Cyrus Sadr

Professor Steven Rosenzweig

Democratic Erosion

2/8/25

The Illusion of Democracy: The Clash Between Capitalist Interests and the Promise of Equality in American Politics

When examined through the lens of a classical definition of democracy, the United States cannot be classified as a democracy. According to political economist Joseph Schumpeter, the classical doctrine of democracy emphasizes that it is a method that must “[arrive] at political decisions [that realize] the common good”. In particular, early social contract thinker John Locke’s definition of democracy emphasizes political equality, individual liberties, and majority rule. French political philosopher Montesquieu characterizes democracy as possessing “public virtue” meaning that those who hold power are motivated to act in the interest of the common good. Swiss philosopher Jean-Jacques Rousseau takes this further and asserts that democracy must protect the sovereignty of the people and warns that representatives may alienate them.  Political theorist John Dewey argues that democracy is not merely a system of governance but a way of life, rooted in collective decision-making, mutual respect, and the shared pursuit of the common good. Dewey asserts that democracy thrives when power is distributed equitably, enabling all citizens to contribute meaningfully to the political process. The core idea conveyed by these definitions of democracy is that it is fundamentally based on the moral ideal of equality: the belief that each individual has an inherent right to participate in decisions that affect their lives, and thus the decision that aligns with the largest percentage of participants can be categorized as the “common good”.

While Schumpeter contends that the above definitions of democratic theory are faulty because the “common good” or “will of the people” cannot be succinctly defined, it is possible to determine what is good for the majority of a population, given that the majority of the population  belongs to the working class. Thus it stands to reason to say that what is good for workers, is a part of the common good. Workers advocate for better wages, workplace protections, and stronger collective bargaining to improve their realities, often through unionization. However, within the U.S.’s capitalist economy, the interest of the bourgeoisie class – those who own the means of production – is fundamentally at odds with the interest of labor. Capitalists focus on measures like wage suppression, offshoring jobs to exploit cheaper labor markets, and weakening unions to enhance profitability. It is sufficient to say that for a state to honor the classical doctrine of democracy, it must put the interests of labor above the interests of the capitalist class. 

However, in the U.S., this is not upheld. The bourgeoisie wields significant influence over government policies, perpetuating inequality and eroding democratic principles. Mechanisms such as campaign financing and lobbying enable economic elites to shape policy disproportionately in their favor, at the expense of the majority. Research by Gilens and Page (2014) underscores this stark reality, finding that “the majority does not rule” in the United States. Instead, policy outcomes overwhelmingly reflect the preferences of economic elites and organized interest groups, while the needs of the American public carry “only a minuscule, near-zero, statistically non-significant impact” in determining policy. This runs counter to Locke’s notion of political equality and Dewey’s belief in the equal distribution of power in the policy-making process. 

The scale of corporate influence is staggering. A 2020 Sunlight Foundation report highlights that from 2007 to 2012, “200 of America’s most politically active corporations spent a combined $5.8 billion on federal lobbying and campaign contributions.” In return, these corporations reaped “$4.4 trillion in federal business and support”—an extraordinary return on investment that reinforces their outsized control over public resources and decision-making. When corporations experience tax cuts, this burden is placed on the shoulders of an already struggling working class. While proponents of liberalism may argue that corporate tax reductions trickle down and help labor, a 2022 study done by the Joint Committee on Taxation and Federal Reserve reveals that, “earnings do not change for workers in the bottom 90% of the within-firm distribution, but do increase for workers in the top 10%, and increase particularly sharply for firm managers and executives.” This dynamic illustrates how capitalists effectively use wealth to tilt policy outcomes in their favor, amplifying their political power and economic dominance. This diverges from Montesque’s emphasis of “public virtue” and exemplifies how those in power ignore the will of the people.

