Does democracy need a market economy? Social Studies: How Democracy and the Market Economy are Linked

When disputes about various aspects of human activity, human rights, duties and so on, much attention is paid to the surrounding conditions. Often the question of whether democracy is needed for a market economy is raised . Let's look for an answer to it.

general information

Initially, let us turn to the answer to economic theory. It is this science that carefully studies the market model as a self-regulating mechanism of interaction in the economic plane. Let's make a brief emphasis on the most important details. For the organization of effective mutual relations between subjects of one society the mechanism of "invisible hand of the market" is used. It is based on obtaining personal benefits from the sale of goods or services. In the end, this leads to the fact that the quality of the assortment is increasing. In addition, it is also expanding. And this is all the result of free competition. That is, this state of affairs is formed under the influence of supply and demand. And with every sold unit something the owner gets a profit. In a market economy, this is expressed by the fact that it pays the employee part of the cost of the goods or services rendered to it. And all that is higher than this (after deducting depreciation spending), goes to the formation of capital. And now let's consider whether democracy is necessary for a market economy.

Precedents

The most popular are the statements that democracy is necessary for successful economic activity within the market. But this is not entirely true. So, a number of authoritarian trends are of interest to us. Their peculiarity is that they reserve, as a rule, only a sphere of politics. And everything else, including the economy, is not limited. But this does not always apply to authoritarianism. One of the most revealing examples is the United Kingdom. In this country there is a system of constitutional monarchy, but this does not prevent it from being one of the most successful countries in the world. One has only to remember how many citizens from our state live there. Yes, that's how it can be. And now let's look at how democracy and the market economy are connected.

Interaction in the ideal case

Let's look at a generalized and somewhat idealized model of how democracy and economics work. In this case, every citizen is a free person and has certain rights (there are also duties in favor of the state in whose territory he lives). In this case, it is necessary to solve the issue of food. A person decides that his knowledge is enough to do his own thing. In this case, they decide to open a company that will provide services or produce goods. If the product turns out to be quite high quality, it will be well advertised, then things will go up. The task of the authorities is to ensure the possibility of developing and implementing such a scenario.

Another example is South Korea and Singapore. The ratio of market economies and democracies in these countries differs significantly from those that are often referred to as reference ones. But at the same time, Singapore and South Korea were able to build a good economy. And although at the time of its construction, the local regime resembled a dictatorship (and many now recall it), now there are democratic power regimes .

What's better?

Which regime of power is more acceptable? A clear answer can not be given to this question. Does democracy need a market economy? Social studies claims that yes. But there is a possibility that an unworthy person will come to power. And even if the right people are in charge of managing all processes, there are many opportunities for democracy in democracy to put them in the wheel. Then, perhaps, it is worth using the services of authoritarianism? After all, there are the same successful countries - the same South Korea and Singapore. But here as luck. After all, there was, for example, a country like Cambodia, in which the Khmer Rouge regime ruled . And he turned into multi-million victims. In general, this option can be compared with a lottery - lucky or not.

Features

But the main question of our article: "Is democracy necessary for a market economy?" So let's determine what advantages we have in this case. Initially, it should be noted that under democracy, one can influence the decisions made in the country, unite people who hold approximately the same views. There are more mechanisms to influence the adoption of the decisions you need. And if they are useful also for numerous entrepreneurs, then it will not be difficult to enlist the support. Thus, decisions will be made that will help entrepreneurs to develop more actively. Also, due to the relative freedom under democracy, everyone can do their favorite thing, if it does not contradict the legislation adopted in the country.

Conclusion

The market economy can be built not only under the democratic regime. But an important feature of this is that entrepreneurs can independently influence the policy pursued in the country. And no one in the trade unions joins the workers in any way, and demands better working conditions. Examples of workers' solidarity include countries such as France and Germany, where hundreds of thousands and even millions of people are regularly striking, demanding better conditions in which they work (increase in wages, state guaranteed security package, etc.).