provide decent wages and benefits, they then put a happy public relations face on it so they could cynically take credit for how beneficial their corporations have been for the American worker. Still, in every economic downturn, workers are the first to be laid off while the corporate elite keep their jobs or are offered golden parachutes to retire early.

But capitalists are relentless. Today, many of the gains made decades ago through brutal struggles have been reversed, with modern day Democrats as well as Republicans leading the way. Now Social Security, Medicare and Medicaid are in their sights. Unions are mostly gone, manufacturing plants have been sent abroad where labor is cheap, and even white collar jobs now are being outsourced to India and China. Capitalists aspire to take the American worker right back to where they were in the early 1900s. The struggle for both political and economic freedom was hard fought, and many of those freedoms are now disappearing or being degraded. We have forgotten to teach our children how we got here. That lack of historical understanding is costing us and them dearly.

When capitalism is allowed to flourish unchecked, democracy suffers. Lawmakers pay little heed to so-called constituents nowadays. Money has corrupted our elected officials and we are fast morphing into our own form of fascism. Without an awake, educated and motivated citizenry, democracy cannot survive. The greed, hypocrisy, and dishonesty that capitalists and lawmakers currently celebrate are a lethal and growing cancer on our republic.

The result of decades of lies and deceit is now coming home to roost: Our economy is at the worst state I’ve seen it in 40 years. It is not a natural disaster; it is a man made disaster. Broke and betrayed, the average American worker will wake up one day and wonder what happened to their lifestyle and their freedom. It will have been stolen right out from under our noses. Capitalists are moving East where there are new opportunities. General Motors is going bankrupt in the US, but is thriving in China.

Frankly, I don’t think this ship can be turned around now before citizens experience a great amount suffering… and turning it around is going to take more than simply replacing a Republican president with a Democrat. As this American tragedy unfolds before my eyes, I am struck by the fact that I don’t know many people who even want to understand what is happening to them. Unfortunately, that won’t keep it from happening. read Part 2



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