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Some people often equate capitalism with democracy and communism with dictatorship, is this necessarily true?

  • What are good examples and counter-examples of these associations?
  • Should kingdoms etc. be called capitalistic?
  • Is there an affinity between the form-of-government and form-of-economy on a solely theoretical basis?
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There is no communist country that is not a dictatorship nor is it possible for a communist country to not be a dictatorship by the definitions given in the "The Communist Manifesto" by Marks and Engels. –  Sardathrion Dec 19 '11 at 7:49
@sardathrion As I understand it, the dictatorship phase was supposed to be temporary and eventually give way to a form of -- essentially -- anarchy. But of course, since anarchy is completely impractical, this never actually happens. –  Daniel Bingham Dec 19 '11 at 20:44
@DanielBingham - Anarchy is not so much "impractical" as unstable. Long term, people will organize from anarchy, since rational people usually see the practical benefits from social organization. If you stop them from organizing, you have dictatorship, not anarchy. If you don't stop them, they will again organize into something on the sliding scale between dictatorship and libertarianism. That process is inevitable, and has a well established name: history. The point Sardathrion makes is that there's nothing aside from dictatorship to stop me from runnnig capitalist sub-society in the commune –  DVK Dec 19 '11 at 21:17
@DVK If you want, we can continue this in chat. I'm in the room awaiting you. –  Daniel Bingham Dec 19 '11 at 21:22
@DVK From Wikipedia: "Stateless communism, also known as pure communism, is the post-capitalist stage of society which Karl Marx predicted would inevitably result from the development of the productive forces. [...] Strictly speaking, pure communism is a stage of social development where material and productive forces are advanced to a degree where actual freedom (freedom from necessity, and thus from wage labor and alienation from work) for every person is possible.The state apparatus becomes redundant because classes cease to exist.[1]" –  Daniel Bingham Dec 20 '11 at 4:27

4 Answers 4

As you have correctly implied, you can NOT equate these terms. Among other reasons, because the first couple are economic systems and the latter are political. There are certain correllations and causations betwene them, however.

Just as a note, your question is nearly impossible to answer for 4 reasons:

  1. You don't actually define what democracy or dictatorship is precisely, and one can twist sematics in many different ways.

    • USSR considered itself a fully functional democracy and held elections every N years, even under Stalin.

    • Wikipedia openly states in the first paragraph of "Capitalism" article There is no consensus on the precise definition nor on how the term should be used as a historical category.

    Moreover, I have a feeling that you may actually mean "free market"/"Lassiez fair" economy when you say "capitalism", despite the fact that these are not at all equivalent. We will explore that in detail below.

  2. As a special case of the above, "democracy/dictatorship" is not straightforward. You can have a country that is somewhat of a functional democracy as defined by populace having elections and a choice in next rulers, which has significant economic freedom in its laws yet very strict social rules (Singapore), and vice verse (France).

  3. Very few countries (I'm gonna go for "zero") have pure democracy, pure capitalism and pure communism. Most are on a continuum, some closer to the edges some more mid-way. USA is nowhere near a real capitalist country at least since Roosevelt (Teddy, never mind F.D.); and USSR had some chunks of private economy, mostly in black market area.

  4. Some of the rules described below take a long time to take effect, and therefore a country in transition from one form of government/economic combination to another may very well violate some of the rules for a period of time, until equilibrium establishes itself. A good example of this is early Nazi Germany, which continued to have a fairly strongly capitalist and even free market economy early on, and moving to somewhat-capitalist NON-free-market economy (as note above, there's a major distinction) later on, with the end goal being a mostly socialist economy with some elements of oligarchic capitalism.

    (As a side note: in case you immediately start wondering why I mention socialism and Nazi Germany in teh same sentence, the answer can fill a whole book, but for a short version, you should recall the actual name of Nazi party: NSDAP. As in, "National Socialist German Workers' Party"

This is a pretty long answer - I will add to it in chunks and remove this sentence when complete

What are good examples and counter-examples of these associations?

  • A good example of a country with strongly "democratic" politics and capitalist economy is USA, though as noted the economy has strongly moved away from "free market" direction with time.

  • As noted above, Nazi Germany had a mix of capitalism (though not very "free market" one) and socialism and dictatorship.

  • Singapore is a parliamentary democracy that is among the most economically free in the world (more so than the USA) but socially the country has laws and customs that some/most people associate more with a dictatorship than a democracy.

  • France has a mix of socialist and capitalist economy with a very strong shift towards socialist, and is a democracy.

  • Pre-1913 Russia was a monarchy (not quite a dictatorship, but nowhere a democracy) with a fairly robust capitalist system beginnings (though leavened with leftover feudalism).

  • Chile under Pinochet can be classified as a dictatorship (though, from my readings, doesn't seem to be nearly as awful as pro-socialist propaganda would have you believe), that pursued a very strongly pro-free-market economic policies. I would classify it under the "in transition" categories mentioned above - eventually, either it would have had to abandon free market approach OR dictatorship (the latter indeed happened).

  • Then there are really weird constructs like Israel, which is a democratic socialist-leaning capitalist country (ala France) with local pockets of genuine honest-to-god communism (kibbutzes). This is a very important example - communism as economic system can actually be made to work on small local scale. Its practical problems appear when you scale up.

