Capitalism vs democracy

Written on May 3, 2007 by Max Oliva in Development

J.Pozuelo-Monfort, MSc candidate in economic development at LSE
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In an ideal world capitalism and democracy would be meant to coexist. Theoretically the only economic model able to survive the carnage of the first half of the XX century that left behind socialism, stands out paradoxically as the single alternative to both democratic and non democratic governments across the world, with a few populist exceptions arising in Latin America.
An economic model, that of capitalism, with different reencarnations, with different implementations. An economic model that has become purely mathematical arising from the recently decesed economist from the University of Chicago and Nobel Prize winner Milton Friedmann. An economic model based on the so-called neoliberal principles of the Washington consensus, led by center-right governments and architected by the International Economic Institution across the world, that impose elimination of tariffs and austere fiscal policies that only work on paper, on the paper of the economists of the University of Chicago.
Capitalism is not a steady concept, capitalism does not operate according to predetermined underlying assumptions. There is in actuality a universe of capitalisms covering a wide spectrum of varieties, from more liberal to more social, from less state intervention to more, from a purely economic focus to a broader social intent. Capitalism is in the end like any other species in constant evolution, like any other species, which strongest specimen will survive. Only when the economic actors that determine capitalism’s fate take action, will we become witnesses of a redefined capitalism, able to sustain society over time based on ethics, sustainability and global justice.


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