Why capitalism is fundamentally undemocratic

It is common in Western discourse to claim there is a natural connection between capitalism and democracy. Sometimes the two concepts are virtually fused together. I always find this odd because I value democracy, but there is nothing democratic about capitalism.

Yes, many of us live in democratic political systems, where we get to elect national leaders every few years, even if we acknowledge that this process is often corrupt and inadequate. But when it comes to the economy, the system of production — which affects our everyday lives and determines the shape and direction of our society — generally not even a pretence of democracy is allowed to enter.

Under capitalism, production is controlled overwhelmingly by capital: the big financial firms, the large corporations, and the 1% who own the majority of investible assets. They are the ones who determine what to produce, how to use our collective labour and our planet’s resources, and what to do with the surplus we generate.

As far as capital is concerned, the purpose of production and surplus reinvestment is not to meet human needs, achieve social progress, or to realise democratically ratified objectives. The purpose is to maximise and accumulate profit and power — that is the overriding goal. These decisions are made in the narrow interests of the capitalist class. The workers — the people actually doing the production — rarely get any voice at all.

This arrangement is completely undemocratic. In fact, it is literally plutocracy. And when you govern a system like this, it leads to perverse outcomes. We end up with massive overproduction of damaging and less-necessary things like fossil fuels, SUVs and industrial beef (which are highly profitable to capital) but chronic underproduction of obviously necessary things like renewable energy, public transit and affordable housing (because these are less profitable to capital or not profitable at all).

The result is that despite having extraordinary productive capacity, with extremely high levels of output to the point of blowing past planetary boundaries, we nonetheless fail to ensure that everyone has access to basic goods and services. In the United States, the richest country in the world, nearly half the population cannot afford healthcare; in the United Kingdom, 4.3 million children live in poverty; and in the European Union, 95 million people cannot afford decent housing and nutritious food. These are totally artificial scarcities.

It also bears noting