democracy and development: theoretical unity, practical split · democracy and development:...

INTERNATIONAL REVIEW OF MODERN SOCIOLOGY VOLUME 37, NUMBER 1, SPRING 2011

DEMOCRACY AND DEVELOPMENT:THEORETICAL UNITY, PRACTICAL SPLIT

M. D. Litonjua

The correlation, if not the causation, between democracy and development is apersistent claim in the political sociology of Third World/Global Southcountries. This is especially true on the theoretical level, and is developed in theworks of Lipset, Moore, Rueschemeyer et al., and Sen. In practice, however,there is a split between democracy and development which occurred inauthoritarian states of the 1960s, the developmental states of Asia, the rise toeconomic prominence of China, and the past history of India. After clarifyingthe usages of democracy and development, the article reviews these theoreticalclaims and practical splits to see what insights might be gained regarding thecontinuing trajectories of democracy and development in the contemporaryworld.

One of the more persistent relationships enunciated in thesociology of development is the positive correlation, if notcausation, between democracy and development. Based on theexperiences of advanced Western societies which were born of theindustrial and democratic revolutions, it was assumed, expected,and promoted that Third World/Global South countries wouldalso follow the simultaneous paths of economic modernization andpolitical democratization. The rise of Japan and the four littledragons of Asia to economic prominence, brought about by theirinitially-authoritarian developmental states, had cast doubt on theintrinsic correlation seen between democracy and development. Inan age of globalization, China has emerged as the fastest growingeconomy utilizing its own unique blend of market socialism, acombination of market economics and communist politics. Thequestion has been raised whether Japan and/or China representalternate models for developing societies.

The time is opportune, therefore, to revisit the question of therelationship between development and democracy, more

52 INTERNATIONAL REVIEW OF MODERN SOCIOLOGY

specifically, between capitalist development and liberaldemocracy. First, a clarification is needed on the exact meaning andattributes of democracy and of development, the two mainvariables in question and under study. Second, positions that arguefor the unity between democracy and development are laid down,attending to the direction of correlation and causation, and thereasons given for such a positive direction. Third, positions thatinsist on the practical split between democracy and developmentare presented, pointing out the arguments given for their non-linkage and the prioritization, if any, of one over the other.

Democracy and Development

Democracy

There is variety and diversity in the long history of the life anddeath of democracy (Keane 2009); there are different models ofdemocracy (Held 1987). In the West, especially in the United States,the understanding and practice of democracy came to be settled onthe definition of formal democracy arrived at by JosephSchumpeter (1975), who distinguished it from substantivedemocracy. Substantive democracy – the classical doctrine ofdemocracy – is “that institutional arrangement for arriving atpolitical decisions which realizes the common good by making thepeople itself decide issues through the election of officials who areto assemble to carry out its will” (Schumpeter 1975: 250), in which,therefore, “the selection of the representatives is made secondary tothe primary purpose of the democratic arrangement which is tovest the power of deciding political issues in the electorate”(Schumpeter 1975: 269). As an alternate theory, Schumpeter (1975:269) “reverse[s] the roles of these elements and make[s] thedeciding of issues by the electorate secondary to the election of themen who are to do the deciding,” and thus comes up with thedefinition: “the democratic method is that institutionalarrangement for arriving at political decisions in which individualsacquire the power to decide by means of a competitive struggle forthe people’s vote.”

For Schumpeter, as David Held (1987: 165) points out,“[d]emocratic life was a struggle between rival political parties,arrayed in parties, for the mandate to rule. Far from democracy

DEMOCRACY AND DEVELOPMENT: THEORETICAL UNITY, PRACTICAL SPLIT 53

being a form of life marked by the promise of equality and the bestconditions for human development in a rich texture ofparticipation, the democratic citizen’s lot was, quitestraightforwardly, the right periodically to choose and authorizegovernments to act on their behalf.” Therefore, formal democracy –the democratic method – is understood and practiced primarily asthe pursuit of an open and competitive system of governance basedon rules acceptable to all. It is simply electoral democracy. Itslegitimacy arises from the fact that it has gained majority rule in acompetitive election in which people exercise their right ofsuffrage.

Electoral democracy is procedural democracy. Procedures havebecome the lifeblood of formal democracy. Procedures are themeans to public peace and common weal. U. S.-based FreedomHouse attempts to measure the degree of democracy and politicalfreedom of countries in the world, and produces annual scores on ascale from 1 (most free) to 7 (least free), on the basis of whichnations are classified as “Free,” “Partly Free,” or “Not Free” –additionally uses an asterisk (*) to indicate countries which are“electoral democracies.” To qualify as an “electoral democracy,” astate must have satisfied the following criteria:

1. A competitive, multiparty political system;2. Universal adult suffrage for all citizens (with exceptions for

restrictions that states may legitimately place on citizens assanctions for criminal offenses);

3. Regularly contested elections conducted in conditions ofballot secrecy, reasonable ballot security, and an absence ofmassive voter fraud that yields results that areunrepresentative of public will;

4. Significant public access of major political parties to theelectorate through the media and through generally openpolitical campaigning.

Electoral democracy, following a minimalist definition ofdemocracy, figures prominently in indicators of democracy utilizedin cross-national quantitative studies (e.g. Banks 1993; Przeworskiet al. 1996) and in criteria for democracy used in comparativepolitics (e.g. Newton and Van Deth 2008), although the mostfrequently used measures today are those of Freedom House which


include political freedom and human rights. Electoral democracywas what George W. Bush wanted to impose on the Middle East atthe point of bayonets, characterized by John Keane (2009: 806) as “ashriveled, deeply reductionist understanding of democracy, asmerely a type of government based on winning a majority of seatsor votes in an election, [based on] the fatuous assumption thatparliamentary institutions could be air-freighted into a country,erected overnight, with instant results next day.”

But it is often forgotten or ignored that Western electoraldemocracy is no mere majoritarian rule. Western electoraldemocracy is founded on an infrastructure of constitutional,because fundamental, values and rights which makes it at once aliberal democracy. In liberal democracy, democracy is not the firstidea, nor even the most basic one. Liberalism is. The Magna Cartacomes first, before political parties, right of suffrage, and electoralpolitics. The Bill of Rights cannot be overridden by majority rulenor in democratic elections nor through referenda. Liberalism saysthat there are rights of the individual that are universal, inviolableand inalienable, that therefore the government cannot infringeupon, that even the majority cannot abrogate. Majority rule inliberal democracies cannot simply suspend, lift, or violate certainhuman, civil, and political rights of minority individuals andgroups.

“The phrase ‘liberal democracy’ is so familiar,” writes PaulStarr (2007: 87-88), “that it no longer seems to denote a compoundconcept. The two elements, however, are not just theoreticallyseparable – liberalism and democracy were historically distinctdevelopments.” Classical liberalism of the eighteenth centurycalled for universal inalienable rights, but in practice sanctioned thedenial of rights to women, men without property, people of color,and colonized populations. Modern liberalism of the latenineteenth and early twentieth centuries resolved the tension, as amatter of principle, in favor of democracy to include politicalliberty and equality in the economic and social fields, protection ofcivil liberties and respect for cultural diversity, human rights andself-determination at the international level. The liberalinfrastructure includes, among other Enlightenment values,reliance on reason and science, universalism, equality, religiousliberty, separation of church and state, and progress. Among the


classical liberal manifestos, the Declaration of Independenceextolled life, liberty, and the pursuit of happiness, while the FrenchRevolution proclaimed liberty, equality, and fraternity.

All theorists of democracy accept that one requirement is freeand contested elections. Robert Dahl (1971: 1-3) in his classicPolyarchy argued that democracy includes the opportunity toformulate and signify preferences and to have these preferencesweighed adequately in the conduct of government. For theseconditions to be satisfied, eight institutional guarantees arerequired: (1) freedom to form and join organizations; (2) freedom ofexpression; (3) the right to vote; (4) eligibility for public office;(5) the right of political leaders to compete for support and votes;(6) alternative sources of information; (7) free and fair elections;(8) institutions for making government policies depend on votesand other expressions of preference.

