Global Capitalism: Anti-Democratic Politics and Existential Crisis

Though it is not often examined in these terms, the popular disaffection of Americans with government in general and the rise of anti-democratic politics around the world are seemingly predictable reactions to the contemporary global crises in the international capitalist economy. Persistent poverty, pandemics, military conflict, economic displacement, climate catastrophes, migration, widespread corruption and social media inundation generate societal insecurities and accelerate dystopian social environments. In large measure, these concurrent global crises are driven by capitalist behavior if not caused by the evolution of capitalism itself. The authoritarian political culture emerging in the U.S. and in other regions of the world is inflamed by growing skepticism and outright rejection of governments and institutions that have matured under capitalist development.

Many working class and rural Americans distrust, even resent and sometimes fear, a government – democratic or not – that has done too little to blunt the negative impact of a global economy threatening their families and communities. At the same time, they witness growing disparities in income and wealth over the past several decades and observe a federal government that appears corrupted by it (Corrupt Politics). The recent assistance to failed U.S banks illustrates this point. It reinforces the widespread perception that the government is more responsive to the wealthiest individuals and entities than ordinary citizens. The government acted swiftly to bail out the banks as corporate executives and large shareholders benefited disproportionately.

The $200 billion of venture capital and high-tech start-up money in the two banks was quickly guaranteed by the government (SVB & Signature Bank), even though the Federal Depositors Insurance Corporation’s (FDIC) legal insurance limit is $250,000 per depositor. Furthermore, a mid-May Senate hearing illustrated how risky behavior and moral corruption in large corporations can be profitable for the wealthy and powerful. In this congressional hearing Senator Elizabeth Warren pointed out that Silicon Valley Bank’s CEO collected nearly $40 million and Signature Bank co-founder and chairman pocketed more than $20 million between 2019 and 2023, even though the FDIC issued dozens of warnings concerning the banks’ financial stability over the same period of time (Senator Warren). Yet neither of the two bank executives committed to repaying the FDIC Fund any of the money that they paid themselves while managing the banks toward failure.

Despite its many benefits, the technology industry frequently aggravates the understandable disaffection of many people. Social media, for example, advances anti-democratic politics and moral disintegration. It “democratiz[es] intimidation and freedom from accountability,” according to NYU social psychologist Jonathan Haidt (Intimidation and Accountability). At the same time, as part of the historical capitalist drive to expand consumerism, going back more than a century (Rise of Consumerism), the digital revolution dramatically reshapes the social and political identity of U.S. citizens and others around the world. As a result, the idea of citizen and the responsibilities of citizenship (Consumerism and Citizenship) erode. People can easily fall victim to deceptive and malevolent political messaging – misinformation, disinformation, conspiracy theories – flowing swiftly across the Internet, sowing the seeds of violence and oppression (Social Media and Oppression).

Driven by profits, frequently corrupt and often subsidized by governments across the world, corporate capitalism is a juggernaut of escalating social and ecological instability. Still, leaders in the media and in government generally reduce national and international crises to a struggle between democracy and autocracy. This analysis ignores the economic framework in which political conflict unfolds. It discounts the causal factors driving the political divisions and obscures the insidious dynamic of corporations seeking profits above all else. Unconstrained capitalism and catastrophic climate change are not part of this argument. Yet climate change, poverty, wealth concentration, military conflict, migration, job loss, corporate and government corruption, pandemics, faltering democracy and authoritarian upsurge are all connected directly or indirectly to the evolution of global capitalism.

While the welfare of ordinary citizens and the planet must be the basis for developing national and international political agenda in the present and succeeding decades, the general market principles of capitalism run counter to public policy that would restrict the profits and excesses of corporations. As the influential free-market economist and Nobel Laureate Milton Friedman asserted in his 1962 book Capitalism and Freedom: “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits…without deception and fraud” (Business Social Responsibility). Deception and fraud, though, seem embedded in 21st century corporate practices (Corporate Corruption). Even in the current inflationary U.S. economy, corporations often justify raising prices much higher than the inflation rate to bolster profits, pushing inflated prices farther upward (Corporations & Inflation).

More so now than ever, broad and strict regulation of capitalism is absolutely essential to addressing the world’s deteriorating environmental and social conditions. No longer should publicly-funded international financial institutions, as an example, support the fossil fuel industry. Between 2018 and 2021, however, the World Bank Group committed $14.8 billion in assistance to144 fossil fuel industry projects and policies, according to a 2022 report from Big Shift Global (Big Shift Global), a coalition of NGOs dedicated to transparency in global energy investments. The World Bank Group made these extraordinarily irresponsible investments after promising in 2018 to align its resources more closely with the goals of the 2015 Paris Climate Accord. Since the U.S. provides the largest portion of funding to the World Bank Group (World Bank), it is incumbent on the American government to demand investment in sustainable industries. Shifting these misappropriated public funds to more rational climate initiatives would benefit the planet and all species including humans.

Imagine, instead, that billions of World Bank Group funds were invested in poor communities in Central and South America. These resources could develop the local economies with small and moderate investments in sustainable agriculture, energy and other local industries. The same could be done in West Africa and other regions of the world through further international cooperation and funding. To these ends, the U.S. should also broker, or at least seek, to establish peace in war-torn nations and regions, fully contributing to their sustainable reconstruction. These are important steps toward reducing the poverty and insecurity that are factors in driving migration. These strategies, by allowing poor people steady incomes from sustainable farming and other small to medium-scale industries, would also provide environmental benefits, diminishing the carbon and greenhouse gases in the atmosphere.

Corporate capitalism nevertheless will inevitably work against the interests of people and the health of the environment if it is not radically reformed and its goals redirected. With their vast resources large corporations and business associations can undermine the public interests. Corporate lobbying of Congress and federal agencies, for example, dwarfs the budget of the Federal Trade Commission (FTC), an agency established to protect American citizens from fraud, deception and unfair business practices and to enforce antitrust legislation. The agency operated on a budget of $434 million to police all business and industries in 2022 (FTC). Meanwhile corporations spent $1 billion in lobbying the government in the first quarter of 2022 alone (Corporate Lobbying). These massive corporate lobbying expenditures are meant to gain favorable legislation which often compromises regulation and weakens enforcement, corrupting democratic processes along the way. Sharply limiting corporate lobbying and eliminating corporate campaign contributions would significantly diminish corruption in the operation of government thus magnifying the potential political power of ordinary citizens.

While the scientific community, progressive political activists and leaders of oppressed people have repeatedly warned of looming catastrophe, it bears repeating in unambiguous terms: The planet and humanity are at a moment of existential crisis. Monopolistic practices, pervasive corruption and heavy corporate lobbying and campaign contributions reflect the present and future course of capitalism. Strategic regulation of transnational and domestic corporate investments and practices is absolutely necessary to curb the crises imperilling people everywhere. Democratic practices, moreover, are essential to fostering greater social equality and improving human and natural environments overall, but only when governance is firmly in the hands of ordinary citizens and democracy is more than a political guise protecting the wealthiest individuals and corporations. As one of the largest and most powerful economies in the world, it is imperative that citizens of the United States aggressively use their political weight to rein in capitalism, to transition from a moribund economic engine to a sustainable one.

Updated: 9 June

John Ripton writes political essays and research articles. He holds a Master in International Affairs and PhD in History. His dissertation explores the historical impact of global capitalism on Salvadoran peasants and how it contributed to the revolutionary struggle against authoritarian and dictatorial regimes. John's articles and essays have been published in journals, magazines, newspapers and other publications in North America, Latin America, Europe and Asia. Read other articles by John.