The old and re-occurring debate on free market and democracy amidst economic scholars is somewhat similar to that of the chicken and egg debate. But despite the controversy, it’s impossible to neglect the fact that there is a strong mutual and complementary link between the two theories, importantly because they mutually strengthen each other. Even those who don’t get to visualize the link between free market and democratic form of government always end up linking both to economic growth and high standard of living. So no doubt about it, both concepts serve as a building block, and a means towards achieving economic growth and prosperity.
Democracy is government of the people by the people for the people. The essence of democracy is that it puts attention on the citizens. It dishes equal right and gives a voice to everyone when vote counts. In all of its ramifications, and in the real sense of it, it gives power to the people. Free Market system is based on the ideals of supply and demand. It ensures that economic activities freely exist with little or zero government involvement and control so buyers and sellers transact based on mutual agreement on price in a free atmosphere void of overburdening regulations, subsidies or taxes.
Simplifying the definitions of the two concepts opens one’s consciousness to the fact that the two concepts focus on liberty, the desires and cravings of the people, agreement, transparency, trust and of course accountability. In both cases it’s more of the people and less of government. In fact in the case of true democracy, (not the semblance of it, as it is shabbily carried out in many African nations such that it utterly renders the word almost meaningless) the people are literarily the government since they can lawfully and peacefully demand change of government and then with the power of one man one vote, fix in another that is widely acceptable to the populace.
The market system is structured around the need for private property, innovation and entrepreneurship which brings about civilization. But can all these play out without free movement, or can innovation be birth without freedom of thought and interaction? People have got to be able to decide; what’s best for them, what to buy, what to sell, who to sell to and what quantity, in an atmosphere where both parties can peacefully agree on price. All these can only be thought out in a market system, as they obviously can’t be well pronounced in a system bounded by collective ownership or an authoritarian system. So we can settle that free market system and democracy are like Siamese twins, since they both centre on the elemental concept of choice and also freedom to maximize such choices.
Many un-free governments recognize that to better the condition of the people and also have a good economy, free market principles work best. However, there is a wide claim that market unavoidably pilots a democratic system of government. In as much as some would rather refute such claims, I prefer to stand on the reality that if a nation moves in the direction of creating a free market system through free trade, from all indications and from the experiences of few nations, the ideologies of free market economy often pave way for the emergence of democracy sooner or later. And that largely explains why proponents of market in un-free nations say that unless free market system is established, there won’t be true democracy. This opinion is based on the contention that free market would birth vibrancy and consciousness powered by knowledge amongst the middle class, such that they can’t but request for democracy.
This thought pattern again lends credence to the connection between capitalistic prosperity and democratic governance. The truth is democracy doesn’t only promote free market and vice-versa, Free market as a matter of fact remains critical in helping to sustain and strengthen democracy, in the sense that democracy and the ideals of market system limits the propensity of political leaders to abuse power. When abuse of power is controlled and put under check, market system would be efficient and effective, adding or leading to the growth and development of the economy.
It should also be noted that it is only when individuals in a given society are free from the shackles of poverty most especially when they are not dependent on the state that they can connect with the benefit of democracy by being active citizens.
Lanre Olagunju is an hydrologist turned freelance journalist. An alumnus of the American College of Journalism, Lanre advocates on several international platforms for the prosperity and absolute well-being of the African continent. He is @Lanre_Olagunju on Twitter.
