POLITICAL-ECONOMIC SYNTHESIS
POLITICAL-ECONOMIC SYNTHESIS
Except for the discussion on communism, we have made no attempt to link
an economic philosophy with a particular political regime, nor a particular
political philosophy with any of the economic systems discussed in the pre-
vious section. In general, a totalitarian political regime encompasses public
ownership of the means of production and a command economy. Prior to the
late 1980s, the countries that took this approach were the East European
nonmarket economies, such as the USSR, Poland, Yugoslavia, Hungary, Al-
bania, Bulgaria, and East Germany; many African countries, such as Libya,
Zambia, Ethiopia, Mozambique, and Angola; Cuba; and China.
There are many examples of totalitarian regimes and mixed (primarily
capitalistic) economies, especially among the secular totalitarian countries.
Some Middle Eastern examples include Jordan, Saudi Arabia, Bahrain, and
Kuwait. African examples include Cameroon, Gabon, Kenya, and Zaire.17
Many observers think that a democratic form of government is comple-
mented best by private ownership of the means of production and a market
economy. Their rationale is that the voter is considered to be rational and to
understand self-interest in the same way that the consumer understands self-
interest and prefers to make independent choices. Japan, the United States,
Switzerland, Germany, Canada, Colombia, Ecuador, Argentina, and South
Korea all have this combination of political and economic systems.
Democratic socialists, however, take a different view. They believe that
since economics and politics are so closely connected, the voters should rely
on their elected government to control the economic system; that is, the part
of the economy not owned by the government should be regulated by the
government. The rationale for democratic socialism is that in order to have a
democratically controlled economy and the economic security necessary for
liberty, the economy must be owned or regulated by a welfare-oriented gov-
ernment. Radical democratic socialists advocate government ownership of all
resources. More moderate democratic socialists support a mix of state-owned
firms, cooperatives, small-scale private firms, and "freelancers" (e.g., jour-
nalists and artists).18 Some countries that fit this model are Austria, Denmark,
France, Greece, Israel, Portugal, Sweden, Egypt, and Zimbabwe.19
Clearly, numerous combinations of political and economic systems are
possible. Speaking generally, perhaps the greater the tendency toward polit-
ical totalitarianism, the greater the reliance on government intervention in
ownership and control of the economy. However, most democratic countries
have also experimented with different degrees of intervention in the eco-
nomic system. The extremes are tending to converge to a more even mix of
public-private interaction in ownership and control. In the case of the indus-
trial countries, the emphasis seems to be on control rather than on ownership.
Most countries that have significant central planning and government
ownership and control of resources are privatizing. Governments find that it
is increasingly difficult to manage the economy and provide adequate support
for public companies. Those companies often operate under political rather
than business guidelines, and resources are not used as efficiently as they
might be in the private sector. Governments that have huge budget deficits
quite often point to the drag on the economy induced by inefficient public
enterprises.
Except for the discussion on communism, we have made no attempt to link
an economic philosophy with a particular political regime, nor a particular
political philosophy with any of the economic systems discussed in the pre-
vious section. In general, a totalitarian political regime encompasses public
ownership of the means of production and a command economy. Prior to the
late 1980s, the countries that took this approach were the East European
nonmarket economies, such as the USSR, Poland, Yugoslavia, Hungary, Al-
bania, Bulgaria, and East Germany; many African countries, such as Libya,
Zambia, Ethiopia, Mozambique, and Angola; Cuba; and China.
There are many examples of totalitarian regimes and mixed (primarily
capitalistic) economies, especially among the secular totalitarian countries.
Some Middle Eastern examples include Jordan, Saudi Arabia, Bahrain, and
Kuwait. African examples include Cameroon, Gabon, Kenya, and Zaire.17
Many observers think that a democratic form of government is comple-
mented best by private ownership of the means of production and a market
economy. Their rationale is that the voter is considered to be rational and to
understand self-interest in the same way that the consumer understands self-
interest and prefers to make independent choices. Japan, the United States,
Switzerland, Germany, Canada, Colombia, Ecuador, Argentina, and South
Korea all have this combination of political and economic systems.
Democratic socialists, however, take a different view. They believe that
since economics and politics are so closely connected, the voters should rely
on their elected government to control the economic system; that is, the part
of the economy not owned by the government should be regulated by the
government. The rationale for democratic socialism is that in order to have a
democratically controlled economy and the economic security necessary for
liberty, the economy must be owned or regulated by a welfare-oriented gov-
ernment. Radical democratic socialists advocate government ownership of all
resources. More moderate democratic socialists support a mix of state-owned
firms, cooperatives, small-scale private firms, and "freelancers" (e.g., jour-
nalists and artists).18 Some countries that fit this model are Austria, Denmark,
France, Greece, Israel, Portugal, Sweden, Egypt, and Zimbabwe.19
Clearly, numerous combinations of political and economic systems are
possible. Speaking generally, perhaps the greater the tendency toward polit-
ical totalitarianism, the greater the reliance on government intervention in
ownership and control of the economy. However, most democratic countries
have also experimented with different degrees of intervention in the eco-
nomic system. The extremes are tending to converge to a more even mix of
public-private interaction in ownership and control. In the case of the indus-
trial countries, the emphasis seems to be on control rather than on ownership.
Most countries that have significant central planning and government
ownership and control of resources are privatizing. Governments find that it
is increasingly difficult to manage the economy and provide adequate support
for public companies. Those companies often operate under political rather
than business guidelines, and resources are not used as efficiently as they
might be in the private sector. Governments that have huge budget deficits
quite often point to the drag on the economy induced by inefficient public
enterprises.
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