THE LIMITS OF THE MARKET AND DEMOCRACY

    With the end of the Cold War and the collapse of the Soviet empire, the market economy and democracy appear to have triumphed. Universally praised, these two central values of Western society have become the prerequisite of any nation seeking acceptance by the international community or assistance from international financial institutions. Moreover, history would seem to suggest that the market economy and democracy together form the equivalent of a virtuous circle. Not only is it seemingly impossible to have one without the other, but in the long run the two appear to be mutually reinforcing. The market economy needs private property, entrepreneurship, and innovation, which cannot flourish without freedom of thought, speech, and movement. Democracy means that people can choose where to live, what to buy and sell, and how to work, save, and accumulate wealth, none of which is compatible with the collective ownership of industry. In sum, the market economy and democracy appear to be deeply intertwined, with both tied to the fundamental concept of private property.

    Yet even the most enthusiastic proponents of both the market economy and democracy would admit that “market democracies” – a shorthand term adopted in recent year by exuberant American policymakers – are not easy to create. The development of a robust market economy in a formerly communist country such as Russia requires more than privatizing industry and allowing the market to determine prices. And the establishment of real democracy in a war-torn nation such as Cambodia calls for more than its much-celebrated free elections. A market economy and democracy can endure only in nations that maintain certain indispensable feature: the rule of law, a legal system, a free media, and a social consensus on efficient tax collection.

    Despite the prevalent belief that the market economy and democracy combine to form a perpetual-motion machine that propels human progress, these two values on their own are in fact incapable of sustaining any civilization. Both are riddled with weaknesses and are increasingly likely to break down.

While the cracks in the façade of Western civilization are only just beginning to show, an x-ray of its foundation might reveal deep weaknesses that could lead to its total collapse.

Inapplicable Principles. Consider two core institutions of the West: the private corporation and the civil service. For all our talk of free markets and equality among individuals, our companies and bureaucracies are organized on the basis of fixed plans and strict hierarchies. Can we imagine a real market relationship between divisions of the same company or between a boss and her assistant? Can we imagine an internal referendum on each decision made by a minister or cabinet secretary?....

Likewise, few Western nations … would appreciate an international community where true democracy prevailed. If international financial institutions had followed such a democratic system during the so-called Global Negotiations of the 1980s, there would likely have been a drastic shift in the global distribution of wealth that would have jeopardized the interest of the West.

Similarly, applying the principles of the market economy both within and among nations is problematic and undesirable. We know of no Western nations that seek a free market in justice, law enforcement, national defense, education, or even telecommunications – and with good reason. Few if any Westerners would want to live in a country where court rulings were for sale, citizenship and passports could be purchased at airline ticket counters, and air waves were auctioned off to the highest bigger without regard to content. And among nations, a free market for nuclear weapons, illegal narcotics, high technology, potable water, and pollution would promote the rapid growth of supranational political bodies and powerful non-state entities capable of challenging national governments.

Vocabulary notes

to praise – хвалить

prerequisite – предпосылка

in the long run – в конце концов

seemingly – кажущейся

reinforcing – усиливающий

compatible – совместимый

in sum – одним словом

proponent – поборник, пропагандист

exuberant – буйный, изобретательный

robust – сильный, здоровый

war- torn – разорённый войной

to endure – выносить, терпеть

to maintain – поддерживать

indispensable – незаменимый

prevalent – распространённый

to riddle with – пестреть

cracks – трещины

x- ray – рентген

inapplicable – неприменимый

core – главный, центральный

drastic – коренной

to jeopardize – рисковать

to seek – искать, добываться

court rulings – постановления суда

entities – организация

challenging - противостоящий

 

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