Response: Private Property and Free Enterprise: Good or Bad?
According to the prompt, "Private property and free enterprise is a source of enmity, conflict and inequality, and it is therefore incompatible with a free, equal and healthy democracy." This is an interesting question; the implication within the sentence is that there is a fundamental incompatibility with free enterprise and an effective democracy. In order to address whether or not this statement is correct, it is necessary to consult some of the great voices in economic thought; through the perspectives of Marx, Rawls, Mill and Hobbes, the importance of capitalism to a just and equitable democracy will be explored. While people like Hobbes believe that government should not interfere with the lives and property of man, Marx believes that it is only through the abolishment of a free market system that class inequalities can be addressed and everyone works toward a common good.
Karl Marx is arguably the loudest voice in the assertion that capitalism and democracy cannot operate smoothly together. In terms of division of labor in a free market society, in which individuals are expected to take on different, segmented tasks to create collective materials and products more quickly, Marx argues that this division creates unique inequalities that cheapen and lessen the overall product. In essence, increasing specialization makes workers have worse skills in other areas apart from their specialization. To that point, it leads to alienation - the one skill in which they are experienced and trained becomes boring and monotonous to them, and as a result, poorer quality of their work results (Marx, 1968). Marx, however, argues that the division of labour can become a necessary evil; it is sometimes the only way in which efficient production can be accomplished on a national level.
According to Marx, manufacturing and the rise of Big Industry has had many effects on international and national politics. This rise in manufacturing created a further division of labor. Manufacturing allowed guild peasants to find a new place to go after said guilds would keep them out, refuse to pay them, or not give them enough. Certain towns became somewhat more civilized and higher-class in their attitudes, while other areas (like factory towns) were still petty-bourgeois in their attitudes. In addition to this, paper money and stocks became a new platform for trade through manufacturing, thus eroding the overall value of capital as a semblance of national character (Marx, 1968). Natural grown towns were no longer a possibility; instead, industrial cities were created to proliferate manufacturing, and craft skill was no longer necessary to learn. Capital became more and more important than science and skill, creating a class that destroyed nationalism and the relationship between an employee and his employer by turning it into a capitalist endeavor.
Normally, a state is the means by which common interests of a ruling class are established and maintained; its goal is to mediate on behalf of the common good in the case of a dispute. This feudalist system was the normal way in which civil society was maintained; with the insertion of big industry into the equation, In a capitalist and industrialist societies, the state is correspondent to modern private property; the existence of property is entirely dependent on how much commercial credit the bourgeoisie possesses. Modern civilizations, with trade and industry eliminating feudalism. Basically, the state's only purpose for existence is to organize and regulate property in this kind of context.
This type of regulation is accomplished through civil law, which asserts that property relationships are now chalked up primarily to the general will (Marx, 1968). Due to the natural community being completely dissolved with the advent of big industry, civil law is the only way to provide accountability and recourse for those who might find their private property infringed upon in any way. This helps to fill in the gap that feudalism has created, providing a sphere of influence that communities must follow. As a result, however, it is possible for man to carry the mistaken perception that he has the legal ownership of the thing without actually having it; this creates problematic assumptions and conflicts between owners of property. According to Marx, the state works in tandem with the bourgeoisie to maintain their own property, perhaps at the expense of the proletariat; the state belongs to those who control the economy.
Proletarians have little to no control over the class conditions they must life with, nor can a social organization provide them with that control. The lack of mobility afforded those in the proletariat class is quite limited, and cannot achieve any other status of class as long as his individuality is separated from his labour. The best way to abolish class is then to assert oneself as an individual in order to overthrow the State and the bourgeoisie. As of Marx's writing, individuals in a capitalist society could only behave as a member within their class; with the abolishing of classes, they could be a strict individual within their society as a whole. Instead of having to work within the confines of class conditions, they can interact with individuals as individuals, with no restrictions to speak of. They would be able to enjoy personal enjoyment and freedom, without being disturbed by limitations and conditions.
The ideal that Marx speaks of in a Communist society are the primary reasons he cites for the abolition of capitalism and classes. Capitalism divides individuals based on their possession of private property, creating splits that force one group of people to work for the other. With the conception of class, which is exclusively created by the ruling class, people are never able to escape their own societal setbacks, which are accidentally created by their class distinctions. In order to allow people to fulfill their own personal destinies, and allow for true equality between individuals, the concept of class must be abolished. Capitalist society, in its hoarding and regulation of private property, is what perpetuates the class system, and according to Marx no free society can exist so long as these shackles remain.
