Capitalism, Democracy, and Ralph's Pretty Good Grocery
by John Mueller
Princeton Univ. Press, 352 pp., $ 29.95
Capitalism and democracy are familiar bedfellows. During the heady days of communism's collapse back in 1989, it was common to hear that the free market provided an important, perhaps indispensable, setting for the growth of democratic institutions. But nowadays, when the subject comes up, the relation is made to seem almost disreputable. The "special interest" of business is said to corrupt representative government, capturing the people's democracy for capitalists' mercenary designs. It's as though we've just discovered that a worthy charity is being run with mob money.
The political scientist John Mueller thinks our ambivalence about the relation of capitalism and democracy is based on illusions we have about both these insitutions. His title, Capitalism, Democracy, and Ralph's Pretty Good Grocery, alludes to the store in Garrison Keillor's Lake Wobegon, which has as its motto "If you can't get it at Ralph's, you can probably get along without it." This is Mueller's theme: Both capitalism and democracy are pretty good -- imperfect, not entirely satisfying, but most likely the best of their kind. They are the systems most likely to last because they are undemanding on ordinary people. Indeed, Mueller insists, ordinary people remain mystified by the workings of capitalism and democracy, and yet the systems function quite well all the same. And while, in his view, neither absolutely needs the other, on the whole they help each other along.
The image of neither capitalism nor democracy seems to fit the reality. Capitalism's image of a grasping, avaricious drive that sweeps away common decency is far worse than its reality, while democracy's image of shared values and deliberative intelligence is far better than its ugly, messy reality. Altruism has more to do with capitalism than many suspect, while greed and ambition have everything to do with democracy. Mueller argues that these "image mismatches" are themselves the cause of destructive cynicism; if we could adjust our theories to reality, we would all be better off.
"Greed . . . is good," declared Gordon Gekko in Oliver Stone's film Wall Street, a phrase intended to capture the amoral ethos of capitalism. And it's true that the desire to make money is the essence of capitalism. But the notion that focusing on short-term gain at the expense of all other values is the best way to do so is simply wrong. Mueller asks us to consider P. T. Barnum. The man known for his "humbugs" and who is supposed (falsely) to have said "there's a sucker born every minute," actually wrote a treatise on how to be a fair and honorable businessman. As Barnum discovered to his profit, the way to encourage people to part with their money is to convince them that you are treating them well -- and the best way to convince them that you're treating them well is, in fact, to treat them well. Early circuses failed because opportunistic owners -- looking only for a quick killing from the local rubes -- bilked customers and let pickpockets and other riffraff roam the grounds. Barnum and John Ringling established fair pricing and a safe experience that drew the public year after year. So, too, Mueller reminds us of the retail revolution brought by John Wanamaker, who made a fortune with "one-price" merchandise -- a price that didn't vary with haggling or changing demand -- and the novel idea of letting customers return unsatisfactory goods.
Mueller also urges us to value the not-inconsiderable "heroism" of entrepreneurs, half of whose start-up businesses fail. He even finds a kind of virtue in stock speculators, who enlarge the overall economy in the quest for quick gains. Capitalism's encouragement of the aspiration to ferret out profit does serve the common good, and Mueller is hopeful about the prospects of capitalism because it requires virtually no support from outside. Even government institutions, such as reliable legal rules, tend to follow the self-regulating development of the market. He also believes that economists have finally figured out some basic truths -- particularly, the imperative value of free trade -- that are increasingly being established as a consensus around the world.
Mueller's minimalist conception of democracy is more controversial than his paean to capitalism. For Mueller, democracy has little to do with virtue. As long as we are all free to pursue acquisitive goals without being subject to harassment and violence, we can be fairly said to live in a democracy. In every political system, there are elites with disproportionate influence, but in a democracy, even the elites are compelled to subject themselves to the noise of the crowd. Tiny, highly disfavored groups can sometimes exert enough pressure to get what they want in a democracy; in no other system are they free even to try. Mueller calls this a system of "minority rule and majority acquiescence." For many theorists, the apathy of the majority is a critical failing in a democracy. For Mueller, apathy is not altogether bad, because without it the majority, aroused to its full militant vigilance, would crush minorities.
And there is one minority whose freedom is especially important to the success of the democratic enterprise: the rich. Mueller turns upside down the complaints of "hyperdemocrats" like Lenin, who argue that the bourgeois democracies, despite their egalitarian rhetoric, perpetuate the power of the wealthy. In fact, democracy successfully co-opts the rich, who could otherwise hire "thugs with guns" to enforce their dictates. Needless to say, in Mueller's version of democracy, egalitarian ideals get short shrift: Because power goes to the favored or loud, democracy means that we are all free to try to be unequal.
Once democratic idealism has been given a cold bath, Mueller suggests, we are in a better position to appreciate democracy. Many political theorists have argued that only special historical conditions of culture or economic development can serve as fertile soil for democracy. Mueller demands instead that we look at the post-Communist nations that have tried the democratic way: boisterous, full of often rancorous debate, sometimes verging on chaos -- but without guns in the streets. That's real democracy. It's only a slavish devotion to a Norman Rockwell image of town-meeting harmony that leads us to disillusionment. For nations to adopt democracy requires, in Mueller's view, only that the elites embrace it. And to get them to do so may require nothing more than a good job of marketing -- helped out by the fact that democracy's best exemplars are successful states such as the United States and Britain.
Mueller's provocative book deserves a wide audience, if only because it shows that in the right hands political theory can be engaging. Mueller writes sharp, brisk, and witty prose that is unfailingly lucid. Yet his irreverence about the role of morality might make us uneasy. After all, if democracy withers without citizens educated in virtue, as many of our Founders claimed, then it makes a difference how we live. Still, the honesty in Capitalism, Democracy, and Ralph's Pretty Good Grocery about the limits of idealism offers its own kind of civics lesson. At Mueller's -- as at Ralph's -- at least you won't get sold a bill of goods.
Daniel J. Silver is an attorney and writer in Washington, D.C.