Arguably, Democratic Capitalism has triumphed as the most effective and now prevalent form of social/economic organization on the planet. It has achieved that status by being the most effective approach for lifting the economics fortunes of the majority of the population, not just a small segment. The United States of America exemplifies this, more so than any other large country. However, of late the success formula of Democratic Capitalism in America has faded. The median income has stagnated for the longest duration in the country’s history at the same time that the payoff to the top economic echelon has been greater that at any time in history.
I am working with colleagues at the Infrastructure of Democratic Capitalism project at the Martin Prosperity Institute to gain an understanding of what has changed for the worse in the functioning of Democratic Capitalism and how to improve its prospects for the future. Our inquiry focuses on the infrastructure that underpins and supports the effective functioning of Democratic Capitalism – or impedes it.
Most familiar is physical infrastructure: the shared, built resources that meaningfully enable and advance our standard of living. More abstract is transactional infrastructure: the set of rules, decision-making institutions and mechanisms that allow a society to exchange goods and services. Lastly, is knowledge infrastructure: the set of systems and institutions, like education, media, and the Internet, that enable the reliable transfer of information from person to person, group to group.
It is our hypothesis that Democratic Capitalism faces a little understood threat from within – that the infrastructure that is vital to its robust existence is fraying, as a result of abuse and neglect. Infrastructure is not eternal; it decays and breaks down. Without the mindful redesign of the very infrastructure that supports Democratic Capitalism, the system will deteriorate and prosperity will decline.
To bolster the infrastructure that supports Democratic Capitalism, we must first understand the nature of that infrastructure, the challenges facing it and some potential remedies. It is through exploring the issues related to various forms of infrastructure that we hope to create a better way forward for Democratic Capitalism.