Book Cover

Democratic
Capitalism,  The Way to a World of Peace and Plenty
by Ray Carey

Hard/Softcover/Kindle - 5 May, 2004, Available on Amazon.com

Ray Carey presents the theory and practice of democratic capitalism by coupling his experience with a synthesis of the thought of Adam Smith, Karl Marx, and John Stuart Mill.  The empirical evidence is clear: democratic capitalistic companies produce superior results, and nations that support economic freedom and keep money neutral improve the lives of their people.


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CCDC Blog

Capitalist Alternatives

Updated on July 8, 2014

Thomas Piketty proposed in Capital that because the rate of return on capital exceeds the rate of economic growth, capitalism automatically generates inequalities which, in turn, undermine the values of democratic society. Piketty later argues that inequalities are not automatic in capitalism, but rather subject to economic and political changes.

Such study would identify two forms of capitalism competing for domination in the twenty-first century: “Stakeholder or democratic capitalism” is responsible to workers, owners, customers, suppliers and community. “Shareholder Capitalism” has responsibilities only to shareholders measured by the short-term price of the stock. This deflects capital away from the job-growth economy towards speculation and is almost total. Trading is now 99% of Wall Street activity, but capital investment in economic growth is less than 1%!

ERISA (Employee’s Retirement Insurance Security Act) was the law that made workers capitalists with trillions of dollars of pension funding. Owner motivation should have increased profits and spread wealth broadly. The political process, however, was dominated by Wall Street. Bob Rubin, Secretary of Treasury, and Alan Greenspan, Chair of the Federal Reserve, in the Clinton administration successfully led in deregulation of finance capitalism and prevented regulation of derivatives.

Excessive liquidity from the workers’ capital helped Wall Street over-leverage their bets with the risk going up until the housing/credit bubble popped. The political process that Piketty refers to, has not yet designed the government support necessary for democratic capitalism; instead, it has concentrated on putting Wall Street’s “Shareholder Capitalism” back together.

Wall Street dominates the economic process and uses the money to dominate the political process. This cycle has persisted from the beginning of the republic, but never before had it used trillions of dollars of workers’ capital. This obscene contradiction requires real reform. Will the citizens finally express their “will and wisdom,” as they must in a democratic society, or will the Wall Street lobby continue to dominate the political process?

 

 

 

 

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