Democratizing the 3rd World Won’t Work
From the 1980s to the 2000s, the United States promoted raw, laissez-faire capitalism throughout the non-Western world. This rapid democratizing of the developing countries before 2008 contrasts sharply with the gradual increase of suffrage in the West. At no point in history did any Western nation ever implement laissez-faire capitalism and overnight universal suffrage at the same time. Instead, universal suffrage emerged in the United States and Europe incrementally, over many generations.
Markets, it was thought, would produce enormous concentrations of wealth in the hands of a few, while democracy, by empowering the poor majority, would inevitably lead to convulsive acts of expropriation and confiscation. In Adam Smith’s words, “For one very rich man, there must be at least five hundred poor…The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions.”
Democracies Sometimes Elect Dictators
However, in countries with a market-dominant minority (like the Chinese in Southeast Asia) and a poor “indigenous” majority (like in Thailand, Malaysia, Brazil and the Philippines), the forces of marketization and democratization collide. Market liberalization — i.e. privatization and deregulating the economy — magnifies the economic dominance of the country’s already rich minority while democratization increases the political voice and power of the frustrated majority.
This sometimes fosters populist demagogues. As America toasted the spread of global elections throughout the 1990s, vengeful ethnic slogans proliferated: “Zimbabwe for Zimbabweans,” “Indonesia for Indonesians,” “Uzbekistan for Uzbeks,” “Kenya for Kenyans,” “Ethiopia for Ethiopians,” “Serbia for Serbs,” “Mexico for the Mexicans”, “Chile for the Chileans,” “Yids out of Russia,” “Hutu Power,” and so on.
The demagogue uses the resented minority as a scapegoat, demands an end to the humiliation, and insists that the nation’s wealth be reclaimed by its “true owners.”
Among the poor indigenous majorities of the developing world, most don’t believe free markets will enable them to go “from rags to riches.” Thus, the sudden political empowerment of a poor, frustrated “indigenous” majority often leads to powerful ethnonationalist violence and anti-market beliefs.
If free-market democracy is the long-term goal in developing countries, holding overnight elections is probably not the best way to achieve it. Democratic elections in developing countries could well sweep in antidemocratic regimes. In Arab states, immediate majority elections could likely bring to power intensely anti-market, anti-Israel, anti-American, anti-globalization regimes. The goal shouldn’t be to hold elections as soon as possible, but neither should it be uncritically propping up authoritarian regimes.
What elites don’t want from democracy is to have property rights and economic policies suddenly determined by their countries’ poor, lower-educated, majorities. Democracy only works if the population is well educated. Democratization to Latin America’s elites usually mean a very gradual process of majority inclusion, beginning first with educational reform, perhaps local elections, and some political participation of the masses — but always tempered by, and subordinated to, an overriding concern for the stability of property rights, foreign investment, and the status quo.
Democracy is a Western value that should not indiscriminately be imposed on other cultures. It’s better to be an open advocate of the priority of markets than to be a self-congratulatory advocate of sham democracy.
Western politicians have to be careful not to project their own negative feelings about affirmative action or identity politics onto societies where the conditions and demographics are totally different.
Examples
Elections brought to power Hitler, Mugabe, (Zimbabwe), and Milosevic (Serbia), Trump, Orban.
For example, democratically elected Chavez proclaimed the right to food was more important than corporate profit. In 2002, to retaliate against his threats of seizing the wealth and power of the market-dominant minority, the minority group momentarily deposed him in a coup. Because of his still-considerable support among Venezuela’s poor majority, he returned to power with speed.
Rwanda had the most extreme form of majority-supported, democracy-assisted efforts to exterminate an economically dominant ethnic minority. In just one hundred days, Hutus killed approximately 800,000 Tutsis, mostly with machetes.
Five Solutions
1. Throughout the non-Western world, if democracy and markets are to be peaceably sustainable, democratization cannot be reduced to shipping out ballot boxes for national elections — a process almost calculated to maximize ethnic politics in deeply divided societies.
