The Adventures of Chester: "Market Autocracies"

A TCS article asks, Does Growth Lead to Liberalization? points to an article in the most recent Foreign Affairs [subscription only - or at the library like me] titled "Develoment and Democracy." Excerpt:

Threading this needle is difficult, but not, as it turns out, impossible. Gradually, through trial and error, oppressive regimes have discovered that they can suppress opposition activity without totally undermining economic growth by carefully rationing a particular subset of public goods -- goods that are critical to political coordination but less important for economic cooperation. By restricting these goods, autocrats have insulated themselves from the political liberalization that economic growth promotes.

The authors note the difference between "coordination goods" and "general public goods":

Eachof these cases has involved the restriction what might be called "coordination goods" -- that is, those public goods that critically affext the ability of th political opponents to coordinate but that have relatively little impact on eceonomic growth. Coordination goods are distinct from more general public goods -- public transportation, health care, primary education, and national defense -- which, when restricted, can have a substantial impact on both public opinion and economic growth.

The four types of coordination goods are:
1. Political rights, including free speech and the right to demonstrate peacefully.
2. General human rights, including legal protections and due process.
3. A diverse and unregulated press.
4. Broad access to higher eduction and graduate training.

The authors go on the mention several countries which have strengthened their autocratic regimes via economic growth. They even mention that in some cases, as incomces increase, political reform seems even less likely. The author of the TCS article calls them "market autocracies."

This all makes sense if one views it through the lens of how developed the economy is. Initially, the general public goods described above are absolutely essential to growth. In fact, they never cease being essential. This is true if one's economy consists of agriculture, mining, timber, all the way up through to manufacturing. But there, the importance of "coordination goods" increases dramatically if an economy is to make the leap from industrial workers to service workers.

In his 1991 book, The Work of Nations Robert Reich, in what probably landed him the job of Clinton's Secretary of Labor discusses three kinds of jobs in the American economy: Routine-production services: basically traditional industrial and factory workers, but data-processing workers too; in-person services: nurses, janitors, retail workers, the entire hospitality industry, secretaries, hairdressers, etc, and symbolic analysts: all the problem-solving, problem-identifying and strategic-brokering activities, such as scientists, doctors, financial experts, lawyers, software designers, engineers, screenwriters, etc.

I have trouble seeing a country developing its economy to the extent that it has a vast number of symbolic analysts without the "coordination goods" mentioned above. The creativity, questioning of assumptions, and robust communcation necessary to, for example, negotiate a complex transaction, write a sitcom, or design a computer game seem to go hand in hand with the kinds of coordination goods that market autocracies would restrict.

Perhaps there's just not enough data yet . . . it'll be a long, long time before China, for example, has more symbolic analysts and service workers than routine producers.

Another take would be this: American culture, shaped by its democratic political values, has resulted in a symbolic analyst culture that reflects those values and would not exist without them. But is it possible for symbolic analysts to thrive in cultures that place higher values on other merits? It is hard to imagine for us cantankerous Americans, but perhaps it is possible.

Time will tell.

Posted by Chester on October 25, 2005 12:10 AM to The Adventures of Chester