By Shahab Sabahi
Energy and Environment - Policy analysis research group
It is worth to note that the collective experience of countries in which intelligent economic development originated from the top in a highly authoritarian setting. It is striking to note that once the economy becomes successful it creates pressures for democratization and free market. (Z.B. Brzezinski 2008)
In contrast, neoclassical economists claim the collective economic success across the world, has been a result of FREE MARKET. They believe, democracy and leaving- all- decision-making occurs in market places will solve the problem of poverty and fair distribution of resources. So the questions are: Should both democracy plus free market be initially placed and then they would automatically guarantee economic growths and prosperity? Or are democracy and free market the products of economic growth and successors of discipline?
In our fresh memories an unsuccessful model happened in very far East- EU in the 1990s. However it is not the sole story of unsuccessful economic transformation. The Russia initially embraced
democracy that produced chaos and near economic ruin. The Russians first modernized their political system, made it more democratic and as a result they had insufficient focused power to force transformation of the economy.
It makes me believe discipline and stringent policies intervention initially shape societies and put them on the economic growth path. The evolution of these new societies over the course of time will converge to democracy and the free market economies.
Conversely Asia’s growth can be a good example for successful model for societal and economic growths. It has taken place within the past three or so decades.
China’s growth caught the eyes of observers. The world looks at China as a symbol of authoritarianism. In contrast the Chinese development model has backed with a strong authoritarian government through which China has done a great job modernizing their economy. However the China model has not finished working itself out.
India is another interesting case that is becoming an economic powerhouse but they are doing it almost in spite of themselves. In its early years, many of the Indian governing elite were educated in England in Marxist economics. They had a socialist orientation. As a result the government still continues some residual suspicion of entrepreneurship. And yet they are doing reasonably well.
South Korea’s experience, it was hardly a democracy until about twenty years ago. And yet its economic success paved the way for an established democracy. Confucius culture values set a great deal of discipline, order and force to guide initial stage and bumpy phase of growth and transformation.
The Japanese experience, in a different way, is even more interesting. The Meiji restoration was a highly mobilized system of economic and technological innovation organized from top down. It created the preconditions for what later on USA did in Japan after World War II and then produced a democracy that is now constitutionally well-established.
Taiwan also started as an authoritarian system, not very different from the Chinese in terms of economic development. The government promoted a fair amount of free enterprise in rural areas, low-scale business then liberalization. Economic development took off and democracy followed.
One of the advantages of the EAST capitalism system and growth model is that economies can grow at a breakneck pace, and turn down the growth speed when it turns out that is about to go into some harmful directions by imposing the policy correction without any problem of losing face.
My key point is that discipline and in some high degree policy intervention are essential when
Energy and Environment - Policy analysis research group
It is worth to note that the collective experience of countries in which intelligent economic development originated from the top in a highly authoritarian setting. It is striking to note that once the economy becomes successful it creates pressures for democratization and free market. (Z.B. Brzezinski 2008)
In contrast, neoclassical economists claim the collective economic success across the world, has been a result of FREE MARKET. They believe, democracy and leaving- all- decision-making occurs in market places will solve the problem of poverty and fair distribution of resources. So the questions are: Should both democracy plus free market be initially placed and then they would automatically guarantee economic growths and prosperity? Or are democracy and free market the products of economic growth and successors of discipline?
In our fresh memories an unsuccessful model happened in very far East- EU in the 1990s. However it is not the sole story of unsuccessful economic transformation. The Russia initially embraced
democracy that produced chaos and near economic ruin. The Russians first modernized their political system, made it more democratic and as a result they had insufficient focused power to force transformation of the economy.
It makes me believe discipline and stringent policies intervention initially shape societies and put them on the economic growth path. The evolution of these new societies over the course of time will converge to democracy and the free market economies.
Conversely Asia’s growth can be a good example for successful model for societal and economic growths. It has taken place within the past three or so decades.
China’s growth caught the eyes of observers. The world looks at China as a symbol of authoritarianism. In contrast the Chinese development model has backed with a strong authoritarian government through which China has done a great job modernizing their economy. However the China model has not finished working itself out.
India is another interesting case that is becoming an economic powerhouse but they are doing it almost in spite of themselves. In its early years, many of the Indian governing elite were educated in England in Marxist economics. They had a socialist orientation. As a result the government still continues some residual suspicion of entrepreneurship. And yet they are doing reasonably well.
South Korea’s experience, it was hardly a democracy until about twenty years ago. And yet its economic success paved the way for an established democracy. Confucius culture values set a great deal of discipline, order and force to guide initial stage and bumpy phase of growth and transformation.
The Japanese experience, in a different way, is even more interesting. The Meiji restoration was a highly mobilized system of economic and technological innovation organized from top down. It created the preconditions for what later on USA did in Japan after World War II and then produced a democracy that is now constitutionally well-established.
Taiwan also started as an authoritarian system, not very different from the Chinese in terms of economic development. The government promoted a fair amount of free enterprise in rural areas, low-scale business then liberalization. Economic development took off and democracy followed.
One of the advantages of the EAST capitalism system and growth model is that economies can grow at a breakneck pace, and turn down the growth speed when it turns out that is about to go into some harmful directions by imposing the policy correction without any problem of losing face.
My key point is that discipline and in some high degree policy intervention are essential when
- Economic and societal transformation are about to take off. Early and raw democracy without institutional enforcement, will be derailed and ended up to its failure
- Economies move on bumpy roads and crisis. There is no particular sense of anxiety about the US and EU to emulate the EAST capitalism model, in order to move out from their crisis.
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