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Tanzi Gill

UnderGraduate - BBA,

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Do you think Political Freedom = Economic Prosperity ?

Definitely politics play an important role in an economy. A lot of people argue that political freedom is better for the economy. Well that was the most "agreed upon" belief. But for the most part of 21st Century, it can be seen that it is not entirely true. China despite oppressing political opponents has performed a lot better as compared to democratic countries like USA, Ireland etc. {Yes China is a small and simple example.} Even IMF has also observed that politically repressed countries are performing a lot better than politically free in terms of GDP.

Note: The intention here is not to make any country look bad. Each country has got different factors and reasons affecting its economy. But generally do you guys think political freedom = economic prosperity?

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  • Dec 8 2011: Both sides have their pros/cons:
    Democracy: with the prerequisite that enough people are engaged/educated, more creative economic solutions, the ability to function with extreme detail. More stable, but slow to reaction or do anything.

    Dictatorship: Has the ability to function extremely quickly. It all rests upon whoever is in charge.

    Democratic is not always capitalistic, and Economic communism doesn't have to be Dictatorial.
    China is in a weird position where it's not quite communist, not quite capitalist, and very dictatorial.
    Its possible that the weird neo-mercantile system, culture, human capital, etc. is responsible for its prosperity.

    I think that there are much more factors that play into the equation.
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      Dec 8 2011: I would argue that for Capitalism to succeed, it must be democratic... though the reverse may not be necessarily true. Capitalism relies on people being free to negotiate salary, criticize leadership both corporate, and political, and strike for better working conditions. That's why China is doomed to fail in it's current structure, though I do hope it can peacefully restructure rather than have a violent revolt. People need to be able to say "NO! I'm worth more than this, and if you don't pay me more, I'll find someone who will", in a capitalist society. It's all about individualism, and personal responsibillity, you need freedom and democracy for that.

      Dictatorships move quickly in the wrong direction... Democracy moves painfully slow, but towards a shared vision that people believe in.
      • Dec 9 2011: Indeed, I would agree that in China's case, there is already the beginnings of an (inevitable?) change. However I'm not completely convinced that capitalism needs to be democratic (and likewise communism dictatorial). In theory (and observably on a small level), a strong/great leader can promote capitalistic freedom without relinquishing political freedom. We can find this model in some workplaces, where the 'boss' creates the guidelines and rules/assignments, but the worker is free to complete it/voice out suggestions however they choose to do so. Obviously this model hinges upon having a great leader (and that power doesn't corrupt that leader).

        Obviously I'm not pro-dictatorship, but the point of the question is whether or not political freedom means economic prosperity. In that regard I believe that there are certain advantages in having less political freedom which can prove preferable in some situations.
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    Dec 7 2011: I would make two points.

    1 Political Freedom = Economic Prosperity, if culture produces educated, engaged, and caring citizens. Freedom comes with responsibillity, so freedom isn't better unless people are inherently good, that is cultures job, imho.

    2 Communism, Monarchy, Dictatorship, and totalitarian states, ie. China... Will always produce the cheapest labor, and cheapest products. Therefore, in order for a free capitalist democracy to maintain its standard of living, it must refuse to trade with countriest that are communist, monarchial, or dictatorial. America has forgotten that. Chinese people will always work cheaper, and have a worse standard of living than Americans, until the Chinese people are free to criticize and protest their government. Until people are free to criticize and protest their government without fear of prison or death... their dollar should be completely worthless to free people. China needs a revolt, we don't need to treat people worse... Again, just my opinion.
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    Dec 6 2011: Tanzi, Economic prosperity is a very confusing term.
    Prosperity to whom? to the country and its resources, to the giants of the markets, or the common people as well? Free market policy with democracy was proved to be impotent with providing property to all of the countries residents. However, China as a country became very reach but most of their citizens are not enjoying western living standards.
    Sweden, with a social -democratic policy has its economic problems for the country, but it managed to provide property to most of its citizens.
    Therefore democracy or totalitarian regimes are not enough factors to decide on economic property. The social and economic policy of each regime is the one who decides it.