Free speech and free markets

Commentary on the 25th anniversary celebrations of the fall of the Berlin Wall has repeatedly touched on one of central political arguments of the early twenty-first century, namely the relationship between political and economic freedoms. For most of the last 30 years the neoliberal economists at the heart of the so-called Washington Consensus have promoted globalization with the argument that free markets facilitate the establishment of other political freedoms. Under George Bush the US National Security strategy even went so far as to emphasize that free trade existed “as a moral principle even before it became a pillar of economics,” adding that “If you can make something that others value, you should be able to sell it to them. If others make something that you value, you should be able to buy it. This is real freedom…” The idea became such an article of faith for President Bush that one of his early denunciations of the 9/11 terrorists included the suggestion that “we will defeat them by expanding and encouraging world trade.”

On the other hand, firsthand accounts from the people who kept alive the isolated portions of civil society that withstood Soviet Communism suggest that the neoliberal model of freedom inverts the true relationship between political and economic freedoms. In The Collapse, Mary Elise Sarotte’s comprehensive new book about the political dissolution of East Germany, one activist recalls, “First we fought for our freedom; and then, because of that, the wall fell.” Contrary to many self-congratulating Western narratives about how President Reagan’s economic and ideological inflexibility won the Cold War, Sarotte’s book shows that East German communism collapsed because of principled resistance by thousands of ordinary people who refused to surrender their political freedoms. Instead, they met clandestinely, often in churches, to discuss the true state of affairs in the country. Similar accounts from many other countries confront this portrait of how societies emerge from authoritarianism.

These questions are far from academic in light of the recent success of authoritarian states like China and Russia. Faced with the obvious recent failings of liberal democracies – six years of gridlock in Washington, endless bickering within Europe – it has often seemed that free markets can function perfectly well without too many democratic restrictions. A more measured version of this argument says that democratic states may simply have overextended themselves. In a book that charts the competition between democratic and authoritarian states over the last five hundred years, two senior editors of the Economist conclude that the “modern overloaded state” has taken on too many responsibilities and created a vicious cycle in which citizens let down by their governments’ ineffieciency to deliver promised goods and services seek further help and become even more disenchanted when their expectations are not met.

Simplified versions of this critique have made it dangerously easy for governments in the developing world to dismiss the importance of democractic institutions. Within Africa, for example, the government of Meles Zenawi, who famously believed “there is no connection between democracy and development” was permitted to pursue, for twenty years, a programme of “authoritarian developmentalism” with hardly a peep of criticism from his Western backers. The legacy of these years remains evident today. In April, shortly before a scheduled visit from US Secretary of State John Kerry, Ethiopia jailed, and reportedly tortured nine bloggers, after charging them with “working with foreign human right activist organisations… and inciting violence through social media to create instability in the country.”

Similar rhetoric, and repression, can be found throughout the Middle East and North Africa, in many parts of the former Soviet Union, and within the Americas. As Michael Ignatieff has written: “The new authoritarians offer the elites of Africa and Eurasia an alternate route to modern development: growth without democracy and progress without freedom. This is the siren song some African, Latin American, and Asian political elites, especially the kleptocrats, want to hear.”

It is important to remember, especially after our own struggles to establish free and fair elections in this country, that democracy is not a panacea for social and political disagreements. But even with its inevitable frustrations and disappointments, it remains an indispensable condition for the transparency and accountability that are essential to genuinely free markets – something that is painfully absent in authoritarian societies which superficially conform to the basic principles of free trade.