"Democracy is the problem Capitalism is trying to solve."

Yes DaisyAnneReturns, it's heartening to know that not all the super rich wish to preserve their fortune at the expense of democracy. I recall reading a BBC article earlier this year where a group of rich millionaires wrote to governments saying it would be more fair to pay more tax and government should do this.... Abigail Disney being one of them I recall....

Also: I don't believe democracy "just is". It has been hard fought for and some of those gains are put at risk by some governments....

And what sort of democracy do we need to make democracy work? Brexit, pandemic response, low quality politicians, etc., doesn't suggest what we've got works too well.

I think capitalism is doing just fine its democracy that needs to get its act together, every election polititians make unrealistic promises to court votes then most governments have to borrow more, year after year.

Who do the borrow from ?, Capitalists, making them richer

Grantanow- my view, though I welcome other views, is that democracy needs a sitting government that is functional, efficient and effective and necessarily includes respect for human rights, supports freedom of expression, an independent judiciary and delivers strong public services. All comes at a cost so all society needs to accept and pay their share through fair taxes. If not capitalism, with wealth and power held by the minority will dominate and continue at the expense of democracy. We see that being played out in the US currently.

David49

I think capitalism is doing just fine its democracy that needs to get its act together, every election polititians make unrealistic promises to court votes then most governments have to borrow more, year after year.

Who do the borrow from ?, Capitalists, making them richer

And the capitalists get most of their money (apart from foreign earnings) from the government, by way of profits from business (because most of their consumers pay with money which originated from the state) , tax subsidies and interest paid on bond holdings.

Democracy struggles when capitalists subvert it, as described by LemonJam, in order to make themselves richer.

Adam Smith recognised the self interest of capitalists over 200 years ago. He was all for control and regulation of capitalists (though the Adam Smith Institute would have you believe differently)

The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

bonbons01

What's that age old saying about democracy DAR? "No matter who you vote for, the government always gets in".
I personally think that it's the other way round. What sort of capitalism do we need to make the democracy we need to work.

That's if you're lucky enough to live in a country where you actually have a vote, or where there is more than one party to vote for.

We all have the goal to better ourselves, that applies from the migrant who arrives destitute to a multi billionaire. Indeed many of us go to university so that we earn more money, those of that are smartest and work hardest pay taxes to help the poorest.

It’s up to the government to build a fair system to both sides bearing in mind nobody has to invest in the UK. Investors have to see a profit from their money that applies to residents as well as foreigners.

An educated electorate costs public money. Capitalism tends to maximise short term profit, so educating the electorate beyond the elementary levels is not profitable.

MaizieD

Adam Smith recognised the self interest of capitalists over 200 years ago. He was all for control and regulation of capitalists (though the Adam Smith Institute would have you believe differently)

^The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.^

In the real world you can only regulate the capitalist to a degree, because if you tax them too much they take their money away.

PS maybe you missed it Adam Smith died a long tome ago

Adam Smith was a very acute observer of how money works in an economy and how capital tries to gather it all in for itself. He undertook extensive study of it.

His observations are as valid today as they were in the 17170s.

You're quite right MollyNew, some populations are denied democracy completely and some have faux democracies. Even when I think of democracy in the UK I am often struck by how low a percentage of the national vote in a general election can lead to a landslide majority in the HoC. How democratic can that actually be?

bonbons01

You're quite right MollyNew, some populations are denied democracy completely and some have faux democracies. Even when I think of democracy in the UK I am often struck by how low a percentage of the national vote in a general election can lead to a landslide majority in the HoC. How democratic can that actually be?

I think that people think that democracy should work to improve their lives. There are so many people having a sh*t time these days, what with rising prices, low wages, rising inflation and failing public services that their faith in democracy has been destroyed. Voting makes no difference so they don't bother to vote.

I agree MaizieD, and with the points you make and in your post at 19:25pm. Perhaps, if David49 read Monbiot's article in the link provided by WW2 then he may consider one of the points that Monbiot makes about capitalism, and I think this is pertinent to neoliberal capitalism, in that it turns 'shared resources into exclusive property'

bonbons01

I agree MaizieD, and with the points you make and in your post at 19:25pm. Perhaps, if David49 read Monbiot's article in the link provided by WW2 then he may consider one of the points that Monbiot makes about capitalism, and I think this is pertinent to neoliberal capitalism, in that it turns 'shared resources into exclusive property'

Neo liberal capitalism is a fact of life, no one country can change that, if we are to participate in the global trade market we cannot opt out it would be suicide because sterling would plummet.

We would then find out what austerity is really like

LemonJam

Also: I don't believe democracy "just is". It has been hard fought for and some of those gains are put at risk by some governments....

Yes! people need to know that it is only just over a hundred years since universal suffrage was granted in the UK. In many parts of the world democracy is very young, in others it does not exist at all.

The problem is that even the population of the US are victims of capitalism, the rich get richer there too, their government borrowing is even higher that ours. The finance market is is far more powerful than any democratic state.

The only winner of any breakdown would be China because they are not a democracy and have a controlled population.

Neo liberal capitalism has only really been fully embraced by UK governments for around 46 years David49, whereas commerce, has existed more than 600 years, often quite successfully, although, admittedly, colonial expansion was a very dark period of exploitation, without it.