Alfred Stepan and Juan Linz (see Stepan 2005: 5), however,consider Dahls’s eight guarantees as necessary but not sufficientconditions for liberal democracy. “They are insufficient because nomatter how free and fair the elections and no matter how large thegovernment’s majority, democracy must have a constitution thatitself is democratic in that it respects fundamental liberties andoffers considerable protection for minority rights. Furthermore, thedemocratically elected government must rule within the confines ofits constitution and be bound by the law and by a complex set ofvertical and horizontal institutions that help to ensureaccountability.” With these two sufficient conditions, democracy isliberal democracy.

Robert Dahl himself (2002) asks: How democratic is theAmerican Constitution? He demonstrates that our Constitutioncame to incorporate anti-democratic elements. Due to the historicalcontext in which it was conceived, it approved of slavery, gave theright of suffrage only to men of property, denied the equal status ofwomen. These have been corrected, but there continue to beelements that are non-democratic, such as, the federal system, thebicameral legislature, judicial review, presidentialism, and theelectoral-college system. It can be argued, however, that some ofthese elements, while potentially anti-democratic, are liberal; theydefend, protect, and promote liberal values. Judicial review passesfinal judgment on legislative acts that can trample on the rights of


minorities. The federal system dismantled the structures ofsegregation in the South that were protected for too long by statelaws.

Our democracy is not simply democracy. It is not simplemajoritarian rule. It is a liberal democracy. It is built upon thefoundations of liberal values. It promotes and safeguards liberalrights and duties. That is why Fareed Zakaria (1997, 2003) warnsthat, in our missionary zeal to spread democracy throughout theworld as our newly found foreign policy goal in the post-Cold Warperiod, we might be abetting illiberal democracies, governmentsthat come to power through elections but that then exercise theirpower to violate the rights of individuals, especially of ethnicminorities and women, that deprive citizens of their basicfreedoms. It might be easy enough to create political parties andcompetitive elections, but it is much more difficult to construct theliberal foundations on which to erect liberal democracies. Absentsuch constitutional liberal infrastructures in many countries of thedeveloping world, we have the strange creature of an electedautocrat who comes to power through one man, one vote, once.Liberal democracy is not simply electoral democracy.

One huge hole in theories of democracy as the competitiveelection of leaders is the absence of the realities of power andwealth and the inequalities that arise from them. They assume thatsince the electoral race is based on neutral rules, the playing field islevel and all the players are equal. Referring specifically to classicpluralists, Held (1987: 200) writes that they “failed to begin to graspthe asymmetries of power – between classes, races, men andwomen, politicians and ordinary citizens – which were behind, inlarge part, the decay of what they called ‘consensus.’” As far as theNew Right is concerned, “the idea that modern societyapproximates, or could progressively approximate, a world whereproducers and consumers meet on an equal basis seems, to say theleast, hopelessly unrealistic when massive asymmetries of powerand resource are (as both neo-pluralists and neo-Marxistsrecognize) not only systematically reproduced by the marketeconomy but also supported and buttressed by liberal democraticgovernments themselves” (Held 1987: 252).

As political events began to unravel in the former Soviet Unionand Eastern Europe, Samuel Huntington (1991) celebrated the third


wave of democratization between 1974 and 1990, the transition ofsome thirty countries from nondemocratic to democratic politicalsystems. Since then, however, as Larry Diamond (2008) points out,there has been a democratic rollback in which democracy has beenoverthrown or gradually stifled. One reason for this is “the fallacyof electoralism,” a superficial form of democracy with which theUnited States and its democratic allies have been far toocomfortable. “If democracies do not more effectively contain crimeand corruption, generate economic growth, relieve economicinequality, and secure freedom and the rule of law, people willeventually lose faith and turn to authoritarian alternatives”(Diamond 2008: 37). If democracy remains on the level ofcampaigns and elections, elites and dictators will allow one person,one vote, once, and turn the state into a predatory one and societyinto a predatory society.

The question, therefore, is: In bandying the word “democracy,”what exactly do we mean? Simple electoral democracy? Or liberaldemocracy with all that the words mean in terms of liberalinstitutions and structures, of liberal procedures and processes, ofliberal values and rights?

Development

Capitalist development, undergirded by the then dominantmodernization theory, was the American academic and policyresponse to the newly emergent nations of Asia and Africa, whichwith the underdeveloped countries of Latin America wouldconstitute the Third World, later on renamed the Global South.Development, in its broadest scope, referred to the process ofincreasing the productivity and standard of living of a society –longer life expectancies, more adequate diets, better education,better housing, and more consumer goods. Through this process,the Third World would undergo the transition from beingtraditional countries to becoming modern societies. Following theprescriptions of Keynesian economics, which brought the worldout of the Great Depression and through the wars against Nazismand Fascism, it was envisioned that governments would take thelead in the development of the Third World. Thus, the U.S.government committed itself to the twin goals of economicdevelopment and political democracy in the Third World, goals


embodied in American economic and technical assistanceprograms at the time (Packenham 1966). President Kenneylaunched the Alliance for Progress, aimed at establishing economiccooperation between North and South America. For its part, theUnited Nations designated the 1960s as the First DevelopmentDecade, urging its members to increase the flow of capital andtechnical assistance to reach one percent of the combined nationalincomes of economically advanced countries (Litonjua 2010).

Moreover, the emergence of the Third World occurred at theheight of the Cold War then fiercely raging between the West andthe Soviet Union. The possession of nuclear arms prevented theirdirect confrontation but made the nations of the Third World thesurrogates and the battleground of the Cold War. The choicefacing Third World countries was not only a choice in politicaland military alliances, but a choice in economic systems betweencapitalism and socialism. The development theorized bymodernization theory and carried out by development plannersin the West and the United Nations was capitalist development.Modernization would bring the Third World to become not onlymodern societies but modern capitalist economies. W.W.Rostow’s (1960) master plan not only envisioned the clearly-delineated stages of economic growth Third World countriesneeded to traverse, but was meant to be an non-Communistmanifesto, intended to win them over to the side of the West in theCold War.

Rostow’s focus on economic growth became the yardstick tomeasure development, the goal to aim at in development efforts,and the indicator of developmental success or failure. GrossNational Product (GNP), therefore, became the most, if not theonly, utilized measure and indicator of a country’s development.GNP is the value of the total output of goods and services generatedby a country’s citizens, whether they reside in that country or not. Itdoes not, however, include the value of the goods and servicesproduced by foreign workers living on the country’s soil. In the1980s there was an ideological shift by international agencies fromGNP to GDP (Gross Domestic Product). GDP is the value of thetotal output of goods and services generated in a particular country,including the profits of foreign corporations even if eventually theywill be repatriated to the home country. It was a blatant


manipulation of accounting protocols on behalf of transnationalcorporations and against the interests of Third World/Global Southcountries. Goodyear, an American corporation has a factory inIndonesia. Under the old GNP, the profits of Goodyear in Indonesiawere included in the GNP of the United States. With the insidiousshift, the profits of Goodyear in Indonesia are included in the GDPof Indonesia, even if those profits will eventually come to roost inthe U.S. The not-too-subtle conclusion: foreign investments inIndonesia are good because they inflate the GDP of Indonesia.

The idea of using GNP or GDP as indicators of development, asindicators therefore of the progress toward the reduction of povertyand, more generally, of the overall economic well-being of a givensociety derives from the presumption of neoclassical economicsthat increases in aggregate growth will eventually “trickle-down”to the mass of the population, as opposed to the “bubble-up”economics of Keynes. This conviction is captured in the saying that“a rising tide lifts all boats,” even if in reality mostly yachts benefit.In development economics, therefore, economic growth isconflated with economic development, and is presented as thenecessary and sufficient condition to the problem of poverty anddevelopment in the Third World/Global South. In fact, growth anddevelopment are virtually synonymous, and we have been taughtthat economic growth automatically translates into greaterprosperity and a better life for all. The use of aggregate measures ofgrowth, like GNP and GDP, however, is not merely incomplete andmisleading but perverse. The money spent on locks and boltsbecause of the increased rate of crime increases GDP although lifein the neighborhood is not enhanced. The consumption of gasolineby cars idling in gridlock on a congested highway, driven byfuming and stressed-out drivers, is counted as a plus in GDP. Strip-mining a picturesque mountaintop, or cutting a primeval forest,show up in GDP as boosts to income. What actually are “bads” arecounted as “goods” for purposes of measuring and indicatingnational income. GDP is now being actively challenged by a varietyof world leaders, as well as, by a number of international groups ashaving skewed global political objectives toward the single-minded pursuit of economic growth (Gertner 2010).

