Democracy and capitalism have, for good or for ill, often been closely aligned. But this moment in global politics is characterised by the intensification of the tension between the two. This tension provides the new ideological faultline in many contexts. Democracy, as Karl Polanyi argued, had as one its functions, the “self-protection” of society against what he called the “satanic mills” of capitalism. This protection had to take place on a number of dimensions.
First, there had to be a modicum of social justice, as evidenced in the share between labour and capital, for the system to have any legitimacy. In practice, this social justice was achieved through the welfare state, which by ensuring basic goods at least maintained the fig leaf of equality of opportunity. The second was to ensure that the political process was not entirely beholden to monied interests to the point that it could not claim independent legitimacy. Politics could serve as an independent source of legitimacy, only if it was not entirely subservient to the logic of market interests. Governments may rise or fall with economic performance. But the resilience of democratic authority requires that its fate not be entirely tied to economic outcomes. Third, the self-protection had to ensure that the commodification of social life did not acquire the dimensions where it would lead to a loss of meaning. It also required ensuring that nature of capitalist accumulation was not self undermining. In the case of the environment for instance, it did not lead to outcomes, where capitalisms own promises of a better life were undermined by a degradation of the environment. Fourth, the state ensured personal liberty as a sign of respect for and trust in the autonomy of persons, as expressed in rule of law. And finally, while economic efficiency promised the satisfaction of private wants and needs, it needed to be supplemented by some account of a common project, a community of fate that tied citizens together in more than just a relationship of convenience. Democracy would allow capitalism to flourish, only if it could be seen to be performing these functions of protecting society to some degree.
It could be argued that at this point in many countries across the world, the “Left-Right” dimension does not quite capture what is at stake in contemporary politics. What is at stake is not just equality of distribution, but the relationship between democracy and capitalism. If you look at the emerging ideological landscape, the issue is not so much between socialists and capitalists. The issue is between those who think that capitalism is the problem, and those who think democracy is the problem. There are those who think that the self-protection functions of democracy stand in the way of capitalism; and there are those who think that capitalism has seriously eroded the self-protection functions of democracy.
In some ways, a potential contest between Bernie Sanders and Donald Trump will turn out to be a more interesting contest because it is the one contest that makes these stakes totally clear. Personality and competence issues apart, the Bloomberg-Trump contest, would be ideologically not a contest at all. Whether the heirs to “Clinton-Obama” centrism are more electorally attractive can be debated. But they are seen to fudge the democracy question. It is true that there is a good deal of the condescension of posterity in how we assess Clinton-Obama-Blair centrism. The condescension underestimates the complexity of electoral politics and the contextual virtue of institutional moderation. But analytically, the critique of that centrism is that it saved capitalism (and some of its plutocracies and associated imperialism) more than it saved democratic enfranchisement; and by not pushing harder on the social protection functions of democracy, it paved the way for disenchantment with it. What may attract the young to Sanders is not equality per se, but restoring the romance of agency; the idea that democracy does not give itself over to a fatality where its protective functions are undermined.
Opinion: When Yankee goes home
That this is a contest on the balance between democracy and capitalism is obscured by two things. First, all parties still work within the frame of electoral contestation and within this frame, contingency matters a lot. Particular leaders may matter, for example. That frame for all its corruptions, seems to have enough legitimacy to appear to be the final arbiter. Second, the Right substitutes, the language of democracy with its close cousin, the language of the people. This language is manifest most clearly in the invocation of nationalism, an alternative language of legitimation.
This language invokes the people but not a group that has to share prosperity, but as a group that has to display unity — often against an enemy. In this sense, the ideological function of nationalism is to immobilise any pushback by democracy and civil society. It is a form of democratic legitimacy that is turned against exactly the self-protection that democracy is supposed to provide: Questions of social justice have to immobilised; there is high degree of comfort with the autonomy of the political process being subverted by the very thing it must be protected against, namely monied interests; there is a deep impatience with the idea that goods like the environment need protection; there is also a contempt for the institutional forms in which power is exercised. But this is not just a pathology of individual leaders. It has now become an ideological faultline.
This is why the question of the internal diversity within parties like the Republican Party has become relatively irrelevant. Moderation made sense when the contest was largely on one dimension — a little more or a little less distribution. But once you have grasped the thought that the pushback against a self-undermining capitalism will come from democracy itself, then there is relatively little resistance to standing behind any form of executive power that will contain that democracy. Right-wing parties hang together not just because they have that ultimate form of identity politics — nationalism — to bind them together. They hang together because their raison d’etre is now to ensure that society does not pushback against capital. They can have a great deal of success in this endeavour, but only at the risk of making society off balance in ways Polanyi had suggested. With an environmental crisis looming the costs of capital democracy relations being off balance are even higher.
So the contest in the US, but elsewhere as well, is less over socialism versus capitalism. It is whether there is too much democracy or too much capitalism, and where the balance between the two lies.
This article first appeared in the print edition on February 18, 2020 under the title “The new faultline”.
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