Capitalism and Democracy

Scott, Bruce R.

doi:10.1007/978-1-4614-1879-5_3

Bruce R. Scott²

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Abstract

In the course of the 20th century, capitalism and democracy became the prevailing models for problem solving in their respective spheres of activity, the economy and the polity.

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Notes

1.
Almond, “Capitalism and Democracy.”
2.
Dahl, On Democracy, 9. Freedom House’s 2007 survey classifies countries as Free, Partly Free, and Not Free, based on scores along two scales, measuring political rights and civil liberties. The 2007 edition of this survey, which draws largely on data collected in 2006 in 193 countries and 15 territories, found 123 electoral democracies but rated only 90 independent countries, which hold 47% of the world’s population, as “Free.” See Freedom in the World 2007 (Washington, DC: Freedom House, 2007).
3.
Almond, “Capitalism and Democracy,” 468.
4.
Ibid.
5.
California provides innumerable examples of such failures of political markets, and their unfortunate consequences. Arguably, there have also been numerous market failures of US democracy that have arisen from the use of open primaries for the nomination of candidates. Both scenarios are discussed in Chap. 14.
6.
This assumes that market frameworks have taken appropriate account of the costs.
7.
Almond, “Capitalism and Democracy.”
8.
Dahl, On Democracy, 93.
9.
Abraham Lincoln, “The Gettysburg Address,” November 19, 1863.
10.
Kenneth Arrow, “A Difficulty in the Concept of Social Welfare,” The Journal of Political Economy 58, no. 4 (August 1950): 328.
11.
Ibid., 330.
12.
Ibid., 342.
13.
Ian Shapiro and Casiano Hacker-Cordón, “Promises and Disappointments: Reconsidering Democracy’s Value,” in Democracy’s Value, ed. Ian Shapiro and Casiano Hacker-Cordón (Cambridge: Cambridge University Press, 1999), 1.
14.
James S. Fishkin, “The Nation in a Room: Turning Public Opinion into Policy,” Boston Review, March/April 2006.
15.
See Dahl, On Democracy.
16.
Seymour M. Lipset, “Some Social Requisites of Democracy: Economic Development and Political Legitimacy,” American Political Science Review 53, no. 1 (March 1959): 71. Quoted in Tatu Vanhanen, “A New Dataset for Measuring Democracy, 1810–1998,” Journal of Peace Research 37, no. 2 (March 2000): 251–252.
17.
Kenneth Bollen, “Liberal Democracy: Validity and Method Factors in Cross National Measures,” American Journal of Political Science 37, no. 4 (November 1993): 1208–1209.
18.
Ibid., 1210.
19.
Fishkin, “The Nation in a Room: Turning Public Opinion into Policy.”
20.
Shapiro and Hacker-Cordón, “Promises and Disappointments: Reconsidering Democracy’s Value,” 4.
21.
For example, Malaysia has ethnic, racial, and religious divisions that are also geographic, and that invite violent competition among its constituent peoples. To deal with such possibilities Malaysia adopted a Constitution that entrenched certain rights and prohibited debate on certain of its principles, even by members of parliament when meeting officially as an organ of the government. An alternative approach, in the United States, protected free speech that led ultimately to secession of the South and to Civil War in 1861.
22.
Thomas Jefferson, “Letter to Samuel Kercheval,” July 12, 1810, http://www.monticello.org/reports/quotes/memorial.html. As excerpted and inscribed on the Jefferson Memorial.
23.
See Arthur A. Daemmrich, International Lobbying and the Dow Chemical Company (A), unpublished Harvard Business School Case draft, November 2009.
24.
See Dahl, On Democracy.
25.
Ibid., 17–21.
26.
Ibid., 20.
27.
Ibid., 16.
28.
Robert Dahl, Polyarchy: Participation and Opposition (New Haven: Yale University Press, 1971).
29.
Robert Dahl, Toward Democracy: A Journey, Reflections 1940–1997 (Berkeley: Institute of Governmental Studies Press, University of California Berkeley, 1997), 93–99.
30.