The stagflation of the 1970s, which could not be cured byKeynesian economics, provided the wedge for the introduction of


the libertarian economic ideas of Milton Friedman and his Chicagoschool by Ronald Reagan in the United States and MargaretThatcher in the United Kingdom. Government was the problem, nolonger the solution. The magic of the market became the newmantra. The debt crisis of the Third World/Global South whichstarted with Mexico in 1982 further advanced the ideology of thetotally free market with the practice by the International MonetaryFund (IMF) of requiring reforms for loans to prevent defaults. Theconditional reforms of structural adjustment programs were soonsynthesized as the “Washington Consensus,” a set of desirableeconomic policy instruments which reflected the worldview thatmarket forces, liberalized trade, and general freedom in economicmatters were more efficient, promoted a better allocation ofresources, and resulted in greater prosperity than a system ofgovernmental regulation and intervention. The structuraladjustment programs meant to create a regime to manage the debtof Third World/Global South countries became the WashingtonConsensus of a new framework for the relationship between Northand South, and marked a fundamental shift in world order fromnational development to globalization.

With the failure of socialism in the Soviet Union and EasternEurope and the apparent triumph of liberal capitalism and liberaldemocracy, globalization reached maturity and was assiduouslypursued and promoted under the flag of neoliberalism, thecontemporary version of economic liberalism, emphasizing themarket economy, limited government, free trade, liberalization,deregulation, privatization, and depoliticization. The IMF and theWorld Bank – the original Bretton Woods institutions – havefundamentally changed their original mandates and, with the morerecent World Trade Organization (WTO), have become the globalenforcers of neoliberal globalization, imposing a one-size-fits-alladjustment programs on all countries that come within theirpurview. Development has been reframed as incorporation andintegration into the capitalist global economy. Instead of projectloans aimed at funding development projects in the Third World/Global South, policy loans have come to be utilized in forcingeconomies, societies, and cultures into the straightjacket – ThomasFriedman (1999) dubs it “the golden straightjacket” – of theglobalization project. Neoliberalism is the new market absolutism,


legitimating the unleashing of capitalist economic forcesthroughout the globalized world.

But through it all, one constant has remained. The goal, themeasure, the indicator is economic growth as shown by the GDPindex.

There are ongoing discussions and debates in academic circles,in and out of governments and international agencies, and in non-governmental organizations (NGOs) and popular organizations(POs) about the necessity and desirability of more expansive andmore comprehensive measures and indicators of human well-beingand societal prosperity. The United Nations Development Program(UNDP 1990) signaled the emergence of a human developmentschool with the publication of the first of its annual HumanDevelopment Reports which contain and use the HumanDevelopment Index (HDI) – a composite of longevity, educationalattainment, and standard of living – and a variety of other cross-national indicators that better reveal the actual conditions ofcountries than aggregate figures. Amartya Sen, UniversityProfessor at Harvard and winner of the 1998 Nobel Prize inEconomic Science, and Martha Nussbaum, Distinguished Professorof Law and Ethics at the University of Chicago, have come up witha human capabilities approach to human development (Crocker2008, 1995, 1992). The distinctiveness of Nussbaum’s (2000a; 2000b)approach lies in a universal listing of human capabilities with athreshold beneath which truly human functioning is not available,an endeavor not attempted by Sen. Jon Gertner (2010) alsodiscusses a Canadian Index of Well-Being, a system of nationalmeasurements, known as State of the USA, and the work headed byU.S. Nobel Laureate Joseph Stiglitz and French economist Jean-PaulFitoussi in the Commission on Measurement of EconomicPerformance and Social Progress to consider alternatives to GDP. Itwill be sometime, if ever, however, before GDP is dislodged fromits preeminent position.

The Great Recession that started in the United States in 2007 andthat brought the world to the precipice of another Great Depressionis attributed to the free market ideology of neoliberalism whichdominated the economics profession, especially the financialsector, for the past thirty years. As a result of this dominance,governmental regulatory powers were eviscerated, regulatory


frameworks were dismantled, and a shadow unregulated financialmarket came to exist alongside the traditional financial sector,where newfangled, esoteric, and abstruse innovations, such asderivatives, securities, credit default swaps, and collateralized debtobligations, were created, which with accounting tricks and creditrating gimmicks, caused financial bubble after financial bubble thatinevitably burst one after the other. Combine the above witharrogance, recklessness, greed, corruption that bordered oncriminality, and we had the makings of the most serious economiccrisis since the Great Depression. It needed the government, GeorgeW. Bush admitted, to intervene in the market to save the market.The Great Recession meant, therefore, the “intellectual collapse” ofthe Chicago School, whose practitioners’ desire for an all-encompassing, intellectually elegant approach gave them a chanceto show off their mathematical prowess (Krugman 2009). AlanGreenspan, chairman of the Federal Reserve from 1987 to 2006,revered during his tenure but reviled in retirement, admitted his“shocked disbelief” at the failure of his libertarian ideas in histestimony before a U.S. House Committee in October 2008.

Still, Robert Wade (2010: 151) notes that the current economiccrisis has done little to shake free-marketers from their beliefs.“What we are seeing in the academy since the American and thenthe global crisis in 2007-08 is continuing efforts to tweak establishedeconomic theory in an effort to save it. We remain in the equivalentof the Earth-centric planetary model named after Ptolemy.”

The same thing holds for economic development equalseconomic growth equals GDP index.

Theoretical Unity

Seymour Martin Lipset

Larry Diamond and Gary Marks (1992) write that “throughout thiscentury, and especially since World War II, no theme has morepreoccupied the fields of comparative politics and politicalsociology than the nature, conditions and possibilities ofdemocracy. And no political scientist or sociologist has contributedmore to advancing our thinking about democracy – in all itsdimensions, both comparatively and in the United States – thanSeymour Martin Lipset.” They add that “within the great and


restless diversity of questions, issues, methods and foci [that headdressed], lies a core theme to Lipset’s work, [which is] theconditions, problems, dynamics, values, and institutions ofdemocracy, both in the United States and comparativelythroughout the world.”

Lipset’s (1959) seminal article, “Some Requisites of Democracy:Economic Development and Political Legitimacy,” reprinted inPolitical Man (Lipset 1963) as “Economic Development andDemocracy,” has proven durable over time to be the starting pointof extensive empirical examination, both quantitative andqualitative. In it, Lispset (1963: 31) hypothesized that “perhaps themost common generalization linking political systems to otheraspects of society has been that democracy is related to the state ofeconomic development. The more well-to-do a nation, the greaterthe chances that it will sustain democracy.”

The defining characteristic of democracy for Lipset, hisdependent variable, is Schumpeterian, free competition of politicalparties for electoral office. To test his hypothesis concretely, Lipsetuses as independent variables various indices of economicdevelopment – wealth, industrialization, urbanization, andeducation – and their computed averages for the countries in theAnglo-Saxon world and Europe and in Latin America, classifiedunder four headings: European and English-speaking stabledemocracies, European dictatorships, Latin American democracies,and Latin American stable dictatorships. His findings: indices ofwealth, industrialization, urbanization, and education arecorrelated with democracy, i.e., the wealthier, the moreindustrialized, the more urbanized, the more educated, andtherefore the more economically developed a country is the morelikely that it is democratic than non-democratic. In fact, “all thevarious aspects of economic development – industrialization,urbanization, wealth, and education – are so closely interrelated asto form one major factor which has the political correlate ofdemocracy” (Lipset 1963: 41).

