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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Course 5:8

Hypothesis #8—Agents of Change: American culture, led by the universities, must train leaders and educate citizens in the functional requirements of economic freedom. Citizens with this knowledge can develop an agenda for structural reform of both industry and government.

The world is whirling in a vicious cycle: The failure to follow an efficacious truth-seeking process to harness knowledge for human betterment has resulted in grievous mistakes by nations’ leaders, causing enormous economic and social damage and bloodshed, in turn causing many intellectuals to abandon idealism, which, in turn, saps the energy that might be directed to true reform. To break this cycle, the universities and the intellectual community must initiate a determined effort at Enlightenment II by assimilating the wisdom of the first Enlightenment, and then by following the process that will reaffirm the ideal and specify the contemporary means.

Enlightenment II is an opportunity for the universities to regain the lost mission of unifying and elevating society. Citizens of Enlightenment II, engaging in an improved, cooperative truth-seeking process among many disciplines and many cultures, will examine the hypothesis that democratic capitalism is the way to peace and plenty and an end to violence. In this process, the humanists will sensitize the economists, the economists will educate the humanists in the superior economic system, and the whole will be greater than the sum of the parts. Most will eventually recognize that Marx was right: Social progress does depend on movement towards a superior economic system.

Enlightenment II will have a difficult responsibility in analyzing the lessons of the twentieth century. Will the demonstrable capacity of economic freedom to improve lives be copied and spread worldwide, or will the violence of governments and terrorists be repeated?  Many twentieth-century philosophers viewed the horrors of their time and abandoned idealism; others, such as Peter Drucker, saw the dawning Information Age as a new opportunity, if only a new synthesis could be developed.  This synthesis could finally bridge the “intellectuals” and the “managers,” along with scientists, humanists, economists, and the religious, that is, combining cultures and disciplines into teams cooperatively engaged in Enlightenment II. Drucker believed that “to transcend this dichotomy in a new synthesis will be a central philosophical and educational challenge for the post-capitalist society.”1

Case studies are available, such as Enron (see chapter 9), for a provocative curriculum that would contrast the fundamentals of democratic capitalism with the corruptions of ultra-capitalism.  When this curriculum becomes available for courses in Adult Education, it will educate and stimulate business groups, civic groups, religious groups, unions, and others, availing the voting public with the economic literacy they require to elect leaders who will structure government in support of free market principles.

All parts of universities and colleges have the obligation to educate citizens in order for economic freedom to work, but Business Schools and Law Schools have a more particular responsibility to train leaders. Many Business Schools, infected by ultra-capitalism, have joined in celebrating the “American Model,” that is, the economic system that is individualistic, greedy, and devoid of any social contract. In hypothesis #2, I propose that democratic capitalism, not ultra-capitalism, is the system that can maximize long-term wealth, the result that is presumably the mission of business and, therefore, the mission of those who teach Business Administration.  As the economic and social damage from ultra-capitalism increases, the obligation of Business Schools becomes more urgent to present their students with the theory and practice of democratic capitalism.

Young people coming into Business Schools are roughly divided into those determined to become millionaires by the time they are thirty, and those with a still vague desire for a contributory career, the wish to “make a difference.” As long as the Business Schools fail to present democratic capitalism, those potential moral leaders default to ultra-capitalism. Conversely, when the Business Schools do present democratic capitalism as a coherent and integral system for student examination, those with a conscious moral instinct will grab democratic capitalism and run with it. Those on the margin, partly conditioned to the idea that morality and the profit motive are mutually exclusive, will recognize instead the synergy, and become enthusiasts for democratic capitalism.

Law Schools are the breeding ground for many politicians; therefore, they have a responsibility analogous to the Business Schools to train leaders in those matters that will generate social progress. Law students with a tilt to the political left will gain from Enlightenment II by an understanding of the pathologies of collectivism, and the enormous opportunities for the state to do more for people at a fraction of the cost simply by applying to governance the philosophy and protocols of democratic capitalism. Those with a tilt to the political right will recognize the opportunity to reduce the role of government by supporting the economic system that produces strong and steady growth, thus allowing many families now needing government assistance to become part of the positive economic momentum. New leaders, thus educated and inspired, will, in time, break the gridlock.

Another college at the university that needs to become fully engaged in the exploration of democratic capitalism by way of Enlightenment II is the School of Education. One outcome of Enlightenment II will be a curriculum for citizen education, pre-K through graduate school, including Adult Education. A curriculum in democratic capitalism will inevitably stimulate a new democratic political agenda.

