Capitalism: The Right Way to Promote Democracy


One of America’s top foreign policy goals, particularly since the end of the Cold War, has been promoting democracy across the world. In the minds of American foreign policy elites, there are both moral and strategic imperatives for spreading democracy.

Regarding the former, Westerners in general, and Americans in particular, believe that liberal democracies are morally superior to other forms of government. As for the strategic rationale, American elites point to the fact that liberal democracies don’t go to war with one another, even if they aren’t any less warlike (and may be more warlike) when interacting with non-democracies. One can quibble with these rationales, but they are deeply held by American elites and, to a much lesser extent, Americans in general. Thus, as Suellen Aguiar pointed out on The Diplomat this week, the U.S. is likely to continue promoting democracy despite the setbacks it has encountered in Afghanistan and Iraq.

But if the American foreign policy community is going to continue trying to promote democracy, it must come to terms with one simple irony: it has become less successful at spreading democracy even as it has made democracy promotion a greater priority in U.S. foreign policy.

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

Although it held itself up as the leader of the free world during the Cold War, the U.S. was much more willing to stand by non-democratic governments so long as they were not communists and promised an iota of stability. Furthermore, when democracy and stability were at odds, the Cold War-era United States was usually more willing to side with the latter. Although the U.S. today still supports its fair share of non-democratic governments, its tolerance for them has lessened.

At the same time, the U.S. has become less successful at promoting democracy in the post-Cold War era. Consider that, throughout the course of the Cold War, nearly all of Western Europe and Eastern Asia became shining examples of democracy. By contrast, America’s experiments in democracy today are more likely to end in anarchy than democracy.

Some may attribute the divergent outcomes to the fact that in today’s world, America’s democracy promotion often takes place in war-ravished countries with no history of democratic governments. There may be some truth to this, which suggests the U.S. should take more care in selecting the countries where it seeks to promote democracy. Still, the argument is ultimately unpersuasive. After all, few places were as ravished by war following WWII than Europe and Asia. And while some countries in Europe had experience with democratic governments, surely this was not the case in places like South Korea and Taiwan.

Rather, I think the divergent outcomes are best explained by how the U.S. approached its democracy promotion. In the Cold War cases, Washington focused first and foremost on promoting capitalism and stability, which generally gave way to democracy. Consider that the centerpiece of America’s post-WWII commitment to Europe was the Marshall Plan, which sought to shore up Western European allies economically. Similarly, the U.S. supported repressive regimes in South Korea and Taiwan that were led by economically-forward looking dictators.

The advantages of promoting capitalism over democracy are manifold. First and foremost, it’s quite difficult to get the leaders of authoritarian regimes to buy into democracy promotion. This is not necessarily because they are power hungry egomaniacs (although they certainly could be). Even if a perfectly benign individual was ruling an authoritarian state, they would have significant incentives not to advocate democracy. After all, swift transitions from authoritarianism to democracy often result in leaders of the former not only losing their power but also their lives. Indeed, the lives of their families are often jeopardized by such a transition.

By contrast, forward-thinking authoritarians can be persuaded to adopt capitalism and integration into the global economy, which can often shore up support for them domestically. Even as it does, economic growth and a modern economy gradually strengthen the institutions and new power brokers who will later be needed to rule in a stable democracy. In that way, capitalism not only gradually supports a transition to democracy, but it creates the conditions necessary to ensure a fairly stable transition to democratic rule. These same conditions are lacking in authoritarian states that seek swift transitions to democracy. A stable transition, in turn, means that the democracy that does take root will be more sustainable and entrenched in society. Just compare the democratic transitions that took place in countries like Taiwan and South Korea with those that occurred in the former Soviet Union and Egypt.

The major drawbacks of supporting democracy via capitalism promotion are the length of time it takes and the uncertain outcome involved. Regarding length of time, although it can be painful for those involved, as just noted, this time usually ensures greater success in the long-term. Democracies or any political systems are not meant to develop overnight.

Regarding the uncertain outcome, it is true that embracing capitalism doesn’t automatically lead to democratic rule. The People’s Republic of China seems to be evidence of that. However, these are the exceptions to the rule, and it’s quite possible that in time democracy will take hold in a country like China. Moreover, while the human rights situation in China is certainly condemnable, it has without question improved drastically since China’s reform and opening up period began. What reasonable person could argue that ordinary Chinese were freer under Mao than they are today?

The bottom line is that if the U.S. is going to promote democracy, it has to get better at it. It is irresponsible and immoral to promote democracy if it is likely to lead to anarchy, no matter how pure initial intentions were. And if the U.S. wants to get better at promoting democracy, a good place to start would be by promoting forward-thinking authoritarian leaders who base their legitimacy on economic growth and integration into the global economy.

Sign up for our weekly newsletter
The Diplomat Brief