Additionally, Lipset (1963: 45) concludes that economicdevelopment, producing increased income, greater economicsecurity, and widespread higher education, largely determines theform of class struggle, that is, it reduces the precipitation ofsufficient discontent to provide the social basis for political


extremism and violence. Since the form of extremist and radicalpolitics is probably more related to the degree of inequality than tothe fact of poverty in absolute terms, “the distribution ofconsumption goods also tends to become more equitable as the sizeof the national income increases” (Lipset 1963: 50). “Increasedwealth also affects the role of the middle class by changing theshape of the stratification system from an elongated pyramid, witha large, lower-class base, to a diamond with a growing middle-class. A large middle class tempers conflict by rewarding moderateand democratic parties and penalizing extremist groups” (Lipset1963: 51). Lastly, he warns against rapid economic development.“Wherever industrialization occurred rapidly, introducing sharpdiscontinuities between the pre-industrial and industrial situation,more rather than less extremist working-class movementsemerged” (Lipset 1963: 54). The foregoing constitutes the rationalefor the thesis that stable economic development is the single mostpowerful predictor of the likelihood of democracy.

Barrington Moore, Jr.

Barrington Moore’s (1966) Social Origins of Dictatorship andDemocracy is a magnum opus in historical sociology and comparativepolitics. His main contention is that the landed gentry and thepeasantry are important forces in determining the social andpolitical order as countries are transformed from agrarian toindustrial countries. Comparing eight major countries in both Eastand West, and looking at the varied political roles played by thesetwo groups, Moore identifies three main paths from the pre-industrial to the modern world: bourgeois democratic, capitalistfascist, and revolutionary communist.

The first of these paths leads through bourgeois revolutions tothe combination of capitalism and Western democracy. This is whattook place in English, French, and American societies on their wayto becoming modern industrial societies, and it happened with thePuritan Revolution, the French Revolution, and the American civilwar respectively. “A key feature in such revolutions is thedevelopment of a group in society with an independent economicbase, which attacks obstacles to a democratic version of capitalisminherited from the past” (Moore 1966: xv). This is the bourgeoisie.“No bourgeois, no democracy” (Moore, 1966: 418). “The landed


upper classes were either an important part of this capitalist anddemocratic tide, as in England, or if they opposed it, they wereswept aside in the convulsions of revolution or civil war. The samething may be said about the peasants. Either the main thrust of theirpolitical efforts coincided with that toward capitalism and politicaldemocracy, or else it was negligible. And it was negligible eitherbecause capitalist advance destroyed peasant society or becausethis advance began in a new country, such as the United States,without a real peasantry” (Moore 1966: xv).

The second route has also been capitalist, but culminatedduring the twentieth century in fascism. Germany and Japan are theobvious cases. The bourgeois impulse was much weaker. It took theform of a revolution from above, capitalist and reactionary, inwhich a relatively weak commercial and industrial class relied onthe older and still dominant landed class to put through thepolitical and economic changes required for a modern industrialsociety. To tamp the revolutionary potential of the peasantry whichsuffered brutally from modernizing efforts, Meiji Japan preserved,integrated, and subordinated peasant society as a mechanism forextracting surplus, while Nazi Germany extolled the romanticimage of the idealized peasant, “the free man on free land,” beforecrushing him. Thus, fascism blunted the weak democratic impulseof the bourgeoisie, while repressing the revolutionary tendency ofthe peasantry.

The third route is communism, exemplified in Russia andChina. The great agrarian bureaucracies of these countries served toinhibit commercial and industrial impulses. The urban classes weretoo weak to serve even as junior partners in modernization. In theabsence of more than the most feeble attempts at modernization ahuge peasantry remained. “This stratum, subject to new strains andstresses as the modern world encroached on it, provided the maindestructive revolutionary force that overthrew the old order andpropelled these countries into the modern era under communistleadership that made the peasants its primary victims” (Moore1966: xvi).

There is a fourth general pattern, discerned by Moore, but it isprimarily a case of “none of the above.” This is India. “In thatcountry so far there has been neither a capitalist revolution fromabove or below, nor a peasant one leading to communism. Likewise


the impulse toward modernization has been very weak. On theother hand, a parliamentary regime has existed for some time thatis considerably more than mere façade” (Moore 1966: xvi).

Accordingly, Moore (1966: xvii) writes: “To sum up as conciselyas possible, we seek to understand the role of the landed classes andthe peasants in the bourgeois revolutions leading to capitalistdemocracy, the abortive bourgeois revolutions leading to fascism,and the peasant revolutions leading to communism. The ways inwhich the landed upper classes and the peasants reacted to thechallenge of commercial agriculture were decisive factors indetermining the political outcome.”

Dietrich Rueschemeyer, Evelyne Huber Stephens, and John D.Stephens

Capitalist Development and Democracy, by Rueschemeyer, Stephens,and Stephens (1992), is a major contribution to the study ofdevelopment and democracy. It has become a commonplace claimof Western political discourse that capitalist development anddemocracy go hand in hand, that democracy is the characteristicpolitical form of capitalism. Quantitative cross-national studiesconsistently show a positive correlation between formal democracyand capitalist growth. Qualitative historical comparative studies,carried out within a political economy approach, however, arguethat economic development was and is compatible with multiplepolitical forms. Moreover, the positive and robust correlations ofquantitative studies do not carry their own explanations. “Therepeated statistical finding,” Rueschemayer et al. (1992: 4) point out,“has a peculiar ‘black box’ character that can be overcome only bytheoretically well grounded empirical analysis.” Accepting themain finding of statistical work as given, they mean to shed lightinto the black box through sequence, therefore causal, analysis ofcomparative historical study.

Their first critical contribution is a carefully built theoreticalframework drawn from “a ‘political economy’ perspective thatfocuses on actors – individual as well as collective actors – whosepower is grounded in control of economic and organizationalresources and/or of coercive force and who vie with each other forscarce resources in the pursuit of conflicting goals” (Rueschemeyeret al. 1992: 5). They point out that “our most basic premise is that


democracy is above all a matter of power. Democratizationrepresents first and foremost an increase in political equality. Thisis the idea upon which all our work stands. The central propositionof our theoretical argument virtually follows from this: it is powerrelations that most importantly determine whether democracy canemerge, stabilize, and then maintain itself even in the face ofadverse conditions” (Rueschemeyer et al. 1992: 5).

The “master key” they use in delineating power relations issocial class, and they identify three power configurations: thebalance of power among different classes and class coalitions; thestructure, strength, and autonomy of the state apparatus and itsinterrelations with civil society; and the impact of transnationalpower relations on both the balance of class power and on state-society relations. Rueschemeyer et al. (1992) then focus on the areasof the world most important for the history of democratization:how democracy was first established in the advanced capitalistcountries and how it subsequently fared in the critical periodbetween the World Wars; the complex processes ofdemocratization and reversals of democratic rule in Latin America;and a comparison of the countries of Central America with theisland societies of the Caribbean.

The authors arrive at three main conclusions. First, “it is not anoverall structural correspondence between capitalism anddemocracy that explains the rise and persistence of democracy.”Second, it is not the bourgeoisie that is the main agent ofdemocracy, whose role is central to both classic liberal and marxist-leninist theory. Third, “capitalist development is associated withdemocracy because it transforms the class structure, strengtheningthe working and middle classes and weakening the landed upperclass. It is not the capitalist market nor capitalists as the newdominant force, but rather the contradictions of capitalism thatadvanced the cause of democracy” (Rueschemeyer et al. 1992: 7).Within these capitalist contradictions that changed the balance ofclass power in favor of subordinate classes, the working class wasthe most consistently pro-democratic; the landed upper-classes,dependent on a large supply of labor, was the most consistentlyanti-democratic; the bourgeoisie was generally supportive ofconstitutional and representative government, but opposed toextending political inclusion to the lower classes; the middle classes


played an ambiguous role in the installation and consolidation ofdemocracy, supportive when confronted with intransigentdominant classes and opposed when threatened by popularpressures; the peasantry and rural worker also played varied roles,depending on their capacity for autonomous organization and theirsusceptibility to the influence of dominant classes.

Three other conclusions warrant mention: consolidation of statepower was an essential prerequisite for democratization, althoughwhere the state was stronger than civil society, as in Latin Americaand the Caribbean, the effects were greater state autonomy andintervention into politics or outright imposition of authoritarianrule; transnational economic dependence had negative effects, andgeo-political interests of core countries generated directinterventions and support for repression; political parties emergedin a crucial role as mediators in both the installation andconsolidation of democracy. Rueschemeyer et al. (1992: 296-302)end with a hopeful but realistic assessment of moving from formalto substantive democracy, of significant progress toward greaterpolitical equality and substantive social justice.

