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Authoritarian capitalism, or illiberal capitalism, is an
economic system An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within a society or a given geographic area. It includes the combination of the various institutions, agencies, entities ...
in which a
capitalist market economy A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ar ...
exists alongside an
authoritarian government Authoritarianism is a political system characterized by the rejection of political plurality, the use of strong central power to preserve the political ''status quo'', and reductions in the rule of law, separation of powers, and democratic voti ...
. Related to and overlapping with
state capitalism State capitalism is an economic system in which the state undertakes business and commercial (i.e. for-profit) economic activity and where the means of production are nationalized as state-owned enterprises (including the processes of capital a ...
, a system in which the
state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * '' Our ...
undertakes commercial activity, authoritarian capitalism combines
private property Private property is a legal designation for the ownership of property by non-governmental legal entities. Private property is distinguishable from public property and personal property, which is owned by a state entity, and from collective or c ...
and the functioning of
market forces In economics, a market is a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering ...
with repression of dissent, restrictions on
freedom of speech Freedom of speech is a principle that supports the freedom of an individual or a community to articulate their opinions and ideas without fear of retaliation, censorship, or legal sanction. The right to freedom of expression has been recogn ...
and either a lack of elections or an electoral system with a single dominant political party. Countries commonly referred to as being authoritarian capitalist states include China since the economic reforms, Hungary under
Viktor Orbán Viktor Mihály Orbán (; born 31 May 1963) is a Hungarian politician who has served as prime minister of Hungary since 2010, previously holding the office from 1998 to 2002. He has presided over Fidesz since 1993, with a brief break between 2 ...
, Russia under
Vladimir Putin Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
, Chile under
Augusto Pinochet Augusto José Ramón Pinochet Ugarte (, , , ; 25 November 1915 – 10 December 2006) was a Chilean general who ruled Chile from 1973 to 1990, first as the leader of the Military Junta of Chile from 1973 to 1981, being declared President of ...
, Singapore under
Lee Kuan Yew Lee Kuan Yew (16 September 1923 – 23 March 2015), born Harry Lee Kuan Yew, often referred to by his initials LKY, was a Singaporean lawyer and statesman who served as Prime Minister of Singapore between 1959 and 1990, and Secretary-General o ...
and Turkey under
Recep Tayyip Erdoğan Recep Tayyip Erdoğan (born 26 February 1954) is a Turkish politician serving as the 12th and current president of Turkey since 2014. He previously served as prime minister of Turkey from 2003 to 2014 and as mayor of Istanbul from 1994 to ...
as well as
fascist regime Fascism is a far-right, authoritarian, ultra-nationalist political ideology and movement,: "extreme militaristic nationalism, contempt for electoral democracy and political and cultural liberalism, a belief in natural social hierarchy and t ...
s and
military dictatorship A military dictatorship is a dictatorship in which the military exerts complete or substantial control over political authority, and the dictator is often a high-ranked military officer. The reverse situation is to have civilian control of the m ...
s during the Cold War.
Nazi Germany Nazi Germany (lit. "National Socialist State"), ' (lit. "Nazi State") for short; also ' (lit. "National Socialist Germany") (officially known as the German Reich from 1933 until 1943, and the Greater German Reich from 1943 to 1945) was ...
has also been described as authoritarian capitalist, especially for its
privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
policy in the 1930s. Political scientists disagree on the long-run sustainability of authoritarian capitalism, with arguments both for and against the long-term viability of
political repression Political repression is the act of a state entity controlling a citizenry by force for political reasons, particularly for the purpose of restricting or preventing the citizenry's ability to take part in the political life of a society, thereb ...
alongside a capitalist free-market economic system.


