Democracy’s basic commitments were simply expressed in Lincoln’s 1862 Gettysburg address at the culmination of the American Civil War over slavery. It contained two principles. Firstly, dedication to “the proposition that all men are created equal’, and, secondly, to ‘government of the people, by the people, for the people’. These principles had been previously set out in the American Declaration of Independence which had asserted man’s ‘unalienable Rights’ to ‘Life, Liberty and the pursuit of Happiness’. If government failed to uphold those rights then ‘it is the Right of the People to alter or to abolish it, and to institute new Government’.
The stated intent was that all humanity would at last be treated as a whole, rather than differentiating between competing sub-groups of the population, defined by race, religion or any other classification. Should a sub-group be excluded from such processes they should have access to remedy. Should a sub-group be enabled to circumvent those principles and in so doing, exploit the rest, it would be a clear democratic malfunction in need of correction.
All ‘men’ may have been created equal, and in terms of innate potential, that certainly appears to be the case. However, not all people have been permitted lives where their equality has been allowed fulfillment. That is not unique to the US, but an aspect of the human condition in most societies. Moreover, it is a widespread, if not universal, experience that a single sub-group of populations is permitted to manipulate systems for their own benefit, no matter the harm that might be done to others.
The United Nations Charter of 1945 declared its members’ determination “to reaffirm faith in fundamental human rights, in the dignity and worth of the human person.” That declaration was subsequently adopted by the UN General Assembly and later incorporated in the European Convention on Human Rights, agreed by member states of the Council of Europe, with its acceptance being a condition of entry for any nations wishing to join, enacted also by the UK Human Rights Act 1998.
The fundamental message of this internationally agreed legislation, is that individuals should all enjoy the same rights to life, freedom and the pursuit of happiness, so long as it doesn’t interfere with the same fundamental rights of others.
The most basic human right is that of a minimum living standard available to all. That is the foundation on which the pursuit of happiness rests. Its delivery is the first responsibility of democratic government. The 1942 Beveridge Report identified freedoms from what were referred to as the five giant evils in society: squalor, ignorance, want, idleness, and disease. Post second world war, UK democracy addressed the five giant evils through the provision of public housing, improved state education, basic welfare payments for the poor, disabled and elderly, the provision of unemployment benefits and acceptance of government responsibility to maintain full employment as far as possible, and the establishment of the National Health Service.
By the 21st century, discriminating against anyone on the grounds of their ethnicity had become illegal in most countries. And most advanced nations also upheld laws which proscribe discrimination against any individual because of their gender, religion or belief, age, disability, sexual orientation or gender reassignment. Discrimination against anyone on any of these grounds is now illegal in most situations.
That simple picture was made more complex in the late twentieth century by the increased knowledge and understanding of humanity’s impacts on the earth’s ecological and environmental systems. Though the details of the science maybe impenetrable to the non-scientist, the broad messages are clear. Human activity is generating various forms of pollution and wasting natural resources. The result is global warming which is damaging the ecosystem, causing polar ice caps to melt, acidification of the oceans and rising sea levels, the extinction of biological species and some human habitations causing a continuing vicious cycle of adverse effects.
Despite massive effort and investment in denying those realities, it has gradually been accepted that human activity is having potentially devastating effects. If such activity continues without check, it seems likely to render planet earth unfit for human habitation and survival. Hence the 2015 Paris climate agreement, signed by 195 members of the United Nations Framework Convention on Climate Change, from which the US has since withdrawn.
Previous generations did not have that knowledge and understanding. Nevertheless, the ambiguity of established political processes continues, with actual performance falling very far short of the formal commitments described by the fine words.
Moreover, there is no logic in distinguishing between individuals who share our fleeting time on earth and those who follow. Basic human rights and equal opportunities must apply to all from what ever generation they come. Democratic aspirations and commitment must include a commitment to bequeath an earth to future generations which is as viable as the one we inherited. But we are not fulfilling that commitment.
The story of Easter Island is sometimes presented as a parable for earth. The first settlers discovered an island paradise with plentiful food supplies of fish, birds and vegetation, as well as trees providing raw materials for clothing, shelter and boat construction. The islanders prospered, carving their giant religion-based Moai statues which remain today. But as the population grew, so did the inevitable consumption and waste of all the islands finite resources. Eventually population turned against itself and it is said survivors, at bare subsistence level, even resorted to cannibalism.
That appears to be the route we are currently taking, guided by an economic ideology that seeks only to maximise the returns to the owners of property in its various forms, through the exercise of free markets. The elaborate, math based neoclassical economic ‘science’ pretends dishonestly to explain and justify dominance by free markets and private property. Rather than dealing with observed reality, neoclassical economics is math based in order to justify the scientific pretence. Being quantitative, and the quantities being expressible only in money terms, it is not capable of taking account of values such as those referenced above.
The ‘most powerful institution in the economy’, business, was defined as focused on maximising its profits. But the notion of profit maximisation was incoherent in many ways. It was not clear whether it referred to short term or long term, and it was left undefined how those profits should be allocated. That was a matter for business management, the economy’s ‘most influential decision makers’. Some profit would no doubt be paid out as dividends to shareholders, some retained within the business as insurance against any future rainy day, and some would be invested in further development of the business, in R&D or expansion. Some would no doubt ‘trickle down’ to the lower forms of economic life.
Then Milton Friedman refocused the theory from profit onto maximising payments to shareholders. That clarified many things. Management discretion regarding the allocation of profits was greatly reduced as immediate payments to shareholders took precedence over retaining profits in the business and long term considerations. There was no legal or theoretical justification for maximising shareholder wealth, till agency theory was invented in the 1970s. That denied the company its legal existence in order to pretend that company directors were directly related to shareholders as their agents, bound to act in their best interests at all times. That was despite their legal contracts were with the company, not the shareholders, who remained protected from any further liability by the continued existence of the company as a legal entity.
The neoclassical theory was also falsely based in many other ways. The notion of free markets pretends that they remain subject to the disciplines of competition. But it is understood and accepted that genuinely competitive markets progress inevitably, as firms compete with each other, towards becoming ever more concentrated, firms moving towards oligopoly, and in most mature market cases to cartellisation and monopoly, unless prevented by extraneous regulation.
Another groundless Friedmanism is that it costs the public sector twice as much to do anything is it costs the private sector. No evidence has ever been produced to support that contention. The privatisation of state provision repeatedly suggests the opposite, as an elaborate new bureaucracy is erected to create the appearance of a competitive market. That appearance has been repeatedly denied as supposedly competing entities act in concert managing prices to maximise shareholder take.
Three results of this dishonest ideology remaining dominant in advanced economies and increasingly across the globe. They are denial of global warming, an upsurge in criminality and fraud across the business and financial sectors, and the explosion of inequality, both within and between economies, leading to increasing loss of social cohesion and denial of democratic values.
It is so obviously wrong and to almost everybody’s disadvantage, that one might wonder why it continues. A sub-group that Roosevelt referred to as ‘organised money’ has become enabled to circumvent the system. It is led by the financial sector, drives financialised business, controls the media, is massively influential on academia by its funding of academic institutions, ‘research’ and individual appointments, and shapes politics through its £multi-billion funding of ‘think tanks’ and lobbyists. Finally it is sealed by the revolving doors between these various sectors and government itself.
This obvious democratic malfunction is in urgent need of correction.