Amartya Sen

Amartya Sen (1999a), 1998 Nobel laureate in Economic Science,offers a paradigm-altering vision of both development anddemocracy by positing that development is democracy, thatdevelopment lies in freedom, that democratic freedom is at once theultimate goal of economic life and the most efficient means ofrealizing general welfare, that the quality of our lives should bemeasured by our freedom. It is an understanding of democracy thatis most expansive and comprehensive; it is a meaning ofdevelopment that is most broad and profound. But they are alsoones that are highly theoretical and philosophical.

For Amartya Sen, (1999a) development is freedom;development lies in freeing and increasing the capabilities a personhas, in expanding the substantive freedoms a person enjoys to leadthe kind of life he/she has reason to value. Poverty, from thisperspective, is deprivation of basic capabilities, denial ofsubstantive freedoms. Both development and poverty, freedomand deprivation have economic, structural, and political causationsand requisites. In fact, the three focal features of deprivation of


basic capabilities on which Sen (1999a: 103) has concentrated incomparing and contrasting India and sub-Saharan Africa arepremature mortality, undernourishment, and illiteracy.Development and freedom, on the other hand, demand beforehandthat the basic requirements in nutrition, education, health, andemployment have been met for which social support, publicregulation, and statecraft, and not only the market, are relevant.The memorable observation of Thomas Hobbes that lives of peoplewere “nasty, brutish and short” was a good starting point for atheory of justice in 1651, and it is still a good starting point for atheory of justice today (Sen 2009: 412).

For Sen (1999a: xii), the expansion of freedom is both the primaryend and the primary means of development. “Development consistsof the removal of various types of unfreedoms that leave people withlittle choice and little opportunity of exercising their reasonedagency. The removal of substantial unfreedoms is constitutive ofdevelopment.” But there is another link between development andfreedom. The intrinsic importance of substantive freedom as thepreeminent objective of development is supplemented by the effectsof instrumental freedoms to promote and advance substantivefreedom. Freedom is not only the end but also the means ofdevelopment. Such instrumental freedoms are of five distinct types:political freedoms, economic facilities, social opportunities,transparency guarantees, and protective security. “Public policy tofoster human capabilities and substantive freedoms in general canwork through the promotion of these and interrelated instrumentalfreedoms” (Sen 1999a: 53).

From the foregoing Sen (1999a: 146-59; 2009: 324-28) derives thevalue of democracy. “The relation between development anddemocracy has to be seen partly in their terms of their constitutiveconnection, rather than only through their external links” (Sen 2009:346). First, democracy has an intrinsic relevance to development;public discussion and political participation which are constitutiveof democracy are also essential aspects of basic capabilities. Second,democracy has an instrumental role; it enhances the hearing peopleget in expressing and supporting their claims, of economic needs,for example, to political attention. Third, democracy has aconstructive importance to development and freedom; theunderstanding and conceptualization of needs, including economic


needs, and the proper public response to them require democraticdiscussion and exchange. Thus, democracy, instead of being aWestern construct, is a universal value (Sen 1999b).

Unlike Martha Nussbaum (2000a, 2000b), therefore, AmartyaSen declines to specify and list the human capabilities, thefulfillment of which is necessary, as well as sufficient, for humanwell-being. Since public discussion and participation, freedom anddemocracy are themselves human capabilities, he would leave it topeople’s exercise of freedom and participation, to their right topublic discussion and democracy to come up with such a list ofhuman capabilities and their prioritization. In discussing what sucha list should be, in participating how they should be fulfilled,people themselves are developing. Amartya Sen’s emphasis ondemocracy meets an important requirement of the principle of thepreferential option for the poor in Christian social ethics. We do notask only what a specific approach, policy, or program does to andfor the poor, but also how the poor participate in it. The aspirationsto equality and participation are two forms of human dignity andfreedom (Paul VI 1971).

But what Sen presents is an idealistic picture of bothdevelopment and democracy; they are an appealing vision on thetheoretical and philosophical level. But what do you do with theseconcepts in historical and comparative analysis; how do youoperationalize them for quantitative cross-national studies?Moreover, he does not attend to what development and democracyhave become in actual practice, even in the United States.Development as it is actually understood, pursued, and promotedis economic growth, measured historically and contemporaneouslyby GDP. GDP is the be-all and end-all of developmental efforts.GDP is the talisman of the unfettered market ideology ofneoliberalism. Democracy has become formal democracy, whoseminimal requirements are met with the trappings of competitiveelectoral democracy: a contest between candidates through acampaign for votes. Money interests and corporate capital, abettedby the U.S. Supreme Court, now rule electoral democracy. This isnot democracy, but plutocracy camouflaged by the procedure ofone man, one vote.

(This paper was finished when news arrived that a newindicator, allegedly based on Amartya Sen’s human capability


approach, has been developed by Sabina Akire and James Foster[Webber 2010] of the Oxford Poverty and Human DevelopmentInitiative, a research center at Oxford University, and will be usedin the forthcoming United Nations Development Program’s[UNDP] Human Development Report.)

Practical Split

Politics of Order

Modernization theory which dominated theoretical thinking in thepostwar period regarding development and democracy soon raninto problems, primarily because it was not paying off in results.The first sign of dissent from this dominant mode of theorizingcame from Gunnar Myrdal (1968), who reported in his sweepingsurvey of Asian nations that “soft states,” with their adherence todemocratic planning, in contrast to “hard states,” did not have thepolitical capacity and will to set and achieve development goals.

The definitive break issued from Samuel P. Huntington(1968: 1), who announced that “the most important politicaldistinction among nations concerns not their form of governmentbut their degree of government.” Third World countries are nolonger traditional, are not yet modern, but are modernizing. Heargued therefore that rising expectations, social mobilization, andpolitical participation brought about by the processes ofmodernization must be harnessed and channeled. They will resultin political decay if they are not organized and restricted bypolitical institutions, foremost of which are political parties, thedistinctive institution of modern society. No longer concerned withthe difference between democracy and dictatorship, Hungtingtonproposed that political institutionalization makes for stronggovernments, and is the key to political order and stability.

The academic acceptance of the politics of order marked theerosion of the democratic ideal in American political science(O’Brien 1979). Robert M. Marsh (1979) even conducted a cross-national study to answer the question, “Does democracy hindereconomic development in the latecomer developing nations?”(Only in a restricted sense, he found out.) The distance traveled canbe measured by Huntington’s (1968: 137-38) assertion that “theKremlin may well be the most relevant model for many


modernizing countries in this century. . . . The primary need theircountries face is the accumulation and concentration of power, notits dispersion, and it is in Moscow and Peking and not inWashington that this lesson is to be learned.” Thus, Huntington(1968: 336) extolled Lenin over Marx, “a political primitive,” in that“Lenin elevated a political institution, the party, over social classesand social forces” as the organizational principle of modern society.No wonder Mark Kesselman (1974: 144) considered Huntington“assigned reading in Silone’s school for dictators.”

The authoritarian turn in development theory soon took theform of “the national security state” (NSS), whose self-avowedaims was to fight Communism and to promote growth (Comblin1979), that sprouted in Third World country after Third Worldcountry during the decade after the 1964 installation of a militaryregime in Brazil and the much-touted economic miracle thatfollowed it. In his study of the Brazilian model of developmentPeter Evans (1979) started with the notions of imperialism anddependency. Imperialism is economic and political expansion bywhich advanced countries export capital to less developed regions,accompanied by the political and military means to protect andmaintain it. The reverse side of the coin is dependency in which thedevelopment of a less developed country is conditioned by thedevelopment and expansion of another more advanced country.The classic case of dependency is the export of primary productsfrom the periphery in exchange for manufactured goods from thecore. The process of development as it was occurring in Brazil wasdifferent because it included a substantial degree ofindustrialization, coupled with a more complex division of laborand increased productivity. Brazil’s situation was what Evanslabeled “dependent development,” such that Brazil belonged to adifferent category which Immanuel Wallerstein called “semi-periphery.” It was this model of development that Evans sought tostructurally unravel.

