[Karl_Bonner_1982]

I'd like to start this as a serious discussion thread on the shortcomings of democracy and capitalism. Let's focus on four major areas for each:

1. What are the needed prerequisites for democracy to function well? What is needed for a healthy capitalism?
2. In what areas of society is democracy likely to not work well? Where does capitalism fall short?
3. Under what circumstances is democracy as a whole likely to fail? When does capitalism fail?
4. What can a society do to correct the flaws in democracy (and capitalism) and ultimately save democracy (and capitalism) from themselves should they ever be put in crisis mode?

I would like to hear your ideas on this deep issue...

K. Bonner

[Dave]

1. What are the needed prerequisites for democracy to function well? What is needed for a healthy capitalism?

Needed for Democracy

• Market dominant majority
• High average IQ (93 or greater)
• High level of basic education
• Settled distribution of property
• Relatively homogeneous population, or at least a significant majority
• Strong moral base, people must be willing and able to defer gratification and have respect for fellow man
• No excessive levels of inequality

Needed for Capitalism

• Stable currency
• Strong property rights
• Rule of law
• Settled distribution of property
• Strong criminal justice system and civil tort claims system (tied in with rule of law)

2. In what areas of society is democracy likely to not work well? Where does capitalism fall short?

Democracy falling short

• Welfare/social services (people vote more money to themselves)
• Sound fiscal policy (people want more spending, don't want to pay more taxes)
• National security issues (secrecy concerns)
• Economic planning (tragedy of the commons, something for nothing, etc.)

Capitalism falling short

• Running a war economy
• Any situation where property rights are not clear and cannot be clarified (e.g., air)
• Land development, especially in areas with high density (can't build new infrastructure without eminent domain)
• Moving a less developed national economy up the value-added chain (comparative advantage makes such an activity uneconomic for investors)
• Very long term planning (e.g., health of soil 70 years from now)

3. Under what circumstances is democracy as a whole likely to fail? When does capitalism fail?

Democracy failure

• Stupid people
• Heterogeneous population
• No clear settlement of property, everyone thinks the guy next to him stole his land
• Immoral, immature people who do not respect others and want everything right now
• Any society with a significant market dominant
• Very high inequality

Capitalism failure

• Hyperinflation
• No rule of law
• Red tape strangulation
• Unclear property settlements
• Endemic ethnic hatreds pervading society (no one will want to cooperate and trade)
• Military invasion (people will sell things to the enemy, not enough tanks will be produced, etc.)

4. What can a society do to correct the flaws in democracy (and capitalism) and ultimately save democracy (and capitalism) from themselves should they ever be put in crisis mode?

Saving Democracy

• Good education
• Prevent non-traditional immigration
• Eugenics (definitely not in favor of this, but it would work)
• Stable currency (prevents inequality and encourages savings)
• Cultivate strong culture
• Avoid excessive welfarism (too many dependents and too few taxpayers will destroy the system)
• Make sure land/property claims are fairly handled and settled

Saving Capitalism

• Stable currency
• Regulate pollution
• Use direct planning for urban development
• Ensure domestic producers are not destroyed by foreign competition, force them up the value-added chain
• Strong rule of law
• Stop corruption
• Prevent/fight crime

How's that for starters? I hate democracy, but this could be a good discussion.

[Ash Faulkner]

Well Dave has highlighted a number of potential problems for democracy here, I agree with most of them. But this is a bit of an odd question; democracy is a system, it seeks no ends for itself. I suppose the only thing it aims for is for peaceful removal of government at the behest of the people (not the monarch, or the press, or the military etc). Aside from that I don't think democracy, per se, aims for anything else: it is the ideological groups that participate within the democratic process that have goals and ideas.

How and whether capitalism will fail is such an old debate, it's been had here plenty of times before, and is no doubt raging in various threads as we speak. I'm sure the Marxists will jump on this one joyously.

Fixing democracy is difficult. I think democracy is the best system of government because it is the most effective way to kick out bad governments peacefully. I don't think individuals are the bastion of wisdom and rationality that some people think they are, but they certainly know better than the government, so having significantly devolved powers to individuals, families, communities, towns, cities, counties, etc would be a good systemic balance to overgovernment, which can come about as a consequence of a demanding population.

[Larendect]

I think Capitalism and Democracy fail for the same reasons.
People are fucking idiots, and even if they get what they want, it's exactly the opposite of what they set out to get.

Both depend on people not being idiots, and that's simply not in the cards for the human race.

[amanamuse]

There are no "failures" to democracy or capitalism in an absolute sense. One must simply know what to expect when enacting democratic or capitalist reforms in a government.

In a relative sense, failure of democracy and capitalism are stupid people and free market failures, respectively.

The results of stupid people...

They react in disadvantageous ways because they are not intelligent enough to see inevitable trends in society at large. The results are states like Mississippi and countries like France.

The results of free market failures...

Certain market entities gain disproportionate amounts of power in the market, creating barriers to entry and stifling innovation. The results are the Standard Oil and pop-culture in the US.

[Dr House]

Certain market entities gain disproportionate amounts of power in the market, creating barriers to entry and stifling innovation. The results are the Standard Oil and pop-culture in the US.

Hello.

1) Standard Oil got its 95% market share by producing and selling at about half the cost of its competitors. It never engaged in predatory pricing or price setting, and it had dozens of competitors during its life.

2) WTF is wrong with pop culture in the US?

[amanamuse]

1) Standard Oil got its 95% market share by producing and selling at about half the cost of its competitors. It never engaged in predatory pricing or price setting, and it had dozens of competitors during its life.

Standard Oil controlled shipping options for most of its major competitors. It was a predatory monopoly in every sense of the word.

Try reading this.

[QatzelOk]

It never engaged in predatory pricing or price setting, and it had dozens of competitors during its life.

I don't know why people are so jealous of this corporate success story.

**picks glitter out of long, gorgeous strand of hair**

[Vera Politica]

Perhaps even a selective reading of Marx's Capital will answer the OP's question on the shortcoming of capitalism and the reasons it fails.

[Larendect]

Democracy fails all the time.

Ask people who the greatest musician of all time is, and you'll get an answer somewhere along the lines of Cher.

The genius of the US was to create a Republic where you are not only protected from the government, but the morons who elected them in the first place.