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Wednesday, August 06, 2008

Democratic versus Authoritarian Capitalism

Robert Reich is back from vacation:

The Real Competition Behind the Olympic Games, Robert Reich: The real competition lurking behind the upcoming Olympic games is between democratic capitalism and authoritarian capitalism.

For years American policy toward China assumed that trade and economic growth would generate a large Chinese middle class, and this middle class would demand democratic reforms. We were right on the first part. ... But we were wrong about the democracy part. We thought capitalism and democracy went hand in glove. They don't. Economic reforms are well underway in China. Individual Chinese can own property and invest, trade and buy almost whatever they want. Private enterprise is in, collectives are out. But when it comes to civil and political rights, China today is where it was almost two decades ago at the time of Tiananmen Square.

Authoritarian capitalism works wonders if all you care about is getting ahead economically... Never before in history have so many people gained economic ground so fast as in China over the last two decades. But if you're someone with a grievance, or you want to criticize those in power, or you're a Tibetan or ethnic minority, or you happen to like clean air, you're out of luck.

Democratic capitalism should win in the end because it responds far better to what people want -- not only as consumers but also as citizens. Yet right now the outcome of the competition doesn't seem so clear. The Chinese economy is booming while we're in deep trouble. Eighty percent of Chinese are optimistic about the future but only 20 percent of Americans say this nation is on the right track. And most Americans tell pollsters they don't trust politicians and believe our government is run by big corporations and the rich.

In terms of this large underlying competition, think of our upcoming presidential election is our own Olympic games. It will showcase to the world whether, and how well, democratic capitalism still works.

Will authoritarian capitalism become the next economic development model as other countries try to mimic China's success? If so, is that a good thing? Will democracy, in fact, win in the end?

    Posted by on Wednesday, August 6, 2008 at 10:17 AM in Development, Economics, Politics | Permalink  TrackBack (0)  Comments (77)

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