Evans concentrated on the internal structure of the Brazilianelite that produced a study of collaboration and competition amongits different segments. He found that multinational corporationsemerged as main characters such that “foreign capital is no longeran external force whose interests are represented internally bycompradores and agrarian exporters. Instead, foreign capital, now


operating locally, shares with local capital, both private and state-controlled an interest in the further development of local industry”(Evans 1979: 9). Second, the internalization of imperialism did notmean the demise of the national industrial bourgeoisie; it is aliveand well. Certain of its members now operate increasingly incollaboration with international capital, which collaboration leavessubstantial ability to bargain in the hands of local capital. Finally,“the direct role of the Brazilian state in the process ofindustrialization has increased dramatically. The internalization ofimperialism has given the state a new position of power from whichto bargain with the multinationals. If classic dependence wasassociated with weak states, dependent development is associatedwith the strengthening of strong states in the ‘semi-periphery.’ Theconsolidation of state power may even be considered a prerequisiteof dependent development” (Evans 1979: 11).

What was created therefore to make up the Brazilian model ofdependent development was a complex alliance between elite localcapital, international capital, and state capital, which Evans called“the triple alliance.” Brazil’s popular classes and mass populationwere absent in the analysis, however, repressed and excluded asthey were by the military force of the authoritarian state. Should thealliance falter and the model collapse, Evans (1979: 329) predicted, aconfrontation will come, and “there would be at least a hope thatanother route might emphasize distribution and participationrather than accumulation and exclusion.”

Developmental State

The academic and popular realization in the 1980s of the rise ofJapan and the newly industrializing countries (NICs) of Asia –Taiwan, South Korea, Singapore, and Hong Kong – to economicprominence brought to the fore once more the practical splitbetween democracy and development. Chalmers Johnson (1982,1987), who pioneered the effort to study Japan, highlighted theinteractive relationship between government and business, theautonomy of technocrats at the Ministry of International Trade andIndustry (MITI), and their commitment to planning within thecontext of a capitalist economy. He used the term “developmentalstate” to characterize the central element responsible for Japan’seconomic miracle in the post-World War II period: “the existence of


a developmentally oriented political elite for whom economicgrowth is a fundamental goal” (Johnson 1987: 140).

The economic success of the “little dragons” of Asia, especially ofTaiwan and South Korea (Amsden 1985; Wade 1990), came to beattributed also to their developmental states. While clearly capitalistin their economies with robust private sectors regulated by marketrelations, their governments intervened with industrial policies,targeted business opportunities, and encouraged with investmentsubsidies. These developmental states made the crucial difference inJapan becoming the only non-Western nation to attain First Worldstatus, and for the NICs of Asia to become the fastest growingeconomies of the world, outperforming even the industrializedcountries of the West (Litonjua 1994). What is even more remarkableis that their phenomenal rates of growth have been achieved not withgrowing inequality as it was in the West, but with relativelyegalitarian income distributions (Litonjua 1994: 4-7). In fact, Wade(2010) insists that, after the financial crisis of 2008, industrial policyand the developmental state in low-income countries are still valid.

At the outset, therefore, a distinction has to be made notbetween an authoritarian regime and a democratic regime butbetween a predatory state and a developmental state. With Zaire asthe archetype, the predatory state “preys on its citizenry,terrorizing them, despoiling their common patrimony, andproviding little in the way of services in return” (Evans 1995: 45). Itwas an instrument for the personal aggrandizement of Mobutu, hisfamily and relatives, with his henchmen occupying the mostsensitive and lucrative positions of the state bureaucracy.

Two characteristics have been attached to these developmentalstates of Asia: effective and autonomous. By “efficacy” is meant thestate’s capacity to lay down developmental goals and paths, todraw up policies and programs aimed at industrial transformation,to follow through on them, and bring them to developmentalfruition. It refers to the effectiveness of the state bureaucracy tosuccessfully intervene in the operations of the market to make theprivate sector more effective, efficient, successful, and profitable. Itconnotes the power and the strength of the state apparatus todiscipline and direct both the market and private industries towardthe goal of the entire nation’s industrial transformation andeconomic development.


The second determinant of the developmental state isautonomy, not absolute but relative. By “autonomy” is meantinsulation of the state apparatus from vested interests in society,independence of the state bureaucracy to pursue goals and coursesof action. As Dietrich Rueschemeyer and Peter B. Evans (1985: 47)point out, the state is an instrument of domination. Theinterrelations between the different parts of the state bureaucracyand the most powerful classes or class fractions in societydetermine the pact of domination. The state, therefore, first of all,becomes an arena of conflict. Various groups, dominant andsubordinate, will try to use, if not capture, the state as a means torealize their particular interests. But the state, in the second place, isalso a corporate actor. The state is not only the expression of classinterests; it is an organization that has its own logic and its owninterests to protect and pursue. There is a gradation, therefore,between the state as a captive of vested interests, on the one hand,and the state as an independent corporate actor, on the other. Thedegrees of freedom in this continuum allow for the relativeautonomy of the state.

The relative autonomy of the developmental state is not,however, a free-floating autonomy. It is in Evans’ (1995) words, an“embedded autonomy.” It is, first, embedded in the informalnetworks of the state bureaucracy, that result from similarities insocial background, graduation from the same elite schools,longstanding work relationships, a common esprit de corps, andconsensus on goals and policies, and that give the bureaucracyuncommon cohesion and coherence. Second, it is embedded in theexternal networks that connect the state apparatus with importantsegments of civil society, which in the case of Japan, Taiwan, andSouth Korea are with business. For one thing, the state bureaucracyis not omniscient nor is it omnipotent. External networks provide atwo-way channel, as it were, in which state bureaucrats gain andgather information about national and international economies andtheir environments, and through which in turn policies andprograms flow to be implemented, thus facilitating the state’sability to intervene in the cause of industrial transformation andeconomic development.

Embedded autonomy gives efficacy to the developmental state.Evans (1995: 12) writes:


A state that was only autonomous would lack both sources of intelligence andthe ability to rely on decentralized private implementation. Dense connectingnetworks without a robust internal structure would leave the state incapableof resolving “collective action” problems, of transcending the individualinterests of its private counterparts. Only when embeddedness and autonomyare joined together can a state be called developmental.

The developmental states of East Asia revealed that the polarity isnot between democracy and authoritarianism in development, butbetween predatory and developmental states, both of which can bedemocratic or authoritarian. The best-case scenario is a democraticdevelopmental state that, it can be argued, was the case of theUnited States under Alexander Hamilton as Secretary of theTreasury. The worst-case scenario is an authoritarian non-developmental state that were those of Mobutu’s Zaire and Marcos’Philippines. An authoritarian developmental state was the initialstates of Japan and the little dragons of Asia, althoughdemocratization followed on the heels of economic development. Ademocratic non-developmental state is preferred to anauthoritarian non-developmental state in that the former affords ameasure of free public space in which demands, criticisms, andaction can be undertaken, while the latter does not.

China

The great economic story of the new millennium was themetamorphosis of China from a sclerotic communist regime to agiant capitalist dynamo. It started in 1978 when Deng Xiaopingcame to power and launched his four modernizations inagriculture, science, industry, and the army. With the relaxation ofstate controls and the introduction of market reforms, China rodethe gales of globalization to become the second largest economy inthe world after the United States. Opening itself to foreign capitaland attracting foreign corporations with cheap labor, China saw therush of transnational corporations that made it the global factory ofthe world’s manufactured goods. In the process, China has liftedmillions of its poor peasants from poverty, such that statistics onthe consumption of crude steel, oil, cement, cotton, rice, and pork,for example, are eschewed by “the China factor.” “Few leaders inrecent history,” write Nicholas D. Kristof and Sheryl WuDunn(1994:105-06) “have so dramatically improved the lives of as manypeople as Deng did in his final years. Under Deng, Chinese learned


what it means to own televisions, refrigerators, and washingmachines. Deng took his two callused hands and yanked, pullingChina away from orthodox Maoist egalitarianism to a new world ofstock markets and special economic zones.”

The arrival of China, together with that of India, marks “atectonic shift in global affairs with few parallels” (Flavin andGardner 2006: 3). Economic power translates into political andmilitary power on the world stage. China, occupying as it does, apermanent seat in the U.N.’s Security Council, is facilitating, forexample, the resolution of the nuclear issue in North Korea, whileconstraining steps to prevent Iran from becoming a nuclear power.China is also building up its military might, is flexing its militarymuscle to become eventually the dominant power in the Pacific. Tofeed its ravenous appetite for economic growth, China is scouringAfrica in competition with other powers in its search for resources(French 2010). On a growing number of international issues, policymakers have to take into account “the China factor.”

