TELOSscope: The Telos Press Blog

Looking beyond Capitalist Democracy

As an occasional feature on TELOSscope, we highlight a past Telos article whose critical insights continue to illuminate our thinking and challenge our assumptions. Today, Kyle Nicholas looks at Adrian Pabst’s “The Crisis of Capitalist Democracy” from Telos 152 (Fall 2010).

In “The Crisis of Capitalist Democracy,” from Telos 152 (Fall 2010), Adrian Pabst “charts the rise of capitalist democracy” (44) in its conceptual and historical origin, and then in its empirical and contemporary manifestation, before presenting an alternative. This alternative seeks the re-emergence of an autonomous realm of “civil society” that is not subsumed by either the free market or the liberal democratic state.

Pabst begins by sketching the collusion of capitalism and democracy and their subsequent fusing into modern “market-states.” Representative democracy, in the same way that free-market capitalism creates abstract, virtual value from local and material processes, “tends toward the formalization and abstraction of politics from the people it purports to represent” (46). The collusion, therefore, of democratic states with free-market capitalism has led to a third-way combination of “some of the worst elements of the left and the right” (48). Specifically, the bureaucratic state is “the supreme guarantor” of the legitimacy of the market, which itself has been tasked as the “delivery mechanism to meet the standards and targets set by the state” (48). This combination helps us glimpse the radical oscillations between individual market choice on the one hand, and a sticky, expensive, bureaucratic government on the other. Rather than being at odds, as both left and right tend to argue, both market and state become more powerful as they merge.

This collusion has lead to a “post-democratic parabola” (45). Just as free-market capitalism tends toward centralizing power, so also the post-democratic parabola shows, according to Pabst, “the tendency of representative democracy to remain formally in place even after actual democratic practices weaken and power reverts to smaller groups” (45).

From sketching the rise of post-democracy through the collusion of capitalism and democracy, Pabst moves onto an historical sketch of the rise of this collusion. Since both democratic states and the market “tend toward higher levels of abstraction, concentration, and centralization,” (52) this means that political, economic, and religious movements were required to move away from relationality and locality toward dis-embedded institutions and more general values in the early modern and modern periods.

Two examples of how this process was realized are the social contract and the fiscal-military apparatus. First, the social contract blends “incommensurate values” of humans found in Hobbes and Hume with “universal principles and uniform political regimes” found in Locke and Kant (50). The result is a transition to liberal modernity where, predating but anticipating the rise of the market-state, states are centralized and territorial while the market is decentralized and de-territorial.

Second, Pabst traces this blending of the territorial sovereign with a de-territorial market to “the rise of a permanent fiscal-military apparatus” (53). This apparatus used war as “the primary means to enhance and extend state power and oligarchic wealth” (53). Pabst provides here a useful argument against the often-simplistic contemporary belief that modernity overcame the “wars of religion.” Following Pabst’s logic, the “wars of religion” were the bubbling up of the fiscal-military apparatus that became the hallmark of modernity and the founder and protector of its institutions.

From the historical sketch of the rise of democratic capitalism, Pabst then moves onto examining its more empirical and contemporary manifestations. In what he dubs “the long twentieth century” (c. 1870–2008), borrowing a term by Giovanni Arrighi, Pabst shows that whereas representative democracy was thought to reduce or check the power of both market and state, instead the fusion of landed, industrial, mercantile, and financial interests produced a strong state, which therefore had the financial responsibility to uphold a strong market. Finance capital then “used the state to extend the reach of trade and capital flows” (56). Presently, therefore, there is little conceptual difference between financial capitalism and liberal, representative democracy.

Specifically, where financial capitalism extends monetary value into almost every area of life, so also liberal, representative democracy extends formal “contractual relations and centralized powers of social control”; where “capitalism oscillates between accumulation-expansion and overaccumulation-contraction, so democracy oscillates between . . . popular sovereignty and . . . absolute sovereign power exercised by the executive alone” (58); and where capitalism is a “spectacle of abstract, fetishized, idealized commodities” (51) that take the place of any intrinsic value or goodness in labor and nature, so democracy “is a spectacle of mass representation of general opinion and desires” (51–52) that tends toward abstraction and endless repetition.

Furthermore, given that both of these centralized abstractions (capitalism and democracy) “must be reinvested in real material processes,” (58) Pabst maintains that “the living universe is almost supplanted by a virtual reality that operates on the basis of a vacuous generality” (59). This virtual reality, as I understand it, squares perfectly with the virtual takeover of everyday life: increasingly advanced smart phones, emails, video games, television, etc. In this takeover, we find that capitalism and democracy are increasingly virtual tasks (online shopping and social media) perpetually uprooted from local concern.

To conclude, then, Pabst argues briefly for some alternatives to the market-state. Any alternative must be based on a radically different anthropological account than what the market-state has offered. First, “sympathy, mutuality, and reciprocity” (64) must supplant the abstract standards and general values of capitalist democracy. It seems that Pabst is highlighting precisely where Antonio Genovesi split with Adam Smith (as traced in the work of economists such as Stefano Zamagni and Luigino Bruni). Genovesi agreed that one’s self-interest can lead to public benefits, but disagreed with Smith that the butcher’s (for example) self-interest excludes a deep interest in the brewer and his family as well. Or to quote Pabst, “natural reality is irreducibly relational (not individual or collective)” (64). This oscillation between the individual and collective is a metaphysically-reductionist anthropology that both free-market capitalism and state socialism hold in common.

Second, Pabst advocates a “gift society.” This requires that “the giving, receiving, and returning of gifts governs not just social relations but also in some measure politics and the economy” (64). It is these two anthropological necessities, relationality and gift giving, that would make it possible to shift “the emphasis from the false dualism between egoism and altruism to the “radical middle” of trust, caring, and cooperation” (65). In terms of practical economic matters, this would mean both punitive measures and positive incentives: anti-usury caps, bans on certain speculative practices, reduced taxation on profits from social investment, a living wage, employee co-ownership, and more.

The alternative to capitalist democracy is a humanizing effort to place civil authority and commercial exchange more and more within an autonomous civil society, with its corresponding local and intermediary institutions, than in the abstract, concentrated, and centralized market-state.

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