Liberal democracy today faces an internal challenge — from the populist movements of the left and the right that have resulted from the badly skewed distribution of the gains from globalization. The strong tides of anti-establishment anger have shaken politics to its core in a number of Western democracies, as symbolized by the British vote to leave the European Union and the rise of Donald Trump in the United States. Liberal democracy, however, faces a bigger threat from outside that few commentators are talking about.
One of the most profound developments in the post-Cold War era has been the rise of authoritarian capitalism as a political-economic model, especially for developing countries. This model, best symbolized by China, involves a fusion of autocratic politics and crony, state-guided capitalism.
Between 1988 and 1990, as the Cold War was winding down, pro-democracy protests broke out in several parts of the world — from China and Myanmar to Eastern Europe. The protests helped spread political freedoms in Eastern Europe and inspired popular movements elsewhere that overturned dictatorships in countries as disparate as Indonesia, South Korea, Taiwan and Chile. After the Soviet disintegration, even Russia emerged as a credible candidate for democratic reform.
The overthrow of a number of totalitarian or autocratic regimes did shift the global balance of power in favor of the forces of democracy. But not all the pro-democracy movements were successful. And the subsequent “color revolutions” only instilled greater caution among the surviving authoritarian regimes, prompting them to set up countermeasures to foreign-inspired democratization initiatives.
More than a quarter-century after the fall of the Berlin Wall, the global spread of democracy unmistakably has stalled. Democracy may have become the norm in the West but, in the rest of the world, only a minority of states are true democracies. Using market forces to liberalize tightly centralized political systems may actually have aided the rise of authoritarian capitalism.
Political homogeneity may be as inharmonious with economic advance as the parallel pursuit of market capitalism and political autocracy. But where authoritarianism is deeply entrenched, the fusion of autocratic politics and state-guided capitalism has progressed well in some prominent cases.
When U.S. President Barack Obama recently paid a historic visit to Cuba — the first by an American president since that small island-nation’s revolution established the first communist state in the western hemisphere in 1959 — it aroused hopes of change. After all, Cuba has incrementally implemented limited economic reforms. Some analysts have hoped that democracy would follow capitalism into Cuba.
However, where communists monopolize power or dominate the political scene, a transition to democracy needs more than capitalism to proceed. Nothing better illustrates this than the world’s largest and oldest autocracy, China, which has risen dramatically as a world power by blending market capitalism and political monocracy. The Chinese Communist Party — which boasts 88 million members, more than Germany’s total population ¬¬— dominates the country’s political, economic and social life.
Vietnam and Laos — two other countries that, like China, officially claim to be communist while practicing capitalism — have also dashed hope for market forces to create a freer flow of ideas and to gradually open up autocratic political systems thriving on private enterprise. Vietnam and Laos began decentralizing economic control and encouraging private enterprise in the late 1980s and now rank among Asia’s fastest-growing economies. Yet their one-party systems have maintained tight control on political expression.
Capitalism actually strengthens a communist state’s capacity to more effectively employ technology and other resources for internal repression and information control. One classic example is the notorious “Great Firewall of China,” a government operation that screens and blocks Internet content, creating a politically sanitized information realm for citizens.
By practicing authoritarian capitalism, an autocratic state can stay abreast with technological innovations to help deny dissidents the means to denounce injustice. Such denial can include blocking or real-time censorship of social-media platforms, including instant messaging.
The point is that, in countries where communists call the shots, a free market for goods and services does not generate a marketplace of ideas. In a communist state, rising prosperity through economic liberalization does not create conditions for political pluralism. In other words, countries that liberalize economically do not necessarily liberalize politically, especially when political conditions remain adverse to change.
As an ideology, communism may have lost its moorings, yet it remains antithetical to democracy, because it is centered on monopolizing political power. In all the communist-governed states, cloistered oligarchies have emerged as the original ideology has given way to new means to retain political power, including family lineage, network of connections, corruption and ruthless self-promotion.
Still, communism has helped to spawn the model of authoritarian capitalism. Communism was never a credible challenge to liberal democracy but authoritarian capitalism is.
Through its success story, China, for example, advertises that authoritarian capitalism is a more rapid and smoother path to prosperity and stability than the tumult and uncertainty of electoral politics and the constant tussle between the executive branch and the legislature in democracies. This model provides encouragement to other autocratic states to pursue economic growth and regime stability through authoritarian capitalism.
More broadly, at a time when democratic and free-market principles have come under pressure, the rise of authoritarian capitalism underscores the imperative for an international debate on a fundamental issue — why the global spread of democracy has stalled. Is the rise of authoritarian capitalism one factor?
Human dignity matters a lot. A poor person can be happy but a rich individual can be miserable, depending on the circumstances of their existence. With dignity, even a poor person can hold his head high. The question is: Can a political-economic system that strips citizens of their dignity survive indefinitely?
Authoritarian capitalism usually pretends to be meritocracy offering competent governance and economic opportunity for all. In reality, it entrenches corrupt oligarchies that are answerable to no one and that employ ultra-nationalism as the legitimating credo of their monopoly on power.
India has finally broken out of years of paralytic indecision and inaction on Pakistan’s proxy war by staging a swift, surgical military strike across the Line of Control — a line it did not cross even during the 1999 Kargil War. Although a limited but unprecedented action, in which Indian paratroopers destroyed multiple terrorist launchpads, it will help to dispel the sense of despair that had gripped India over its prolonged failure to respond to serial Pakistan-backed terrorist attacks.
Despite the worsening Afghanistan quagmire, this month’s 15th anniversary of the longest war in American history attracted little attention. The raging battles cast a shadow over Afghanistan’s future and highlight the failure of U.S. President Barack Obama’s strategy to gradually wind down the conflict. The war now draws little international attention, except when a major militant attack occurs.
After the bloody cross-border terrorist attack on an army camp in Uri, near the Line of Control with Pakistan, it will be difficult for Prime Minister Narendra Modi’s government to return to business as usual. Uri is just the latest in a string of important Pakistan-orchestrated strikes on Indian targets since Modi’s 2014 election victory: The other attacks occurred at Herat, Mazar-i-Sharif and Jalalabad in Afghanistan and at Mohra, Gurdaspur, Udhampur, Pathankot and Pampore in India.
From Atal Bihari Vajpayee’s Lahore Declaration to Manmohan Singh’s peace-at-any-price doctrine and Narendra Modi’s Lahore visit statement, India’s readiness to trust Pakistan’s anti-terrorism assurances draws attention to the adage: “Fool me once, shame on you. Fool me twice, shame on me”. India has been fooled repeatedly.
The violence-marred water feud between Karnataka and Tamil Nadu illustrates how water stress is fuelling bitter discord between Indian states over sharing the most vital of all natural resources. India’s Supreme Court intervened this year too in the Punjab-Haryana dispute in the Indus Basin over the Sutlej-Yamuna Link Canal.
China is a big fan of dams. Indeed, over the last 50 years, the country has constructed more dams than all other countries combined. But there is one dam that China never managed to get built: the Myitsone Dam in Myanmar. And Chinese leaders can’t seem to let it go.


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