Can Capitalism Ever be Democratic? The Difference Between Pete Buttigieg and Elizabeth Warren

POLITICS--The formula for creating an American hero goes like this. Take a dude, preferably white. Make him an underdog. Position him as a champion of the upwardly aspiring. Hey presto! There’s a knight in shining armor, coming to save the promised land. 

Forgive me. I’m being cynical. But I have to question the hero myth surrounding the new golden child of American politics, Pete Buttigieg. Wow! He’s gay! He’s young! Great, good, that’s progress of a kind, I suppose. But what about his ideas? Versus, say, the rest? For example, the emerging theme of his campaign — “democratic capitalism.” Maybe you’re not interested in PB. The bigger question is: can capitalism ever be democratic? Is that the path to progress — or a dead end, a blind alley?

Something a bit like asking a hungry T-Rex to tend your garden — an oxymoron? 

(Listen, I get it. “Democratic capitalism” is seductive — especially to American ears. What could be better than having your cake — capitalism — and eating it too — democracy? Yum. It sounds wonderful. Brave, true, kind, and wise, all at the same time. Like the magic recipe. The silver bullet. It sounds, even, maybe too good to be true. So is it?) 

Now, the American love for “capitalism” dies hard. It’s survived all the following things. Slavery, segregation, middle class implosion, social collapse, rising fascist-authoritarianism. You’d think one of these things alone might have made Americans question capitalism — but no, that’s how deep the attachment is, how strong the abusive bond is. So you’re going to get angry reading this essay, because I’m questioning two or maybe three sacred cows at once: PB, capitalism, and the idea of the American hero. 

But I want to question all this, for a very simple reason. The rest of the rich world made stunning leaps in progress for one reason: social democracy. Yet as the name implies, “democratic capitalism” — if there even is such a thing — is precisely the opposite of social democracy. Social democracy…democratic capitalism…say them in your head three times. See how they’re polar opposites? Social democracy: we all decide, collectively, as equals which public goods and institutions to make shared investments in, like healthcare, education, retirement. “Democratic capitalism” — we do the opposite of that, treat each other as “consumers” and “producers”, and so there are less and fewer public goods and institutions in society. 

In other words, PB is asking Americans to believe in something truly strange, bizarre, and weird. That America can prosper in a different way than the entire rest of the rich world, from Canada to Europe to Australia. That it needs to. That it should. That reinventing the wheel is both desirable and necessary. Is any of that true? Or is it just pandering to capitalism — because that’s what you have to do to make it in America, especially as a political? But if capitalism is the problem — then how can it be the solution? 

That’s a lot of questions. Let’s take them one by one, and unpick this weird turn of phrase called “democratic capitalism,” which I’d bet that more and more American pundits, the Ezra Kleins and Chris Hayeses of the world, are swooning over, falling head-over-heels in love with, and will start reciting like a mantra soon. (It sounds nice, doesn’t it? Maybe that’s why Democrats have been using it for decades…and it’s gotten America less than nowhere.) 

The first thing any sane person should ask about America today is: “why did American life fall apart?” Let me recite the litany of grim statistics: 80% of Americans live paycheck to paycheck, 70% can’t raise $1000 for an emergency, longevity is shrinking, the middle class is imploding, happiness is plummeting, suicide is skyrocketing. I could go on — but you get the picture: it’s a portrait of a society in freefall. And societies in freefall tend to turn to strongmen, bellowing authoritarians, for salvation. 

So. American life fell apart. Why? Well, obviously, because Americans don’t have any of the things that people in the rest of the rich world take for granted — and even that people in the middle income and poor world are starting to enjoy. America’s exceptional today — but in a backwards way. Having a baby doesn’t “cost” $50K in Spain, Chile, Pakistan, or England — nowhere else but America. American living standards imploded — which produced a turn towards authoritarianism, as it always does and has, from Nazi Germany to the Soviet Union — because Americans lack public goods. Public healthcare, public retirement, affordable public university, public childcare and parental leave, and so on. 

Why are public goods totally missing from America — where every other rich country has them in spades? Whenever poor and middle incomes countries are developing them (even Argentina and Chile have public healthcare, friends)? 

The answer’s as simple as it is obvious again. America was built on the belief that capitalism can solve all a society’s problems and challenges. Healthcare? Capitalism. Medicine? Capitalism. Education, retirement, childcare? Capitalism. Hence, America never built great public institutions, like Britain’s NHS, or the French pension system, or Germany’s model of corporate governance where workers are board members, too. Instead, it built its own weird, singular, unique institutions. “401Ks”: capitalist retirement. “HMOs”: capitalist healthcare. “Student debt”: capitalist education. Etcetera. 

So now American life is a trip through the minefield of capitalism. One wrong move — and bang!! — there goes your life. Get seriously ill, lost that job, make a bad investment — wham — you’re out on the streets. It doesn’t happen anywhere else, really, but America, at least among rich countries. This minefield of capitalism has produced an atmosphere of crushing anxiety and perpetual trauma, hence Americans can barely think straight anymore — and the world laughs at their weird, backwards beliefs (like the death penalty for abortion, or white supremacists in the Oval Office, but I digress.) 

Now we can answer our first question. If what’s missing in America are public goods…can “democratic capitalism” provide them? Of course not. What we should have learned from the American experiment is that capitalism fails to provide public goods — absolutely and completely, no matter how hard it tries. Americans have tried to get capitalism to provide decent healthcare and retirement for decades now — and it just hasn’t worked. 

What’s needed to provide public goods is social investment. Societies decide that they want everyone to have healthcare, education, retirement, and so on — and then build social institutions, like the NHS, to provide those goods. 

