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Capitalism vs. Democracy

8.30.13
by Shawn Gude
Pitting public power against unbridled accumulation, DC's living wage
legislation is an attempt to rectify injustice in the market. And
capitalists can't stand it.


If Washington, DC Mayor Vincent Gray signs a bill mandating big
retailers pay a living wage, he'll do more than raise workers'
remuneration.
He'll establish a potent precedent for powerful corporate actors like
Walmart. Threaten to shelve construction plans, as the retail giant
has warned it will do if the legislation is approved, and democratic
governments will remain undeterred. He'll demonstrate that elected
officials, instead of being cowed by businesses that blackmail, can
bring them to heel. He'll prove that policies which corporations
bitterly oppose, which negatively affect their best efforts at
unbridled accumulation, don't have to be deep-sixed.

At issue, in other words, is the relationship between democracy and
capitalism. Can the prerogative of capital be curtailed, or must
self-governing communities accept the terms that corporations dictate?

Gray, who expended a great deal of energy trying to lure Walmart to
the nation's capitol, is expected to veto the living wage legislation;
it's set to hit his desk today. The Large Retailer Accountability Act
is narrowly drawn, applying only to stores which exceed 75,000 feet
and whose parent companies pull in more than $1 billion in gross
annual revenue. The businesses who meet those criteria—the most
prominent of which is Walmart—would be required to pay workers at
least $12.50. In July, less than than 24 hours before the DC Council
was set to vote on the proposal, Walmart said they'd forgo
construction of at least three stores if the city imposed the wage
floor. But the Council stood fast. They approved the legislation by a
vote of 8-5, one shy of a veto-proof majority. Since then, Target,
Home Depot, and other retailers—unaffected, as of yet, but still
vexed—have registered their own disapproval.

In defense of the living wage bill, pro-labor liberals have rightly
argued that Walmart, an immensely profitable company, can easily
afford to pay its employees a relatively paltry $12.50. They've also
pointed to the stimulative effect of boosting low-wage workers' pay.
What's been missing, however, is a forceful defense of public power to
rectify injustice in the market, of the right of citizens and their
representatives to constrain capitalism's cruelty. Government action
shouldn't supplant collective, extra-legislative worker action. But
when corporations unceasingly quash organizing attempts, it's salutary
for the state to step in.

Not to say it's easy. The vituperation with which Walmart has attacked
the living wage bill is perhaps most striking because capital's
threats, typically tacit, have actually been openly made. The Council
dared question the untrammeled control of capital, and now they're
seeing the result of such temerity. Even marginally shifting the locus
of power from capital to labor— even if it's done by a state that
usually does the bidding of business—is enough to occasion outcry from
the business community. DC's deputy mayor, for instance, has
said,"People have no idea how damaging this is," and argued that even
a veto wouldn't be enough to restore business confidence.

The controversy throws into sharp relief one of our era's great
unspoken truths: Capitalist democracy, if not an oxymoron, is less a
placid pairing than an acrimonious amalgamation. The marriage that
Francis Fukuyama famously pronounced eternal is in fact a union of
opposites. Inherent to capitalism is inequality, fundamental to
democracy is equality. Class stratification, the lifeblood of
capitalism, leaves democracy comatose. The economic "base," to put it
in classical Marxian terms, actively undermines the purported values
of the political superstructure.

Capitalist democracy is a domesticated democracy. Even before it makes
its existence visible in the political arena—via campaign donations
and high-powered lobbyists—capital markedly narrows the range of
policies available to citizens and their elected officials. Policies
which impinge upon that most sacrosanct of things, private property,
or severely hinder the profitability of firms aren't formally
rejected. They don't have to be. The mobility of capital ensures that
corporations can play governments off of each other, forcing them to
compete to be the most "business friendly." Capital strikes are the
other nuclear option.

But it never really comes to that. The implicit threat of adverse
actions is enough. Consequently, absent sustained pressure from below,
the array of policy options available to a nominally democratic polity
is extremely limited. The citizen, guaranteed legal equality and
self-determination, is reduced to a supplicant.

Capitalist enthusiasts no doubt welcome this check on popular power,
viewing the market and private businesses as countervailing forces
that constrain an otherwise overweening state. Liberal democracy, to
them, means markets are opened and private property is inviolable. But
it's at least important to recognize the capital-as-counterbalance
justification for what it is: A profoundly anti-democratic position, a
severe restriction on popular sovereignty.

This isn't to say that the DC Council is democracy embodied, or even
that the LRAA's passage would be a substantial blow to corporate
power. The living wage campaign is ultimately a fight for a more
humane capitalism. A genuinely democratic society requires we go
beyond that. But Gray does have an important decision to make, in the
here and now: Capitulate to capital, or demonstrate the justness of a
properly wielded democratic state. Whatever he elects to do, this much
is clear: the contradictions between democracy and capitalism have
been on full display, as they so rarely are.


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Shawn Gude is an assistant editor at Jacobin.


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