On capitalism, democracy, and world peace

08.01.2003

I believe that the spread of democracy and capitalism is the greatest weapon for peace in the twenty-first century. This doesn’t mean, of course that the spread of democracy and capitalism will end “War” as we know it. I only mean that democracy and capitalism make war much less likely.

First, democracy and capitalism are necessarily intertwined as twin sons of liberalism. It’s no surprise that one of the key books in liberal political theory was Adam Smith’s The Wealth of Nations. Even Locke’s Second Treatise on Government is filled w/ the language of both political philosophy and economics. After all, both a theory of labor and property rights derived from them are critical elements of liberalism.

Liberal democracy and free market capitalism necessarily require the same basic fundamental rights. Freedom of speech allows individuals to not only express their own opinions, but also the ability to advertise their products. Freedom of the press offers the same dual purpose. So does freedom of association, which protects both our right to form a political party or movement and our right to join others in corporate enterprise. Liberal democracy rests on the idea of a contract between government and citizens, a conceptual structure borrowed from economics. The subsequent liberal right to change government (both individual leaders and fundamental structure) is the same right that allows us to choose between Ford and Toyota. If I don’t like my Toyota, I can sell it and purchase a Ford.

It’s no surprise, therefore, that all liberal democracies in the world are also capitalist economies. Sure, the experiment of “people’s democracy” has existed in the past. And they did stay faithful to some (but not all) principles of broader democratic theory. But, given a choice, few would choose to live in the USSR, North Korea, Cuba, or East Germany. Beyond structural, logical problems inherent in these states come one simple indictment: history. Every year, hundreds of people risk their lives in miserable rafts attempting to flee Cuba for America’s shores. There’s no exodus in the opposite direction. Thousands risked their lives attempting to cross the Berlin Wall into West Berlin. No one risked his life to go in the opposite direction. Sure, some Americans did prefer to live in such regimes. But they never had to run barricades to leave this country.

Second, capitalist countries are less likely to go to war w/ one another. It’s a historical fact that no two democracies have ever fought a war against each other. When you look at the historical experience, democracies are least likely to engage in war. This is more true the more democratic the country is. Canada and the US have never fought a war. But the Latin American military regimes have fought over a hundred wars between each other. In 1979 El Salvador and Honduras fought a brief war over a controversial soccer match.

This doesn’t mean that capitalist countries don’t compete. Japan, the US, and the EU are economic rivals. But even this rivalry is tempered by capitalism. In the first place, capitalist economies are so intertwined that it’s difficult to see where they begin and end. Is Daimler-Benz-Chrysler a German or American corporation? Is Sony-MGM a Japanese or American corporation? Is FOX television an American or Australian corporation? The truth: no one really cares. In the second place, it’s not in any capitalist country's interest to cripple another. We don’t want Europe or Japan to have recessions. That hurts our economy, slows down exports, and reduces consumer markets generally. Witness the US bailout of Mexico’s economy a few years ago. Or Germany’s willingness to prop up the European economy.

Third, a counter-argument is made that other countries are still antagonistic towards the US even though heavily involved in the international economy. Saudi Arabia is a major world oil supplier, yet it’s politics are antagonistic (it supports international terrorism). China is a huge international economic presence, yet it rattles sabers over Taiwan. But let’slook closer.

By definition, all states are involved in the international economy. But they aren’t all capitalist. China’s trying to play the game of international capitalism while limiting capitalist and democratic reforms at home. The gamble is a long-term failure. After a decade of economic reforms, we’re seeing more and more Chinese demanding similar political reforms. The historical distance between glasnost and perestroika may be wider in China, but their convergence is inevitable. It’s only a matter of time before China is so far along the capitalist path that war w/ Taiwan becomes unthinkable. After all, Taiwan is already a major source of Chinese investment capital and a major export market.

The Saudi example is clear: Saudi Arabia is neither a democracy nor a capitalist state. If democracy requires a separation of church and state, capitalism requires a separation of state and economics. Saudi Arabia allows neither. Governed by an absolutist monarchy wrapped up in religious mysticism, neither its politics nor its economics are popularly determined. Saudi princes manage its political policies and its economic ventures for personal reasons. In a democracy, w/ free press and political tolerance, what kind of leaders would Saudi citizens elect? Those who pursue economic growth and property? Or those who pursue religious interests that keep the country backward and politically isolated?

I disagree w/ the enemies of globalization. First, because it’s obvious that globalization is inevitable. But, since an event’s inevitability says nothing about its ethicality, I also present the above argument. Globalization not only brings countries closer together, it also spreads universal values of democracy and free markets. And just as life is better in a democracy, so life would be better in a democratic world.