History


Early development

As a political economic model, authoritarian capitalism is not a recent phenomenon. Throughout history, examples of authoritarian capitalism include
Manuel Estrada Cabrera Manuel José Estrada Cabrera (21 November 1857 – 24 September 1924) was the President of Guatemala from 1898 to 1920. A lawyer with no military background, he was a strong ruler (dictator) who modernised the country's industry and transportat ...
's and
Jorge Ubico Jorge Ubico Castañeda (10 November 1878 – 14 June 1946), nicknamed Number Five or also Central America's Napoleon, was a Guatemalan dictator. A general in the Guatemalan army, he was elected to the presidency in 1931, in an election where ...
's respective reigns in Guatemala,
Augusto Pinochet Augusto José Ramón Pinochet Ugarte (, , , ; 25 November 1915 – 10 December 2006) was a Chilean general who ruled Chile from 1973 to 1990, first as the leader of the Military Junta of Chile from 1973 to 1981, being declared President of ...
's reign in Chile,
Suharto Suharto (; ; 8 June 1921 – 27 January 2008) was an Indonesian Army, Indonesian army officer and politician, who served as the second and the longest serving president of Indonesia. Widely regarded as a Dictatorship, military dictator by inte ...
's New Order in Indonesia and the
People's Action Party The People's Action Party (abbreviation: PAP) is a major conservative centre-right political party in Singapore and is one of the three contemporary political parties represented in Parliament, alongside the opposition Workers' Party (WP) and ...
's early administration in Singapore. During World War I, the ideological divide between authoritarian and liberal regimes was significantly less pronounced as both were aligned to
capitalist Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private p ...
economic models. Moreover, the
Axis powers The Axis powers, ; it, Potenze dell'Asse ; ja, 枢軸国 ''Sūjikukoku'', group=nb originally called the Rome–Berlin Axis, was a military coalition that initiated World War II and fought against the Allies. Its principal members were N ...
of World War II have been described as possessing
totalitarian Totalitarianism is a form of government and a political system that prohibits all opposition parties, outlaws individual and group opposition to the state and its claims, and exercises an extremely high if not complete degree of control and regul ...
capitalist economic systems, acting as examples of the early developments of authoritarian capitalism. From the end of World War II, various authoritarian capitalism regimes emerged, developed and transitioned into a liberal capitalist model through East Asia, Southern Europe and Latin America. It has been argued that the change of these early regimes was predominately due to the dominance of liberal capitalist countries such as the United States as opposed to a natural transition, suggesting that modern authoritarian capitalist regimes may further develop the system.


Recent prominence

While having been a relatively unknown system due to the failure of authoritarianism within the
First World The concept of First World originated during the Cold War and comprised countries that were under the influence of the United States and the rest of NATO and opposed the Soviet Union and/or communism during the Cold War. Since the collapse of ...
during the Cold War, with the transition of authoritarian countries such as China and Russia to capitalist economic models, authoritarian capitalism has recently rose into prominence. While it was initially thought that changing to a capitalist model would lead to the formation of a
liberal democracy Liberal democracy is the combination of a liberal political ideology that operates under an indirect democratic form of government. It is characterized by elections between multiple distinct political parties, a separation of powers into diff ...
within authoritarian countries, the continued persistence of an authoritarian capitalist models has led to this view decreasing in popularity. Furthermore, some have argued that by using capitalist economic models authoritarian governments have improved the stability of their regimes through improving the quality of life of their citizenship. Highlighting this appeal,
Robert Kagan Robert Kagan (; born September 26, 1958) is an American neoconservative scholar, critic of U.S. foreign policy, and a leading advocate of liberal interventionism. A co-founder of the neoconservative Project for the New American Century, he is a ...
stated: "There's no question that China is an attractive model for autocrats who would like to be able to pursue economic growth without losing control of the levers of power". Moreover, authoritarian capitalist regimes have experienced notable growth in their economic production, with the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glob ...
stating that authoritarian capitalist countries experienced an average 6.28% GDP growth rate compared to the 2.62% of liberal capitalist countries. In addition, many have argued the inability of liberal capitalism, with the
global financial crisis Global means of or referring to a globe and may also refer to: Entertainment * ''Global'' (Paul van Dyk album), 2003 * ''Global'' (Bunji Garlin album), 2007 * ''Global'' (Humanoid album), 1989 * ''Global'' (Todd Rundgren album), 2015 * Bruno ...
and the slow response of the United States government, to quickly respond to crisis compared to more authoritarian systems has been bought into prominence. In fact, many argue that authoritarian capitalism and liberal capitalism have or will compete on the global stage.


