Term Paper on "Economic Democracy Comparing and Contrast"

Term Paper 5 pages (1653 words) Sources: 0 Style: MLA

[EXCERPT] . . . .

Economic Democracy Comparing and Contrast

Democracy is a much desired form of government in today's society,

and thus there is considerable debate on how to achieve the utmost level of

democracy. Particularly important to democracy is the economy, because the

political economy and the functioning of the economic aspects of a country

are influenced heavily by government and also influence government. The

relationship between democracy and the economy therefore needs to be

studied. In Economic Democracy, by Robert Dahl the potential of democracy

is argued: "Is it not reasonable to think that democratic leadership will

go further in helping to achieve that potential than authoritarian

leadership can ever do?" he writes showing that democratic leadership will

help the economy and therefore democracy is beneficial to the economy more

so than authoritarian forms of government (Dahl 156). This is in contrast

to the arguments of Arthur M. Okun in Equality and Efficiency, who has come

to understand equality leads to more equality. The argument brought forth

by Milton and Rose Friedman in Free to Choose suggests that freedom is most

important and will lead to equality. An understanding of these arguments

leads one to believe that Dahl's perspective, no matter how difficult it

would be to attain, is the most beneficial to democracy as if the economic

sphere is treated as a democracy, then both freedom and equality will

prevail.

Dahl's understanding of equality is grounded in Toqueville's notions

of democracy from years ago, that if there is to be equality then it must

be universal liberty or none of all. Furthermore, to maintain equality in

liberty there must be protection from the tyranny of the majority. This

inherent aspect of democracy means that it appears that liberty is more

important to democracy because equality can have a detrimental impact.

However, so can freedom in which the majority can impose its will on the

minority. If the minority lost its rights there would be no more

democracy, however this does not become a reality because of a powerful

aspect of democracy. That aspect is that "if it is desirable that a people

should govern itself democratically, then it cannot be desirable that it be

governed undemocratically," which means that democracy is not flawed (Dahl

29). Also it means that greater freedom will not inherently lead to a

lesser equality because people who desire more freedom in democracy do not

desire lesser equality. Tocqueville, whose evaluation of American

democracy has been long lasting and is admired by Dahl, maintains though

that eventually equality can and will lead to oppression. But this widely

accepted inverse relationship of equality and freedom is not necessarily

true according to Dahl or the Friedman's.

It is therefore not necessary to decide which is more important-

liberty or freedom. Despite Dahl's question "Is the coexistence of

democracy, equality, and primary political rights often, perhaps typically,

no more than a transitional state between the birth of a new democratic

order and its transformation into a mass-based despotism?" which many

believe to be true, it is not the case (Dahl 32). An evaluation of

historical examples of democracy shows that there was support for

authoritarian government in instances which democracy turned to

authoritarianism, such as in the Weimar Republic for example. This is a

key point in demonstrating that equality is not harmful to liberty and Dahl

has the advantage of many years of historical evaluation in understanding

democracy that Toqueville was not afforded. In fact, Dahl while not

directly demonstrating Toqueville was wrong noted that, "under certain

conditions, which he thought largely existed in the United States, equality

might be reconciled with liberty," meaning it is not necessary to come to

the conclusion that liberty is more valuable then freedom or vice versa

(Dahl 45).

On the contrary, Okun maintains that there is a double standard in

democracy in which people are treated equally, but forced to seek

inequality in terms of economic betterment. Okun's notion that more

equality is necessary to a better economy is based in the fact that the

inequalities of democracy create "a tradeoff between efficiency and

equality" (Okun 4). In the end, Okun's argument is one that suggests that,

"the conflict between equality and economic efficiency is inescapable. In

that sense, capitalism and democracy are really a most improbable mixture,"

which suggests that capitalism cannot function in democracy because

economic freedom and a functioning economy will destroy equality (Okun

120). This is almost a Marxist argument as capitalism leads to inequality,

yet equality is a cherished value of democracy. Equality is therefore

necessary for a better economy because democracy now encourages inequality

and discourages the economy. Okun uses facts to back up this argument,

such as "the narrowing of racial differentials during the sixties implied a

gain of nearly one-fifth in the wages and salaries of blacks. Dahl

counters this argument by his notion to treat the economy like democracy,

and thus the economy can flourish as does democracy. There does not have

to be an inherent paradox in capitalism and democracy. Dahl's argument is

thus more effective than Okun's as Dahl's use of Toqueville's democratic

notions and the history of democracy show that equality and freedom can

both be a reality.

In this way Dahl also is in accordance with the Friedman's. The

Friedman's maintain that putting equality before freedom will result in a

loss of both. The Friedman's write that, "the growth of crude criminality

in Britain in recent decades may well be one consequence of the drive for

equality," which suggests that economic problems lead to inequality and

thus problems for democracy (Friendman 144). While it is obvious that

economic problems are bad for democracy, this does not mean that the

economy has to be detrimental to democracy. In fact, Dahl argues that

"ownership and control of firms affects political inequality," which would

be a restatement of the obvious if not for that fact that Dahl also gives

an alternative (Dahl 54). This is because the United State's believes in

the right to property as one of the inherent rights. Dahl writes that

everything "depends, of course, on what we mean by economic liberty,

democracy, and the democratic process, and the relative value we assign to

each," which suggests that the words have little meaning compared to what

we assess to them. This makes Dahl's argument all the more intriguing.

Dahl's argument is based on the fact that the right to property is

important and that a democratic treatment of the economy will result in a

better democracy and a better economy, which means he differs from the

Friedman's and Okun's perspective. He looks at whether "a fundamental

right to property comparable, perhaps even superior to the right to the

democratic process" would be a benefit (Dahl 64). This ties in the

relationship between the economy and democracy and weighs them both, before

Dahl reaches his final conclusion. While Dahl recognizes that "democracy

may be seen as a danger to property rights; or property rights may be seen

as a danger to democracy," which is suggestive of the Friedman's view of

economic equality being necessary for democracy, he counters it by noting

that democracy became to be associated with capitalism and capitalism for

change and the economy became an important aspect of change (Dahl 68).

This is an important fact in noting that capitalism is important to

democracy, even though democracy praises equality that capitalism

discourages, which seems to disprove the Freidman's argument that there is

an inherent paradox within capitalist democratic societies.

Ultimately Dahl reaches the conclusion that the rights to private

property are not necessarily consistent with democracy. He believes in a

right to collect "the resources necessary to life, liberty, the pursuit of

happiness, the democratic process, and primary rights," but this does not

mean the right to… READ MORE

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