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Note: Steve Giardina points out that definition of democracy was unclear. I use the definition developed by Robert Dahl's (1971) seminal Polyarchy: Participation and Opposition.

Posted by Miguel at 11:27 PM

Comments

A good post, but I would like to make a correction to it. The proper system of government is NOT a democracy. A democracy, by definition, is a system of government in which the people decide everything. A representative democracy is a system of government in which the people indirectly decide everything by giving power to governent officials who then in turn decide everything. In a democracy, the freedom of an individual is only recognized if a majority of people provide this freedom to the individual. This means, that a democracy is meant to recognize whatever a majority of people wills. If a majority of people will that the rich must sacrifice themselves for the poor, so be it. If a majority of people will that black people are inferior and we should execute them, so be it, etc.

Do you see the problem with labeling the ideal system of government as a democracy?

The ideal system of government is laissez-faire capitalism, in which, the form of government is a constitutional republic. In a constitutional republic, the rights of the individual are strictly defined and what the government can and can not do are also strictly defined.

It is incorrect to describe the ideal system of government as laissez-faire capitalism AND democracy. These two systems of government are VERY different.

I can't stress to you how much democracy IS NOT AN IDEAL SYSTEM OF GOVERNMENT, but rather, it is another variant of dictatorship.

Please refer to my blog at http://rationalegoist.rationalmind.net for further elaboration of this point. I wrote a post on this on 7/24/03.

Posted by: Steve Giardina at August 2, 2003 11:35 AM

I tried posting something, but it didn't work, so I'll try posting it again. Democracy is not an ideal system of government. In a democracy, there is absolutely no recognition of individual rights, freedom, liberty, etc. In a democracy, there is only the recognition of whatever the majority of people will. If the majority of people will something, the government does it. For example, if the majority of people will that President Bush be shot, President Bush is shot. If the majority of people will that the rich must sacrifice themselves to the poor, then the rich are sacrificed to the poor.

The spread of "democracy" would result in A LOT of war.

The spread of laissez-faire capitalism, and its political corollary, a constitutional republic, is what would prevent war. Only in a constitutional republic based on the system of laissez-faire capitalism are the individual rights of EVERY citizen recognized as inalienable. Only in a constitutional republic based on the system of laissez-faire capitalism would result in a drastic reduction of war.

Check your premises.

For more evidence of this, consult my 7/24/03 entitled Democracy on my blog which you can find at http://rationalegoist.rationalmind.net

P.S. I apologize if this comment comes after another one of mine already, there seems to have been some glitch in the post.

Posted by: Steve Giardina at August 2, 2003 11:45 AM

Well, the definition of democracy as majority rule is only ONE possible definition of democracy. There are reasons why it's actually not even a possible system in reality. Read some of Robert Dahl's work on the subject especially, also Giovanni Sartori. They give the strongest arguments for why that version of democracy can't work in large states for practical reasons.

When I use the word "democracy", I mean "polyarchy" — which is the definition of democracy developed by Robert Dahl in 1971 and throughout his subsequent works.

Posted by: miguel at August 2, 2003 02:31 PM

It’s a historical fact that no two democracies have ever fought a war against each other.

Assuming we are talking about representative democracies here, then that leaves us with the Civil War and the War of 1812. (Both of which illustrate the possibility of extreme ideological and power conflict even among normally-passive states)

Similarly, democracies have often engaged in war with non-democracies for reasons other than political ideology. American public reaction was actually the cause of the Spanish-American War, and also preciptated a number of crises. History also would reveal that democratic feeling (popular sentiment against other countries, even other republics) is the cause of many crises. Consider the Trent Affair, the Vneezulea Crisis, the Fashoda Crisis, and the Ruhr Crisis. These all come from relatively the same time-period because that is the only tim ein which major republics have come into contact with one another.

Realists propose that the lack of democratic war is instead a matter of small-N sampling: there haven't been enough of them, and they haven't existed for long enough to demonstrate their ture colors. Consider: no Communist country has ever attacked another. Yet we would not claim that they are inherently peaceful. There simply have never been the right circumstances for either theory to be tested.

This is not to say that republicanism and capitalism are not excellent social organization schemes. But they aren't perfect.

At the same time, we must realize the causation actually goes the other way. It is not that democracy causes peace and stability. It is that peace and stability are the necessary prerequisites for republicanism, which is itself only excellent at preserving these conditions.

I've written on this before here
-- the American form of government is a great one, but it only works because of centuries of gradual progress and established social norms. Simply installing elections in far-away lands is not a recipe for peace, it's a plan for disaster.

Posted by: Adam at August 2, 2003 11:07 PM

Adam:

You actually have two factual errors in your comment. First, I never stated that democracies don't fight wars, only that no two democracies (and here I mean "polyarchies") have ever fought a war. Second, you provide examples that are NOT democracies.