Citizens will examine the proposition that democratic capitalism solves the persistent problem of the maldistribution of wealth. Citizens should examine the proposition that as the standard of living in the world rises through economic common purpose, so the violence will go down. Citizens will learn to structure fiscal and monetary policies to support economic freedom, assist those inadequately prepared to participate in the economy, and engage in cooperative U.N. actions to stop the violence.

Long before any of these good things can happen, school children, starting in Pre-K, must be educated for their dual participation in individual development, and social cooperation. National educational standards are useful points of reference, but they remind us of massive failure without addressing root causes. Top-down application of remote standards do little to educate the kids, and they burden teachers and principals with another time-consuming distraction. Only integration of the philosophy and protocols of democratic governance can free education from the bottom up, and release the latent power of principals, teachers, and students. Only then, and in time, will there be a chance to for all schools to meet national standards. 

Multi-disciplinary truth-seeking for the improved curriculum for citizen education and training of leaders is neither a precise science nor need it be, as Aristotle cautioned:

It is the mark of an educated man to look for precision in each class of things just so far as the nature of the subject admits; it is evidently equally foolish to accept probable reasoning from a mathematician and to demand from a rhetorician scientific proofs.2

Human history is not about small misses; it is about large, persistent mistakes and violence.  No great precision is required for humans to determine what is required to stop killing hundreds of millions of our own species. Similarly, no great precision is required to adopt the commercial system that has demonstrated its capacity to eliminate material scarcity, and elevate and unite people.

Disciplined by the correct process, the model produced by many minds assimilating knowledge from different cultures would have a tremendous benefit for the education of citizens. The model could serve as a template for all international agencies, most importantly the United Nations, to provide consistent advice to nations trying to improve the lives of their people.  The new model could show the conservatives how actually to attain the reality contained in the slogan “compassionate conservative,” and it could give the collectivists a new identity not as bureaucrats and micromanagers but as true liberals.  Further, it could give true liberals on both sides of the ideological aisle an effectual political agenda to improve the human condition. The potential political power of this agenda is vast because it provides focus for the feelings of most citizens.

What is the benefit of an excellent Liberal Arts education if it sensitizes many wonderful young people to the desire to improve the human condition, but it also sensitizes them to a contempt for capitalism, and provides them no education in the fiscal and monetary matters upon which improvement in the human condition depends. I do not suggest that everyone needs to major in Economics and minor in Accounting; rather, I am suggesting that the college curriculum include a basic understanding of socio-economic principles and issues and raise broad questions of policy and social implications.  For example, ought not every citizen know about “easy credit,” “leveraged speculation,” and in general the history of the government’s failure to control currency and credit for the general welfare?  Ought not a future citizen know that Adam Smith warned about the “prodigals and projectors” who, uncontrolled, would deflect capital from the job-growth economy to speculation? Ought not every citizen know how free markets depend on “neutral money,” and understand the government’s responsibility to assure that money be not “volatile and impatient?” Ought not future tax-payers legitimately expect their college professors to teach them why bank subsidies, bailouts, and deposit insurance are abrogations of the disciplines needed for the free market to work properly?

A democratic republic depends for success on educated citizens; the universities in an open society are responsible for the education of those citizens. The job is not now being done, and that is the root cause for a society that blunders along the well-worn path of folly and violence.

Enlightenment II is the long-term way to peace and plenty that will gain positive momentum with each generation of students and citizens. Other agents of change, people who can press for reform more rapidly, are to be found among institutional investors, the concern of hypothesis #9.

1Peter Drucker, Post-Capitalist Society (New York: Harper Business, 1993), p. 9.

2Aristotle, The Basic Works of Aristotle: Nicomachean Ethics 1:3 (New York: Random House, 1941), # 1094,  p. 936.

Ray CareyRay Carey

Ray Carey learned through managing companies for 33 years how to change the work culture to provide employees with their best opportunities to develop and contribute. This experience began as a 28 year old plant manager and later president of an electric motor company, and concluded with eighteen years as president , chairman, and CEO of ADT, Inc.

See Carey's autobiography of his work career in chapter two of his first book,

Democratic Capitalism, The Way to a World of Peace and Plenty.

For more information about Ray Carey and his advocacy of democratic capitalism, visit the pages of this website.


Most Recent Post

Democratic Capitalism: The Way to a World of Peace and Plenty

Updated on Jan 11, 2017

For some time there has been a general feeling that there is something wrong with the American economy. There is: the domination by finance capitalism slows growth and keeps millions from good jobs.

The solution: Democratic Capitalism, was described in my book but it was rejected by publishers and received no reviews. I published and distributed it at my expense but in time the following leaders of industry and education confirmed the solution. 

Click here for the full post