It is an absolute and irrefutable fact that it is the state which issues our money. This has been so for many hundreds of years. Any history of money will tell you that. For trade to take place a country has to have a universally accepted and trusted currency coming from a single source. And historically that source has always been the monarch, the tribal leader or a republican government.

The currency is legitimised by the fact that it is the only one which the ruler/government will accept for payment of taxes.

Or state issues our money and it does it by spending money on services and resources to maintain the state.

A concrete example of state money creation is the creation of the 'greenback' dollar by the Union in the US civil war. This comes from a paper by the academic Christine Desan who specialises in the study of money

The U.S. government needed a lot of money to fight the Civil War.
Rather than relying only on gold backed money, which was in very short supply because everyone was hoarding it it printed paper money (greenbacks) — money that wasn’t backed by gold or silver.
These greenbacks weren’t just promissory: they were declared legal tender, meaning people had to accept them for debts and taxes.
Their value came from more than ink: because the government insisted they be used (especially for taxes), people kept using them.
The success of this system depended on the Union’s administrative and democratic strength — its ability to tax, enforce, and shape trust.

That's how one state created money out of nothing and made it accepted.. the principle is the same for any state with a sovereign currency (like us)

When the state issues money by spending some of it is returned to it in the form of taxes. The money that is left is available for those who received it to spend or save as they want to,

In a neoliberal economy (which is NOT the only way to run an economy), the money tends to flow upwards to profit seeking businesses. or the already wealthy. who 'invest' their money so as to make it grow by earning interest or dividends.

You can find diagrams of what are called 'sectoral balances' which show the 'balances of the public and private sectors. If the public sector is in deficit, the private sector (that's us, the recipients of the state issued money) will be in surplus (i.e it will have money to spend or save). If the public sector is in surplus and the private sector in deficit then the private sector (us) will have no money. The two balances must always add up to zero because one person's gain is always some else's loss.
Everyone's money is state issued, there is no other source (apart from foreign earnings, which are comparatively negligible so I'm ignoring them to explain the way money 'works)

This is why I suggested that governments selling bonds is not a logical action on their part as it is taking back money which the it issued in the first place and paying interest to the people who deposited it with them by buying bonds. They could more cheaply just spend the money without going through the bond sale process.

Of course, thee is a sound historical reason for the issuance of bonds and bond sales have a purpose in offering a safe place for money with guaranteed interest and repayment of the original principle in full at term if required But it still has that illogical element to it.

On elf the problems in the article is the suggestion that all be devolved down for "local communities" to make decisions. but there will be conflicts and contradictions, because communities local differ so much in terms of wealth, and how do we get fair distribution of wealth all over the country?

And the sad fact that many people are not interested in politics at all, do not inform themselves, and are not really in a position to make the very complex choices that may involve sacrifice from the relative wealth in their particular community for very deprived communities?

Maizie you really have lost it, upthread you were arguing that the banks issued money, the fact is that the state controls the money, using minimum lending rate. It is true that the state can allow the bank to lend more but they don’t because that would lead to inflation. Currently inflation is nearly double the target rate so there is very little scope for reduction in MLR.

That is separate from state spending, that is funded by tax revenue and borrowing, we already pay £100 billion in interest.
Again in theory a state can borrow more but the interest rate increases, in an emergency QE can be used, but if that is used to increase social spending sterling will devalue, that is what has been happening year by year already.

Japan tried using QE to to fund state spending QE it now accounts for 80% of their borrowing over 200% of GDP, result, the Yen lost 80% of its value. Don’t even mention Argentina which has a valueless currency and has to rely on the US dollar for commercial trade

This is what is happening in the real world so forget socialist utopia

“You can find diagrams of what are called 'sectoral balances' which show the 'balances of the public and private sectors. If the public sector is in deficit, the private sector (that's us, the recipients of the state issued money) will be in surplus (i.e it will have money to spend or save). If the public sector is in surplus and the private sector in deficit then the private sector (us) will have no money. The two balances must always add up to zero because one person's gain is always some else's loss.”

This is total nonsense, it only works in a closed economy.
The UK imports a great deal more than it exports, moreover many companies have foreign owners, a constant drain on the economy every time we use Amazon, Apple, Sky, BMW or a host of Chinese companies we drain the U.K. economy.

David49-"Neo liberal capitalism is a fact of life, no one country can change that, if we are to participate in the global trade market we cannot opt out it would be suicide because sterling would plummet".

I disagree. A country CAN modify liberal capitalism and still trade globally. Nearly all modern economies are mixed economies, incorporating elements of both market systems ( capitalism) and government intervention ( socialism/regulation) and all participate in global trade to some degree.

International trade is governed by the World Trade Organisation (WTO) rules and members include countries with a wide range of economic models, from the heavily market-oriented to those with significant state involvement....

David49: "PS maybe you missed it Adam Smith died a long tome ago".

Rustow- who coined the term Neo liberalism in 1938, and key architects of the ideology, e.g. the American economist, Milton Friedman, also both died a long time ago. Margaret Thatcher was inspired by Friedman and she is dead also. Do you feel the ideology should die with them?