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The Clash of Capitalism and Democracy (Part 1 of 5)

© Jason Gottlieb

It is easy to get caught up in the day-to-day events of East Asia and lose sight of the bigger picture. Especially given the ongoing currency crisis, riots, elections, and other incidents of an attention-grabbing nature, we forget that the development of Asia, particularly the development of economic and political principles, is a process that takes decades. In this series, I would like to focus on the bigger picture, specifically addressing the past and future development of East Asia's market economies and democracies.

Capitalism and democracy seem to be goals of virtually the entire world right now, with a few notable exceptions such as Cuba, Iraq, and in East Asia, North Korea and Myanmar. It is understandable why nations strive for both capitalism and democracy. Capitalist notions have led to a higher standard of living for more people than any other economic system yet invented. Similarly, democracy has brought more freedom to enjoy that standard of living literally to billions of people.

Yet many in the West simply assume that capitalism and democracy go hand in hand; that they are mutually complimentary; that one leads to the other; and that one is impossible without the other. All of these assumptions are myths. In truth, capitalism and democracy can actually clash with each other in many areas. Mega-corporations push around smaller, developing democracies. Institutions such as the International Monetary Fund and the United Nations try to support capitalist and democratic ideals in nations that may not want the brand of ideology that the IMF and UN are selling. The desire to acquire cash, the underpinnings of a capitalist society, can lead to corruption, where governments and business break democratically decided laws to earn a profit. Finding the golden mean of capitalism and democracy is a challenge for the government of any nation, big or small, rich or poor.

This series will focus on the clash between capitalism and democracy, not with an aim to undermine either notion, but rather to explore the areas in which the two concepts clash in order to find concrete policy prescriptions that can better harmonize them. The ideas of this series should, theoretically, apply not only in East Asia, but in any given nation. However, as this is a column on East Asian Politics, I shall focus on the effects of these political theories in East Asian nations. (But as parts of the series will inevitably be purely theoretical, and not at all topical, I ask those numerous fans of my "East Asia, all East Asia, and nothing but Asia" writing to please bear with me.)

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