Domestically, China confronts enormous problems andchallenges. There is the territorial and separatist problem posed byTaiwan, Tibet, and the Muslim area of Xinjiang. There is theecological threat not only to its biosphere but to the world’s, whichbecause of its size is central to the question whether the globalcommunity succeeds in building a healthy, prosperous, andenvironmentally sustainable future for the next generation. There isthe widespread corruption which has seeped into the lowest levelsof government bureaucracies, and which therefore affects more andmore all aspects of the lives of ordinary citizens, and which seemsto be beyond the control of the central authorities in Beijing. Thereis the increasing agitation of factory workers for more pay andbetter working conditions, which can only spread wider and moreintensely as labor awakens to its rights amid its insufferablesituation.

But the greatest danger to China is the loss of legitimacy of theCommunist Party. “As I traveled the country, roaming from thealpine plains of Tibet to the fishing villages of Fujian Province,”Nicholas D. Kristof (Kristof and WuDunn 1994: 141) observes, “Icame across one message: Almost nobody believed inCommunism. It was a charade.” The only acknowledgementpeople give to the Chinese Communist Party is that it opened the


country to its present economic boom. It stays in power only as longas it is able to maintain the country’s economic upward trajectory,but for how long? Sooner than later, China has to come down fromits economic heights to more stable and sustainable levels. But it hasto be recognized, as Kristof himself does (Kristof and WuDunn1994: 334-35), that “the Maoist revolution . . . unified the country,broke the entrenched interests, divided up the land, and suppliedfinancial and human capital. . . . For all its cruelty, the CommunistRevolution laid the groundwork for the economic revolution thatcame later.” Throughout its long history, China’s primal fear anddanger has been luan, chaos. The Chinese Communist Party hasheld the country together through repression and by managing thestrains and the tensions of its modernizing process. But as it willfinally lose its Mandate from Heaven, what will take its place?

Will democracy be the solution? Will China be democratic?Ever since the crackdown and massacre at Tiananmen Square in1989, where the protests were as much anti-corruption and anti-inflation as pro-democracy, the yearning for democracy hasdampened. “Consumerism now serves as the ideological backdropfor popular culture, and popular culture in turn encourages massconsumption. Since the 1990s consumerism has become a newcultural ideology in Chinese society, silently replacing both Marxistideology and traditional cultural values. Unlike the massconsumption of the 1980s that concentrated on householdappliances such as refrigerators and TV sets, consumerism in the1990s featured a newly emerged interest in a variety of leisureactivities, many of which lie at the core of popular culture, such assports, body building, MTV, karaoke bars, and so on. At the sametime, hedonistic values and the desire for material goods areblatantly expressed in sitcoms, pop music, movies and other formsof mass media, encouraging people to consume more and more”(Yan 2002: 28).

So what are the prospects for democracy in China? Willdemocracy follow on the heels of the fastest greatest economicgrowth the world has ever known? There are as manyprognostications as diagnosticians. The more optimistic ones (e.g.,Hiro 2010; Rowen 2007) see the glimmerings of a “manageddemocracy” in the intellectual debate on democracy at the ChineseAcademy of Social Sciences, in the legal institutions and


nationwide judiciary, though still firmly under the control of theChinese Communist Party, established by the National People’sCongress, in the Organic Law on Villager Committees whichrequired that they be popularly elected, and in the proliferation ofnon-governmental organizations (NGOs) that exercise what Keane(2009) labels “monitory democracy.” Whether or not this “manageddemocracy” will morph into a Western-style liberal democracy orinto a Chinese-style democracy with Confucian characteristicsremains to be seen. Having emerged alone from the worldwidefinancial crisis of 2008-10 more confident and powerful than before,the question also remains whether China’s authoritarian,government-led economic development becomes a viablealternative model and challenge to Western democracy. What wehave seen is that China has accomplished an economic miracle ofstratospheric proportions under the political leadership of a party-state.

India

Opening his chapter on the “banyan democracy” of India, JohnKeane (2009: 586) writes:

India fundamentally altered the nature of representative democracy itself. Anew ‘post-Westminster’ type of democracy resulted, in the processslaughtering quite a few goats of prejudice. None of the standard postulatesabout the preconditions of democracy survived. They had spoken ofeconomic development as its fundamental precondition, so thatrepresentative democracy could be practicable only when sufficient numbersof people owned or enjoyed such commodities as automobiles, refrigeratorsand wirelesses. Awash in poverty of heart-breaking proportions, the regionmanaged to laugh in the face of pseudo-scientific and fatalistic propositionsthat had insisted that there was a causal – perhaps even mathematical – linkbetween economic development and political democracy. Millions of poorand illiterate people rejected the view of their masters that a country must firstbe deemed fit for democracy. Struggling against themselves, they decidedinstead that they must become fit through democracy.

Jawaharlal Nehru, founding father, envisaged India, newly-independent in 1947, to be socialist in economics and democratic inpolitics, in pursuit of whose economic and political development heinsisted on English as one of two official languages and he hadestablished, after the Soviet Union’s policy, research institutes inthe physical sciences and top-grade engineering colleges. Exceptfor the emergency rule of Indira Gandhi from 1975 to 1977, India


has been a democracy since independence. Socialist economicplanning has not been as successful. Socialist policies and centralplanning tamped initiative, efficiency, and productivity ineconomic matters. For example, to protect nascent industries fromforeign competition, to make optimum use of available resources,and to achieve economic self-reliance, a licensing system that wasestablished to rationally regulate imports, output, and investmentended up being a corrupt regime, contemptuously referred to asLicense Raj, that hobbled industrialization. The majority of thepeople continued to be mired in massive poverty. Theuntouchables, the dalits, who subsisted below the Hindu castehierarchy, had the added indignity of being subjected todiscrimination and reduced to working at dirty menial jobs.Especially under the Bhartiya Janata Party (Indian People’s Party)which promoted Hindutva, Hindu nationalism, as opposed to thesecularism envisioned by Nehru, ethnic conflict, communal riots,and violence erupted more frequently between Hindus, Muslims,and Christians.

While there were antecedents, the breakthrough occurred withthe New Industrial Policy, announced by the finance minister of theCongress Party government, Manmohan Singh, in July 1991, whichdrastically reduced the licensing system, abolished import quotas,slashed tariffs, and ended industrial licensing, except forenterprises in defense and national security, limited public sector-monopoly, and allowed private companies in the service-sector.This liberalization of India’s economy was continued andexpanded by subsequent parties and governments.

Singh also established Export Processing Zones (EPZs), laterupgraded to Special Economic Zones (SEZs), which were foreignterritories for the purposes of trade, duties, and tariffs. The Y2Kmillennium bug paved the way for Indian ICT (Information andCommunications Technology) firms to multiply their business inthe United States, and eventually to become the world’s back office,as China became the world’s factory. In this, Nehru’s earlydecisions about the English language and about research institutesand engineering colleges proved valuable assets and are payinghandsome dividends in the globalized age of new information andcommunications technologies. “India’s invisible humaninfrastructure,” affirms Robyn Meredith (2007: 11) is the nation’s


mighty resource now that it has reconnected to the globaleconomy.” Such ICT pioneers as Infosys and cities like Bangalore,home to 1,700 software companies, have enabled India, unlikeChina, to leapfrog, bypass the manufacturing stage and go directlyto services in its modernization process.

But India has also enormous problems and challenges. India’sindustrialization has proceeded at a far slower pace than China’s.Its ICT businesses provide direct and indirect employment to lessthan one percent of a national workforce of 400 million. The benefitsof deregulation and globalization have been primarily skimmed offby the already well-off, such that China has lifted more of its poorpeople than India has. The gulf in living standards and educationbetween the indigent and the affluent continue to widen,aggravated by ethnic tensions that are always ready to explode. Inthis India is more of a polyglot nation, lacking perhaps the unityand strength of China, which is more homogeneous. At first blush,democratic India would seem to have an advantage in terms oflegitimacy and support from its people over communist Chinawhose Marxist-Leninist ideology has been supplanted by whatNicholas Kristof aptly labeled Market-Leninism (Kristof andWuDunn 1994: 431). However, Dilip Hiro (2010: 205) opines that“the increasingly corrupt democratic politics of India, where thestandards of public life have declined sharply over the decades,make it less equipped to march to an economic goal with the single-mindedness of a popular, authoritarian regime as in China.” Willdemocracy and development ultimately align with and reinforceeach other, or will they further split and fall apart in India?