State capitalism


Overlap

Authoritarian governments often seek to establish control within their borders and as such will use state-owned corporations, therefore
state capitalism State capitalism is an economic system in which the state undertakes business and commercial (i.e. for-profit) economic activity and where the means of production are nationalized as state-owned enterprises (including the processes of capital a ...
will emerge to some extent within countries that practice authoritarian capitalism, manifesting from the ruling authorities desire to exercise control. The prominent use of state owned corporations and
sovereign wealth fund A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as ...
s within authoritarian capitalist regimes demonstrates such a tendency, with Russia decreasing its private ownership of oil from 90% to 50% while transitioning to a more authoritarian model under the leadership of
Vladimir Putin Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
. It has also been noted by individuals such as Richard W. Carney that authoritarian regimes have a strong tendency to use their economies as a method to increase their influence heavily investing in their economies through state owned enterprises. Carney describes the intervention of authoritarian states occurring through means he describes as extra-shareholder tactics, including regulations, government contracts and protectionist policies alongside the state engaging in
shareholder activism A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal owne ...
. Moreover, he focuses on the use of state owned funds to engage in take-overs of key assets in other countries such as
Khazanah Nasional Khazanah Nasional Berhad is the sovereign wealth fund of the Government of Malaysia, entrusted with growing the nation's long-term wealth via distinct commercial and strategic objectives. Khazanah's commercial objective is to grow financial as ...
's takeover of
Parkway Pantai Parkway Pantai, Ltd. is a medical company based in Singapore and is Southeast Asia's largest private healthcare provider, and one of the largest in Asia. It is a wholly owned subsidiary of Kuala Lumpur-based IHH Healthcare, whose largest shareho ...
in 2010.


Differences

Within countries that practice authoritarian capitalism, state capitalism is generally also present to some extent and vice versa. As such, there is a widespread confusion between the terms with them at times being treated as
synonym A synonym is a word, morpheme, or phrase that means exactly or nearly the same as another word, morpheme, or phrase in a given language. For example, in the English language, the words ''begin'', ''start'', ''commence'', and ''initiate'' are a ...
ous by individuals such as former Australian Prime Minister
Kevin Rudd Kevin Michael Rudd (born 21 September 1957) is an Australian former politician and diplomat who served as the 26th prime minister of Australia from 2007 to 2010 and again from June 2013 to September 2013, holding office as the leader of the ...
. However, there remains a fundamental difference with state capitalism being a system in which government owned entities engage in for-profit activities while authoritarian capitalism is a system where an authoritarian regime co-exists with, or at least attempts to adopt aspects of, a
market economy A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers are ...
, highlighted in countries such as Hungary by the
Transnational Institute The Transnational Institute (TNI), is an international non-profit research and advocacy think tank that was founded in 1974, Amsterdam, Netherlands. According to their website, the organization promotes a "... just, democratic and sustainable wor ...
.


Examples


China

It is generally agreed that China is an authoritarian regime, with the
Fraser Institute The Fraser Institute is a libertarian-conservative Canadian public policy think tank and registered charity. The institute describes itself as independent and non-partisan. It is headquartered in Vancouver, with additional offices in Calgary, Tor ...
ranking them 136th for personal freedom and the
Human Right Watch Human Rights Watch (HRW) is an international non-governmental organization, headquartered in New York City, that conducts research and advocacy on human rights. The group pressures governments, policy makers, companies, and individual human ri ...
's 2018 report describing a "broad and sustained offensive on human rights" within China due to the treatment of
activists Activism (or Advocacy) consists of efforts to promote, impede, direct or intervene in social, political, economic or environmental reform with the desire to make changes in society toward a perceived greater good. Forms of activism range fro ...
, restrictions to
freedom of information Freedom of information is freedom of a person or people to publish and consume information. Access to information is the ability for an individual to seek, receive and impart information effectively. This sometimes includes "scientific, indigen ...
, political expression,
religious freedom Freedom of religion or religious liberty is a principle that supports the freedom of an individual or community, in public or private, to manifest religion or belief in teaching, practice, worship, and observance. It also includes the freedom ...
and
minority rights Minority rights are the normal individual rights as applied to members of racial, ethnic, class, religious, linguistic or gender and sexual minorities, and also the collective rights accorded to any minority group. Civil-rights movements oft ...
as their core reasons. Moreover, while recognising the limited scope and reducing pace of capitalism within China, with
The Heritage Foundation The Heritage Foundation (abbreviated to Heritage) is an American conservative think tank based in Washington, D.C. that is primarily geared toward public policy. The foundation took a leading role in the conservative movement during the presiden ...
ranking them 110th for economic freedom in 2018, Michael Witt argues that China broadly displays capitalist traits with a significant number of companies either being private or shared between private and public owners alongside a strong entrepreneurial presence despite a continued predominance of indirect state control. Observers wonder whether authoritarian capitalist regimes can endure. Reporter Joseph Kurlantzick and political scientist Yuen Yuen Ang state that China is unable to fully use the entrepreneurial elements needed to drive future growth if it maintains authoritarian control. As Ang writes in ''
Foreign Affairs ''Foreign Affairs'' is an American magazine of international relations and U.S. foreign policy published by the Council on Foreign Relations, a nonprofit, nonpartisan, membership organization and think tank specializing in U.S. foreign policy a ...
'', " achieve this kind of growth, the government must release and channel the immense creative potential of civil society, which would necessitate greater freedom of expression, more public participation, and less state intervention". As stated by Joseph Kurlantzick, "China's growth 'model' has shown impressive resilience in recent years", with an ability to rapidly respond to crises, confidence around economic success and growing soft power being used to explain it.


