Introduction
Capitalism is a means of production which is usually dominated by free competition and involves profit orientation and private ownership of business. This demonstrates an open market. It encourages individual operated firms rather than government operated ones. Capitalism has been common in the western countries since time immemorial, and was mostly fostered by the sanction of hard work. It involves increasing productivity rather than investing in the economy. On the other hand, the most viable western version is the liberal economy. Scholars who support the authoritarian regime argue that the liberal system could lead to a crisis in the economy (Barro 67).
This paper supports authoritarianism for economic development as compared to a democratic system. It mostly examines a state that advocates for the authoritarian regime, and deals with Asian countries. Regardless of their past records of autocracy, most Asian countries present a flourishing economy (Feenstra 234). In addition, the Japanese economy which is under bureaucratic rule is also very successful. The interdependence of political and economic factors in authoritarian regimes enables a country to grow and outshine others, as compared to those under democratic regimes. This is because authoritarian regimes do not pay much attention to short term drawbacks, but rather, focus on long-term economic success. The experience of the Korean economic growth under an authoritarian regime was characterized by control of the people which fosters economic growth (Barro 67-104). All these form the basis of my argument.
Economic Development in Autocracy
As described in the essay, economic development flourishes more in an autocratic economy as compared to a democratic economy. According to history, there were phases of industrialization that led to economic growth in most developed countries. These are the countries that were mostly associated with authoritarianism. Economic development does not necessarily entail political liberty but economic autonomy. For instance, in 1985, there was a cross market holding in Korea, where the stockholders were about 45 percent of the entire producers’ sales, a trend that persisted with time (Feenstra 56). This pushed the economy as well as the political sector towards an authoritarian policy that was beneficial to all, as it led to economic growth (Haggard 270). The support accorded by the government enhanced the economic growth, regardless of the policies advocated by potential successors. The integration of state and regime types can be diversified depending on particular stipulations within each nation (Collins 104-107). Consequently, it would be an understatement to pronounce that the dictatorial political regime was a precondition for the swift economic escalation in the concerned countries. On the other hand, determining when autocracy ended as well as when the western model of democracy took place in Asian countries is indeed controversial.
As indicated by Kim, the major feature of the western democracy that goes against the Asian perception of community is that both countries had fundamental agencies which were not meant just for economic development, but also to manage the people with the aim of upholding the political rule. However, through the set up in these organizations, the leaders ensured that institutional and ideological cleavages witnessed in the third world countries disappeared (Haggard 262). Since they did not mind about the immediate consequences of these policies, this control in conjunction with the weak labour lobby groups facilitated successful economic transformation in both regimes. The economy in the liberal system appears to be more individualistic, and hence poses a threat on the community or country development. This threat may affect the political as well as the business sectors. Authoritarian capitalism should indeed be seen as a stage towards the development of a liberal model. Liberal systems may be faced with political instability due to increased competition that results from allowing too much democracy. This is especially experienced when elections are said to be unfair. On the part of the capitalist government, the election procedures and policies are clearly defined, and the likelihood of such rivalry is rare, and thus may do well economically (Alberto, Ozler and Swagel 34).
Nevertheless, economies that advocate for the authoritative regime are faced with several challenges (Collins 105). Some of these challenges include the fact that; the assumption of the growth is usually unrealistic and thus this might result to a financial crisis (Haggard 109). For example, the economic growth in Russia, which was largely fuelled by records of oil and gas production, has led to a financial crisis since the fall of the oil prices was experienced. Russia grew richer without considering what the future may hold. Due to individuality, the government was not able to save or set aside money for such phenomenon (Collins 106). This has adversely affected the Russian economy, something which could have been avoided in case an autocratic economy was not adopted. In countries where the government is not exclusively involved in controlling the economic factors, there are higher chances of planning for such unpredictable incidents.
Moreover, an authoritarian economy is likely to suffer from instability in most of its institutions which include social, political and legal systems. Capitalist economies are likely to experience political chaos in that, groups may be formed to challenge governments which in most cases do not support a majority of private programmes. Such situations may lead to dominance of the poor by the wealthy in society (Alberto et al 25). This system therefore creates a wide gap between the poor and the rich leading to the formation of social classes, which differentiate people such as the royal families and other prominent people from the rest of the people in the society who are said to have a lower social status, in this case the poor (Collins 107).
In addition, in authoritarian economies, there is a likelihood of conflicts arising between neighbouring countries or groups especially in situations where one side feels that the other side controls resources in an unfair manner meaning that they acquire more benefits from these resources at the expense of others. This may discourage trade between the two regions and affect their economy negatively. A good example of this is the conflict over the energy policy between Russia and Europe (Barro 69). Most European countries depend on Russia for the supply of natural gas. About eighty percent of this gas is transported through Ukraine on its way to the European countries. The disputes that evolved from the exorbitant prices charged during transit and the fact that Ukraine was withholding some of the gas destined for European countries and using domestically led to strained relations between Russia and Ukraine meaning that all the countries involved including the European countries suffered economically as Russia was forced to redirect transportation of the gas to other countries, completely denying Ukraine any economic benefits that would have resulted from its transportation of the gas. These continuous disagreements between the said countries have led not only to economic strains but also political disputes and as such lessened the political goodwill between the countries governments. This affects government led policies as they are mostly meant to work against rival countries by reducing their benefits, as opposed to increasing the benefits of the policy making country which in the end has negative implications on these countries social and economic benefits.
Conclusion
Based on my argument in the above discussion, it is clear that a country’s economy can perform well in an authoritarian system of governance as compared to a democratic one. A good example is demonstrated by Asia which presents a successful autocratic economy in terms of growth. Though the system may have some negative effects on the economy, it is better than the democratic system, especially if it is well managed while keeping other economic factors constant. For instance, Asia was able to successfully control society into a thriving economy (Collins 107). Another example involves the regime by the Japanese in the husbandry sector which flourished under officialdom command. The interdependence between the economic sector and the government policies should ensure that a country focuses on the long-term rather than the short term effects of its system. Therefore, Asian economies can be said to have thrived more under non-democratic regimes. This indicates that economic development is not always dictated by democracy. On the other hand, it is always good to keep in mind that for economic development to occur there has to be some essence of economic freedom. This can be achieved through trade freedom that is acquired in a liberal economy.
Works Cited
Alberto, Alesina, Ozler, Sue and Swagel, Philip. Political Instability and Economic Growth. Journal of Economic Growth, 1. 2.
Barro, Robert. Democracy: A Recipe for Growth? In M. G. Quibria and J. Macolm Dowling (Eds), Current Issues in Economic Development. Oxford: Oxford University Press, 1996. Print.
Collins, Mary. Lessons from Korean Economic Growth’ in the American Economic Review, 80. 2 (1990).
Feenstr, Robert. Emergent Economies, Divergent Paths: Economic Organization and International Trade In South Korea And Taiwan. Massachusetts: Cambridge University Press, 2006. Print.
Haggard, Stephen., The Politics of Industrialisation in the Republic of Korea and Taiwan. In Hughes H. (edit.) Achieving Industrialisation in East Asia. Massachusetts: Cambridge University Press, 1988. Print.