By all accounts, a democracy demands equal political rights for all its citizens. The US Civil War is not a war between democracies because of one simple point: slavery. Actually, neither the North nor the South were full polyarchies in the 1860s (the South for obvious reasons, the North for restricting suffrage to property owning males). The first full polyarchy emerged in the 1920s when the US granted full adult suffrage (though this was problematic, since the South was not a full polyarchy until the 1960s).

The War of 1812 was a war between a near-polyarchy (the US) and a monarcy (Britain). The Spanish American War was also a war between a near-polyarchy (the US) and another monarchy (Spain). All the "crises" you point out involved a polyarchy (or near-polyarchy) and dictatorships of various kinds (military, fascist, or other kinds).

The historical still stands that no two democracies have ever fought a war. And democracies by and large are less prone to even be involved in a war.

Posted by: miguel at August 3, 2003 03:11 AM

Of course, Adam raises a good point. The correlation between democracy and peace does not by itself demonstrate a causation. But it is, nevertheless, good evidence. And I think another positive evidence is that some of the countries that were most beligerent (i.e. militaristic) in the past (e.g. Germany) have stopped engaging in war after they become democracies.

Posted by: miguel at August 3, 2003 03:14 AM

I still contend that the proposed peacefulness of democracies is merely a matter of small statistical size. (If we do not even count America until the 19th amendment, then there very few examples indeed)

But even granted that those countries where stable democracy exists are more peaceful, it does not necessarily correlate that the spread of democracy will make the world more peaceful. The growth of so-called illiberal democracy has brought about regimes which, though they feature elections and power-sharing, are neither stable nor truly free. In these cases, such as Zimbabwe or Nigeria, where democratic elections only cement the power of a tyrant, ultra-nationalism and violence are the clear result.

I have written about how democracy would certainly fail in Iraq, here

To simply push democracy into places without a history of legalism, separation of church and state, mutual respect between ethnicities, and experience with Western-style institutions would be disastrous. The failure of pseudo-democracies in Pakistan, The Ivory Coast and Zimbabwe (among many others) demontrates the difficulty of forcing freedom onto countries without the proper preparation.

Posted by: Adam at August 3, 2003 12:36 PM

Adam:

While I agree w/ some of what you're saying, you're still pushing the wrong side of the envelope. You keep providing examples of non-democracies hoping to support your argument. A democracy requires elections, but elections do NOT make a democracy. The USSR also had elections, but it wasn't a democracy. When I say "democracy" I mean the very detailed definition spelled out by Robert Dahl.

Democracy (or "polyarchy") is measured on three dimensions: 1) participation, 2) competition, and 3) civil and political liberties. Dahl gives a variety of logical arguments for why democracy is impossible w/o free speech, associational autonomy, etc. For more information, check out polyarchy.org.

As to the limited sample size of democracies, you're right. But it's not such a small sample as you'd think. And the experience of these democracies is in sharp contrast to the experience of the world's non-democracies.

Finally, while I think that your argument about Iraq is fair, I don't think the failure of democrac is inevitable. We once thought the same about Germany; we were proven wrong. If the US military occupation continues, and if other conditions remain favorable, Iraq could become a democracy. This is not innevitable, of course. But neither is the opposite.

Posted by: miguel at August 3, 2003 01:35 PM

Miguel, please do not think that I am trying to argue that true republicanism is a bad thing. You are exactly right in listing the necessary elements that define a democracy. Given these things, stable political systems are not only possible but likely.

The point I was making was simple: many Americans are of the opinion that such conditions can simply be imposed on the remainder of the world. (As in President Bush's recent declaration that the US should force its values on the Middle East.) Because Iraq has no significant experience with any of the factors you list, such a plan would require centuries of continued effort and American colonialism.

In short, then, my problem with your original post is the inference that such stable democracy can be expanded into the remainder of the world to guarantee safety. The definition you provide very clearly indicates that it cannot. The rule of law, individual freedoms and acceptance of dissent cannot simply be forced onto a country. They took centuries (millennia even) to develop in Europe, and will tkae quite some time to develop through the rest of the world, if ever. America should try to build true freedom, but simply supporting 'democracy' and sham elections throughout the world is no the way to accomplish this.

Posted by: Adam at August 3, 2003 02:09 PM

Well, I don't know about "forcing" values on people. But I do know about "enforcing" values. Democracy is possible; but it must also be staunchly defended and guarded. We certainly did ENFORCE democracy in post-war Germany and Japan. So it certainly is possible.

You're right, supporting sham elections isn't the way to support democracy. But I think our new foreign policy -- the policy of Wolfowitz (the way I understand it) -- goes much further than this. It seems to mean a turning away from supporting "friendly" dictatorships and pushing for democratic reforms instead.