Tax policy exemplifies this distortion of democratic governance. Despite widespread public support for higher corporate taxes—polls consistently show that “Two-thirds of Americans believe corporations pay too little in taxes and that they should pay more”—meaningful reform remains elusive. Corporations exploit tax loopholes to avoid paying their fair share, shifting the fiscal burden onto individual taxpayers. This regressive shift disproportionately impacts the working class, deepening existing inequalities and undermining public trust in government institutions.

When wealth distorts representation, it supplants the collective will with the narrow interests of an elite minority, violating the foundation of democratic governance. This erosion of equality not only disenfranchises the majority but also degrades the legitimacy of the state itself. As the originator of fascism himself, Benito Mussolini once noted, “Fascism should more properly be called corporatism because it is the merger of state and corporate power.” When a state acts in the interest of business, it no longer can be considered democratic because it is ignoring the interests of the laboring majority.

By distributing power, democracy helps to prevent the concentration of authority that historically leads to oppression and tyranny. However, this runs contrary to the centralization of power under capitalism. According to an Oxfam study, the top 1% now control more wealth than the bottom 95% combined. Capitalism creates a society where economic power translates directly into political dominance, allowing elites to manipulate laws and policies in ways that perpetuate inequality and stifle reforms. This betrays the democratic promise of fairness and accountability.

If democracy is to function as more than a facade, it must resist the corrosive effects of capitalist influence. True democracy requires mechanisms to limit the disproportionate power of wealth, ensuring that governance reflects the collective will rather than the interests of a privileged few. Without such protections, the principles of “one person, one vote” and the moral imperative of equality remain hollow, leaving the majority disenfranchised and democracy itself in peril.

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Works Cited: 

Schumpeter, J. (1942). Capitalism, Socialism, and Democracy. Harper & Brothers. https://periferiaactiva.wordpress.com/wp-content/uploads/2015/08/joseph-schumpeter-capitalism-socialism-and-democracy-2006.pdf

Democracy – The legitimacy of government. (n.d.). Encyclopedia Britannica. https://www.britannica.com/topic/democracy/The-legitimacy-of-government

Dewey, John. Democracy and Education a Penn State Electronic Classics Series Publication. A Penn State Electronic Classics Series Publication, 2001.

Lobanova, T. (2019). The Study of Labor Interests of Young Workers in the Selection and Adaptation of Personnel. Behavioral Sciences, 10(1), 22. https://doi.org/10.3390/bs10010022

Gilens, Martin, and Benjamin I. Page. “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens.” Perspectives on Politics, vol. 12, no. 03, 18 Sept. 2014, pp. 564–581, www.cambridge.org/core/journals/perspectives-on-politics/article/testing-theories-of-american-politics-elites-interest-groups-and-average-citizens/62327F513959D0A304D4893B382B992B, https://doi.org/10.1017/S1537592714001595.

Allison, Bill, and Sarah Harkins. “Fixed Fortunes: Biggest Corporate Political Interests Spend Billions, Get Trillions.” Sunlight Foundation, 17 Nov. 2014, sunlightfoundation.com/2014/11/17/fixed-fortunes-biggest-corporate-political-interests-spend-billions-get-trillions/. 

Ross, J. (2024, April 30). The Tax Cuts and Jobs Act Failed To Deliver Promised Benefits. Center for American Progress. https://www.americanprogress.org/article/the-tax-cuts-and-jobs-act-failed-to-deliver-promised-benefits/

Berlet, Chip. “Mussolini on the Corporate State.” Political Research Associates, 12 Jan. 2005, politicalresearch.org/2005/01/12/mussolini-corporate-state.

Oxfam. “World’s Top 1% Own More Wealth than 95% of Humanity, as “the Shadow of Global Oligarchy Hangs over UN General Assembly,” Says Oxfam | Oxfam International.” Oxfam International, 23 Sept. 2024, www.oxfam.org/en/press-releases/worlds-top-1-own-more-wealth-95-humanity-shadow-global-oligarchy-hangs-over-un.