The “Economic, Democracy, and the Distribution of Capital Ownership” by Robert Ashford is an educative article that integrates economy, democracy, and ownership of capital in the USA. The writer majors on how democracy in the United States provided people with significant ownership of land, higher wages, and participation in politics to make democracy and the economy sustainable. The “ownership neutrality assumption” was mainly aimed at improving the country’s economy, but eventually, this never happened. This article gives a good explanation of how the “American dream” was no longer a dream. It provides a view of how the Keynesian theory and neoclassical economics changed the perspective of economic growth, which was no longer about ownership of great pieces of land but rather the distribution of human resources. The article explains in detail how economic growth, democracy stability, and capital ownership are related.
Over the years, economists have come up with different theories and assumptions about how the economy can be boosted. One of the assumptions discussed in this article is the “ownership-neutrality assumption,” based on Adam smith’s classical economics. The assumption explains that “the broader distribution of capital acquisition (in itself) has no fundamental, positive relationship to the fuller employment of people and capital, the broader distribution of greater individual earning capacity, and growth” (Ashford, 2011). The economic schools, namely Adam Smith’s classical economics and mainstream economics, supposes that capital ownership is not that important for democracy sustainability. The article does not clearly explain this in detail and does not give a perspective of what would lead to democracy sustainability.
Robert gives a view of what it was like during the early years when the American government offered people higher wages, land ownership, cheaper basic needs, and freedom. Most people could afford better-living conditions, and most bought land to supplement their income and live up to what the government had made them believe. Doing so would make democracy more sustainable. The writer mentions that by this time, only people who owned land would vote; hence, many were working so hard to gain at least the right to vote (Ashford, 2011). As more people owned land, labor became scarce since most people were working their family land, and there was no point in going to get hired on others people’s farms. The writer clearly explains how the demand and supply of labor changed over time. Most laborers could now afford to buy land, and they concentrated on their farms more hence, lack of labor, which led to an increase in wages in America more than in any other country (Ashford, 2011). This again comes down to capital ownership whereby, even to date, the price of labor or any other resource affects the ability to acquire capital.
One of the article’s strengths has clearly explained the relationship between capital ownership, and the price of labor, by giving a background of how this came up in the US after acquiring democracy. The article also provides a more profound explanation of the similarities and differences between Keynesian theory, neoclassical economics, and the “ownership-neutrality assumption. On the other hand, the author does not explain how land ownership would have assisted in the economy’s growth. There could have been a more profound explanation of how the economists and the government wanted this to work out to better the economy and democracy. The article does not conclude how the government could use the economists’ theories and assumptions to improve the economy and sustain democracy.
One of the most exciting and surprising factors in the article is that there was a time only white males were allowed to vote. This changed after most people had acquired land. Before this policy, only those who could afford land were allowed to vote, which also necessitated the need to own land. Another factor was how the government has over the years denied ownership of most corporates to ordinary people. The only people who benefit are the ones with money, which evolved during the industrialization and corporatization of the American economy (Ashford, 2011). Finally, it was interesting to learn that there was a time the agricultural sector had led to significant economic growth. According to Smith’s “ownership-neutrality assumption,” investing in agriculture is far better than corporate investment since farming is all naturally supported by the sun and the rain.
The information has highly contributed to gaining a better understanding of the US government and politics. The government had earlier made most people buy land since land ownership came with privileges, like participation in politics. Only people who owned and were allowed to vote, and this pressured more people to acquire land. The government, during industrialization, limited how corporates were to be owned by limiting shares acquisition and shares transfer. Only the people who had money were able to acquire these shares, and this has been the case to date, whereby ordinary people can hardly access shares from corporates.
The article gives an overview of how capital ownership generally integrates with economic growth and democratic stability. The article uses different economic theories and assumptions to explain how labor prices affect capital ownership in an economy. The article also gives a perspective of how the government has treated economic growth and democracy stability over time and how it would improve the two.
Reference
Ashford, R. (2011). Economics, Democracy, and the Distribution of Capital Ownership. Forum for Social Economics, 40(3), 361–370.