My problem w/ the "democracy is improbable in the third world" is the harsh reality of the situation. People once argued that democracy couldn't survive in certain European countries. History has proved them wrong. People once argued that democracy couldn't survive in Latin America (where I'm from), and yet now all of Latin America is democratic (minus Venezuela and Cuba). Is it easy? No. Does it mean that dictatorships won't come back? No. But it means that democracy is possible. We now have several Asian democracies (Japan and South Korea are shining examples). South Africa is now a democracy (albeit still in its infancy). The theory of certain cultures, races, or religions aren't democratic is fading quickly.

Posted by: miguel at August 3, 2003 04:55 PM

Wow? Enforced democracy on (1) a country that experienced the Enlightenment and Reformation and subsequently oscillated between semi-democracy and semi-oligarchy while maintaining economic growth and establishing a welfare state and (2) a nation-state with millennia of united history and experience with bureaucratic and organizational government? And all after only billions of dollars of investment and decades of military presence?

Please excuse the sarcasm. But these two cases were easy: after a great world war, public opinion across the globe was for rebuilding the nations to be more peaceful in the future. Both had experience with the prerequisites to democracy, and American citizens remained willing to pay for both.

Now consider Iraq. Pesky minority groups. Neighboring countries trying to preserve the chaos. Terrorist cells and cross-border ethnic associations. A short stint with constitutional monarchy. And now American citizens who were dubious of going to war in the first place are going to sit around and pay billions of dollars a year to try and instill in the country the entire experience of the Western world from the Renaissance to today? We have a long way to go, and even if I agreed with you that this was the right thing to do (which I do), I have to accept that American citizens will never support it. Too many questions, too much animosity, not enough determination to make it work.

Posted by: Adam at August 3, 2003 05:01 PM

Interesting post. I have a few comments:

first: I agree that even in its short existence so far, capitalism in combination with liberal democracy has proven its worth. Still one thing to be carefull about is a point also raised in other reactions here: what's good for the majority may be devastating for a small minority. Therefore, you always need a basic set of human rights that you will adhere to. To my opinion this is not the case in any liberal democracy so far as constitutions that grant such rights can usually be changed by two-thirds majorities. Another point is taking care of those that cannot take care of themselves. For instance people with severe disabilities. Therefore, I think the best solution is a liberal democracy based on capitalism but with compassion and with inalienable human rights. Don't get me wrong: I think most western democracies are doing a pretty good job at this, although I feel that there could be a little more compasion.

Second: it may be true that there has never been a war between two democracies, but we shouldn't forget that it has only been 100 some years since democracies became a widespread phenomenon in the world, while other forms of government have been around for much longer. Consequently, I don't think this is a very strong argument (it may be in a couple of centuries).

Third: I completely agree with this one.

Posted by: Jan des Bouvrie at August 4, 2003 03:06 AM

There is also the fact that democractic governments can and do fall, as Adam pointed out. Democracies may prevent wars, but that only forces those who seek wars to take the additional step of eliminating the democratic government first.

Charles Taylor did this to Liberian President Samuel Doe, not long ago (and had him cut into pieces and eaten, too). Hugo Chavez is rapidly dismantling Venezuela's government to create a Stalinist state. And many other democracies in Africa, Asia, and South America have suffered similar fates. The Weimar Republic is not an exclusive example, by any means.

Democracy, like so many other ideals, only survives when it is defended with sufficient physical force. For this reason, there will never be absolute peace, even in a globalized world.

Posted by: Tatterdemalian at August 4, 2003 04:48 AM

Sure, democracies can and do fall. But this isn't an indictment of democracy necessarily, as much as an indictment of the people who live in them.

The Weimar republic fell because the liberals were too willing to heap criticism against the shortcomings of the regime than to fight either the right (Nazis) or the left (Communists). In the end, they regretted their decision.

The lesson for liberals should be this: Never confuse a criticism of policy for a criticism of democracy itself. Democracy may not be perfect, but it's worth defending. Camus paraphrased Churchill in stating that democracy may not even be a half truth, but even a sliver of truth is worth fighting for against the force of lies.

A true democracy must be ever on guard. That's the irony. We need a standing army. But it's ironic that most of the most powerful, professional, modern standing armies are democratic ones. And they've not yet fought or engaged in an arms race against each other. Rather, they're ALL allies.

Posted by: Miguel at August 4, 2003 05:04 AM

To Steve Giardina:

Please define human rights and tell me from where that definition comes. Once you have done that, tell me how these rights will be enforced without infringing on economic activity.

Posted by: Derek Richards at September 24, 2003 05:15 PM