In direct contrast with Marx, however, is Thomas Hobbes, who did not necessarily feel that capitalism and democracy were not as strictly divisible as it seems. Hobbes' philosophy came as a direct consequence of the Cartesian era of science and philosophy; he became one of the major philosophers in the 16th century for his audacity to consider human beings as components of an equation, one inextricably linked to corporeal reality. Metaphysics were something he viewed with skepticism; instead, he felt that human beings were things that could be taken apart and put back together to find their component parts. What we perceived as thought and perception were merely reactions to material causes found in the world around us, according to Hobbes (Melchert 364). Life "is but a motion of limbs, the beginning whereof is in some principle part within, why may we not say, that all automata have an artificial life?" (Hobbes 129). Hobbes does not believe, therefore, in the concept of a soul; the difference between machine and man would then be a matter of semantics or origin, not the presence of life.
Hobbes elucidates the concept of regulated thoughts - a pattern of behavior and action that stems from causes and is a means to achieve a desired effect. Our thoughts are self-regulated when we use them to decide how we interact or communicate with others: we might say one thing to achieve a desired effect in another. This discourse is performed through words and reasoning in concert; we reason causes and effects in relation to our wants and desires, and then communicate them through words in order to convey them to someone else (Melchert 368). As this relates to his thoughts on communication within society, there is a struggle between the laws and rights of nature of all human beings. People have the right, or the liberty, to do whatever they can to stave off death and see to their interests; however, in order to interact with a group of other human beings, they must voluntarily give up those rights of nature to an extent to allow other people to have a communal sense of civilization. This is known as a social contract theory, wherein a group of people understand that they cannot just follow their urges, as that would disrupt the society in which they live (Melchert 373). The social contract theory provides a decent middle ground between Marxism and libertarianism; while people are free to pursue their interests, they cannot do so at the expense of the people, or while defying the social contract.
John Stuart Mills' take on the relationship between private enterprise and democracy is likely similar to Hobbes'. One of Mills' primary arguments is the Greatest Happiness Principle, which states that “actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. By happiness is intended pleasure, and the absence of pain; by unhappiness, pain, and the privation of pleasure” (Mill, 1998). According to Mill, there are varying degrees of happiness, and different forms of pleasure are more righteous than others. Mill thinks that intellectualism and moralism are admirable, whereas physical pleasure takes a backseat to these nobler pursuits. He also thought that there should be a difference between being contented and being happy - blind happiness is no happiness at all, but mere ignorance; happiness must come from knowledge of one’s world and acceptance of it. “It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. And if the fool, or the pig, are of a different opinion, it is because they only know their own side of the question” (Mill, 1998). To Mill, the priority is in acting in the best interests of society in general, which often means delaying your own satisfaction (i.e. profit and material goods from private enterprise).
John Rawls' positions and theory of justice plays more into Marx's idea of creating a more equitable and just democracy; to his mind, society should factor in redistribution of wealth to make up for inherent class and social inequalities. In response to utilitarianism and the Greatest Happiness Principle, Rawls argues that the philosophy favors the will and desires of the majority over the minority. In essence, by finding and doing the things that cause the greatest number of people happiness, you by definition exclude the minority from achieving that happiness. People can make many sacrifices without reaping any real rewards from it, which is why Rawls argues for his theory of justice. In essence, his 'original position' states that most people have a veil of ignorance, where "no one knows his place in society, his class position or social status" (Rawls 11). His principle argues for a social contract in which individuals mutually agree to work together for the overall rights and privileges of as much of the society as possible.
In conclusion, the question of whether or not a free market capitalist society can allow for a just democracy remains a complex one; conflicting perspectives seem to be present even among the great philosophers of economic thought. However, except for right-libertarian views like those of John Locke, it seems apparent that at least some inequality and imperfection is detected, whether through class conflicts, division of labor, difficulty in distributing wealth and the conflict between the social contract and individual liberty. To that end, it can be argued that, while free market capitalism and democracy as a concept do coexist, it is by no means perfect or just.
Dahrendorf, Ralf. Class and Class Conflict in Industrial Society. Stanford, CA: Stanford University Press. 1959.
Hobbes, Thomas. Leviathan, 1651.
Marx, Karl. The German Ideology (Progress Publishers), 1968.
Melchert, Norman. The Great Conversation: A Historical Introduction to Philosophy (Oxford University Press), 2010.
Mill, J. S. Utilitarianism. Oxford: Oxford University Press, 1998.
Rawls, John. A Theory of Justice.