Democratic capitalism in the United States

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O'Connor, Mike

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Though democracy and capitalism are both central to American identity, they admit of a deep and often unnoticed philosophical contradiction. The capitalist ideal of the distribution of goods through market mechanisms is incompatible with the democratic notion that the will of the people, as expressed through the political process, should carry the day. Yet the history of the simultaneous affirmation of these ideas in the United States reveals widespread prosperity, relative stability and broad assent. In order to address the divergence between theory and practice in this area, this dissertation offers a new theoretical and historical understanding of American democratic capitalism. Applying the American pragmatism of philosopher Richard Rorty to the problem of democratic capitalism yields the conclusion that its solution is to be found not in a philosophical analysis of the meanings of its component terms, but in an historical investigation of their construction. Such an examination reveals that Americans of different historical periods have expressed substantially dissimilar economic and political requirements, and the nation’s democratic capitalism should not be understood as a seamless celebration of political and economic freedom. Instead, it is a uniquely democratic project in which the people retain onto themselves the prerogative of defining the parameters of economic success. From one era to another, a country’s citizenry can hold varied expectations of its economy—from providing jobs to winning wars. Harnessing the nation’s production and distribution to specific projects, however, often compromises the commercial freedom that is the hallmark of the market system. In the face of these continually shifting economic goals, the nation’s political thinkers have generally sought to adapt the meaning of capitalism to the exigencies of the day, rather than reject the doctrine entirely. Thus the intellectual history of democratic capitalism in the United States is one of continual reformulation. Considering three case studies in which political thinkers or actors have, in response to the national mood, articulated or re-imagined the function of the nation’s economy, the dissertation argues that U.S. political economy, at both the theoretical and historical level, has been more democratic than capitalist.