For posterities sake, this is what I have been thinking:
I thought I would take this opportunity to write down my thoughts about democracy and class formation. Bear in mind these are just thoughts I haven't properly articulated yet, so it might not be that well rounded, but I think it's interesting and useful.
The idea of democracy quite often gets left out of Marxist theoretical discussions, mainly for two reasons - firstly, in its current representational form, democracy can easily be associated with bourgeois interests and/or reformism (a keyword harking back to the reform vs. revolution debate); and secondly, since the 1970s in particular (and, obviously, aided by the collapse of the Soviet Union in 1991), democracy has become central to the sloganeering of neo-cons in the United States who talk about 'exporting democracy' and explicitly associate democracy with free-market capitalism and neo-liberal reforms. However, I think it's important to realise that this is a problem with "form" rather than either the concept of democracy or its history.
That democracy is inherent to capitalism is not an uncommon view - and a view that I think is irrefutable. (However, we should note rather that democracy is the form which capitalism chooses to take, not that capitalism IS democracy or that you can't have democracy without capitalism - and neither does it mean that in the absence of democracy, capitalism cannot survive - a point I'll come back to.) If we look at the history of capitalism, the emergence of the bourgeoisie at the end of the 18th Century also largely marked the emergence of ideas of modern democracy - with the shift away from the rule of the landed aristocracy toward meritocracies (in the French form), monarchies and autocratic rule became slowly untenable and were replaced by representational parliaments with varying limitations on suffrage. Regardless of the turbulent history that Europe underwent in establishing democracy (which was not established in large parts of Europe until after WWI), we see the seeds of it in the early stages of capitalism.
The bourgeoisie are contrarily both enamoured with and opposed to democracy. It is useful for them only in that it allows them to pursue their class interests - those of capital accumulation and creating ideological hegemony (in the pursuit of a more efficient system of capital accumulation). That's precisely why democracy has historically been so closely linked to capitalism, because it was a tool which the bourgeoisie used in defeating the landed aristocracy. Conversely, the same fact is also the reason why the bourgeoisie often resisted extending suffrage to the working class, because, when extended to its fullest potential, democracy would logically become the tool of the majority to defeat minority rule. This is something which the working class (and its allies) often are aware of, and comparative studies of development towards democracy has shown that the working class is overwhelmingly the class which continues to pursue the extension of democracy, while the bourgeoisie resists it.
In this analysis, democracy is the sight of class conflict. By which I don't mean that in its daily mechanisms of convening parliament or even calling elections class conflict is a motivating force in a direct sense. But rather, the struggle for democracy and the extension of democracy is the struggle between classes.
We can see this more clearly if we analyse the way in which the bourgeoisie manipulates democracy as a means of diffusing crises and maintaining social control. The welfare state is one way that they have been able to do this - class conflict, which pushes the state to meet the needs of the majority, can be contained within institutional models (including industrial relations commissions, but all forms of welfare as well) and stripped of its radical edge by bureaucratising needs. In a more general sense, however, the functioning of democracy can be used as a diversion from class struggle, through the running of election campaigns, and through the participation of pressure groups and other public bodies in the creation and institution of legislation. By presenting a democratic facade (ie, creating an illusion around the current form of democracy that it is the only possible form of democracy and that it is a permanent factor in modern society) the bourgeoisie are able to legitimate their dominance in decision-making and, through their over-representation within democratic bodies, to influence policy in the favour of capital. And this same democratic facade can be used to distract the working class from the sources of their problems, by firstly assuring them that democracy is at its fullest and cannot be extending and secondly by channelling demands within the bureaucratic system. Thus working class demands are tailored to suit the system and simultaneously dealt with by the system in a way which does not challenge the dominance of capital.
To this end, we can analyse modern democracy as being the epitome of continual bourgeois triumph in class struggle. However, democracy is not in and of itself always necessary for the continued survival of capitalism, but is more an aid towards the development of bourgeois hegemony. Thus, if hegemony is completely constructed and democracy becomes the greatest challenge to this hegemony, then its full removal and the establishment of an oligarchic regime is not countrary to capitalist interests (because capital can and will negotiate with any regime - whether it be democratic or not). In many ways, this is the process which is currently taking place in Poland and Eastern Europe - the gradual development of authoritarian rule as a means of enforcing bourgeois hegemony.
