Today we surrendered democracy to capitalism

Today, in a decision that I am certain will go down in infamy, the U.S. Supreme Court voted 5-4 to overturn 20+ years worth of legislation that had limited the ability of corporations to spend money to win political influence. This is deeply disturbing to me and here’s why…

We have two main institutional power structures operating in the U.S.: democracy and capitalism. Despite the fact that we tend to think of these two systems as compatible, they can be at odds with one another unless a balance is found and then managed well. It’s like this: democracy is about including many opinions in decision making, even if, ultimately the majority decides the fate of the nation. So democracy is about inclusion. Capitalism on the other hand is about finding the One via competition and is therefore, about exclusion. Furthermore, in democracy, one person = one vote; but in capitalism, one dollar = one vote. Needless to say, there are many more dollars than voters in the U.S.

This asymmetry in power allocation is what scares me about today’s Supreme Court ruling. In fact, the folks who shaped the United States upon its legal creation were aware of the need to balance these types of power structures as witnessed in the ordering of the U.S. legislative branch of government. We have the House of Representatives which is equivalent to capitalism, in that votes are allocated unevenly. Big States get more votes, just as big monied capitalists get more votes because they have more dollars. Then we have the Senate where each State, no matter its size, gets 2 votes. This is the equivalent of democracy where each person is the same under the eyes of the law. But the U.S. Supreme Court’s decision today undermines the fine balance between democracy and capitalism. Maybe not today, but eventually.

Even the original philosophical creators of capitalism felt that its existence depended on a legal framework, and here I am thinking specifically of Adam Smith. He believed that there needed to be equal access to market information if both producers and buyers in a capitalist system were to be treated equitably. He also felt that goods had to priced appropriately or they would be misused – but more on this momentarily. On the blog I have long written about the fact that all sports (capitalism being very similar to a sport) need rules to protect its participants. Imagine if tomorrow all of the rules in football were done away with. Its my feeling that within 3 seasons it would be very gladitorial and that we would witness deaths. So within our country there are laws that protect the fine balance between democracy and capitalism. But if businesses, who wield billions of dollars are allowed a billion votes to influence the political process then what chance do Jane and John Doe stand against that?

Even with the previously modest anti-lobbying laws Big Business was able to overturn almost all of the Depression Era finance industry legislation that had protected the country for nearly 80 years. Big Business has staunchly fought environmental legislation that would help to counter the cascade of potential doom that is Global Warming. Big Business insisted on the deregulation of the utilities industry, resulting in the unabashed manipulation of power prices by Enron. Those manipulations led to power blackouts in California that resulted in many deaths of folks without proper access to air conditioning or other life saving, electricity-driven technology. Big Business has polluted our water such that on average there are now 60,000 chemicals in our water system vs. 3,000 a generation ago. And on and on. The problem is that Big Business is a gigantic, out of control Frankenstein obsessed with profit. And worse, they measure profit, on average, over the time frame of just one year. Whereas, the consequences of their profit-motivated actions affect the world around us for many decades. By the time democracy catches up to the profit motivated Big Business choices of yesterday, it is often too late to do anything about it. Which brings me to another critical tenet of the effective need for balance between democracy and capitalism.

Capitalism works so long as every good is priced appropriately. Let’s use oil as an example. In the late 1800s when oil was first being used as a fuel, the long-term environmental effects of its eventual massive use could not be foreseen. Consequently, oil was priced too cheaply. That is, the full costs to the entire planet were not known, therefore not factored in. Folks can be forgiven for not pricing oil appropriately because no one has any idea what is going to happen in 5 years, let alone 140. But this is the very reason that democracy must be equal to capitalism. There has to be a check on, and balance on the callous “anything for a dollar” philosophy. Without that checking and balancing then most capitalist “goods” are underpriced, and consequently overused. More recently, when financial legislation was rolled back, and worse, not updated to keep up with the rapidly evolving mortgage industry, mortgages were too cheaply priced. The effects on the economy of this underpricing due to an improper equilibrium between democracy and capitalism are gigantic and will be felt for a generation.

For these reasons I am sickened by today’s Supreme Court decision. Effectively, they have said the foxes should be in charge of the chickens, or that it is alright if the inmates run the asylum. And we should all be very careful and pay attention to what is about to unfold as the effects won’t be noticed or felt today, but many, many years from now.

Jason