September 25, 2005


Capitalism vs. Democracy: We often assume they go hand in hand, but recent elections in Japan and Germany provide a sobering reminder that there are deep conflicts. (Robert J. Samuelson, 9/25/05, Newsweek)

The recent German and Japanese elections deserve more attention than they've got because they illustrate the uneasy relationship between capitalism and democracy. Capitalism thrives on change—it inspires new technologies, products and profit opportunities. Democracy resists change—it creates powerful constituencies with a stake in the status quo.

Capitalism (by which I mean an economic system that relies heavily on markets and private ownership) and democracy need each other. The one generates rising living standards; the other cushions capitalism's injustices and, thereby, anchors public support. But this mutual dependence is tricky because if democratic prerogatives are overused, they may strangle capitalism.

Folk often misunderstand the idea of the End of History as a bit of triumphalism, but, in fact, it will doom most nations because their societies do not have the foundations required to sustain a healthy liberal democracy.

Posted by Orrin Judd at September 25, 2005 12:11 PM

...capitalism's injustices? Jeesh. Gimme a break, wudda.

Posted by: erp at September 25, 2005 1:40 PM

> "Democracy resists change"

But not as much as all other forms of government.

Posted by: at September 25, 2005 6:39 PM

The essential problem is thinking of capitalism as an actual economic system. Capitalism is what you get when you have well defined and enforced property rights. It is an emergent system, not one that is directly implemented.

Posted by: Annoying Old Guy at September 25, 2005 9:07 PM