Seymour Martin Lipset, inspired by the modernization theory that gained prominence in the late 1950s, agreed with German sociologist, Max Weber that capitalism helps growth of a modern democracy (Some Social Requisites of Democracy, 1959). Lipset claimed that a wealthy nation has better chances to sustain democracy. He has drawn attention to mechanisms like education level which increases with prosperity. Social and political tolerance is promoted by access to higher education and it also reduces myths and misinformation. Socioeconomic development also strengthens civil society and middle class, who generally are promoters of democratic values. Presence of a large middle class is often seen as a stabilizing force as it is assumed that large economic inequality leads to class conflict. Lipset had quoted Alexis de Tocqueville saying only those who have nothing to lose ever revolt. Middle class pressures have been an important factor for democratization in different places like the UK, South Korea, the US, the Philippines and Latin America. However, middle class can also support authoritarianism if it suits their interests, like in countries such as China, Germany in 1930s and Chile in 1970s. Another argument is that experience with capitalism creates space for democratization as economic freedom creates pressure on state for political freedom. Capitalism gives rise to a business class who want more say in areas like taxation and property rights and would push for an accountable government. On the other hand, absence of economic freedom would reduce the scope of political freedom making authoritarianism more likely. In countries like the US and the UK, democratization was the result of industrialization. However, it led to authoritarian regimes in countries like Russia, Japan and Germany. A hybrid regime model also emerged in countries like China, Singapore, Mexico, Chile, Argentina and the Philippines where the business class threw its weight behind authoritarian leaders who supported private enterprise. During the Cold War, democracy could not survive and collapsed in Latin American countries like Argentine, Chile and Uruguay, even though these countries had high levels of development. China has raced on to become world’s second largest economy by allowing private enterprise and economic freedom even while retaining strict control and regulation of political freedom. Opening up of economy has not been followed up with political liberalization in China. In Singapore, the ruling party, People’s Action Party has been governing the country since independence in 1965 largely due to impressive economic growth experienced by Singapore. However, in the last decade, there have been some gains for the opposition and in the July 2020 general election, the Worker’s Party secured ten seats, the best result for any opposition party in the country. The achievement of high levels of economic growth without political freedoms in prominent Southeast Asian nations has been explained by the Asian Values argument. According to this argument, in Asian cultural tradition, community is valued over the individual and stable leadership over political pluralism. However, as Amartya Sen has pointed out, there is a general agreement on policies that help economic growth – competitive market, high literacy and school education level, successful land reforms, state support for investment and industrialisation. None of these factors requires presence of an authoritarian government and they are not incompatible with democracy and human rights. Sen has further argued that the so-called Asian values often invoked to justify authoritarianism are not Asian in any sense as Asia is culturally diverse. He has highlighted that to achieve universal freedom of choice, capabilities like education are necessary.
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