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Freedom and growth
Published in Al-Ahram Weekly on 13 - 10 - 2005

Though democracy is not a condition of wealth creation, it is the only thing that sustains it, writes Sharif Elmusa*
This is a season of democratic openings. Half a century ago and until the end of the Cold War, economic development, understood mainly as industrialisation, was the universal rallying call. The war then was between capitalism and socialism, not so much between democracy and dictatorship. Some democracy advocates, notably influential sociologist Seymour Martin Lipset, even said the system would be engendered by economic development. Apart from this, Third World countries, having won their political independence from colonial rule, saw industrialisation as a source of wealth and power, two essentials to possess if they were not to be trampled on again.
Today democracy has stolen the limelight; industrialisation lingers in the shadows. One rarely finds these two hefty beasts linked in the sphere of Arab opposition. Yet there is a subtle and indispensable nexus between them. If we are to go by history, not by ideology or copycatting, it is this. Neither is economic development necessary to the emergence of democracy, nor is democracy for industrialisation. But each is essential for the sustainability of the other. That is what a review of much of the research on the matter tells me.
Modern Western Europe and the United States started out poor but democratic, after a fashion. Then they became the cradle of the Industrial Revolution. They advanced the ideas, the institutions, and the science and technology that propelled it forward, seemingly inexorably. And so the West ended up with both democracy and industry.
In "the Rest", trajectories of democracy and industry were more varied. Japan built a viable industrial base after the restoration of Emperor Meiji, between the end of the 19th century and World War II. In the post-war era, Japan rebuilt and greatly forwarded its industrial prowess under democratic government. In short, Japan industrialised under authoritarian and democratic political systems. China, ruled by the Communist Party for 50 years, began its industrial leap forward only in the second half of that period. In India, a similar sequence, although less dramatic, occurred under democracy. Put differently, the same type of political regime in each of the two populous countries produced different outcomes. Democratic India is somewhat of an exception among industrialised Asian countries. In the others -- South Korea, Taiwan, Singapore and Malaysia -- autocratic rulers led industrialisation.
The conclusion that can be drawn at this point is that robust industrialisation has taken place under both systems, although authoritarianism has been the more typical experience outside the West. Dictatorship has spawned much misery, too. Examples are numerous, from Zaire, Uganda and North Korea to Iraq. And so has Indian democracy, with its horrendous caste system and colossal poverty. That said the continuance of industrialisation appears to be a function of the type of political system. Industrialisation, after an initial surge, stagnated under dictatorship; witness the former Soviet Union and Eastern Europe. It was, however, sustained in nations that shifted from dictatorship to democracy, as attested by East Asia. Unfortunately, for those who thrive on simplification, there is always the vexing case. Singapore continues to progress economically under authoritarianism. Perhaps, it is better to speak in terms of probabilities and say that sustained industrialisation is more probable under democracy.
The whys and wherefores are but grist for the mill of academicians. Successful industrialisation under authoritarianism is attributed to one or more factors -- state capacity and autonomy, vision, nationalism, state-business cooperation, education, suppression of labour, and the presence of regional economic powers. Reasons adduced for failure include cronyism and corruption, inferior governance and culture. Sustaining economic industrialisation requires the flow of information and open debate over policy, and democracy delivers these goods better than does dictatorship. And just as economic development requires democracy only for sustainability, democracy is dependent on economic development not for emergence, only for continuity. Democracy happened in a variety of circumstances when the social forces balanced in such a way as to make the ballot box a viable way to settle conflicting interests. European democracy grew out of decentralised feudal societies at a time when most of the population was poor. India, too, became democratic at its inception as a sovereign state, in spite of widespread poverty and illiteracy.
Whereas East Asian democracy was mostly born on the heels of industrial revolution, in Japan, democracy was an arrangement of the American occupation. In Argentina, it followed the defeat in 1982 of that nation's military by Britain in the Falklands War, and without British occupation of the country. Recent democratic openings in the Third World, including in Egypt, have been induced by shifts in global power and past state failures, hardly by economic transformation. But even where democracy followed industrialisation, it was not just an automatic by-product of economic determinism; it was fought for.
The story coheres better when it comes to the sustainability of democracy. Historical and contemporary evidence indicates that democracy has a higher probability of being sustained when society achieves a modicum of prosperity, not necessarily at a very high threshold. The survival of East Asian democracies after the financial meltdown at the close of the 20th century is positive corroboration. The point can be demonstrated as well by negative examples. European and American democracies faltered mainly during periods of economic decline. The many military coups in Latin America are also instructive. The concentration of power in the Kremlin in Putin's Russia is another illustration. And the recent ouster of elected presidents in Argentina, Ecuador and the Philippines clearly points toward the precariousness of representative democracy in poor countries. Who knows how the military in these states would have behaved had the world power configuration been different or the bad aftertaste of dictatorship was not so fresh. But once more the persistence of democracy in low-income India confounds the desire for finding simple patterns of cause and effect.
The lessons for the Arab opposition are clear. In the heat of the battle for democracy, it must not lose sight of the challenge of creating wealth, both for improving the material lot of the disenfranchised citizenry, as well as for sustaining democracy. From this vantage point, if one has to be a fundamentalist, he had better be an industrial fundamentalist. The preoccupation with democracy at the expense of industry is understandable in Western discourse; but the Arab opposition has to go beyond it. It cannot just reproduce the same exegesis and borrow theories out of context. It has to script its own agenda and be nimble in thinking about policy. And, if need be, consult poets: "For the pattern is new in every moment/ And every moment is a new and shocking/ Valuation of all we have been," said T S Eliot, summing up his life experience.
* The writer is associate professor of political science at the American University in Cairo.


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