More capitalism can’t solve the problems that capitalism created. Not now, not ever. That’s what America’s lesson teaches us in no uncertain terms. And yet guys like Pete want us all to believe just that — the answer to capitalism’s bizarre and gruesome problems is more capitalism, only of the “democratic” kind. 

What that means, probably — he’s never explained it, and nobody’s going to ask him, given the state of American media — is more or less something like this: we need more markets! With more corporations! That offer more “choices” for “consumers!” Sorry, none of that works. It’s a fantasy. In these spaces — healthcare, education, retirement — markets just don’t work, because the most predatory rise, monopolies are built (out in the open, a la private equity’s “rollup” strategies), and the result is ever rising prices, and falling quality (and if you don’t believe me, take a look at “401Ks”, “HMOs”, and “student debt”.) 

So, more capitalism isn’t going to solve the problems of capitalism. How could it? Hoping for capitalism to solve problems of missing public goods is like hoping that a blowtorch and a flamethrower are going to prevent your house burning down, or that dropping water on a tsunami is going to save you from the flood. 

That brings me to my second question. If all the above is true, that more capitalism can’t solve capitalism’s problems — as you might infer taking a glance around, oh, the entire rest of the world — then can capitalism ever be “democratic”? Is “democratic capitalism” an oxymoron — a phrase that contradicts itself? 

The answer to that one’s pretty easy. If capitalism was democratic…then why is the most capitalist society in human history also the one with the imploding democracy, America? The obvious lesson is that capitalism is profoundly anti-democratic. I don’t mean my local baker, barber, and butcher — they’re hardly capitalists. I mean the real capitalists. They ended up with the power to buy democracy wholesale, to corrode it, paying lobbyists to write bills sponsored by bought politicians — and they did. 

America’s descent into authoritarianism and fascism should teach us what capitalism really is and does. Capitalism implodes into fascism, as the older thinkers used to point out. That is because capitalism promises middle classes better lives — which it has no intention whatsoever of delivering. The aspiring prole becomes a frustrated prole, with a declining quality of life. He blames those even more powerless than him — Jews, Mexicans, Muslims. A demagogue comes along — bang! The spark of implosion is lit. 

Left to its own devices, capitalism implodes into fascism. There’s no such thing as “democratic capitalism.” America’s lesson teaches us that in no uncertain terms — it’s repeating the 1930s, and its thinkers are of such poor quality, nobody seems to know it. If capitalism were compatible with democracy, wouldn’t the most capitalist society in human history also have the best democracy? Come now. 

Under capitalism, money equals power — and that’s not remotely compatible with a democracy of true equals. Hence, the most ruthless, calculating, greedy, and selfish of all one ends up atop the heap — and the rest are left to fend for themselves. Maybe they even believe that’s the way it should be — which is when democracy truly dies: when a belief in freedom, justice, and equality for all is replaced by the idea that only the strong should survive, and the weak perish. When that trend climaxes — bang! Fascism. It happened in Nazi Germany — and it’s happening in America again today, whether or not MSNBC or CNN says it. 

It’s nice to believe that — as many Americans do, maybe even you — “real” capitalism is something else, something noble, something wonderful. That’s a fantasy. What most Americans mean is that they’d like an economy of many small, local businesses, instead of…megacapitalism. Instead of Wall St and hedge funds and private equity and billion-dollar bonuses for looting pensions. But that’s capitalism. In other words, poor Americans have been brainwashed to see capitalism as exactly its opposite. Capitalism, America teaches us, is just this: monopolies which prey on people to the point their lives fall apart. What Americans fantasize is “true” capitalism is better thought of an economy of small businesses, most of whom aren’t anything like predatory capitalists, only in it for profit. 

And chief among those Americans is Pete Buttigieg. He appears to have no idea what capitalism (really) is. Nor that “democratic capitalism” a) doesn’t exist b) never will exist and c) is the polar opposite of the breakthrough that lifted the advanced world to enjoy history’s highest living standards…social democracy. That’s genuinely amusing, because Pete’s lionized as a great intellectual. Only in America. 

“Democratic capitalism”, my friends, asks us to make fools of ourselves. It asks us to believe that more capitalism can solve capitalism’s problems — instead of a little bit of (shock, horror) socialism. It asks us to ignore what’s right in front of our lying eyes: the most capitalist society in human history is the one with the spectacularly collapsing democracy — because, just as Europe understood the hard way…capitalism implodes into fascism. 

(So why — if you give him the benefit of the doubt — is PB saying all the above? Probably because he knows that it’ll sell. Maybe because his advisers have told him that he has to — or else the fundraising will dry up. That you have to tell Americans these pretty little lies to get them on your side. In other words, he’s betting on your stupidity, weakness, and ignorance. The other possibility is that he’s too foolish to know himself that “democratic capitalism” is the opposite of social democracy…not to mention an oxymoron…not to mention ignorant of the great lesson of the 20th century, fascism.) 

Needless to say, there’s one candidate who gets all the above, and it’s not Pete Buttigieg, who I’d rank as one of the great disappointments of this year. It’s Elizabeth Warren. She doesn’t get the attention she deserves — her policies, her thinking, her ideas are all founded on a sophisticated understanding of 21st century economics — because she’s a woman. But the difference between Warren’s intelligent and courageous social democracy, which learns from the world, and Buttigieg’s oxymoronic, simplistic, nonexistent “democratic capitalism” — a reiteration of tired, false American exceptionalism — couldn’t yawn wider. And in that, we see how the narrative of the American Hero — choose a white dude, make him an underdog, position him as a working-class hero — lets us all down. 

Because when the Petes of the world get more attention than the Elizabeths — for having done a tenth of the work and having not one iota of the ideas — then, my friend, something is very wrong with us, our minds, and our societies.


(Umair Haque posts at Medium.com.) Edited for CityWatch by Linda Abrams.