So, we have those who say that economic development can only come from government picking winners, from infant industry protection, from high tariff barriers and the like.
The Ha Joon Chang\’s of this world and the like: you know, War on Want, Action Aid, various points left.
And it\’s certainly true that some countries which have done such things have had economic growth. S Korea (Dr. Chang\’s homeland and an oft used example of his).
OK, now, let\’s add a further condition to this.
Can anyone point me to a democracy which has managed this feat?
That sort of picking winners, tariff barriers and infant industry protection leading to strong economic growth in a real and true democracy? By which I mean universal adult franchise and real changes in who is in power?
Nowhere really comes to mind, at least not immediately.
I tend to think that such government control of who is allowed to make what and where people can buy what they want from is actually incompatible with democracy.
Clearly, it\’s incompatible with liberty, but that\’s not quite what I mean. In a democratic system the way in which special interests can capture the decision making process about who gets to do what means that even if we concede (which we don\’t, but will for the purpose of this argument) that the governor telling the governed what to do produces economic growth, it needs to be a hard headed (and hard hearted: it might well be necessary to shoot a number of people) auithoritarian doing so, for he needs to be able to tell the rent seekers to fuck off. Only an autocrat has the power to insist that people do the economically viable things, assuming that the governmernt has taken to itself the power to tell people what to do economically.
An example perhaps: one way to increase capital accumulation is to deliberately depress the workers\’ wages. Profits are higher and thus there is more capital to invest in the next round of building more factories etc. But in a democracy you\’re inevitably going to have a political party which (claims at least) to represent the workers. And they\’re not going to stand for such a policy. So that policy can only be followed in an authoritarian political system (Stalin deliberately did this for example, although he then wasted the capital having killed millions doing it).
Another: S Korea quite simply told business people \”You go build ships, you cars and you cement. And you\’re banned from doing anything else.\” It worked, sure, but would this be possible in a democratic system (which S Korea wasn\’t until what, the mid 90s?)?
See what I\’m getting at?
So, can anyone disprove the contention: that this sort of directed economic growth is incompatible with democracy?