Economic Democracy Comparing and Contrast

Economic Democracy Comparing and Contrast

Democracy is a much desired form of government in today's society, and thus there is considerable debate on how to achieve the utmost level of democracy. Particularly important to democracy is the economy, because the political economy and the functioning of the economic aspects of a country are influenced heavily by government and also influence government. The relationship between democracy and the economy therefore needs to be studied. In Economic Democracy, by Robert Dahl the potential of democracy is argued: "Is it not reasonable to think that democratic leadership will go further in helping to achieve that potential than authoritarian leadership can ever do?" he writes showing that democratic leadership will help the economy and therefore democracy is beneficial to the economy more so than authoritarian forms of government (Dahl 156). This is in contrast to the arguments of Arthur M. Okun in Equality and Efficiency, who has come to understand equality leads to more equality. The argument brought forth by Milton and Rose Friedman in Free to Choose suggests that freedom is most important and will lead to equality. An understanding of these arguments leads one to believe that Dahl's perspective, no matter how difficult it would be to attain, is the most beneficial to democracy as if the economic sphere is treated as a democracy, then both freedom and equality will prevail. Dahl's understanding of equality is grounded in Toqueville's notions of democracy from years ago, that if there is to be equality then it must be universal liberty or none of all. Furthermore, to maintain equality in liberty there must be protection from the tyranny of the majority. This inherent aspect of democracy means that it appears that liberty is more important to democracy because equality can have a detrimental impact. However, so can freedom in which the majority can impose its will on the minority. If the minority lost its rights there would be no more democracy, however this does not become a reality because of a powerful aspect of democracy. That aspect is that "if it is desirable that a people should govern itself democratically, then it cannot be desirable that it be governed undemocratically," which means that democracy is not flawed (Dahl 29). Also it means that greater freedom will not inherently lead to a lesser equality because people who desire more freedom in democracy do not desire lesser equality. Tocqueville, whose evaluation of American democracy has been long lasting and is admired by Dahl, maintains though that eventually equality can and will lead to oppression. But this widely accepted inverse relationship of equality and freedom is not necessarily true according to Dahl or the Friedman's. It is therefore not necessary to decide which is more important- liberty or freedom. Despite Dahl's question "Is the coexistence of democracy, equality, and primary political rights often, perhaps typically, no more than a transitional state between the birth of a new democratic order and its transformation into a mass-based despotism?" which many believe to be true, it is not the case (Dahl 32). An evaluation of historical examples of democracy shows that there was support for authoritarian government in instances which democracy turned to authoritarianism, such as in the Weimar Republic for example. This is a key point in demonstrating that equality is not harmful to liberty and Dahl has the advantage of many years of historical evaluation in understanding democracy that Toqueville was not afforded. In fact, Dahl while not directly demonstrating Toqueville was wrong noted that, "under certain conditions, which he thought largely existed in the United States, equality might be reconciled with liberty," meaning it is not necessary to come to the conclusion that liberty is more valuable then freedom or vice versa (Dahl 45). On the contrary, Okun maintains that there is a double standard in democracy in which people are treated equally, but forced to seek inequality in terms of economic betterment. Okun's notion that more equality is necessary to a better economy is based in the fact that the inequalities of democracy create "a tradeoff between efficiency and equality" (Okun 4). In the end, Okun's argument is one that suggests that, "the conflict between equality and economic efficiency is inescapable. In that sense, capitalism and democracy are really a most improbable mixture," which suggests that capitalism cannot function in democracy because economic freedom and a functioning economy will destroy equality (Okun 120). This is almost a Marxist argument as capitalism leads to inequality, yet equality is a cherished value of democracy. Equality is therefore necessary for a better economy because democracy now encourages inequality and discourages the economy. Okun uses facts to back up this argument, such as "the narrowing of racial differentials during the sixties implied a gain of nearly one-fifth in the wages and salaries of blacks. Dahl counters this argument by his notion to treat the economy like democracy, and thus the economy can flourish