The following is in response to an on-line discussion between several colleagues which started with a post about the possible decline of democracy in the US, and went on to ponder whether that was caused by capitalism:

I do think that the strength of US democracy should not be taken for granted, but I don’t view capitalism as the threat. We have been democratic and capitalist for a long time. Granted, capitalism and democracy are two different things, and they don’t automatically support each other. A strength of capitalism is that you can profit, and that possibility is available to…I won’t say anybody…but to many. A weakness is that if you don’t, you and all the people that depend on you are screwed. Unfortunately for the system, that seems to be unavoidably cyclical. It is also unfortunate that it is easy to get seduced by quick ROI increases through short-term maneuvers such as cutting people and expenses (such as maintenance and R&D). It also appears to be true that without government intervention, wealth and the ability to profit consolidates into fewer and fewer hands, hands with a disproportionate ability to influence the government. With that in mind I personally favor a capitalist economy with a government that has strong checks and balances to detach itself from the influence of money (a need which the founders didn’t pay much attention to, and which the US currently lacks), and a government which redistributes a high percentage from the wealthiest to the rest of society, much as the tax structure did in the US in the 1950s (when we built much of the infrastructures that we rely on today).

While much more could be added to my simplistic analysis, it is certainly a cold hard fact that organizations functioning within a capitalist economy have to meet the requirements of that environment.  

Going back to the comment on the possible decline of democracy in the US and elsewhere, Kurt Lewin was clear that democracy must be learned and renewed with every generation, and that it is easier to adapt to totalitarianism than to being a citizen in a democracy. We need look no further than Lewin for lessons on failures of democracy. He wrote several articles pondering the failure of democracy in post WWI Germany. While there were many variables, one that stands out was the misguided belief that freedom of speech must be extended to all, even those who would spread hate and rule autocratically if they were in power. The initial German experiment with democracy was too weak to stand up to the rise of Nazism. Germany “tolerated the intolerant.”

We have done that for far too long here in the US imho by tolerating white supremist groups for example. Democracy in Lewin’s mind must be strong. The representative government must act, as FDR did during WWII, and as Lincoln did when he arrested the Maryland state assembly rather than allowing them to secede from the union. That was decisive action by a democratic leader, and the lack of the same would have led to disaster.

That doesn’t mean that every action will work the away it was intended. Some will have negative consequences. The same is true of inaction. democratic leadership is not for the faint of heart because the free press and the armchair quarterbacks, myself included, will voice our opinion of every decision.

Applying Lewin’s democratic principles of leadership to organizations, I am not so quick as some of my colleagues to label most US corporations as essentially “totalitarian.” relentlessly pursuing ROI is a challenge which must be pursued for an organization to exist within a capitalist environment, but it does not have to be done without a soul. In Lewin’s model (which works for me) the democratic leader is in charge, and then allows as much freedom and influence as possible. This combination of leadership and freedom consistently results in high productivity and morale, even within a capitalist environment. As his research further showed, many mistake “hands off” leadership, or laisse-faire, as democratic. Such passive leadership, even if the leader is “nice,” consistently leads to confusion, infighting, and low productivity. A democratic leader can allow a high functioning team to operate without supervision. A laisse-faire leader will try that with every team and create chaos. The OD industry imho too often doesn’t make these distinctions, instead favoring the flat self-organizing laisse-faire model as somehow morally superior.

Turning back to politics, we’ve been laisse-faire in the US about racism, militias, police violence, poverty, etc., for too long, much as in post WWI Germany, allowing a small vigorous minority to poison our political a social discourse. I for one say “enough!”