Element contents
The Fading Light of Democratic Capitalism
How Pervasive Cronyism and Restricted Suffrage are Destroying Democratic Capitalism as a National Ideal … And What to do About it
Published online by Cambridge University Press: 14 November 2024
Summary
This Element discusses how pervasive cronyism and restricted suffrage are destroying democratic capitalism as a national ideal and offers suggestions on how the promise of US-style democratic capitalism can be restored. To this end, the author draws on the work of political philosopher and democracy advocate Danielle Allen in calling attention to the principle of political equality, as well as the two related sub-principles of reciprocity and power sharing, as essential guides. Based on these ideas, a series of practical steps is suggested to make economic and political markets more democratic by curbing cronyism and expanding citizens' access to the political processes governing the nation. The author also discusses how private corporations can become more 'democracy supporting.' The Element ends with some reflections on the moral culture required to restore and sustain public trust and confidence in democratic capitalism as a system of economic and political governance.
- Type
- Element
- Information
- Online ISBN: 9781009587655Publisher: Cambridge University PressPrint publication: 28 November 2024
Bibliography
Allen, Danielle, Talking to Strangers: Anxieties of Citizenship since Brown v. Board of Education, University of Chicago Press, 2004.CrossRefGoogle Scholar
Allen, Danielle, Justice by Means of Democracy, The University of Chicago Press, 2023.CrossRefGoogle Scholar
Anderson, Elizabeth, “The Business Enterprise as an Ethical Agent,” in Rangan, Subramanian, ed., Performance and Progress: Essays on Capitalism, Business, and Society, Oxford University Press, pp. 185–202, 2015.CrossRefGoogle Scholar
Bahat, Roy E., Kochan, Thomas A., and Rubensteain, Liba W., “The Labor Savvy Leader,” Harvard Business Review, July–August 2023.Google Scholar
Bebchuk, Lucian A., Jackson, Robert J. Jr., Nelson, James D., and Tallarita, Roberto, “The Untenable Case for Keeping Investors in the Dark,” Harvard Business Law Review, Vol. 10, 2019.Google Scholar
Blair, Margaret M. and Stout, Lynn A., “A Team Production Theory of Corporate Law,” Virginia Law Review, 85, no. 2, 247–328, March 1999.CrossRefGoogle Scholar
Bower, Joseph L., Leonard, Herman B., and Paine, Lynn S., Capitalism at Risk, Harvard Business Review Press, 2011.Google Scholar
Clements, Jeffrey D., “But It Will Happen”: A Constitutional Amendment to Secure Political Equality in Election Spending and Representation, Harvard Law & Policy Review, 13, 373–419, 2019.Google Scholar
Dyer, Davis, Salter, Malcolm S., and Webber, Alan M., Changing Alliances, Harvard Business School Press, 1987.Google Scholar
Freeman, R. Edward, Martin, Kirtsen E., and Parmar, Bidhan L., “Stakeholder Capitalism,” Journal of Business Ethics, 74, no. 4, 303–314, 2007.CrossRefGoogle Scholar
Friedman, Milton, “The Social Responsibility of Business Is to Increase Profits,” New York Times Magazine, September 13, 1970.Google Scholar
Gilens, Martin and Page, Benjamin I., “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” Perspectives on Politics, American Political Science Association, 12, no. 3, 564–581, September 2014.CrossRefGoogle Scholar
Granovetter, Mark, “The Social Construction of Corruption,” in Nee, Victor and Swerdling, Richard, eds., On Capitalism, Stanford University Press, pp. 152–172, 2007.CrossRefGoogle Scholar
Hanauer, Nick and Beinhocker, Eric, “Capitalism Redefined,” Democracy: A Journal of Ideas, no. 31, Winter 2014, https://democracyjournal.org/magazine/31/capitalism-redefined/.Google Scholar
Henderson, Rebecca, “The Business Case for Saving Democracy,” Harvard Business Review, March 10, 2020.Google Scholar
Iversen, Torben and Soskice, David, Democracy and Prosperity, Princeton University Press, 2019.Google Scholar
Jensen, Michael C., “Eclipse of the Public Corporation,” Harvard Business Review, September–October 1989.Google Scholar
Jensen, Michael C., “The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems,” The Journal of Finance, 48, no. 3, 831–880, July 1993.CrossRefGoogle Scholar
Jensen, Michael C., “Self-Interest, Altruism, Incentives, and Agency Theory,” Journal of Applied Corporate Finance, 7, no. 2, 40–45, Summer 1994.CrossRefGoogle Scholar
Jensen, Michael C., Foundations of Organizational Strategy, Harvard University Press, 1998.Google Scholar
Jensen, Michael C., A Theory of the Firm: Governance, Residual Claims, and Organizational Forms, Harvard University Press, 2000.Google Scholar