Conclusion

In his historical and comparative study on the origins ofdictatorship and democracy, Barrington Moore (1966: 159)observed that there was a time in the still recent past when manyintelligent thinkers believed that there was only one main highwayto the world of modern industrial society, a highway leading tocapitalism and political democracy. The experience of the last fiftyyears has exploded this notion, although strong traces of unilinearconception remain, not only in Marxist theory, but also in someWestern writings on economic development. Western democracy isonly one outcome, and one that arose out of specific historical


circumstances. . . . [I]f we take the seventh decade of the twentiethcentury as our point of observation, while continuing to realize thatlike all historical vantage points it is arbitrarily imposed, the partialtruth emerges that nondemocratic and even antidemocraticmodernization works.”

Similarly, John Keane (2009: 841, 844), in his magisterial historyof the life and death of democracy, recognizes that “democracy hasbecome its own justification. It has been embraced around theworld as if it were a way of life that has global validity . . . [But] mostof these claims resemble a dog chasing its own tail . . .” They havebecome clichés. Democracy is good because it allows people toparticipate in the making of collective decisions, because it is betterin stimulating economic growth, because it tames the tigers of war,fosters democratic peace, and reduces terrorist threats to nationalsecurity, because it promotes human development. But Keane(2009: 852) reminds us that these claims stood side by side withefforts at “democracy promotion” or “democracy crusade” thatserved as an alibi for the strong, or the pushy, against the weak, as afanatical presumption of “arrogant power fed by talk inspired byprinciples like God, History, Truth, Man, Progress, the Party, theMarket, the Leader or the Nation.”

These are necessary cautelae amid celebratory talk of “the end ofhistory” (Fukuyama 1989, 1992). A couple more, plus one thatapplies specifically to the United States, will serve as conclusion.

With the dissolution of the Soviet Union and the liberation ofEastern Europe, a foreign policy consensus emerged that themagical combination of market economies and political democracywould transform the world of nations into communities of peace-loving citizens and consumers. Amy Chua (1998, 2003) shows justthe opposite happened. The combination of markets anddemocracy collided with the equally powerful force of ethnichatred to set the world on fire. Markets and democracy favor notjust different people or different classes, but different ethnicgroups. Markets concentrate spectacular wealth in the hands of anethnic minority, while democracy increases the political power of afrustrated, because, impoverished majority. In countries with“ethnic-dominant minorities” – Chinese in Southeast Asia,Croatians in the former Yugoslavia, whites in Latin America andSouth Africa, Indians in East Africa, Lebanese in West Africa, Jews


in post-Communist Russia – the pursuit of free market democracybecomes an engine of destructive ethno-nationalism, pittingmajority against minority.

More ominous is Paul Collier’s (2009: 8-11) contention that inthe countries of the bottom billion, “the façade rather than theessential infrastructures of democracy . . . has increased politicalviolence instead of reducing it.” Collier (2009: 15) points out that“the great political change may superficially have looked like thespread of democracy, but it was actually the spread of elections. Ifthere are no limits on the power of the winner, the election becomesa matter of life and death. If this life-and-death struggle is not itselfsubject to rules of conduct, the contestants are driven to extremes.The result is not democracy: I think of it as democrazy.” The promiseof democracy in reducing political violence rests on theaccountability and legitimacy effects of democracy. A democraticgovernment tries to perform, to deliver what citizens want, becauseit is accountable to voters, otherwise it does not get reelected. In ademocratic country, being elected is the mandate for government todo what it promised to do, is the only basis for governmentlegitimacy. In low income countries, however, democracy hasopposing effects; at low income, democracy increased politicalviolence. Collier (2009: 20-21) concludes that “in low incomecountries, democracy made the society more dangerous. As ifpoverty was not miserable enough, the effect of democracy addsinsult to this injury. . . . If democracy makes poor societies moredangerous, but societies that are not poor safer, there must be somethreshold level of income at which there is no net effect. Thethreshold is around $2,700 per capita per year, or around $7 perperson per day. The societies of the bottom billion are all below thisthreshold: most of them are a long way below it.”

In the United States, something disturbing is also happening inthe relationship between capitalism and democracy. YaleUniversity’s Jacob Hacker contends that “roughly 40 percent of allhousehold income gains over the last generation, from 1979 to 2007,went to the richest 1 percent of Americans” (Rose 2010: 18).Washington Post’s Steven Pearlstein adds that “as more and more ofthe income gets concentrated in the top, people at the top might usesome of that money to essentially buy the political process, to buypoliticians, to buy lawyers, to frustrate regulatory efforts, and


essentially turn the government into an instrument in which theycan get yet more” (Rose 2010: 18). For Robert B. Reich (2010: 3), “thisis the heart of America’s ongoing economic predicament.” With alarger and larger portion of the economy’s winnings going topeople at the top, the American middle class aspirations for a betterlife can only be fulfilled by borrowing and going into debt.Borrowing has its limits. Lacking purchasing power, the middleclass cannot keep the economy going. Unless the Americaneconomy is rebalanced so that its benefits are shared more widely,there will be deepening discontent and nastier politics. The GreatRecession is but the latest and largest outgrowth of an increasinglydistorted distribution of income in democratic America.

The U.S. Supreme Court, supposed to be the last bastion ofdemocracy, is abetting this subversion of democracy. In Buckley v.Valeo (1976) and in the more recent Citizens United v. The FederalElection Commission (2010), the Court ruled that the governmentmay not ban political spending by corporations and labor unions inelections, vindicating the First Amendment’s most basic rule,namely, that the government has no business regulating politicalspeech. The ruling releases a flood of anonymous corporate moneyto elect or defeat candidates for political office and for the judiciary,thus drowning out the already feeble voices of everyday Americansin an increasingly dysfunctional democracy (Kirkpatrick 2010;Liptak 2010). “Most wrongheaded of all is its insistence thatcorporations are just like people and entitled to the same FirstAmendment rights. It is an odd claim since companies are creationsof the state to make money” (The New York Times 2010). TheSupreme Court ruling strikes at the heart of democracy, indecentlyin the midst of the Great Recession that was caused by corporatepower and greed, corporate depravity and malfeasance, corporateirrationality and recklessness.

According to Noah Feldman (2010), the principles involved goto the core of how government and business should interact, to theinstitutional reality of the effects that corporate money can have onour entire democratic system, to democratic integrity that may insome circumstances outweigh the constitutional value ofunfettered speech.

[T]he for-profit corporation, man’s most-advanced technology for makingand concentrating wealth, creates unique risks for the structure of democratic


government. It is true that corporate political speech is still speech, as JusticeKennedy and the A.C.L.U alike have insisted. But that speech serves differentends than individual speech. Organized to use all lawful means to generateprofit, corporations have the means and opportunity to try to capture theoperation of government to serve this objective. Campaign-spending letsthem do it directly. That is why Congress must be able to limit the effects ofcorporate speech during elections. It is a matter of defending democracyagainst the risk that business interests will come to dominate governmentdecision-making – an interest that derives from the constitutionalcommitment to republican government.

What the U.S. Supreme Court allows leads to a distortion ofdemocratic practice, a perversion of the democratic ideal. John Keane(2009: 855, 857, 865) asserts that “from the moment of its birth,democracy pointed to a universal way of life because it took the sideof people everywhere in their efforts to live as equals, to resist thearrogance of power camouflaged in grand Universal principles andpiffling prejudices. . . . [I]n a democracy those who exercise powershould be prevented from bullying others, threatening them withviolence, pushing and pulling them into different shapes, as if theywere mere clay in the hands of potters, or as if (as Aristotle liked tosay) they are mere pawns on a chess board.” If democracy is to be auniversal ideal and value, it must be “the self-government of equals,”not the rule of corporate power, even if rationalized by judicial fiat.

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