We can thus analyse all of the movements against the government within our own country, Australia, as being potential expressions of class conflict. For example, when we struggle to defend universal health care, that is a struggle which is of importance to the majority who don't have access to the majority of capitalisms profits, while the defeat of the struggle aids capital in that it extends its market share. Yet, these movements don't become genuine expressions of class struggle until they are linked together to become a comprehensive analysis and attack on capitalism in favour of extending democracy and in favour of social change. And it is precisely the role of socialists to facilitate such a comprehension.
While the traditional strategies and tactics of the working class (particularly in Marxist theory - which is different to historical precedent) are predominantly centred around attacking capital at its heart, ie. within workplaces or through general strikes, it becomes problematic when we remove the democratic element from this struggle. Indeed, we can criticise the experience of the Russian revolution (and other expressions of Soviet-inspired socialism) for not giving enough emphasis to democracy - a fact which resulted too easily in the contortion of the revolution by an authoritarian state-run bureaucracy (and I won't continue to analyse the experience, because we are well aware of the history of the Soviet Union and its offspring). The contention here is that an extension of democracy is necessary for the success of any attack on capital, because it allows working class hegemony to develop. We can argue that this extension of democracy can happen in two ways, and that neither is better or worse for class struggle but can only be determined by the specifics of the historical context in which that struggle is taking place - the first way is that democracy becomes extended through the process of class struggle, and the second is that democracy is extended as a premise for class struggle to develop and succeed.
We can again look to the potentials of Eastern Europe for the first - a genuine class struggle in Eastern Europe in the current context would both necessarily be demanding economic change and challenging the encroaching threat of authoritarianism. Yet, the second is more interesting and historically problematic for socialists.
We can look to the example of Venezuela as a case study. Many socialists time and time again complain that Venezuela is not socialist, despite its verbose proclamation of creating Socialism in the 21st Century. The critique that Venezuela is not socialist because there has been no coherent and direct challenge to capitalism is a valid one, and one which it is impossible to deny. Yet, the key point that is missing in the analysis of the process which is underway in Venezuela is the potential for such a challenge to develop. Socialists, particularly from the International Socialist tradition, point to the non-existence of a genuine workers' party, as though such a challenge to capital could only come from that sort of formation. This is missing the complexity and potential of the democratic reforms underway. The particular promise of transferring lage amounts of authority to directly elected community councils of a few hundred people means that decision-making power will be placed within the hands of the majority of people - that being the poor, who are the primary support-base of Venezuela's Bolivarian revolution, and are often the more radical elements which continually push the revolution into more radical expressions. If this extension of democracy is successful and free of manipulation from any counter-productive force which is set upon protecting the interests of either capital or an entrenched technocratic bureaucracy, then it is difficult to see that capitalism will have a long future in Venezuela. Similarly, such an extension of democracy would negate the threat of authoritarianism that became the defeat of socialism in the Soviet Union. Such a potential is combined with the economic imperative of endogenous development, which is helping to extricate Venezuela from the grips of external capitalist restraints - a development which is in and of itself an extension of democracy in the form of economic sovereignty. With the reclamation of decision-making power over the form of development which takes place in Venezuela, and the control of decisions at the level of the local community, we can see the potential for a real challenge to capitalism to develop organically within this process. Thus, while Venezuela is not socialist, it is developing the basis for socialism, and this basis is located primarily within the extension of democracy. (I would also like to add that the extension of democracy is also linked fundamentally to the extension of literacy and education through the missions, as well as access to all the different social benefits that the mission programs provide, which has increased the level at which people can participate in society by developing them educationally and resolving their subsistence problems.)
The issue of the class-basis of a challenge to capitalism is also resolved to some degree by this analysis of democracy as a site of class struggle. While in Marxist theory, the working class is the class which directly challenges capital, there are many and varied anomalies to this theoretical stereotype, which include the problem as to why the so-called petty bourgeoisie do not follow Marx's chosen path as counter-revolutionaries, but are, particularly in Latin America, some of the most vehement opponents of capital's interests. When the petty bourgeoisie are in fact poor workers from the informal economy, their interests are not met by bourgeois hegemony and capital's control of democracy. They do not have a voice, in the same way that the workers do not have a voice, and thus there emerges a class-alliance in the struggle for the extension of democracy. This has been evident in the development of democracy throughout Europe - although, it is a thought which I haven't read deeply into and am as yet just beginning to develop.