Article Analysis
Robert Ashford’s article “Economics, Democracy, and the Distribution of Capital Ownership” published in the Forum for Social Economics journal advances the argument that widespread, practical access to capital acquisition is essential for sustainable widespread prosperity and democracy. According to Ashford (2011), to support a democratic government, the founders of the United States of America agreed that equal distribution of factors of production, mainly land, was essential to allow all people to equally participate in the process. The article, therefore, tries to focus on the nexus between capital acquisition and distribution and democracy. Democracy and human capital are two intertwined elements. It occurs democracy cannot be achieved when there is no fair and equal resource distribution. Democracy as a political system refers to system of government by the whole population. The key element of a democratic government is representation. Through democratically elected officials, all people in a democratic state participate in decision making and determining the course taken by the country.
Participation in a democratic country or nation cannot be achieved without first focusing on important issues such as capital acquisition. Taking United States as an example, after acquiring its independence, segregation took over where some people such African Americans and Asians were denied rights to own capital. These minority groups have lagged behind for centuries struggling to keep up with the strides taken by the rest of the population during the initial years after independence. Ashford (2011), therefore, takes an economic approach to the issue of capital acquisition and its significance when analyzing the economy in a democratic state. The author asserts that the importance of widespread land ownership to individual prosperity and sustainable democracy has been apparent to all people and at the same time supported by prevailing philosophical views of prosperity. Land is one of the main factors of production. Therefore, land played a key role in the accumulation of wealth in the 18 th , 19 th and 20 th century. It is only in the 21 st century that the internet has provided alternative models of wealth accumulation hence pushing land out of scope as a major factor of production. Ashford (2011) notes that after independence, America offered widespread access to land ownership as compared to Europe. The country also adopted a more democratic model where there were equal opportunities, [prosperity and political participation. However, the author notes that although the notion of equal distribution of wealth was held in the nineteenth century, it has been lost today in public discourse. Ashford’s article therefore suggests that Keynesian economics and neoclassical economics have played a key role in the disappearance of this important public discourse. The view taken asserts that the idea of widespread capital ownership was made impractical and/or of little economic significance after adopting the two economic models. Second, democracy can be achieved in the current world where technology rules without necessarily focusing on widespread ownership.
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The approach used in the article tries to explain how different models of ownership favors existing owners at the expense of the extensive ownership distribution. Ashford’s position can be contested in a number of ways. First, the view that the founders of U.S.A. held a common belief about ownership distribution is not absolutely correct. Although the idea of democracy was clearly outlined in the constitution, it was manipulated to favor ownership distribution among Whites (Caucasians) while disfavoring other groups in the population. As a result, democracy was largely not achieved. It should be noted that equal ownership distribution is also reflected in the political process. Existing owners tend to control the political process and so groups which were pushed out of the broader ownership distribution suffered as they struggled to find their footing in a ‘democratic’ country. Democratic is put in quotes since democracy only existed in writing during the first century after United States achieved its independence.
Ashford’s view that Keynesian and neoclassical economics took an erroneous ‘ownership-neutral’ position is true. The two only focused on the whole society and avoided focusing on some minor details that affected the society in regard to its economy. Ashford, therefore, raises a very solid argument claiming that founders would be shocked by the diminished importance of the distribution of ownership in the mainstream analysis of prices, efficiency, production, growth, and democracy. Although the concept can be manipulated in different ways to investigate different economic aspects of the population, the significance of distribution of ownership in democracy should not be ignored.
In conclusion, Ashford raises several important ideas in his article. First, he notes that it is erroneous to ignore the important of distribution of ownership as provided for by the founders of the great nation in analysis of other factors such as growth, production, democracy and prices. Second, Ashford attributes the errors to the interpretation of economics by Keynesian and neoclassical economists. The argument is true since the two tried to shift from the over-emphasis put on ownership distribution and rather focused on macro and microeconomic factors in any society. Third, Ashford proposes a new model that seeks to suspend the ownership neutrality assumption proposed by Keynesian and neoclassical economists. In its place, he proposes a broader ownership growth assumption which suggests a voluntary market strategy to address issues such as individual earning capacity, broaden equal capital ownership and consequently provide widespread and equal economic prosperity. By ignoring ownership distribution, economists expose themselves to bias which may limit achievement of an equal society in terms of prosperity.
Reference
Ashford, R. (2011). Economics, democracy, and the distribution of capital ownership. Forum for Social Economics, 40, 361-370. https://doi.org/ 10.1007/s12143-011-9092-y
