Democratic Capitalism and World Peace by Larry Fedewa

It is a wholesome and uplifting exercise to dream occasionally about what an ideal world might look like. Clearly, such ideas are far from the messy realities of the world as we know it today but lifting our gaze to the clouds can give us courage as well as direction.

So, what would a world look like if democratic capitalism were universally practiced instead of restricted to our own country and a few of our friends? First, we have to describe what we mean by “democratic capitalism”.

The chief characteristics of democratic capitalism are as follows:

  • Democracy is a political system, meaning a way in which a nation’s governance is organized. Capitalism is an economic system, meaning a way in which a nation’s commerce is organized.
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  • The basis of capitalism is private property. The value of private property is its answer to the age-old question: “What induces millions of people to work hard and to be productive through self-motivation?” In human history, no other incentive has been as effective – not fear, not slavery, not regimentation, not even religion. Only granting each person the responsibility and the opportunity to provide for his/her own survival and that of their family through hard work and the prospect of success has been proven effective in motivating masses of humanity to be productive. The vehicle for this effort and success is ownership of the means of survival in the form of private property. Ownership in turn demands personal freedom, recognition of the right to private property by the community as a whole through law and custom.
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  • Democracy provides the means for determining the common good of the community by allowing each person a vote in choosing the people who will make those decisions. Throughout human history the ultimate authority in any society was always, “Who has the weapons?” Typically, a small group of people, whether nobility, tribal chiefs, or wealthy oligarchs, controlled the weapons. Democracy came about when control of the weapons was transferred to officials elected by the people. With control of the weapons came control of social justice in the form of laws, including the laws governing private property. The functional role of government in a democratic capitalist society is to act as the referee between competing interests, such as individual freedom versus the common good, or management versus labor.
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  • There is always tension between government and the private sector of the society over control of the money produced by the society. All the funds which exist in a democratic capitalist society come from the profits generated by private companies and individuals. Governments never produce profits. However, there are certain functions of government which are critical to the welfare of the society, such as national defense and the making and enforcement of laws. These government activities require funds, which are raised in the form of taxes. The tension arises when the government wants a greater percentage of the available profits than the people who earned those profits want to surrender. Ultimately, these decisions are made at the ballot box.
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  • The ultimate characteristic of democratic capitalism as we know it in the United States of America is this: America is a business-oriented society. Our social intercourse is peaceful, relying on litigation, not violence, to resolve our differences. There are, of course, many differences because our system is also based on competition for the rewards of creating the most value for the masses. Americans would far rather sell something than shoot somebody. Perhaps the purest expression of the American ethos as applied to foreign policy was President John Kennedy’s creation of the Peace Corps. America was represented to the world by missionaries of practical technologies and practices aimed at bringing a higher standard of living to people who needed help.

We must admit that, as Americans, we do not live up to our own ideals. But what if we did? What if we lived in a world where we could present ourselves and our way of life in the spirit of the Peace Corps rather than Special Ops or invading armies? The military objective of all the wars in history has been the occupation of new territory. But that goal is clearly obsolete in today’s omnipresent networks of communication and transportation.

In a world dominated by democratic capitalism, there would be no incentive for war. Commercial competition rather than armies would determine rewards, and the most successful companies would be the best salesmen. This is the world the business community on its best days would like to see. Far from being an isolationist, as he is sometimes called, our businessman President is placing down markers toward a world which values trade above conquest.

Today’s world is far from the picture presented here, but it does no harm to dream. After all, many of today’s realities were once only dreams.

Dr. Fedewa is the host of the Dr. Larry Show.

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