Conventional wisdom tells us that capitalism and democracy go hand in hand. The freedoms that democracy purports to give enables the innovation and enterprise needed for capitalism to thrive. While capitalism may work under other systems it wont work as well as in a democracy.
However, now with China we see a thriving capitalism without democracy. The myth has been broken. There is no need for democracy. There is no link between democracy and capitalism beyond democracy was the system used by the burgeoning capitalists back in the day to remove feudal control and put oppression and control firmly in their own hands. It wasnt about the development of economic system but about who got to control it. Democracy in those days suited the capitalists.
As time has gone by the academic institutions of control have firmly entrenched the mythical connection in minds across the globe. This also helps those who control capitalism in advanced western countries to tell all and sundry that you need to have the same political system as them to be wealthy. This of course saddles less developed countries with even bigger disadvantages as they try to adapt to both globalised capital and at the same time adjust their political system.
Now as the recent recession has bitten it is apparent that the Chinese model of capitalism without democracy works better than the old and probably less dynamic model of capitalism with democracy. The Chinese economy has moved through the recession hardly affected and has come out far quicker while the traditional economies of the EU and US splutter and attempt to exit.
Indeed the lack of democracy in China may well be an advantage as decisions can be quickly made and made with much less concern for public approval although of course complete disregard of the people would still be a dangerous thing. However, western governments with democratic systems need to be constantly aware of the mood of the public and there are plenty of opinion polls to remind them and any government upsetting the people will soon be out of power. While seemingly giving people a say in their government and policies or as argued elsewhere giving people a stake in their own oppression, democracy does mean that hard, necessary and unpopular decisions cannot be made.
What was once seen as a not only a natural link to the dominant economic system is now clearly not so and in fact fast becoming a natural inhibitor to control of the economic system vis-a-vis those with advantageous political systems or forms of oppression. For confusionists it will beinteresting to see how the structures and institutions respond to this challenge as they slowly recognize it.