PSC101 CSN American Politics Democracy and Market Capitalism Discussion

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Read chapter 13&14 by Dahl and respond to his points and arguments. Also, comment constructively on a classmates’ posting.

Here is classmate’s posting from question. Please reply in 1st person point of view.

Classmate’s post

According to Dahl. “Democracy and market capitalism are like two persons bound in a tepestous marriage that is risen by conflict and yet endures because neither partner wishes to separate from each other. ” (Dahl. p.166. 1998).   Market- Capitalism is favors due to polyarchal democracy- has only existed in countries with predominantly market capitalist economies.  This strict relation exists because certain basic features of market capitalism make it favorable for democratic institutions.  In  a market  capitalist economy, the economy entities are either individuals or enterprises that are privately owned by individuals and groups, and not, for the most part by the state. (Dahl p.167.). According to Dahl. “Market capitalism is also favorable to democracy because of its social and political consequences.  It creates a large middling stratum of property owners who typically seek education, autonomy, personal freedom, property rights, the rule of law, and participation in government.”(Dahl. p.168, 1998).  A nonmarket economy can exist where resources are scarce and economic decisions are few and obvious.  In a more complex society, to avoid economic chaos and provide at least a moderate standard of living, a substitute for the  coordination and control provided by markets is necessary.(Dahl. p.168.).  There are some qualifications.  Economic growth is not unique to democratic countries, nor is economic stagnation unique to  nondemocratic nations.  A market capitalism economy need not to exist, only in its familiar urban industrial or postindustrial form. (Dahl. p.170).  According to Dahl. “Are these preindustrial origins of several of the oldest democracies irrelevant to countries in the postindustrial era? No. That  experience reinforces a crucial point; whatever its dominant activity, a decentralized economy that helps to create a nation of independent citizens is highly favorable for the development and maintenance of democratic institutions.” (Dahl. 0171. 1998). There is another view of democracy not being favorable.  Democracy and market- capitalism are locked in a persistent conflict in which each other modifies and limits the other.  According to Dahl.”The political system provided opportunities for the effective expression of opposition to unregulated market capitalism.  Turning for help to political and governmental leaders, those who felt themselves injured by unregulated markets sought protection.  Although some opponents  proposed only to regulate market capitalism, others wished to abolish it outright.  And some compromised; lets regulate it now, they said, and eliminate it later.  Those who proposed to abolish capitalism never achieved their goals.  Those who demanded government intervention and regulation never did”. (Dahl. pp.173-174, 1998).  The institution of market -capitalism requires government intervention and regulation.  Competitive markets, ownership of economic entities, enforcing contracts, preventing monopolies, protecting property rights. A market economy is not and can’t be self regulating. Without government  intervention and regulation a market economy inflicts harm on some people; and those who are harmed will demand government  intervention. (Dahl. p174 1998).  Marker capitalism creates inequalities. It limits the democratic potential of polyarchal democracy by generating inequalities in the distribution of political resources.  It greatly favors the development of democracy up to a level of polyarchal democracy.  Because of its adverse consequences for political equality, it is unfavorable to the development of democracy beyond the level of polyarchy.  For this reason market capitalism is a powerful solvent of authoritarian regimes. (Dahl p177-178. 1998). This unfavorable  market capitalist democracy compares well with the documentary Inside Job.   In the “Inside Job” they talked about deregulation economy and how it started with  corporations.  There was banks that were privatized.  In New York City the financial district went out of control. There was merging of financial groups and banks as well.  The credit card, car loans  also went out of control.  Yet the bankers were getting huge bonuses on tax payers money. (Furgeson. Youtube, 2010).

                                                                    Work Cited

Dahl, Rober, Shapiro, Ian. “On Democracy”, Yale University Press pp.168-178. 1998

Furgeson, Charles. “Inside Job Film Documentary.” 2010.

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