Socialism cannot stop the rise of fascism if it fails to halt the slide of market economies into market societies. (Photo: Spencer Platt/Getty Images)
If socialism is going to save democracy, it needs to bring about equality without snuffing out freedom, and it needs to respect the role of markets without letting them dominate society.
By Theo Horesh
A consensus is emerging on the left that capitalism produces inequality, which leads to oligarchy, which undermines democracy, and paves the way to fascism; and only socialism can save democracy, because it can break the oligarchy, which will restore equality, so democracy can function effectively.
It is a simple argument that is easily over applied, for modern democracy has always come coupled with markets. But it is an important argument that needs to be taken seriously, for inequality has threatened democracy, by fracturing the citizenry and producing oligarchy, since at least the time of Aristotle.
Economic equality produces the shared basis of experience through which citizens might arrive at a national consensus. Shared experiences facilitate the social integration of autonomous individuals and ethnic minorities alike and produce the middle classes that might keep the wealthy in check.
The wealthy have greater political influence almost everywhere, which they buy through electoral campaigns and lobbyists, think tanks and the media. And the greater the differences between rich and poor, the more the system appears rigged in their favor, leading to a loss of faith in democracy.
Hence, it is important that sizable majorities can form parties and agree on what needs to be done, for without such agreement, the wealthy can divide the electorate and buy influence.
It is no accident social democracies like Denmark and Sweden, Germany and the Netherlands, are both the most equal and the most democratic states in the world. Democracy produces equality by keeping power in the hands of the people, and equality produces democracy by bringing ordinary citizens closer to power.
However, these are not socialist states but rather social democracies, with strong universal health and social programs, high taxes and public expenditures. As is the case with every market economy, the state sector is minuscule, and labor and capital are free to seek the highest bidder. Socialist parties may have often built these states, but it was always in conjunction with strong liberal and conservative oppositions.
There have been dozens of communist states, which were miserable failures by almost any measure, but never a communist democracy. And no developed state has produced a hybrid between social democracy and communism. Hence, democratic socialism is either a strong expression for the social democracies of Northern Europe and Scandinavia or simply an unrealized vision.
And unfettered capitalism alone cannot explain the recent global failure of democracy. The rise of rightwing nationalism in former Soviet states like Poland and Hungary may suggest that neoliberalism leads to fascism, but it was integral to their democratization in the first place, and democratization and the opening of markets usually go hand-in-hand.
And while social democracy may be more resistant to the rise of fascism than American-style capitalism, it is far from an impenetrable barrier. Brazilians just experienced a decade of social democratic rule, only to elect perhaps the most fascist leader in the world. And fascism is rising in the model social democracies of Sweden and Germany.
So, if we want to stop the spread of fascism, we will need stronger medicine than socialism; and if we want to save democracy, socialism can only be part of the answer.
The Nobel Laureate Amartya Sen has argued that markets are integral to freedom. They facilitate personal development by opening up a range of career choices. And they provide countless opportunities to develop and explore personal tastes and to express our deepest interests.
Moreover, markets tend to spur economic growth, and almost every growing economy eventually democratizes, because economic development produces personal freedoms, the realization of which leads to the demand for greater political freedoms.
But markets do not arise naturally and free of human interference. They require public infrastructure like roads and railways, regulations against abuse and nepotism, tort and anti-trust law, and if workers are to be productive, public health and education systems.
The modern era has yet to produce a stable democracy that does not possess a market economy. And some of the most stable democracies, like the United Kingdom and Australia, are the most capitalistic. But there is a striking difference between market economies and what the moral philosopher Michael Sandel labels market societies, where corporations shape the culture.
Hence, capitalism threatens democracy not simply by producing inequality and oligarchy but by undermining the relations that bring people together in common cause.
Market societies are an assault on human dignity, for everything that is meaningful is transformed into a means of making a profit. And this transformation of autonomous individuals into consumer automatons strains the bonds that make democracy possible.
Market societies produce a special kind of inequality, which leaves people clamoring to restore their dignity. And they all too often seek it in any demagogue who promises to turn the system of moral valuation on its head. Hence, capitalism threatens democracy not simply by producing inequality and oligarchy but by undermining the relations that bring people together in common cause.
Accounting for the threat of inequality will require renegotiating the relationship between markets and democracy. Campaign finance reform can halt the growth of oligarchy, but reform should strike at the source inequality itself, for if democracy is to work, citizens need to feel in it together.
And yet, socialism cannot stop the rise of fascism if it fails to halt the slide of market economies into market societies. If socialism is going to save democracy, it needs to bring about equality without snuffing out freedom, and it needs to respect the role of markets without letting them dominate society.
It is a tall order demanding an intelligent and heroic response a socialism suited to its twenty-first century challenges.
Originally published by Common Dreams, 12.12.2018, under the terms of a Creative Commons Attribution-Share Alike 3.0 license.