Invisible fist: can capitalism and authoritarianism work together?
HISTORY WAS SUPPOSED to have ended in 1989 with the triumph of Western-style democracy and capitalism. The fall of the Berlin Wall proved, at least to the satisfaction of many American pundits and academics, that economic and political liberty advanced hand in hand. Prosperity must bring freedom and vice versa, a virtuous cycle that would lead the developing world inexorably toward American ideals.But after 20 years, an alternative scenario has arisen. "By shifting from Communist command economy to capitalism, China and Russia have switched to a far more efficient brand of authoritarianism," Azar Gat of Tel Aviv University argued in Foreign Affairs. These countries "could establish a powerful authoritarian-capitalist order that allies political elites, industrialists and the military; that is nationalist in orientation; and that participates in the global economy on its own terms." Indeed, our erstwhile Cold War foes are doing well with their new economic systems. Russia under Putin and China since the end of Maoism have both registered high rates of economic growth. In Russia, disposable income in the last six years has risen almost fourfold, while unemployment has gone down by more than half. There and in China, the vast majority express a high degree of satisfaction with the way the government has handled the economy.
This stands in sharp contrast to public opinion in America, where 82 percent of the population considers the country to be "headed in the wrong direction." As the events of recent weeks have shown, democratic capitalism--once imagined to be the unstoppable wave of the future for the entire world--now faces an uncertain tomorrow even in the West. Pat Buchanan noted in a recent column, Liberal democracy is in a bear market. Is it a systemic crisis, as well?" If it is, might authoritarianism and capitalism soon seem to be natural complements, the way that free markets and democracy were once thought to be?
Advocates of "democracy plus free markets" typically favor some variation of capitalism that is fused with popular elections, religious and cultural pluralism, secularized political institutions, tolerance of homosexuality, and women's rights. These seem to be the necessary preconditions for economic and moral well-being and for a peaceful international community, since, according to this particular picture of human history, democracies never fight each other.
At least to some extent, the identification of democracy with prosperity is true. The Fraser Institute's Economic Freedom of the World, 1975-1995 and other more recent surveys show the correlation between high standards of living and "democratic institutions." Even such heavily taxed and regulated democratic" countries as Sweden and Norway boast some of the world's highest living standards, as well extensive domestic and foreign investments in their economies. Welfare states such as Australia, Iceland, Canada, and Sweden also register respectable rates of economic growth. That is because these countries, like our own, are politically stable and still have relatively unfettered economies.
But there is no reason to think that only governments that are "democratic" in the current usage can provide political stability and good investment climates. Free markets are operating well in very different political systems. One of the most successful examples of nondemocratic capitalism is Singapore, which after winning independence in 1959 flourished under the firm hand of Lee Kuan Yew, who was prime minister or senior minister from 1959 until 2004. Lee has always stressed economic productivity and very low taxes. But in a 1994 interview with Fareed Zakaria, he pronounced his opposition to "Western democratic imperialism." While acknowledging that the U.S. has some "attractive features," such as "the free and open relations between people regardless of social status, ethnicity or religion" and "a certain openness in argument about what is good or bad for society," Lee expressed doubts about the American way "as a total system." "I find parts of it totally unacceptable," he told Zakaria, "guns, drugs, violent crime, vagrancy, unbecoming behavior in public--in sum the breakdown of civil society. The expansion of the right of the individual to behave or misbehave in public as he pleases has come at the expense of an orderly society."
In Lee's country--and in Asia more generally--they do things differently: "In the East the main object is to have a well-ordered society so that everyone can have a maximum enjoyment of his freedom. This freedom can only exist in an ordered state and not in a natural state of contention of anarchy." Lee had admired the U.S. in the past, but given the "erosion of the moral underpinnings" and the "diminution of personal responsibility" that has since taken place in recent decades, he has since changed his view of American democracy for the worse.