Dahl, Toward Democracy: A Journey, Reflections 1940–1997, 61–79, 98; Dahl, On Democracy, 38. In On Democracy, Dahl adds “Alternative sources of information” to this list.
31.
Dahl, On Democracy, 147; Dahl, Toward Democracy: A Journey, Reflections 1940–1997, 99–105.
32.
Dahl, On Democracy, 159.
33.
Ibid.
34.
Ibid., 147.
35.
Dahl, Polyarchy: Participation and Opposition, 94.
36.
Dahl, On Democracy.
37.
Robert Dahl, Democracy, Liberty, and Equality (Oslo: Norwegian University Press, 1986), 10.
38.
“Special Report on the World Economy,” The Economist, September 16, 2006.
39.
Douglass C. North, William Summerhill, and Barry R. Weingast, “Order, Disorder and Economic Change: Latin America vs. North America,” draft chapter, September 1999, 6, http://www.stanford.edu/~weingast/north.summerhill.weingast.8.05p.pdf.
40.
Ibid., 9.
41.
S.E. Finer, The History of Government from the Earliest Times, vol. 2 (Oxford: Oxford University Press, 1997), 905.
42.
James T. Kloppenberg, “Democracy,” in A Companion to American Thought, ed. Richard Wightman Fox and James T. Kloppenberg (Oxford: Blackwell Publishers, 1995), 174.
43.
See Jeffrey D. Sachs, The End of Poverty: Economic Possibilities for Our Time (New York: Penguin Press, 2005).
44.
Obviously it would be dubious to sum the scores in different dimensions, but approximate scores still might be valuable.
45.
Friedman, Capitalism and Freedom, 10, 3.
46.
Ibid., 17.
47.
Ibid.
48.
Ibid., 4.
49.
Ibid.
50.
Ibid.
51.
Milton Friedman, “Preface,” in Capitalism and Freedom, 40th anniversary ed. (Chicago: University of Chicago Press, 2002), ix–x.
52.
The US Supreme Court seems to have taken a position similar to Friedman in supporting paid advertising as free speech, as in Buckley v Valeo, 424 U.S. 1 (1976).
53.
Dahl, Democracy, Liberty, and Equality, 10.
54.
Dahl, On Democracy, 166.
55.
Dahl, Toward Democracy: A Journey, Reflections 1940–1997, 147.
56.
Simon Kuznets, “Economic Growth and Income Inequality,” The American Economic Review 45, no. 1 (March 1955): 1–28.
57.
See Edward L. Glaeser, “Inequality,” Unpublished draft chapter for the Oxford Handbook of Political Economy (Harvard Institute of Economic Research, June 2005).
58.
For an illustration of this process involving the Southern Pacific Railroad and the State of California, see Chap. 13.
59.
Adam Przeworski and Fernando Limongi Neto, “Modernization: Theories and Facts,” World Politics 49, no. 2 (1997): 155.
60.
Ibid., 158.
61.
Ibid., 158–159.
62.
Ibid., 165.
63.
Ibid., 165, 167.
64.
Ibid., 175, 176.
65.
See Edward N. Muller, “Economic Determinants of Democracy,” in Inequality, Democracy, and Economic Development, ed. Manus I. Midlarsky (Cambridge: Cambridge University Press, 1997).
66.
Ibid., 133. Italics original.
67.
Ibid., 134.
68.
Ibid., 137.
69.
Ibid., 141.
70.
Larry Diamond, “Promoting Democracy,” Foreign Policy 87 (Summer 1992): 26.
71.
Dahl, On Democracy, 86.
72.
Thomas E. Patterson, “The United States: News in a Free-Market Society,” in Democracy and the Media: A Comparative Perspective, ed. Richard Gunther and Anthony Mughan (Cambridge: Cambridge University Press, 2000), 244.
73.
Ibid., 250–252.
74.
Robert W. McChesney, Corporate Media and the Threat to Democracy (New York: Seven Stories Press, 1997), 7.
75.
For some discussion of this topic in the contemporary US context, see Chap. 14.
76.
See Muller, “Economic Determinants of Democracy,” 135.
77.
de Tocqueville, Democracy in America, 2:611.
78.
Dahl, On Democracy, 10.

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Harvard Business School, Boston, MA, 02163, USA
Bruce R. Scott (Paul W. Cherington Professor Emeritus)

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Scott, B.R. (2012). Capitalism and Democracy. In: Capitalism. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-1879-5_3

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DOI: https://doi.org/10.1007/978-1-4614-1879-5_3
Published: 19 September 2011
Publisher Name: Springer, New York, NY
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