2. But, don’t rapidly democratize and turn a country into a free market.
3. Hold off on democracy until free markets produce enough economic and social development to make democracy sustainable. Globalization promised a decrease in poverty and it’s worked. According to the World Bank in 2017, globalization and market policies since 1980 have reduced absolute poverty in a number of Southeast Asian countries.
3. However, laissez-faire alone doesn’t work. We need capitalism and significant redistributive mechanisms. The emergence of redistributive institutions of unprecedented magnitude softened the harshest effects of capitalism. Sweden and other Nordic countries all have extensive “cradle to grave” social legislation, including worker management rights, government-paid maternity, child support, and rent control.
Strong redistributive measures in the West such as progressive taxation, social security, and unemployment insurance, as well as antitrust and financial regulation, temper the harshest effects of capitalism.
In some of the poorest countries in the world, the tax rate for the very wealthy is effectively zero. But also, effectuating tax-and-transfer programs is immensely difficult in countries where the state is weak, money scarce, and corruption pervasive.
4. All over the world sports, across both class and ethnic lines, have a tremendous unifying power. In the United States, nothing has improved race relations more over the last two decades than the idolization of such figures like Michael Jordan, Sammy Sosa, and Tiger Woods.
5. Powerful families of Indian descent — among them the Madhvanis, Aga Khans, Mehtas, and Chandarias — have made immense contributions to their local communities, often concentrating heavily on indigenous African welfare and development. Indians, for example, were principally responsible for creating the University of Nairobi, East Africa’s first nonracial institution of higher education.
More recently, the Madhvanis, owners of the largest industrial, commercial, and agricultural complex in East Africa, not only provide educational, health, housing, and recreational facilities for their African employees but also employ Africans in top management and offer a number of wealth-sharing schemes.
Kenya’s powerful industrialist Manu Chandaria, who owns 14 companies and employs 5,000 workers in Kenya, has become a household name because of the millions he has poured into local education, health, and environmental conservation.
Jewish billionaire Roman Abramovich was elected governor of the godforsaken, poverty-stricken region of Chukotka, where temperatures commonly drop to -30 degrees Celsius. For better or worse, Abramovich bought his popularity by spending tens of millions of dollars of his own money airlifting food, parkas, boots, and medicine, buying computers and textbooks for the schools, and even flying three thousand children to sunny vacation destinations so they could swim in warm water.
*What poor countries at the lowest rungs of economic development need is not a multi-party democracy, but in fact a decisive benevolent dictator to push through the reforms required to get the economy moving.
*In the early stages of development it matters little to a starving African family whether they can vote or not.
*a woman in rural Dongo cares less about the risk to her democratic freedom in forty years’ time than about putting food on her table tonight. China promises food on the table today, education for her children tomorrow and an infrastructure she can rely on to support her business in the foreseeable future.
*While public institutions — the executive, the legislature and the judiciary — exist in some form or fashion in most African countries (artefacts of the colonial period), apart from the office of the president their real power is minimal, and subject to capricious change.
*Foreign direct investment and rapidly growing exports, not aid, have been the key to China’s economic miracle.
*Democratic regimes engage in activities that assist private production in two ways: either by maintaining a framework (regulatory, legal, etc.) for private activity or by directly supplying inputs which are not efficiently delivered by the market (for example, a road connecting a small remote village to a larger trading town.
*Democratically accountable governments met the basic needs of their citizens by ‘as much as 70% more’ than non-democratic states.
*Przeworski et al. offer this fascinating insight — ‘a democracy can be expected to last an average of about 8.5 years in a country with a per capita income under US$1,000 per annum, 16 years in one with income between US$1,000 and US $2,000, 33 years between US$2,000 and US$4,000 and 100 years between US$4,000 and US$6,000 . . . Above US$6,000, democracies are impregnable . . . [they are] certain to survive, come hell or high water.’ It is the economy, stupid.
*It is the economy that matters. Places like Singapore have shown that, even in the absence of democracy, peace prevails when the median citizen is economically better off.