Contemporary Russia and China provide even more striking examples than diminutive Singapore of relatively free markets under authoritarian governments. But one need not look so far afield--the historical milieu in which capitalism arose in Europe supplies ample evidence closer to home. Industrial development in the West began long before European societies became "democratic" in the contemporary sense. Until the 20th century, women didn't vote, nor did they hold extensive property rights. In many of the countries in which industrialization and the rise of the bourgeoisie first occurred, there was nothing like separation of church and state. And most of the Western societies that were undergoing industrial development in the mid- or late 19th century were not particularly tolerant toward labor unions: workers' strikes were often broken up by the police or the military. The Western societies that created free markets and expansive economies sometimes look almost medieval, as viewed from the perspective of contemporary "democracy." Yet these societies typically had freer--that is, less regulated--markets than our own modern states.
Conversely, present-day notions of democratic equality and what the state must do to promote that value may eventually preclude the possibility of relatively free markets. Despite their costly welfare states, Western democracies have so far been able to survive as wealth-producing countries, and this situation might have prevailed forever--if certain conditions of late democracy had not come along. In particular, feminist attitudes toward childbearing and the modern democratic state's affinity for mass immigration have clouded the future of free markets. To regard these culturally revolutionary features as merely accidental accompaniments of democratization is naive. They are inherent in the claims made by modern democracies to being pluralistic, egalitarian, and universalistic.
The current version of democracy benefits from consumer capitalism inasmuch as public administration needs the financial resources and consumer goods produced by the market to maintain social control. Consumer societies also serve the goal of democratic socialization--that is, the creation of "democratic," as opposed to "authoritarian," personalities--by encouraging a materialistic way of life. As Daniel Bell argues in The Cultural Contradictions of Capitalism, other things being equal, democratic-capitalist societies work against pre-modern institutions and values. A stress on consumption and on fashionable commodities leads to a condition of life characterized by the availability of ever-increasing goods and the association of social rank with their acquisition. Living in this manner nurtures both individual-centeredness and openness to change. These are values that democratic educators are happy to emphasize in order to weaken and replace traditional, pre-democratic communities.
But there are limits to how far democratic welfare states will go to sustain capitalism. Democracy's support of feminism, for example, creates short-term benefits but also long-term headaches for the economy. While today's working women earn and spend more than their predecessors who were not part of the labor force, they are also less focused than earlier generations on child-rearing, and are unable or unwilling to devote as much time and energy to their offspring. Among the results of women's emancipation from the family, particularly in Europe, has been a graying of the native population and the need to import a foreign, largely Third World, labor force. The rationale for this step has been to pay for retirement funds and social services, although more recently this policy has also been justified as helping to enrich the culture.
The gamble of importing unskilled immigrants to make up for the birth dearth has not paid off for Germany. Because of that country's bloated welfare state, its national debt is now 11 times higher than it was in 1972, and it is likely to increase fivefold in the next 20 years in order to provide social services to the new immigrants, the vast majority of whom are either unemployed or earning-impaired. Unemployment is now many times what it was in the 1970s. And the demographic collapse is only worsening. A prominent economist and onetime adviser to the Christian Democrats, Meinhard Miegel, in his monograph Die Deformierte Gesellschaft, draws a gloomy picture of a society that is falling on the skids materially, in a way that Freedom House and the Fraser Institute have avoided noticing. By 2200, if present trends continue, Germany will have the population that it did in 1800, but the demographic distribution will be the opposite: in 1800, most Germans were below 40 years of age; already today 24 percent are 60 or older.
Although there are special circumstances in the German case, such as the costs of national reunification, most of Germany's problems are characteristic of other Western societies. Women marrying late or choosing not to marry at all, low fecundity rates, and the welcoming of unskilled immigrants have all become endemic in the West. Democracy today, with its emphasis on equality and pluralism, is an agent of social disintegration.
It's also bad business. Although a modern democratic system can coexist with capitalism in the short and even middle terms, the two will eventually clash. Their contradictions are too glaring not to surface. Expanding social programs, the lopsided statistical distribution of young and old caused by the very democratic feminist movement, and the importing of unskilled labor are bound to increase popular demands for income redistribution. Our own country now stands at the threshold of new social spending such as government-controlled healthcare. While it might be hard to demonstrate that such developments have always inhered in a welfare-state democratic regime, one can easily comprehend how modern democracy reached its present state here and in Europe.
