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Democracy and Capitalism in the Developing World: Compatible or Conflictive.

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GT 64 A: Democracy 1 Theme: DEMOCRACY AND THE ECONOMY Topic: Democracy and Capitalism in the Developing World: Compatible or Conflictive. Democracy and capitalism have been seen as the panacea for the political development in the 21st century. However the form of democracy that is most widely called for is the liberal democracy. Embedded in the liberal democratic theory are the notions of equality and freedom. As a political theory liberal democracy is mostly conducive to the capitalist economic theory. With the existence of capitalism at the heart of the liberal democratic theory the achievement of freedom falls in the face of dire inequalities both in the political and economic sphere. For the developing world this situation is all too familiar, since for the most part they face the dilemma of achieving economic and political development at the same time. Therefore in the developing countries democracy and capitalism exist in more conflict than compatibility and therefore reflect the need for a higher level of political development. The liberal democratic theory embraces the following freedoms: * electoral competition * freedom of belief, expression, organization and demonstration * protection from political terror and unjustified imprisonment * a rule of law under which all citizens are treated equally and due process is secure * political independence and neutrality of political institutions to maintain checks and balance * an open pluralistic civil society * control of the military (Diamond. 2003) Sartori further provides a breakdown of this liberal democratic theory. Liberalism deals with the protection of individual freedoms, as mentioned above, while democracy deals with equality. Together they promote not just political equality, but also social and economic equality (1987: 386-7). Therefore, the freedoms being promulgated by the liberal democratic theory makes it attractive and thereby seemingly compatible with capitalism. Capitalism promotes a predominantly market driven competitive economy in which individual or corporate private owners of the major means of production and distribution are free of state intervention to dispose of their holdings of profits accrued (Cunningham 2002:46). ...read more.


Likewise in the former Soviet Union, Central and Eastern Europe and the Baltic's income inequalities increased drastically (HDR, 2002:60). Max Weber conducted a study on the bureaucracy. He found that within the capitalist society there exists an elitist class. These are the leaders of public sector organizations and the modern economy. In their activities they produce larger, complex and numerous organizations, which in turn create more bureaucracy and not democracy. This bureaucracy creates layers of organization between leaders and the people and a new class of technocrats and bureaucrats. The latter inadvertently becomes the new holders of power demonstrated through expertise, agenda setting, managing routines, and administering rules. They in turn widen the gap between the leaders and the people and with the resources of their organizations (wealth, information and influence) create a new source of power for the elites and disempowerment for the unfortunate masses (Buddan, 2003). The brand of democracy being enforced by these groups is hazardous to developing countries. The current social policies of mega corporations, such as NAFTA, the W.T.O, the World Bank and the United Nations seemingly unintentional, serve to restrict functioning democracies. In order to protect the interest of the wealthy nations, like the OECD they lock developing democracies into treaty arrangements that provide transnational corporations with the power to restrict the arena of democratic politics and allow them to manipulate the market. This can be seen in the relations between the United States and Haiti in the 1990s, in an attempt to alleviate the growing disaster that called forth the United States hostility and military coup the first democratic government followed the recommendation of the USAID- World Bank to create an economy based on assembly plants and agro export over land cultivation for local food consumption. Local rice production supplied most of the countries domestic needs, however with the new reforms this decreased to 50%. In 2002 the USAID withheld aid to ensure that the cement and flour mills were privatized for the benefit of wealthy Haitians ...read more.


More than $7 billion in aid to developing countries now flows through international NGO's, reflecting and supporting a dramatic expansion in the scope and nature of NGO activities (HDR 2002:5). Tied to this is the need for independent and plural media that will be free from state control and from corporate and political pressure. This will further create opportunities for people to exercise their right to free speech, assembly and information. The media allowed for transparency in the 2000 Ghanaian elections and prevented any attempt to rig voting, bringing credibility to the announced results (HDR 2002:6-7). People must be empowered to influence the decisions that affect them nationally and globally. In 2001 a global health fund was launched to address an imbalance in health research. Malaria, for example, kills 1 million people a year, nearly all of them in the poorest countries. More and more developing nations are able to protest for their various freedoms. Under a strict capitalist system this would have been hazardous for the survival of investments within the country. The level of pluralism which is emerging today has been largely aided by new forms of collaboration between governments and civil society groups both locally and internationally. The argument for human development position the debate on democracy and capitalism into oblivion, as the democratic deficit which exists in the interplay of the market and the state creates inequalities that are detrimental to the survival of developing countries in the global arena. There are decreasing levels of national investment in the social programmes, such as education and healthcare and if these issues are not addressed then the millennium goals to eradicate world poverty by 2015 and also to demolish the system where the rich gets richer and the poor gets poorer will not be realized. The debate was on whether democracy and capitalism were compatible, as indicated for developing countries in particular they exist in great conflict. Globally there needs to be a shift in focus from making democracy and capitalism work to promoting human development both in the political and economic sphere. ...read more.

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