1. THIS MORNING:
1. Examples of business government partnership
2. The constitutional context of American politics
1. Main propositions: constitution versus democracy and capacity



2. STATE CAPITALISM IN PRACTICE:
1. The nature of the business government partnership
2. Direct and indirect support of business
1. Continental Illinois Bank case
2. "Mexican bailout"
3. Industrial policy
1. Research and development
2. "Infrastructure" (e.g., roads, harbors, airports)
3. Protection (tariffs)
4. "Human capital" (schools, health, job training)
1. Supply of trained, "disciplined" labor to enhance productivity



3. THE CONSTITUTION AND THE POLITICAL SYSTEM:
1. Consider this proposition: In their zeal to guard against the abuse of power while protecting the commonwealth the framers created a system that incapacitates the political system and hinders accountability and hence weakens democracy as defined earlier.
1. The constitution partly explains the deadlock and disaffection that characterizes our system.



4. THE FOUNDERS CONCERNS:
1. Concern with centralized political power.
2. Madison's two "tyrannies":
1. Control "minority" in power to ensure that it does not abuse the rights of its citizens. (Recall the early emphasis on liberalism.)
2. Control majority: there was a perceived need to protect minorities (e.g, property owners) from majorities and ochlocracy.
3. The Constitution embodies these concerns, but in so doing it sets up a conflict between the need to govern and the need to protect liberties.

1. WHAT THE CONSTITUTION DOES:
1. Creates a republic, not a democracy.
2. It also constructs a "moat" around "representatives"
1. The electoral college and the indirect election of the president.
2. Divided power protects representatives from being held accountable.
3. In order to limit government the constitution fragments power:
1. The shattered sword:
1. Separation of powers
1. Three semi-autonomous branches
2. Checks and balances (e.g., veto, advise and consent, tax legislation, etc.) (See Squire and others, Dynamics of Democracy, Chapter 2)
3. Federalism
4. "Bicameralism" - two houses of Congress
5. Independent constituencies (Pay attention to this item because it is so important.)
6. Geographical representation
7. Enumeration of specific powers; others left to the states.
8. An independent judiciary
1. Judicial review established gives the Supreme Court extraordinary power.
4. The bottom line: all of these work against capacity and democracy



2. NEXT TIME:
1. The constitution
2. Reading:
1. Read all of the essays under the "The Public Philosophy"
2. Squire and others, Dynamics of Democracy, Chapter 2. Pages 20-31 provide historical background material, which you should read for general understanding. The remainder of the chapter discusses the founders' philosophy and how they wrote the constitution to keep a reign on government.
1. Figure 2.1 is helpful.
2. Note that the interpretation presented in pages 45-46 ("Political Flexibility") differs from mine.
3. What is federalism?

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