Is authoritarian capitalism the ideal economic model?

Sidharth Wagle
3 min readJan 2, 2022

Introduction

In recent years, the outstanding success of authoritarian capitalist economies like China has fueled critics of liberal democracies, seemingly proving that social and political freedoms have little place in economic development, and indeed, general economic analysis. This stance originally advocated for the suppression of political rights in order to achieve economic growth and prosperity. Advocates put forth two lines of reasoning defending this thesis, namely: (1) people in poverty do not care about political freedoms, and attach more importance to economic well-being, and (2) the emphasis of political rights hampers the process of economic growth.

Here, I will critique both lines of reasoning, hoping to conclude that political, social, and economic rights, both independently and collectively, are fundamental requirements in any politico-economic system that claims to benefit the welfare of its citizens. It should be noted that this critique is heavily inspired by and draws from Amartya Sen’s Development as Freedom. However, I hope to summarize his arguments and present a more easily digestible version to facilitate efficient consumption.

1. Poor people do not care about political freedoms

This first claim is doubly false- false in its support of the above-mentioned thesis, and false in and of itself. Firstly, even if we assume the claim that “people in poverty do not care about political rights” is true, it does not automatically follow that people’s political freedoms should be suppressed forcefully. On the contrary, if true, this line of reasoning bolsters the case for free and fair democratic elections with open public participation and criticism. If poor people truly do not care about political rights, they would vote for a party that advocated for authoritarian capitalism, resulting in the same alleged economic benefits of the model, just with political freedoms, which is necessarily an objectively better situation.

Secondly, the claim has itself been conclusively proven wrong. After Indira Gandhi’s infamous declaration of Emergency in India, allowing the state to assume much more authoritarian policies, the next general election was fought primarily on the acceptability of the authoritarian measures put forth by Indira Gandhi. She overwhelmingly lost that election. Sen writes:

“…the Indian electorate- one of the poorest in the world- showed itself to be no less keen on protesting against the denial of basic liberties and rights than it was in complaining about economic poverty.”

2. Emphasis on political liberties hampers economic growth

It was argued that any emphasis placed on political freedoms would distract from the goal of economic growth and result in greater inefficiency. However, as poignantly pointed out by Sen, political rights have an instrumental role in encouraging economic policies aimed at the benefit of citizens. In other words, when a government is subject to open public criticism and is accountable to the electorate, they are incentivized to not adopt policies that would be harmful to the economic development of the country, whereas an unchecked authoritarian government could very easily swerve from the goal of economic growth, wreaking economic havoc due to rent-seeking behaviour by enterprising government officials.

Conclusion

In conclusion, the argument for authoritarianism in capitalist economies has seemingly little empirical and theoretical evidence to support it, and the fundamental importance of political and social rights cannot be ignored when pursuing economic prosperity and well-being.

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