Democracy, capitalism; Disentangle the ideals

The Washington Times


The Dow Jones industrial average’s recent extreme rollercoaster ride is a prime example of how “instability” in the world negatively impacts our lives. In one week, the market went from a historic 936-point gain to a chilling sweep downhill just a couple of days later, impervious to the assurances of the government bailout package and bank support that was designed to mitigate the “ups and downs.” But the will – of government, of banks, of companies, and of investors – is the most important part of the equation.
The stakes in this situation are extremely high, making it difficult for anyone to admit that what they’ve done has “failed.” President Bush announced plans for an emergency summit of leaders from the world’s top economies to determine a collective course of action to “preserve the foundations of democratic capitalism.” There is certainly a need for an orchestrated action plan to address the root causes of this financial crisis, which has brought us so close to global recession. Equally important: using the “right words” that will calm the markets and generate stable activity. That said, democratic capitalism is no longer the empowering expression to address the challenges of today and the future.
Divorcing the idea of money or capitalism from democracy is crucial. Capitalism and democracy mean very different things to people. Democracy promises freedom and justice, while free market capitalism can be merciless. Surely, however, that does not mean that democracy is not implacable; prosperity does not always mean that equality or justice will result. Or, in other words, there is no guarantee that capitalism leads to democracy.
Democracy has no single definition, but many are troubled by the way the system is abused in many countries that hold elections. Take Iran, for example. Who would argue that Iran is a democracy? For its part, Iraq is working to develop a government based on democratic ideals. Liberated Iraqis certainly elected their leaders. But indeed, we can all agree that Iraq is miles away from being a democratic society. Before the United States pushed the idea of elections as “proof” that Iraq is moving toward being democratic, it should have made it a priority to strengthen Iraq’s democratic institutions, its culture and its values.
Unfortunately, there’s a growing “illiberal democracy” trend among countries that hold elections: an environment in which the winning ticket in any election can unilaterally do anything and everything it wants. For example, Turkey’s ruling government embraces majority rule. It wishes to hold unlimited power. While that trend has in some ways grown out of U.S. support for many settling or emerging democracies, it’s very different from America’s “liberal” democracy, with checks and balances, constitutional oversights, and principles that protect minority rights.
In “The End of History and the Last Man,” the famous political economist Francis Fukuyama argued that when the Soviet Union collapsed, capitalism and democracy became unavoidably linked, which will eventually turn all of the world’s countries into Western-style democracies. Since his argument things have changed; “democracy” has acquired new definitions. But in this new century, it will still remain important to distinguish between democracy and capitalism.
The world markets need stability urgently. The International Monetary Fund recently warned of a possible food crisis in 30 to 50 countries if the financial crisis is not brought under control. Rising fuel prices – although they recently eased, the oil prices still remain above the level when the price surge started – adding to transportations costs are making many countries vulnerable. In its prediction, the IMF has included Pakistan, but not the Middle East, though the nations of the Middle East import almost 50 percent of their food needs. Because of some of their rich oil supplies, those countries do not seem vulnerable. But if the global economic crisis worsens, no one will be left unaffected.
New guidelines must be created, adopted, and adhered to in order for the financial markets of the 21st century markets to be stable. Globalization has reached new levels linking countries in ways that have made the rules and regulation of the past century now incompatible. Yet building this new architecture must take place separately from politics.
Many rich countries have been indifferent to democracy. People use the power of their wealth for both good and bad. Politically speaking, those that use their wealth to create autocratic, totalitarian or dictatorial systems can be challenged by wealthy democratic countries in other ways.
For example, the U.S. has had no problem working with Saudi Arabia, which clearly has a place in the global capitalist system, but it’s certainly not a democracy. If we stand a chance at developing a stable financial future worldwide, we must disentangle the ideals of democracy and capitalism. We need to beware, adjust and focus on the present time.
Tulin Daloglu is a free-lance writer.