Sunday, April 11, 2010

Capitalism and democracy: no cake walks

Whenever the writer is flying to Eastern Europe, given the language barrier, he would ask for English periodicals – and the flight attendant would typically hand him a pile. Two articles recently attracted his attention: (a) What went right (in Eastern Europe’s economies) and (b) How democracy dies.

The Economist says: “If Spain, Portugal, Italy and Greece want a lesson in how to take hard decisions, they should look eastward . . . The cuts in spending and increases in taxes and the retirement age that some ex-communist countries have imposed over the past year were much more savage than anything that Greece or Spain have so far contemplated . . .”

And Newsweek asserts: “A global decline in political freedom is partly the fault of the middle class . . . Many of the same middle-class men and women who once helped push dictators out of power are now seeing just how difficult it can be to establish democracy, and are pining for the days of autocracy . . . the public in many countries, who became disgusted that these democrats seemed no more committed to the common good than their authoritarian predecessors . . .”

We’re not alone in our reluctance to take hard decisions; and we’re not alone either in being disgusted with the country’s leadership.

Given the last several years – working and traveling around Europe – the writer appreciates the perspective of The Economist: countries may not be predisposed to take hard decisions. It’s worth noting that the countries referenced are favorite tourist destinations, i.e., Spain, Portugal, Italy and Greece. Being welcoming and cordial doesn’t come together with the instinct to take hard decisions?

Ex-communist countries, on the other hand, could “impose much more savage spending cuts and increases in taxes.” While the old system provided them with basic necessities it also conditioned them to accept a lot of restrictions – e.g., limited choices of if not outright ban on a number of things. In short, spending cuts and tax increases could be more palatable to them. And given the global recession, such “flexibility” was precisely what “the doctors ordered”? To be sure, The Economist recognizes that “ex-communist Europe still has to grapple with its share of problems: an ageing workforce, bossy officials and poor infrastructure . . . To catch up on the what the region missed when it was behind the Iron Curtain remains a mighty task.”

In any case, Newsweek makes an interesting point: capitalism and democracy have taken a beating because of: (a) the war on terror post 9/11 starting with the US invasion of Iraq; and the subsequent difficulty of establishing democracy in the country, (b) the global recession following the collapse of the global financial system owing to greed and irresponsibility in the West and (c) failure of democratically elected leaders in many countries, e.g., Thaksin in Thailand, and Estrada in the Philippines.

Capitalism and democracy are no cake walks – but people and countries could make the choice and be committed to the common good. Indeed, the way to righteousness – the common good – is straight and narrow? As even Gorbachev recognizes in his self-criticism of Russia?

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