Hungary

While controversial among experts, some have claimed that after the election of
Viktor Orbán Viktor Mihály Orbán (; born 31 May 1963) is a Hungarian politician who has served as prime minister of Hungary since 2010, previously holding the office from 1998 to 2002. He has presided over Fidesz since 1993, with a brief break between 2 ...
in 2010 in Hungary has experienced
democratic backsliding Democratic backsliding, also called autocratization, is the decline in the democratic characteristics of a political system, and is the opposite of democratization. Democracy is the most popular form of government, with more than half of the nati ...
from its former position as a leading example of
liberal democracy Liberal democracy is the combination of a liberal political ideology that operates under an indirect democratic form of government. It is characterized by elections between multiple distinct political parties, a separation of powers into diff ...
in Eastern Europe and become an example of an authoritarian capitalist regime. Exemplifying this claim of an
autocratic Autocracy is a system of government in which absolute power over a state is concentrated in the hands of one person, whose decisions are subject neither to external legal restraints nor to regularized mechanisms of popular control (except perh ...
transformation, Orbán has been described as severely limiting
freedom of press Freedom of the press or freedom of the media is the fundamental principle that communication and expression through various media, including printed and electronic media, especially published materials, should be considered a right to be exerci ...
and balances of power alongside engaging in reworking the
democratic process Democracy (From grc, δημοκρατία, dēmokratía, ''dēmos'' 'people' and ''kratos'' 'rule') is a form of government in which the people have the authority to deliberate and decide legislation ("direct democracy"), or to choose go ...
in his favour through processes such as
gerrymandering In representative democracies, gerrymandering (, originally ) is the political manipulation of electoral district boundaries with the intent to create undue advantage for a party, group, or socioeconomic class within the constituency. The m ...
. In addition to increasing authoritarianism, Hungary has maintained its capitalist elements, being ranked 59th globally by the
Fraser Institute The Fraser Institute is a libertarian-conservative Canadian public policy think tank and registered charity. The institute describes itself as independent and non-partisan. It is headquartered in Vancouver, with additional offices in Calgary, Tor ...
for
economic freedom Economic freedom, or economic liberty, is the ability of people of a society to take economic actions. This is a term used in economic and policy debates as well as in the philosophy of economics. One approach to economic freedom comes from the li ...
in 2016, leading to the Transnational Institute using Hungary as an example of a highly authoritarian capitalist regime. The rise of authoritarian capitalism has been depicted as emerging from Orbán using a disillusionment at liberal capitalism due to slow wage growth, increasing unemployment and high debt to implement policy reform. These reforms have been described as involving both obtaining the support of businesses through low corporate tax rates alongside preventing opposition from entities such as trade unions or low income workers through the use of authoritarian measures.