Should kingdoms etc. be called capitalistic?

As noted above, one has to do with political structure and one with economic. While there are some correlations, there's nothing that precludes a kingdom from having an economic system that can be described as capitalist - United Kingdom would be the classical example.

Please note that a kingdom can have many forms - UK is not the same today as Quing China.


Ah! Yes! You got it! Please note that:

  • SOME of the theoretical rules take a while to play out as far as stable outcomes, so things can appear to violate them for a while due to either historical timespans

  • Externalities in the system can cause violations in the rules.

  • As alluded to before, most of the rules ONLY work in large scale closed system. If you get a small enough polity with like-minded people, and ability to exchange undesirable elements with outside world, you CAN set up a fairly stable system of almost any kind for a time being. You can have a fully functionally democratic communist small village - as long as those who live there and disagree with the economic rules get to leave to outside world, AND the outside world economy supports your commune.

  • You can have an "enlightened" dictator enforcing free-market capitalism in a small polity (see Pinochet). But the problem stability-wise is that the "benevolent" "enlightened" dictator will eventually die and be replaced with a less enlightened one; or the system will grow enough that the middle-levels of government would be un-transparent enough for the dictator that those people can avoid "enlightened" policies in their own favor.

The short-short-short version:

  • Communism is incompatible (long term, on large scale) with full-participation democratic republic like American political system.

  • Free market capitalism is hard to impossible to have with full-on directorship.

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Great answer, though on first read it appears to have an authorial bias in favor of free market capitalism. A couple of things -- socialism and "free market" are not exclusive. In one form of Democratic Socialism, companies are owned by their workers (not the government), but still operate in a larger free market context. Corporate Capitalism is in itself economic oligarchy (each company is essentially an oligarchy of the owners). Also, Corporate Capitalism gets on quite well with dictatorship. You're very right when you say there is no agreement on many of the definitions. –  Daniel Bingham Dec 19 '11 at 20:58
@DanielBingham - 1. "owned by their workers" - are they legally allowed to sell them to someone who wants to buy for an accepted price? If not, it's not "free market". If yes, most likely a factory run by an owner would easily outcompete the one owned by the workers, given the managerial qualities of an average factory worker. Personally, I'd rather work in a place managed by someone more competent than me at drumming up business and executing business plans - and I have a lot higher IQ and ability than an average "worker". –  DVK Dec 19 '11 at 21:03
@DanielBingham - 2. IMHO, There's no such thing as NOT "Corporate Capitalism" in practice these days - every country that has any form of capitalism assigns a separate legal entity distinct from its members to corporations which is 100% of what "corporate" means. –  DVK Dec 19 '11 at 21:04
@DanielBingham - 3. Corporate Capitalism is in itself economic oligarchy - false. Oligarchy is a political system where specific elite has more political power. Relationships within coporations don't cleanly affect political power, at least in states with universal franchise. You get one vote, your boss gets one vote. You really need to study what the terms used by propaganda mean before repeating them –  DVK Dec 19 '11 at 21:06
@DanielBingham - if you can't sell a company in practice, how do you obtain investment capital? The state must allocate it. if you don't see the practical problems with that, look at nitty gritty details of Chinese economy in the last 10 years. As I very clearly stated in the answer, in short term you can make any beast you want. Long term, only some of them will be stable and sustainable (heck, don't go as far as China - look at European economy. Where do you thing the more socialist countries would be if there wouldn't be nice capitalist Germans to bail them out?) –  DVK Dec 19 '11 at 21:11

Should kingdoms etc. be called capitalistic?

There are numerous kingdoms (e.g. UK) that can be most definitly called capitalist and democratic. The UK is nominally a kingdom, but the elected parliament can control the monarch, and invite a new one in if they want (cf. The Glorious Revolution)

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1.) Germany, before WWI, was a very successful capitalist autocracy - they only became democratic at (literal) gunpoint. The rulers were hereditary - it was an imperial monarchy. Ditto Austria-Hungary.

2.) Spain spent most of the 20th Century as a capitalist power-house under Franco's dictatorship, something like the 8th largest economy. Portugal lasted just as long as a Fascist (in the political science sense of the word) dictatorship.

From what I can see, pure free-market capitalism results in a corrupt oligarchy, and pure Marxist-Lenninist socialism (Communism) results in the same.

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I am just seeing pattern.

  1. Free market leads to prosperity
  2. Prosperity leads to cowardice (late Sung, contemporary US). I am too rich to die.
  3. Cowardice leads to dictatorship or socialism or other form of heavy oppression (heavy taxation in US, socialism in europe, mass murders in Kamboja).
  4. This lead to poverty (Yuan dinasty, communist countries, sub mortgage crisis).
  5. People got fed up they fight for freedom. Starving means they don't fear death anymore (Early Ming, American revolution, french revolution, capital flight to Asia, tea party movement).
  6. That leads to free market capitalism.
  7. Free market leads to prosperity.

Looks like we just got to repeat this same karma wheel again and again till we are enlightened enough to know the truth.

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Hei, if I am wrong, show me where I am wrong? –  Jim Thio Dec 25 '12 at 4:05

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