Market Economics and Political Change (review)

Doctoral candidates preparing for comprehensive examinations on political development and modernization can ill afford to ignore this important volume, which provides, among other things, a most lucid, systematic, and up-to-date survey of the important literature in this field. Market Economics and Political Change is a joint effort by faculty from the political science and history departments of Colorado College, together with senior scholars from other leading institutions. They came together in a colloquium to examine the relationship between market liberalization and political and social change in China and Mexico, using what they call "comparative contextual analysis." The conventional wisdom that market reform will lead to democratization comes under critical scrutiny. As may be expected, the controversies remain unresolved because of the complexities of such relations; no groundbreaking theory has emerged. The most that can be said from this effort is that "Without market liberalism, no democracy. With market liberalism, maybe democracy—depending on three conditions: liberty preserved by constitutional and political culture, prosperity credibly attributable to the market economy, and absence of powerful social coalitions mobilized to suppress democracy" (p. 300).

However, this erudite volume is exemplary of what all good edited books should do but too often fail to achieve. All the contributors focus on a common theme, they have a lively dialogue addressing one another's work even as they disagree on important theoretical issues and interpretations, and one person (David Finley) makes an intelligent summary of the tentative conclusions by testing the findings against a third case (i.e., Russia).

The rationale for comparing Mexico and China includes a concern with both their common characteristics and their substantive differences. Both countries are authoritarian, one-party states; both countries have deep historical memories of, and aversion to, anarchy and chaos; both have an instrumental and formalistic attitude toward the role of law and no independent judiciary; both have strong family structures, an increasing number of nongovernmental organizations (NGOs), but weak "civil societies"; and both have carried out extensive market liberalization without political reform. They differ not only in size, geographical location, and the degree of exposure to Western liberalism, but also in the role of ideology in their political parties, the role of the state in economic planning, and the absence or presence of a bourgeoisie. Thus, a comparison of the two countries helps us to understand their divergences, given their similarities, and the affinities, given their differences.

Jorge I. Dominquez lays the theoretical groundwork for the rest of the book with a masterful summary of the literature, dating from Hobbes, on the relationship between a market economy and democracy. He shows that, historically, there was no intellectual consensus that the market was a precondition for democracy or vice versa; moreover, as Robert Packenham makes even clearer, social science scholarship on the subject—whether optimistic or pessimistic concerning the role of capitalism in shaping democracy—has frequently reflected the trend of the times. This is best illustrated by the about-face of Fernando Cardoso, who denounced capitalism in the seventies when American imperialism was the bane of left-wing intellectuals, because they were trained to look at relations among nations and classes only in terms of exploitation. As president of Brazil, Cardoso now embraces democracy and the market because he needs to maintain Brazil's international credibility and creditworthiness. To Dominguez, the relationship between market and democracy is neither predictable nor easy; it is a function of world economic structure and policy choices.

In the same vein, Packenham argues that the revolution from statism to market that swept through much of Latin America in the late eighties and early nineties occurred only because policy makers and intellectuals in Latin America, after fifty years of futile but fatal adherence to state capitalism, conceded to entertaining social capitalism as a possible alternative model of development. The impetus for change was the collapse of communism and...