Has Democracy Become A Luxury?


With the onset of computers and advanced technology, the lines separating the haves and the have-nots have grown so far apart that 1% One Percentof the wealthy elite essentially controls the fate of 99% of the rest of the planet. The development of robotic manufacturing techniques has reduced the number of people necessary to run factories and plants. Access to cheaper labour in third world countries increases a corporation’s bottom line, at the expense of jobs in the corporations location. The rich get richer. But at the expense of the middle and lower classes.

Capitalism is a funny thing; at its best, capitalism should promote economic growth, as measured by a standard of living enjoyed across the whole of its extended reach. Proponents would argue that this give and take would bring about a better availability of food, housing, clothing, and health care, better education for children, and the ability to provide for the elderly and less fortunate. Capitalism assumes a level playing field, where more opportunities exist for individuals to create their own businesses or new professions.

99 percentBut in practice, “capitalist economies prioritize profits and capital accumulation over the social needs of communities, and capitalist enterprises rarely include the workers in the basic decisions of the enterprise.” (Tom Brass, author and academic, University of Cambridge.)

Modern day capitalism has its origins in slavery and indentured servants; “when historians talk about the Atlantic market revolution, they are talking about capitalism. And when they are talking about capitalism, they are talking about slavery.” (Greg Grandin, Historian.)

Politicians have pandered to the wealthy for decades. “Reaganomics,” or “the trickle-down theory,” posited that “tax breaks or other economic benefits for businesses and upper income levels will benefit poorer members of society by improving the economy as a whole. “ (Wikipedia)Trickle Down

It’s a lovely thought, but just a theory, I’m afraid. Corporate and personal greed eclipsed the high-minded ideals, and by 2008, after the spectacular 2007 global collapse of the banking system, economist Alan Greenspan admitted to the United States Congress that, “The whole intellectual edifice collapsed. I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders. … I was shocked.”

In 2013, Pope Francis issued an 84-page paper describing unfettered capitalism as “a new tyranny” and calling upon world leaders to fight rising poverty and inequality: “Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.” (Wikipedia)

crashSo, on the one hand, capitalism has the potential to benefit both the job creators and the workers, while raising the overall standard of living for society. On the other hand, capitalism can create economic and social instability, fiscal inequality, endanger or destroy the natural resources of its own or other countries, and has only to hold its own self accountable for how profits are distributed throughout that society, whether through payrolls, donations, or taxation.

Ah, what to do, what to do? In 2010, in the United States, politicians decided that giving even more power to corporations would benefit their parties.

“Still, for decades, candidate elections remained free of direct corporate influence under federal law. Only money from individuals and groups of individuals — political action committees — were permitted in federal elections.

citizensunitedThen came Citizens United, the Supreme Court’s 5-4 First Amendment decision in 2010 that extended to corporations for the first time full rights to spend money as they wish in candidate elections — federal, state and local. The decision reversed a century of legal understanding, unleashed a flood of campaign cash and created a crescendo of controversy that continues to build today.

It matters not, the court said just this year, that some speakers (corporations), because of the money they spend on elections, may have undue influence on public policy; what is important is that the First Amendment protects both speech and speaker, and the ideas that flow from each.” (http://www.npr.org/2014/07/28/335288388/when-did-companies-become-people-excavating-the-legal-evolution)

CRONYISMIn exchange for receiving personhood, corporations sponsor politicians. And the politicians slash tax rates and offer tax credits and benefits in response. It’s a perpetual motion machinery that keeps power and money in the hands of those already in politics or corporate businesses, and gives an unfair monetary advantage to the wishes of the wealthy, while muffling the voices of socially conscious citizens who believe in a democratic government.

In Canada, under the law, a corporation has the same rights and obligations as a natural person. It can acquire assets, go into debt, enter into contracts, sue or be sued, and even be found guilty of committing a crime. A corporation’s money and other assets belong to the corporation and not to its shareholders.

Our politicians, well aware that corporations have money to burn, have adopted similar tax cuts and incentives. Corporations are taxed at 38% of taxable income, which drops to 28% after federal tax abatement, and then drops again after general tax reductions. The net tax rate for corporations keeps falling, from 18% (2010,) to 16.5% (2011,) to 15% ( 2012,) For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11%.

taxesContrast that with your personal tax rate for this year, which is 15% on the first $44,701 of taxable income, 22% on the next $44,700, 26% up to $138,586, and 29% of taxable income over $138,586.

Most Canadians believe that those with higher incomes ought to share a bit more of the tax burden than those with low incomes, especially businesses and corporations which rely on public infrastructure to do business. Taxation lawyers argue, however, that wealthy corporations taxed more than poorer ones will simply split themselves into smaller entities to avoid the higher taxation. And a smart high-income person with good lawyers and accountants will form small corporations to shelter their income.

The harsh reality is that Harper’s government has given businesses an extra $50 billion in tax cuts and credits in the last few years. And due to cuts to the GST, personal and corporate taxes, Ottawa now collects about $45 billion less revenue per year. Meanwhile, plans are in place to cut public health funding by $36 billion over the next 10 years. Retirement age will be raised to the age of 67. Education and child care are low priorities, and our veterans are disrespected by the very people they protected during foreign wars.

InfrastructureThe rate of economic growth, government revenues and employment could be raised by investing in infrastructure like mass transit, but where can you find the funds to do so when you’ve already spent the taxpayer’s funds on corporate incentives, security, policing, corrections, spy agencies and multimillion-dollar taxpayer-funded ad campaigns designed to get Canadians to vote Conservative in the next federal.election?

Capitalism appears to be trumping the objectives of democracy; the voices of the people are unheard, while money and power remain in the hands of the rich and the powerful.

It would seem that true democracy cannot co-exist with unrestrained Capitalism.

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