About the author: Jagdish Bhagwati is a professor of economics and law at Columbia University in New York, an advisor to the United Nations and the World Trade Organization, and a senior fellow for international economics at the Council on Foreign Relations, a nonpartisan think-tank for foreign policy issues. Bhagwati is the author of the book, In Defense of Globalization (2004), from which the following viewpoint is excerpted.
Globalization promotes democracy both directly and indirectly. The direct link comes from the fact that rural farmers are now able to bypass the dominant classes and castes by taking their produce directly to the market thanks to modern information technology, thereby loosening the control of these traditionally hegemonic groups. In turn, this can start them on the way to becoming more-independent actors, with democratic aspirations, in the political arena.
Globalization is at the source of this phenomenon in two ways: the computers themselves are available because of trade, and the markets accessed are foreign in many cases, not just domestic. Thus, a recent report from Kamalpur village in India by the Wall Street Journal reporter Cris Prystay documents how the villagers are now selling their crops by computer, cutting out the middlemen.
Soybean farmer Mohammed Arif, 24 years old, says the computer allows farmers greater control over their own goods. Farmers often get cheated at markets, or get stuck with whatever price is offered that day. With the computer, he says, they can make a considered decision at home, holding crops until prices improve.
The Link Between Prosperity and Democracy
The indirect link, on the other hand, comes from a proposition vigorously advanced by the American political scientist and intellectual Seymour Martin Lipset in his 1959 classic Some Social Requisites of Democracy....
The thesis popularly attributed to Lipset has ... been that economic prosperity produces a middle class. This emerging middle class creates, however haltingly, an effective demand for democratization of politics: the new bourgeoisie, with wallets a little fatter, seeks a political voice, not just one in the marketplace.
So, as with the thesis successfully linking globalization with reduced poverty, we now have another two-step argument: globalization leads to prosperity, and prosperity in turn leads to democratization of politics with the rise of the middle class. The first step is supported by evidence. Is the second step also?
There is no doubt that many believe it to be true. Indeed, many politicians embrace it passionately. In arguing for China's entry into the World Trade Organization, Congressman Tom DeLay confidently asserted, "Entrepreneurs, once condemned as 'counter-revolutionaries', are now the instruments of reform.... [T]his middle class will eventually demand broad acceptance of democratic values." President Bill Clinton, also supporting China's entry, argued that "as China's people become more mobile, prosperous, and aware of alternative ways of life, they will seek greater say in the decisions that affect their lives." President George W. Bush has also spoken in the same vein: "It is important for us to trade with China to encourage the growth of an entrepreneurial class [because when we do this] you'll be amazed at how soon democracy will come."
The strong belief that economic prosperity, engineered through globalization as also the fostering of economic freedoms and associated use of markets rather than central planning, will promote democracy has also been at the heart of a different impassioned debate, contrasting the Russian and the Chinese experience. Russia under Gorbachev opted for glasnost (political freedom and democracy) before perestroika (economic restructuring);... China opted for economic change while keeping democratization firmly away. China's enormous success and Russia's astonishing failure have led many to think both that democratization should follow, not precede, economic reforms, and that, as Lipset would have it, the prosperity and the middle classes that follow the success of economic reforms will indeed lead to democratization down the road....
After the massive shift to democracy that began in the 1980s, the thesis received a new lease on life. As the political scientist Sheri Berman has stated: "Wherever one looked—from Southern Europe to East Asia, from Latin America to the Soviet Union—it seemed as if transitions were the order of the day. In many cases, furthermore, the transitions seemed to follow impressive periods of economic development or correlate with a shift to a free-market economy." And it is noteworthy that, after reviewing three decades of literature on the link between economic development and democracy, the political scientist Larry Diamond concluded that the evidence broadly supported Lipset's proposed link between development and the rise of democracy.
The Role of the Middle Class
But if the link between development and the rise of democracy is robust, Lipset's causation in the shape of the rise and role of the middle class is less so. There is, of course, some evidence in favor of this explanation. Middle classes, particularly today, have greater contacts with other societies by travel, video, radio, and television and hence indulge in more seditious thoughts and a diverse range of protests that include samizdat. [Political scientists] Juan Linz and Alfred Stepan note that there is "even strong empirical evidence that increases in regional wealth increase citizens' expectations that they should be well treated by the police."
The Internet, despite attempts at regulating it, is working its insidious way into ... [China's Communist Party] system.
Yet factors other than the rise of the middle class have played a role. Thus Linz and Stepan make the fascinating observation—based on Pinochet's regime in Chile, Brazil in the early 1970s, and two decades in Franco's Spain—that while there was willingness to put up with authoritarian regimes as long as they were delivering development, this willingness disappeared once development was delivered and prosperity seemed to be securely in place....
It is also well to remember some notable recent experiences that do not really support the role-of-the-middle-class thesis. Consider the way democracy was ushered into Indonesia and South Korea in the immediate aftermath of the Asian financial crisis in 1997-98. Democracy came not as a result of orderly, gentle opening of the door as bourgeois groups increased with economic prosperity and demanded more political rights. It was instead a result of the economic upheaval that the crisis wreaked: the authoritarian elites were discredited and swept away! The mismanagement of globalization and its malign impact were what really produced the swift transition to democracy.
Then again, the benign China scenario—that rapid development will democratize China—has also been challenged, but the criticisms are frankly not persuasive.... The political oversight of the Communist Party over the society and the polity are evident to all who see without wearing blinkers. Yet local elections have taken place. The Internet, despite attempts at regulating it, is working its insidious way into the system. Trade and investment, though concentrated in the four dynamic coastal provinces, are creating new consumers, new producers, and new links with the outside world and its capitalist allures and democratic ways. To assert that all this will not nudge, even push, the communist regime into more political freedoms seems to be to confuse inertia with rigor mortis.