Is Capitalism Possible Without Democracy?

I recently came across an interesting opinion piece on FT written by Slavoj Zizek (Director of the Birkbeck Institute for the Humanities) entitled, “Capitalism has broken free of the shackles of democracy.” In the piece, Zizek argues that while the West has not been able to export democracy as well as it hoped it would, capitalism has been a much more fluid and successful export.

As Zizek notes:

It is often said that the west has failed in its attempt to export its civilisation to the rest of the world. That is only part right. No one dreams any longer of a global liberal democracy that marks the end of history. But economic models have proved more portable than political ideas, and capitalism has triumphed. Poor countries that endorsed it are growing at spectacular rates. 

Unknown-2Market-based economics has no problem accommodating local religions, cultures or traditions. It is easily reconciled with the primacy of an authoritarian state. No longer wedded to western cultural values, it is arguably divorced from them; critically reinterpreted, many of the ideas that westerners hold dear — egalitarianism, fundamental rights, a generous and universal welfare-state — can be deployed as weapons against capitalism.

Zizek continues with a sharp critique of the state of Western capitalism, decrying its claims to increase freedom as illusory:

It is no accident that freedom is a weak foundation for capitalism in the west, for it is also a hollow one. Liberty survives there, but in a strangely twisted form. Since free choice has been elevated into a supreme value, social control can no longer appear as infringing on it. Often, however, the accommodation is merely rhetorical. 

When the hope of long-term employment is taken away, it is sold as a “flexible” labour market, one that offers the perpetual opportunity to reinvent ourselves. When state provision for retirement is taken away, it is to give us the freedom to plan our old age. We are constantly forced to make “free” choices — decisions we must make alone, though we do not know enough to make them wisely. If this is freedom, it is a burden.

Interestingly, I think Zizek’s second point is stronger that his first. He is right that in the West the corruption of the capitalist system by rent-seekers and embedded interests often couches negative outcomes (or rejections of regulations) as a discussion about “freedom.” When we allow billionaires a disproportionate influence on political discourse or regulation, we do so in the name of “free” speech. Likewise, when when the poorest of society are denied a basic living wage, we emphasize that this gives them the “freedom” to chose from a wider variety of “entry-level” jobs. This is nothing new in Western societies, of course, and such abuses have been documented since the creation of modern capitalism. What is new is that these abuses were seen as something that needed correction and not reinforcement, which often seems to be the case today. Perhaps that is why some emerging economies have embraced capitalism but rejected, in whole or in part, the Western social model that many in the West once though was necessary to the adoption of a market-based economy.

At first glance my last point might suggest that Zizek is also right about the “portability” of capitalism into undemocratic (Singapore), corrupt (India) or even repressive (China) regimes but that is not the case. While it’s true that China’s leaders have rejected democracy, its people have not. They may not be pushing for it as loudly or as adamantly as Westerners may want, but rest assured that it is happening nonetheless. I happen to meet many Chinese students through my work at the University of Maryland, and their views of what I would call “personal democracy” (freedom to chose a career, spouse, way of life, etc.) are almost identical to those of U.S. students. Where they diverge is in their views of what I would call “social democracy” (freedom to chose a legislature or president). Here they are, as yet, less concerned about choice, but I believe that is a temporary phenomenon. In time, as their personal democratic foundation strengthens, so too will their demand for social democracy. This is inevitable.

In the meantime, the West has its own housecleaning to do. Decades of corruption have created a economic/financial system that is neither truly democratic nor truly capitalist. One hopes that Western societies will push hard for reform now and in the future — a return to what capitalism is supposed to be: the transparent alignment of capital with entrepreneurs. Sadly, some who have benefited greatly from the Western socioeconomic model seem ready to throw it away. Indeed, as Peter Thiel wrote in the journal Cato Unbound:

…I no longer believe that politics encompasses all possible futures of our world. In our time, the great task for libertarians is to find an escape from politics in all its forms — from the totalitarian and fundamentalist catastrophes to the unthinking demos that guides so-called “social democracy.”

I do not agree with Thiel. I think it’s time to fight to save democratic capitalism, not abandon it. A reformist agenda with this aim in mind would benefit the West immensely, but it would also make the case to the new capitalist nations that the classic Western model of personal freedom was not an enabler of capitalism but, as Adam Smith would have noted, its ultimate and most noble goal.

Read more:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: