A Question of Linkage: Capitalism, Prosperity, Democracy

By Stelzer, Irwin | The National Interest, Spring 1994 | Go to article overview

A Question of Linkage: Capitalism, Prosperity, Democracy


Stelzer, Irwin, The National Interest


THE SIMULTANEOUS explosion of economic growth in still-authoritarian China and economic collapse in increasingly democratic Russia rekindles an old debate concerning the relationship between democracy, capitalism, free markets, and economic development. There can be little doubt that the economy and the polity interact with each other, but the nature of that interaction is elusive.

We begin with the conventional, conservative formulation. Crudely stated, it goes something like this. Market capitalism is the greatest engine for economic development the world has ever seen, what Peter Berger calls a "horn of plenty that heaped...immense material wealth and an entrepreneurial class, on the countries in which it originated." By creating a thrusting entrepreneurial class, impatient with government restrictions on its adventures, and a middle class clamoring for consumer goods, education and choice, capitalism creates counterpoises to government authority, eventually forcing the acceptance of democratic institutions. In short, by producing economic wealth and an entrepreneurial class, capitalism inevitably produces democracy. And since democracies don't start wars or have expansionist proclivities--forget, for the moment, Theodore Roosevelt and imperialist Britain--capitalist-democratic development contributes to security and to world peace.

There is much to be said for this view, especially that portion that relates prosperity to market capitalism. Certainly, it seems to be validated by our own recent experience. Entrepreneurial capitalism became more dominant in the America of Ronald Reagan than it had been before, and job growth and record-breaking prosperity followed. In Britain, Margaret Thatcher reversed almost four decades of socialism--only the pace, but not the direction, of increasing government involvement in economic affairs changed when pre-Thatcher Tories alternated with Labour as Her Majesty's ministers--and changed her country from the sick man of Europe into one positioned for long-term, non-inflationary growth. Meanwhile, the Soviet economy was shown to be like the Wizard of Oz--an imposing facade, but impotent and powerless at its core. Put these events together and you have an unassailable proof that capitalism produces a level of economic welfare that a planned economy simply cannot emulate.

Add to that the apparent relationship between capitalism, prosperity, and democracy, and you have reason for self-satisfaction with the American political-economic system, at least in the broad. After all, in recent years a more-or-less free market capitalism in Chile, South Korea and Taiwan has produced, first, prosperity and, then, democratization. In Russia it may be the other way around: democratization (glasnost) preceded economic restructuring (perestroika). No matter: it all comes out well in the end--capitalism, democracy and prosperity march hand-in-hand into a bright, and therefore secure, future. Knowledge (or faith) that this is so informs several aspects of domestic and foreign policy.

Swings and Roundabouts

UNFORTUNATELY, ALL is not as simple as it first seems: the linkages between economic and political structures, and between economic structures and economic performance are not quite as clear as the foregoing recitation suggests. And because they are not, we may have to do more to secure ourselves from external threats than wait for some inevitable historical tide to produce prosperity, democracy and world peace.

Consider America's experience. Nicholas Eberstadt, in his Foreign Aid and American Purpose, points out that, in 1787, when America adopted its Constitution, "life expectancy in the United States was almost certainly significantly lower than in sub-Saharan Africa today."(1) And per capita income some one hundred years later was "substantially lower than the figures currently imputed to such places as Algeria, Jordan, and Mexico." Yet America, poorer than many totalitarian countries are now, opted for democracy and made a spectacularly good go of it.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A Question of Linkage: Capitalism, Prosperity, Democracy
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.