Are Capitalism, Democracy linked?
February 21, 1998
Re: Steve Lohr, New York Times (Are capitalism, democracy linked?, The Straits Times - Comment and Perspective FEB 20 1998)
An endless procession of pundits have taken it upon themselves to enlighten poor benighted Asians about the cause of their financial woes: "It's the democracy, stupid!" "Your recession is your Asian Values bill come due!"
This self-congratulatory "explanation" may flatter Asia-bashers egos, but it hardly accords with economic history. The worst economic catastrophe in modern times was America's Great Depression. Was America devastated by the Great Depression because her citizens were denied free and fair elections? Was four term president Franklin D. Roosevelt a practitioner of "untenable Asian Values?"
As a passionate advocate of classical liberalism I am confident that pure laissez-faire is the optimal economic system; that any nation which adopts it will enjoy rapid growth and general prosperity.
The problem is free market capitalism is not the preferred economic system of those who typically speak in solemn tones about the sanctity of democracy, universal suffrage, and majority rule. Their preferred economic system is more often than not democratic socialism, and the ballot box their instrument for legalized plunder.
As H.L. Mencken observed "an election is nothing more than an advance auction of stolen goods." "Rule of Law" legal protections afforded private property have historically been shredded by mob "rule of the majority."
Democracy is far more hostile to capitalism than Mr. Lohr and champions of "western values" would have us believe. What the answer is to this dilemma I do not claim to know. But the simplistic formulations I have heard so far are definitely not it.
Taipei, Taiwan, China