as does democracy. There does not have to be an inherent paradox in capitalism and democracy. Dahl's argument is thus more effective than Okun's as Dahl's use of Toqueville's democratic notions and the history of democracy show that equality and freedom can both be a reality. In this way Dahl also is in accordance with the Friedman's. The Friedman's maintain that putting equality before freedom will result in a loss of both. The Friedman's write that, "the growth of crude criminality in Britain in recent decades may well be one consequence of the drive for equality," which suggests that economic problems lead to inequality and thus problems for democracy (Friendman 144). While it is obvious that economic problems are bad for democracy, this does not mean that the economy has to be detrimental to democracy. In fact, Dahl argues that "ownership and control of firms affects political inequality," which would be a restatement of the obvious if not for that fact that Dahl also gives an alternative (Dahl 54). This is because the United State's believes in the right to property as one of the inherent rights. Dahl writes that everything "depends, of course, on what we mean by economic liberty, democracy, and the democratic process, and the relative value we assign to each," which suggests that the words have little meaning compared to what we assess to them. This makes Dahl's argument all the more intriguing. Dahl's argument is based on the fact that the right to property is important and that a democratic treatment of the economy will result in a better democracy and a better economy, which means he differs from the Friedman's and Okun's perspective. He looks at whether "a fundamental right to property comparable, perhaps even superior to the right to the democratic process" would be a benefit (Dahl 64). This ties in the relationship between the economy and democracy and weighs them both, before Dahl reaches his final conclusion. While Dahl recognizes that "democracy may be seen as a danger to property rights; or property rights may be seen as a danger to democracy," which is suggestive of the Friedman's view of economic equality being necessary for democracy, he counters it by noting that democracy became to be associated with capitalism and capitalism for change and the economy became an important aspect of change (Dahl 68). This is an important fact in noting that capitalism is important to democracy, even though democracy praises equality that capitalism discourages, which seems to disprove the Freidman's argument that there is an inherent paradox within capitalist democratic societies. Ultimately Dahl reaches the conclusion that the rights to private property are not necessarily consistent with democracy. He believes in a right to collect "the resources necessary to life, liberty, the pursuit of happiness, the democratic process, and primary rights," but this does not mean the right to collect unlimited property (Dahl 80). Instead Dahl assumes the notion that it would be best to have "a system of economic enterprises collectively owned and democratically governed by all the people who work in them," meaning that he differs from the notions of Okun and the Friedman's by proposing something radically different to promote the ultimate goal of democracy (Dahl 92). Neither equality nor freedom is necessary to fix the relationship between the economy and democracy, but rather a completely different and even radical outlook on the relationship between the economy and government can solve the dilemma. Furthermore Dahl argues to how it is possible to retain the democratic principle within firms, and prevent problems such as oligarchy. These notions in which the economy becomes compatible with the political notions are completely different than the Friedman's and Okun's notion that there lies a problem with democracy. Dahl is even casting serious doubt on Tocqueville's long lasting reflection on America's democracy. Dahl's argument, which would account for drastic changes to the American system and relationship of democracy and capitalism accounts for errors in the arguments of Okun and the Friedman's. Perhaps there are no errors in Okun's and the Friedman's arguments, yet Dahl has found a better solution. He has taken the issue from a different perspective that does not necessarily assume the notions we currently assume about capitalism and its relationship to democracy to be permanent and the only answer. Liberty and freedom are both possible to Dahl and the economy can help to encourage them both. His answer is not only obvious, but reasonable. It may be impossible, but if capitalism and democracy, liberty and freedom, cannot co- exist what good is democracy? Instead, Dahl sought a simple solution to make them co-exist and I believe his arguments are before his time and before our time and will one day make our notions of the co-existence of capitalism and democracy, communism and authoritarianism, obsolete. At the very least, Dahl understands the economy and democracy in terms that are deeper than the obvious and this can only lead to a better future and more equality, wealth, and freedom, not just for one but for all.