Russia

Azar Gat Azar Gat (born 1959 in Haifa, Israel) is a researcher and author on military history, military strategy and war and peace in general. Along with Steven Pinker and others, Gat argues that war is in decline in today's world. He is currently Ezer Wei ...
describes Russia along with China as a prominent example of a modern authoritarian capitalist nation, describing the nation as becoming increasingly authoritarian while maintaining a predominately capitalist economic model. Aaron L. Friedberg simplifies the evolution of the Russian model in the following statement: "The Russian system has also evolved from communist totalitarianism to a form of nationalist authoritarian capitalism that appears for the moment at least to be relatively stable". Friedberg also describes the 1996 presidential election as the point where authoritarian capitalism began forming within Russia, depicting an increasingly powerful majority party backed by media controlled by
oligarchies Oligarchy (; ) is a conceptual form of power structure in which power rests with a small number of people. These people may or may not be distinguished by one or several characteristics, such as nobility, fame, wealth, education, or corporate, ...
and led by
Boris Yeltsin Boris Nikolayevich Yeltsin ( rus, Борис Николаевич Ельцин, p=bɐˈrʲis nʲɪkɐˈla(j)ɪvʲɪtɕ ˈjelʲtsɨn, a=Ru-Boris Nikolayevich Yeltsin.ogg; 1 February 1931 – 23 April 2007) was a Soviet and Russian politician wh ...
and later
Vladimir Putin Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...
. From 1999 under Putin, Friedberg describes the Russian regime as solidifying its power through a re-obtaining state control of natural resources, obtaining control of media and limiting dissidence through measures such as restricting non-governmental organization operations.


Saudi Arabia

Saudi Arabia is considered by Freedom House as an authoritarian country, receiving a civil liberty score of 7/100, this is due to the fact that the Saudi absolute monarchy prevents any political rights and freedom of expression and religion are extremely controlled by the government. In the Heritage Foundation's economic freedom ranking, Saudi Arabia ranks 63, ahead of China and Russia in 2021. The Saudi economy has been opening the market regularly even though it has nationalized some state-owned companies.


Singapore

Singapore is considered by agencies such as the
Human Rights Watch Human Rights Watch (HRW) is an international non-governmental organization, headquartered in New York City, that conducts research and advocacy on human rights. The group pressures governments, policy makers, companies, and individual human ri ...
as a highly repressive regime. They describe a lack of
freedom of speech Freedom of speech is a principle that supports the freedom of an individual or a community to articulate their opinions and ideas without fear of retaliation, censorship, or legal sanction. The right to freedom of expression has been recogn ...
, capital punishment,
detention without trial Indefinite detention is the incarceration of an arrested person by a national government or law enforcement agency for an indefinite amount of time without a trial; the practice violates many national and international laws, including human rights ...
and sexual freedom as causing the country to run contrary to
international human rights International human rights law (IHRL) is the body of international law designed to promote human rights on social, regional, and domestic levels. As a form of international law, international human rights law are primarily made up of treaties, ag ...
. Moreover, the country under the rule of
Lee Kuan Yew Lee Kuan Yew (16 September 1923 – 23 March 2015), born Harry Lee Kuan Yew, often referred to by his initials LKY, was a Singaporean lawyer and statesman who served as Prime Minister of Singapore between 1959 and 1990, and Secretary-General o ...
has been described as embracing the core aspects of capitalism, with the Fraser Institute ranking it second for economic freedom in 2016, creating a state of authoritarian capitalism. However, there is contention around the continued viability of Singapore's economics success which has increased its GDP per capita from US$427.88 in 1960 to US$57,714.3 in 2017. Some economists argue that Singapore has severely restricted its ability to obtain future growth through the repression of individual freedom of expression and thought. Regardless of this, Singapore is considered as an exception in regards to its stability, with Daniel W. Drezner stating that "with the exception of Singapore, this model has never worked over the long run".