Jensen, Michael C., “Corporate Budgeting Is Broken, Let’s Fix It,” Harvard Business Review, 79, no. 10, November 2001.Google Scholar
Jensen, Michael C., “Value Maximization, Stakeholder Theory, and the Corporate Objective Function,” Business Ethics Quarterly, 12, no. 2, 235–256, January 2002.CrossRefGoogle Scholar
Jensen, Michael C. and Meckling, William H., “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure,” Journal of Financial Economics, 3, 305–360, 1976.CrossRefGoogle Scholar
Jensen, Michael C. and Murphy, Kevin J.. “CEO Incentives: It’s Not How Much You Pay, but How,” Harvard Business Review, 68, no. 3, May–June 1990.Google Scholar
Jones, Geoffrey, Deeply Responsible Business: A Global History of Value-Driven Leadership, Harvard University Press, 2023.Google Scholar
Kaiser, Robert G., So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government, Vintage Books, 2010.Google Scholar
Kaiser, Robert G., Act of Congress: How America’s Essential Institution Works, and How It Doesn’t, Knopf, 2013.Google Scholar
Lapore, Jill, “The United States’ Unamendable Constitution,” The New Yorker, October 26, 2022.Google Scholar
Lazonick, William, “Innovation and Financialization in the Corporate Economy,” Chapter 4 in Lewin, Arie Y., Linden, Greg, and Teece, David J., eds., The New Enlightenment: Reshaping Capitalism and the Global Oder in the 21st Century, Cambridge University Press, 2022.Google Scholar
Lessig, Lawrence, Republic, Lost: How Money Corrupts Congress – and a Plan to Stop It, Hachette Book Group, 2015.Google Scholar
McCraw, Thomas K., Creating Modern Capitalism, Harvard University Press, 1998.CrossRefGoogle Scholar
McMillan, Charles, The Transformation of Boeing from Technological Leadership to Financial Engineering and Decline, Cambridge University Press, 2022.Google Scholar
Mokyr, Joel, A Culture of Growth: The Origins of the Modern Economy, Princeton University Press, 2016.CrossRefGoogle Scholar
Paine, Lynn, Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance, McGraw-Hill, 2003.Google Scholar
Rajan, Raghuram and Zingales, Luigi, Saving Capitalism from the Capitalists, Princeton University Press, 2004.Google Scholar
Ross, Stephen A., “The Economic Theory of Agency,” The American Economic Review, 63, 134–139, 1973.Google Scholar
Salter, Malcolm S., “Crony Capitalism, American Style: What Are We Talking about Here?” October 22, 2014. Harvard Business School Research Paper Series No. 15–025. https://ssrn.com/abstract=2513490.CrossRefGoogle Scholar
Salter, Malcolm S., “Sugar-Coated Capitalism Is No Free Market,” Forbes, November 16, 2015. www.forbes.com/sites/realspin/2015/11/16/sugar-coated-capitalism-is-no-free-market/.Google Scholar
Scott, Bruce R., Capitalism: Its Origins and Evolution as a System of Governance, Springer, 2011.CrossRefGoogle Scholar
Soudek, Josef, “Aristotle’s Theory of Exchange: An Inquiry into the Origin of Economic Analysis,” Proceedings of the American Philosophical Society, 96, no. 1, 45–75, February 1952.Google Scholar
Stockman, David A., The Great Deformation: The Corruption of Capitalism in America, Public Affairs, 2013.Google Scholar
Streek, Wolfgang, “The Crises of Democratic Capitalism,” New Left Review, September/October 2011.Google Scholar
Strine, Leo E. and Walter, Nicholas, “Originalist or Original: The Difficulties of Reconciling Citizens United with Corporate Law History,” The Harvard John M. Olin Discussion Paper No. 81, February 13, 2015.CrossRefGoogle Scholar
Swindler, Ann, “Culture in Action: Symbols and Strategies,” American Sociological Review, 51, no. 2, 273–286, April 1986.CrossRefGoogle Scholar
Teece, David J., The New Enlightenment: Reshaping Capitalism and the Global Oder in the 21st Century, Cambridge University Press, 2022.Google Scholar
Tulum, Oner, Andreoni, Antonio, and Lazonick, William, From Financialization to Innovation in UK Big Pharma, Cambridge University Press, 2022.Google Scholar
Upham, David, “The Primacy of Property Rights and the American Founding,” Foundation of Economic Education, February 1, 1998.Google Scholar
Vermaelen, Theo, “Maximizing Shareholder Value: An Ethical Responsibility,” in Smith, Craig and Lenssen, Gilbert, eds., Mainstreaming Corporate Responsibility, Wiley, pp. 206–218, 2009.Google Scholar
Williamson, Oliver E., “Managerial Discretion and Business Behavior,” The American Economic Review, 53, no. 5, 1032–1057, 1963.Google Scholar
Woodly, Deva R., Reckoning: Black Lives Matter and the Democratic Necessity of Social Movements, Oxford University Press, 2022.Google Scholar
Zitner, Aaron, “Voters See American Dream Slipping Out of Reach,” The Wall Street Journal, November 24, 2023.Google Scholar
This Element is free online from 14th February 2025 - 28th February 2025
- 1
- Cited by