Can authoritarian governments conceivably do better than modern democracies as frameworks for capitalist economies? Certainly the old idea that capitalist development inevitably leads to political freedom has fewer adherents today than it did at the end of the Cold War. Robert Kagan, in his new book The Return of History and the End of Dreams, no longer treats the movement toward liberal democracy as "the unfolding of ineluctable processes," though he still calls for the U.S. to form a "league of democracies"--an arrangement that his admiring blurber, John McCain, intends to put himself in charge of--to force the world to be free.
Once the reader looks beyond Kagan's search for enemies against whom the "democracies" can mobilize their laggard populations, however, one sees that he makes several relevant points. Authoritarian powers like Russia and China can effectively integrate free market economies into their nationalist projects. Economic freedom does not necessarily require the adoption of liberal or democratic institutions. The belief that had driven the end-of-history theorists of the 1990s, that movement toward the free market would be accompanied by political liberalization, has not proven consistently true, and the exceptions might be more important than the embodiments of the rule.
Although Kagan ignores the changing meaning of his god-terms "liberal" and "democratic," he correctly perceives the degree to which politics can control economics, even in a recognizable market economy. Not all capitalist economies will lead to the election of Barack Obama or Tony Blair. Indeed, in some societies a thriving economy may go hand in glove with a favored Russian Orthodox Church, the veneration of the last tsar and his family, or evocations of the glory of the Ming dynasty. To his credit, Kagan admits that capitalism does not always lead in the political direction he wants it to go. Market economies can be a valuable asset to any kind of government. Even those that prefer to rule by the stick have come to recognize the need for carrots.
Even so, autocratic capitalism may prove a transitory phenomenon, for the simple reason that authoritarian regimes are not likely to endure. Israeli political scientist Amos Perlmutter, the author of Modern Authoritarianism, argues that despotic governments rule in societies that are only imperfectly modernized: they have typically depended for their establishment on (often shifting) alliances made with the peasantry, military, established churches, and elements of the working class. Over time, such regimes either give way to other, similar orders--often as the result of military coups--or else they evolve, like Franco's Spain, Syngman Rhee's South Korea in the 1950s, and Pinochet's Chile in the 1980s, into middle-class constitutional states. Perlmutter does not have an ax to grind against authoritarian regimes, which often provide the breathing space for economic and political change. But he views them as stepping stones to periodic instability or else to democratic capitalism. Within this view, one does not have to agonize over a Singaporean exception, since Lee's attempt to blend economic growth with Confucian culture may not have any significance outside of his region. Lee may have produced an exotic flower that does not flourish in other climates.
It goes without saying that should authoritarian-capitalist states metamorphose into new democratic-capitalist regimes, they will soon be subject to all of the problems familiar to the West. And these difficulties will set in far faster than they did in our country because American cultural values will soon be swamping these fledgling democracies--by example, if not by force. Given their longtime totalitarian pasts--and in China's case, far-flung, dense population--the modern malaise may take root in authoritarian lands more slowly than in more Westernized countries such as Japan. But the Chinese and Russian cases are not yet illustrations of a stable, long-term "authoritarian capitalism." Most likely, Putin and the Chinese Communists will eventually give way to "democratic capitalist" governments or to periodic regime changes followed, in the best of circumstances, by further economic growth. Without nurturing any illusions about the supposed friendship between democracy and capitalism, there is no compelling reason to treat autocratic capitalism as a permanent arrangement. The friendliest climate for economic freedom may have existed in pre-democratic Western societies in the 19th century. But that too proved to be a transition to something else, a new "democracy" with whose consequences we are still contending.
Paul Gottfried is Raffensperger professor of humanities at Elizabethtown College and the author of Conservatism in America: Making Sense of the American Right.
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| Title Annotation: | World |
|---|---|
| Author: | Gottfried, Paul |
| Publication: | The American Conservative |
| Geographic Code: | 9CHIN |
| Date: | Oct 20, 2008 |
| Words: | 2420 |
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