Contention

Authoritarian capitalism is a political-economic model that has faced a variety of criticism to various facets of its nature, both around the ability of
capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, private pr ...
to coexist effectively with authoritarianism; and more general criticisms towards authoritarian modes of government. Some experts agree that the authoritarian capitalist model is unstable and will eventually transition into that of
liberal capitalism Economic liberalism is a political and economic ideology that supports a market economy based on individualism and private property in the means of production. Adam Smith is considered one of the primary initial writers on economic liberalism, ...
, with Daniel W. Drezner stating: "The conventional wisdom in comparative politics is that as societies get richer ..they also start demanding more
political accountability Accountability, in terms of ethics and governance, is equated with answerability, blameworthiness, liability, and the expectation of account-giving. As in an aspect of governance, it has been central to discussions related to problems in the pub ...
". In opposition, others argue that the increased wealth of capitalist regimes allows authoritarian regimes to more adequately utilize technology to assist in maintaining their regimes.


Criticism

Daniel W. Drezner, writing for ''
Foreign Policy A state's foreign policy or external policy (as opposed to internal or domestic policy) is its objectives and activities in relation to its interactions with other states, unions, and other political entities, whether bilaterally or through mu ...
'' magazine, argues that when societies get richer, their citizens start demanding more political accountability and democracy. Therefore, capitalist economic policies that successfully promote
economic growth Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
will be inherently detrimental to the continuation of an authoritarian regime. Individuals will increasingly seek to reduce restrictions upon their human rights as their quality of life and access to communication resources increase, so a successful economy will inevitably lead to citizens revolting against authoritarian governments. An appropriate example of this is the Imperial State of Iran during the reign of the Shah Mohammad Reza Pahlavi which was an authoritarian state capitalist system that enjoyed incredible growth but which nonetheless led to
revolution In political science, a revolution (Latin: ''revolutio'', "a turn around") is a fundamental and relatively sudden change in political power and political organization which occurs when the population revolts against the government, typically due ...
. Yuen Yuen Ang, writing in ''
Foreign Affairs ''Foreign Affairs'' is an American magazine of international relations and U.S. foreign policy published by the Council on Foreign Relations, a nonprofit, nonpartisan, membership organization and think tank specializing in U.S. foreign policy a ...
'', argues that the restrictions to freedom of expression found in authoritarian regimes are harmful to the ability of citizens to innovate and engage in
entrepreneurship Entrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values th ...
, leading to a reduction in the economic growth of the country.
John Lee John Lee may refer to: Academia * John Lee (astronomer) (1783–1866), president of the Royal Astronomical Society * John Lee (university principal) (1779–1859), University of Edinburgh principal * John Lee (pathologist) (born 1961), English ...
, Michael Witt and Gordon Redding claim that authoritarian capitalist regimes primarily obtain their
legitimacy Legitimacy, from the Latin ''legitimare'' meaning "to make lawful", may refer to: * Legitimacy (criminal law) * Legitimacy (family law) * Legitimacy (political) See also * Bastard (law of England and Wales) * Illegitimacy in fiction * Legit (d ...
through their ability to deliver economic growth, and therefore this inherent restriction upon economic growth would eventually lead to the collapse of the regime. Moreover, authoritarian capitalist regimes are viewed as having to face civil disobedience towards their authoritarian characteristics, exhibited by countries such as China experiencing 87,000 instances of mass unrest in 2005.


