Independence & a Democratic Economy

“A great democracy has got to be progressive or it will soon cease to be great or a democracy.” (Theodore Roosevelt)

This Independence Day, let’s remember that building a robust, democratic economy has always been essential to the success of the American experiment. The quality of an economy drives the quality of a nation’s political life. Prosperity preserves human rights.

Look no further than the connection between the Great Depression and the rise of Fascism. On the positive side, remember how 20th century U.S. prosperity supported the emergence of women’s and minority rights, environmental protection, and widespread stock ownership (at least through 401(k)s). No, I don’t mean to overlook some profoundly troubling, undemocratic facts in our history. But the progressive evolution of our economy has been, and is still, a necessity for maintaining our political democracy.

The United States was born with slavery as the foundation of the Southern economy. Accepting slavery was essential to convincing the Southern states to support the new Constitution and agree to join the United States. But an economy that required a vast system of brutal, forced labor to support a few large landowners was fundamentally at odds with democracy. Slave owners offered a backward-looking, aristocratic view of society, not a forward-looking, democratic one.

And so we abolished slavery, and a long period of economic growth followed the Civil War.

The Industrial Revolution powered our country’s growth and prosperity. It also was built on a vision that required vast supplies of cheap, powerless labor and cheap natural resources that served the needs of a few large owners of capital. The negative human and environmental side effects of industrial activity (conveniently termed “externalities” by economists) were deemed acceptable costs for economic growth.

President Theodore Roosevelt was a powerful advocate for putting limits on business, limits that protected workers and the environment. Following his lead, we adopted laws and regulations that protected people (workers and consumers) and the planet time after time throughout the 20th century – and despite the limits, our economy boomed through the second half of the 20th century. In his 1902 State of the Union, he said:

“Our aim is not to do away with corporations … We are not hostile to them; we are merely determined that they shall be so handled as to subserve the public good.”

An early Progressive, Roosevelt also linked environmental protection to the same democratic impulse:

“Our duty to the whole, including the unborn generations, bids us to restrain an unprincipled present-day minority from wasting the heritage of these unborn generations. The movement for the conservation of wildlife and the larger movement for the conservation of all our natural resources are essentially democratic in spirit, purpose, and method.”

Roosevelt’s words hold the key when he speaks of unborn generations. Our democracy was created as a forward-looking experiment. The Founders incorporated change mechanisms into the system, because they were smart enough to know that they couldn’t foresee the future, and because they understood that short-circuiting progress inevitably undermines freedom.

Independence and a Democratic Economy: Quality of economy = Quality of political life.

And so, capitalism must continue to evolve. What inspires me about the movement toward sustainable business of all kinds is that we are learning from history and using the results of successful experiments to build a better model. We can imagine a better future and leverage the power of business to create it.

This Independence Day, let’s recognize the importance to our political freedoms of a robust, democratic economy that improves the lives of the people it touches and the planet that sustains us all. Let’s resolve to support all the experiments that serve these goals: local and organic farmers, local businesses of all kinds, worker- and member-owned co-ops, Conscious Capitalist enterprises, B Corporations and others that focus on a ‘triple bottom line’ that serves people, planet, and the profit that makes it all possible.