Most Americans consider Capitalism to be the core of their society. They frequently confuse Capitalism with democracy because they also consider themselves a democratic society. They are not the same, of course.

Capitalism is an organization of economy in a society; that is, it is a way in which the people meet all of the needs for survival, indeed, more hopefully for their general welfare. Capitalism assumes private ownership of real property, which can be used for production of goods. This could be land, which can be used to grow crops; but it can also be machinery, which can be used to manufacture consumer goods. Typically, in a modern Capitalist society, only a small percent of the people are fortunate enough to own real property of this kind. Other people, indeed the majority of people, must exchange their labor with the Capitalists for the benefit of wages.

Jeffersonian democracy was considered to be harmonious with Capitalism because agricultural land was the principal form of real property and the great majority of citizens were land owners. [Saying this somewhat ignores the fact that citizenship belonged to land holders and that even early American economy was already becoming industrialized, especially in the North.] The concept was that the majority of citizens would share common interests and be able to function effectively as a democracy. But the Founding Fathers did not foresee the social revolution that would unfold in the 19th Century. Putting it very simplistically, population rapidly out-stripped the availability of agricultural land so that the majority of Americans became wage-laborers living in cities rather than becoming landed democrats. From 1900 to 2000, farm population fell from about 80% of Americans to less than 1% (so insignificant that the Bureau of Census ceased keeping records). This means that a great majority of Americans have no stake in real property or the Capitalist system except for being wage laborers.

The classic analysis of Capitalism is Marx's, and the classic proposition is that Capitalists will always strive to make as much money as possible by selling their products at as high a price as possible and paying for the resources of production as little as possible. Since one of the chief resources of production is labor, this implies that Capitalists will always pay as little as possible for labor. Marx added to his analysis the fact that Capitalists use their productive capacity to create new real property which can expand their ability to produce, and he called this "alienated labor" because it is something produced by the labor force but not owned by them. Hence, in Marx's view, the Capitalist class becomes always increasingly powerful while the laboring class becomes increasingly poor, indeed, becoming what he called the Proletariat. Since wealth can quickly acquire political power, democracy has faded into oligarchy, the rule of wealth.

Marx, of course, believed that the Proletariat would eventually revolt and bring about a utopian society. In America, in spite of tremendous oppression of laborers in the late 19th Century, often enforced by police and militias, an ingenious system of Imperialism successfully elevated the working class into a comfortable MIddle Class. The system was based on importation of resources from what became called the Third World. Since resources abroad could be bought at extremely low prices, Capitalists could afford to provide better wages to people back home. In effect, as Lenin pointed out, American and other First World economies were able to guard against rebellion by exporting the proletarian condition to the Third World. All of this was achieved through the international operation of government, applied in the interest of American business. A key tool in this operation was the stabilization of regimes in Third World countries that would sympathetically cooperate with development of resources and provision of cheep labor.

What is the situation today? Colonialism and Imperialism began to collapse after the Second World War. Interestingly enough, Marx's predictions of rebellion against the Capitalists turned true enough in the Third World where there was a genuine proletariat. This, of course, lead to the American panic that Communism was taking over the world. Indeed, many of the factions fighting for the proletariat in Central and South America are Communist. All of this has, needless to say, put a lot of pressure on American business operations around the world.

In certain respects, the solution to the collapse of raw Imperialism is what we now call "globalization." By developing property outside of America in the former Third World, Capitalists can achieve a new system of production. Wage labor in other countries can be increased comfortably above Imperialist levels, hence, satisfying local communities; yet wages are well under those demanded by laborers in America and resource costs remain low. As a consequence of globalization, America's productive capacity is moving off-shore and there are fewer employment opportunities for Americans at home. Worse yet, America is allowing itself to become dependent upon the rest of the world for manufacture of important goods. In America, the Middle Class is disappearing and will continue to disappear. If you want to take Marx literally, you have to ask how long this can continue before there is a well-defined Proletariat in America that can do nothing but rebel in order to salvage a minimal standard of life.

But our future is not my point. My point is the relationship between Capitalism and government, or would-be democracy. That America is now an oligarchy should be obvious. It takes millions of dollars to run a successful campaign for political office. The recent Supreme Court decision to legitimize corporate spending in political campaigns will soon make this situation even worse. Americans naively continue to believe in their democracy because, after all, they continue to have the right of voting. But what is the right to vote when the choices offered voters are thoroughly orchestrated by corporate wealth. In 2008 Americans voted for Obama with the hope that he would effect numerous reforms. But examine just the issue of health care reform. Obama alone has little or no power. Real power is vested in Congress, and Congress is dominated by lobbyists from all the major corporate interests, in this case, insurance carriers and the medical profession. This is no democracy. It is, in fact, the wealthy who determine our future under the plan of protecting and enhancing their own wealth.

Conservatives, today, seem to believe, as they always have, that good business sense is the best (and only) tonic for democracy. Government should promote and protect business. Property-poor people are unfortunate but have basically not worked hard enough to acquire wealth. Their situation, in other words, is their own fault. This situation is a natural product of human nature and government should not be used to change that which is natural. What we have to ask is whether this point of view can be applied to our national politics consistently and whether it will lead to the kind of stable society envisioned by our Constitution. In particular, will this society achieve the "general welfare" of all people?

The answer, it seems to me, is a loud "no" unless Conservatives can tell us what is wrong with the account of Capitalism above and, hence, how a Capitalist society is actually able to promote the general welfare of all. Liberals, I believe, must argue that government (indeed, strong Federal government) is required in order to achieve these ends.