Defense

John Lee and
Brahma Chellaney Brahma Chellaney is a geostrategist, public intellectual, columnist and author on geostrategic affairs. He is a professor of strategic studies at the Centre for Policy Research in New Delhi. He was a member of India's National Security Advi ...
have argued that authoritarian capitalism is a potential competitor with liberal capitalism, with the recent success of authoritarian capitalist regimes such as China being used as the core of their argument. Chellaney has further stated that through using elements of capitalism, regimes may more effectively employ modern technologies to suppress dissidence towards government such as the
Great Firewall The Great Firewall (''GFW''; ) is the combination of legislative actions and technologies enforced by the People's Republic of China to regulate the Internet domestically. Its role in internet censorship in China is to block access to selected for ...
used within China. Niv Horesh also argues that authoritarian capitalist model offered by China is a viable alternative to liberal capitalism, with more effective decision making processes. In addition, Niv Horesh holds that capitalist
free-market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any o ...
policies lead to an increase in authoritarian policies such as those pursued by Margaret Thatcher. The core of this argument lies in the view that citizens will support whichever regime provides material comforts which increasing
economic inequality There are wide varieties of economic inequality, most notably income inequality measured using the distribution of income (the amount of money people are paid) and wealth inequality measured using the distribution of wealth (the amount of w ...
and
automation Automation describes a wide range of technologies that reduce human intervention in processes, namely by predetermining decision criteria, subprocess relationships, and related actions, as well as embodying those predeterminations in machines ...
in liberal capitalist nations undermine. Moreover, challenges to liberal capitalism from an inability to adequately cope with advances of technology have also been raised, summarised in the statement by former Australian Prime Minister
Kevin Rudd Kevin Michael Rudd (born 21 September 1957) is an Australian former politician and diplomat who served as the 26th prime minister of Australia from 2007 to 2010 and again from June 2013 to September 2013, holding office as the leader of the ...
: "Democracies, like corporations, can now be hacked". Alongside these technological challenges, Michael Witt and Gordon Redding have also pointed to a seeming failure to address structural issues such as
gerrymandering In representative democracies, gerrymandering (, originally ) is the political manipulation of electoral district boundaries with the intent to create undue advantage for a party, group, or socioeconomic class within the constituency. The m ...
. Anders Corr has described the expansion of China as a compelling argument for the success of its authoritarian capitalist regime.
Aaron Friedberg Aaron Louis Friedberg (born April 16, 1956) is an American political scientist. He served from 2003 to 2005 in the office of the Vice President of the United States as deputy assistant for national-security affairs and director of policy planning ...
of the Sasakawa Peace Foundation has argued that authoritarian capitalist nations have used an exploitation of the Western world, the reshaping of the international order and exclusion of international actors in an attempt to establish their systems of governance. He has also stated that unlike in the Cold War contemporary authoritarian powers are likely to be driven towards cooperation in their attempts to consolidate their regimes.


Impact on business

In recent years, the
Ease of Doing Business The ease of doing business index was an index created jointly by Simeon Djankov, Michael Klein, and Caralee McLiesh, three leading economists at the World Bank Group. The academic research for the report was done jointly with professors Edward Gl ...
scores and rankings of the authoritarian capitalist states Hungary and Poland have fluctuated around the same level, while Singapore remains at the top of the world and China has improved dramatically. China's
Global Innovation Index The Global Innovation Index is an annual ranking of countries by their capacity for, and success in, innovation, published by the World Intellectual Property Organization. It was started in 2007 by INSEAD and ''World Business'', a British maga ...
ranking has also improved substantially, while the rankings of Hungary and Poland are fluctuating around the same level despite right-wing populist rule. This evidence suggests that authoritarian capitalism can be very business-friendly and attractive for business; in light of this evidence, it is unclear whether liberal democracies are still significantly more attractive for business than authoritarian capitalism, as many have claimed.


See also

*
Liberal autocracy A liberal autocracy is a non-democratic government that follows the principles of liberalism. Until the 20th century, most countries in Western Europe were "liberal autocracies, or at best, semi-democracies". One example of a "classic liberal aut ...
*
Illiberal democracy An illiberal democracy describes a governing system in which, although elections take place, citizens are cut off from knowledge about the activities of those who exercise real power because of the lack of civil liberties; thus it does not con ...
*
Authoritarian socialism Authoritarian socialism, or socialism from above, is an economic and political system supporting some form of socialist economics while rejecting political liberalism. As a term, it represents a set of economic-political systems describing thems ...


References


Further reading

* Berger, Mark T. (August 1997). "Singapore's Authoritarian Capitalism: Asian Values, Free Market Illusions, and Political Dependency by Christopher Lingle". "Book Reviews". ''The Journal of Asian Studies''. Cambridge University Press. 56 (3) 853–854. . . * Bhasin, Balbir B. (2007). "Fostering Entrepreneurship: Developing a Risktaking Culture in Singapore". ''New England Journal of Entrepreneurship''. 10 (2): 39–50. . Retrieved 23 April 2020. * Budhwar, Pawan S., ed. (2004). ''Managing Human Resources in Asia-Pacific''. Psychology Press. p. 221. . * Lingle, Christopher; Owens, Amanda J.; Rowley, Charles K., eds. (Summer 1998). "Singapore and Authoritarian Capitalism". ''The Locke Luminary''. I (1). {{authoritarian types of rule Authoritarianism Capitalism Capitalist systems Economic systems Ideologies of capitalism