Sunday, February 13, 2011

Is Democracy the Best Religion

Is democracy the best religion: exportable and broadly workable in today’s diverse and divisive world? As practiced in the United States democracy is a representative form of government – with the majority deciding on their representatives. It is less the classic ancient Greek implementation – which went directly to the public for policy and decisions. Armed by the media, we are led to believe that democracy works for all countries. But where in modern history has democracy worked? In Haiti, Somalia, Iran and Zimbabwe? In such countries, democracy is synonymous with anarchy – run by an elected tyrant.

President Mubarak just chose to step down from his Egyptian post (nudged) and the military has taken over. They are reevaluating the country’s constitution. Events are too new for us to know whether the protestors’ cries were really accepted and a true democracy will be allowed to reign. Northern Africa and select middle-eastern countries have similarly been facing cries for freedom from long subjugated masses.
Not so long ago, Iran – nominally a democracy - had mass demonstrations – matched by bullets - against a (most likely) rigged election. Honduras ousted its elected president – Manuel Zelaya – who, taking lessons from Venezuela’s Hugo Chavez, was using elected power to change the country’s Constitution on his behalf (and was arrested based upon a warrant from the country’s Supreme Court). The American government supports Zelaya – though we don’t support his advisor, Chavez (also elected). We’ve long supported Mubarak and other like regimes in the region. With such examples, can we say that democracy has proven its workability outside of Western-oriented, economically developed countries?

Indeed, the list of recent successful (not nominal) democracies is small, and includes: Chile, Germany, India, Italy, Japan, Korea, Portugal, Spain and South Africa. What sets these countries apart from those that are democracies in name but not in practice? After all, in 1900 only 10 countries were democracies. That number reached 30 by mid-20th century then didn’t grow for 25 years. By 2005, 119 of the world’s 190 countries considered themselves democracies. So what defines a “true” democracy?

True democracy requires certain factors including: a strong rule of law; property rights; a broad based, effective educational system; a well developed middle class; separation of church and state; a system of checks and balances; fair elections; stable transitions to democracy; a multi-party system; freedoms of the press and speech; and incentives for the wealthy to create jobs and retain their capital domestically. Of these factors, a few typically precede the others. A strong rule of law and – somewhat related – property rights are non-negotiable foundations for true democracy.

Surprisingly, modern true democracies often follow disciplined dictatorships that established such basic rights. An enforceable code of laws creates certainty, fairness, recourse and a basis upon which to make long term planning assumptions. Property rights – and registration of property –protect the rich and support a functioning infrastructure: encouraging the wealthy to retain capital domestically and invest these assets in creating new jobs and industries. Collectively, these rights also provide the poor with stepping stones out of poverty by giving them an asset base to leverage and use as a foundation for building businesses. Capital is what powers a market economy – which then creates a solid middle class.

But establishing such a system can be rocky. In Chile the media still treats lauds Allende (democratic – elected by a minority) and demonizes Pinochet (dictator). Yet under Allende Chile had anarchy and a disrespect of law. The newly empowered masses showed no respect for contract or property rights and the economy spiraled downwards. Chile hadn’t built the necessary base to support a new democracy. Pinochet restored the rule of law, repaired the economy and brought back the middle class. His advisors included free market disciples such as Milton Friedman and the University of Chicago school of thought. True democracy followed; built on the framework Pinochet established using his dictatorial power.

Russia wasn’t prepared for democracy after communism and its rule of law was both weak and selectively enforced. It became a country of mobsters – with the former communist leaders being the mafia bosses. Putin – elected – was a dictator who restored order. Have the changes necessary to establish a true democracy been implimented? Thus far, the signs aren’t promising – in part because the rule of law is still being exercised as a political tool.

Zimbabwe took property rights away from the rich (white) farmers leading to starvation and ultimately chaos. The wealthy fled the country, taking their money and farming expertise. Foreign capital followed them. Today the country is in anarchy.

In contrast, in Peru Hernando De Soto Polar advised (elected) Presidents Fujimori and Garcia – to reform the property system which stabilized the economy and the currency. This upward mob of newly empowered (and better educated) used their newfound capital to increase production and expand the country’s collective wealth and prosperity. DeSoto has since gone on to advise numerous other “fledgling” democracies in helping create the strong middle class and accessible capital necessary for building a true democracy.

Can a true democracy flourish if hindered by religious, ethnic or other inconsistent ideologies? No democracy controlled by religious zealots has yet succeeded. Imams in a mosque aren’t competent rulers. Ultimately, they are taught to honor a holy book and not the realities of modern geopolitics. Dissenters face religious decrees and damnation.

Indeed, ethnic tensions, language differences and religious conflicts greatly complicate the implementation of democracy – the elected majority uses its power against the minority groups. Many countries have used the cover of democracy (or other forms of majority rule) to descend into anarchy, to limit the rights of minorities and to cover up – and perpetuate - war crimes. Yet, the United States – itself the greatest melting pot that ever existed – has shown that people will work together regardless of their differences – in a democracy.

Each political system has proven that the leaders and how they govern profoundly affects its eventual success. Yet no other system outside true democracy gives the people a strong voice and a real chance at long term prosperity. The Internet has “democratized” communication bringing a broad meeting of the masses – making democracy perhaps more relevant today than it has ever been. And, recent events have demonstrated, the people will speak up for their rights when elected leaders try to deprive them of true democracy. To quote Winston Churchill, “It has been said that democracy is the worst form of government except all the others that have been tried.”

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