Posted by: Tony Shannon | November 30, 2016

2016 Q4: Democracy v Capitalism

Well 2016 has certainly turned out to be a most interesting year.

  • 2016 set out to be the 100th anniversary of Ireland’s bid for independence from Britain in 1916, which failed at the time but set a cultural shift in motion that led to independence for the Irish Republic a few years later.
  • 2016 was the year that the British public voted for Brexit , i.e. an exit/independence from the European Union.
  • 2016 was the year that the US public voted for something, though its not yet clear what. On the face of it they seemed to have voted for unqualified racist chauvinist so he can become their next president… though perhaps Mr Trump is simply completely misunderstood?

Either way there is something going on in 2016.  Irelands leading economic commentator David McWilliams recently interviewed Paul McCulley (of PIMCO Investment Management background/fame) who nicely explained what was going on ..  thats is the inherent tension between two governance systems;

  • Democracy; based on 1 man/1 vote – aimed  at fairness & equity
  • Capitalism;  based on $1 ; 1 Vote – aimed at efficiency

When all is going well in recent decades, the combined forces led to a shared prosperity which the masses enjoyed.
Right now, things are not going so well and as he said the “sharing stinks”. So we should see this historic vote for Trump as related to a set of broader forces at play

  • Rich V Poor
  • Insider V Outsiders
  • Layman v Political Elite
  • 1% v 99%
  • City V Rural
  • Democracy v Capitalism

Of all those dimensions, this evident tension between capitalism and democracy has now become apparent, in 2016 – for the first time since the end of WW2, the fall of communism and ascent of capitalism and faith in the free market.

Yet Trump doesn’t look likely to reverse the tide of capitalism with a new flavour of democracy any time soon. More likely that history will note the sharp irony in this silver spooned billionaire ascended to the US presidency by appealing to the common man with the help of a baseball hat and then helping himself. Time will tell. What he will do, no ones knows, it simply seems fair to say that now we have a better idea of what it felt like during the troubling 1930’s.

So we the people must look to learn and educate ourselves as to the issues at play here. No one demagogue , good or evil, will sort this out for us. So start reading and get thinking.

To consider then : How will this battle between capitalism and democracy pan out? How could/should it?  We don’t yet know but we do know that unfettered capitalism is causing revolt/revolution at the ballot box in the most unexpected of places.  We do know that the mechanics of democratic forces alone are struggling to manage this. We can expect more trouble to come.

One particular area to watch is the growing tension between nation states vs corporations – in terms of taxation for instance, or the gains to be made from intellectual property from public investment.

Can our social networked generation support a social movement to inform smart  government policy and good corporate behaviour? We live in hope.


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