Here is my final post as guest blogger at Free Exchange:
I BEGAN the week discussing the link between capitalism and democracy. In my initial post, I emphasized the importance of economic freedoms for generating political freedoms. In the current issue of Foreign Affairs, Michael Mandelbaum echoes this same logic:
The desire for a democratic political system does not by itself create the capacity for establishing one. The key to establishing a working democracy, and in particular the institutions of liberty, has been the free-market economy. The institutions, skills, and values needed to operate a free-market economy are those that, in the political sphere, constitute democracy.
To reiterate the connection between capitalism and democracy, free markets tend to foster democracy because private property, which is central to any notion of capitalism, produces a sphere of autonomy that grants each individual certain liberties. Private property disperses power and shields each person from coercion. Further, well-defined property rights tend to encourage the emergence of private civil associations. As I discussed in an earlier post, these private associations provide individuals with an alternative form of governance where the state is ineffective or absent. A robust civil society fosters self-reliance and individual responsibility, characteristics necessary for any liberal democratic order.