- Marx, Schumpeter, and the East Asian Experience
AS the twentieth century approaches its end, we are witnessing two epoch-making historical developments. Contrary to the expectations of both socialists and their opponents, the socialist regimes in Eastern Europe and the former Soviet Union have collapsed swiftly and thoroughly, and without any external cause such as war.1 Perhaps less surprisingly, but also against the predictions of most experts, modernizing authoritarian regimes with successful market economies, particularly in East Asia, have begun to evolve into democracies.
Both developments have profound implications for the relations among capitalism, socialism, and democracy. They also suggest the possibility that we may be entering the age of democracy. In order to comprehend fully the meaning of these recent historical developments, however, we must pause to consider the theories that predicted the opposite of what actually happened.
Communism at its philosophical core amounted to a belief that man could not fulfill his humanity unless society was transformed so as to liberate him from all individual acquisitiveness. In a sense, communism was as much an ideology of freedom as liberalism. Where it differed from liberalism was in its belief that man could obtain true freedom only through the absolute destruction of all structures of inequality.2
The failure of communism, therefore, calls into question the notion that the utter denial of man's acquisitive urge is a necessary condition for the actualization of man's freedom. Indeed, this failure suggests that [End Page 17] the exact opposite—namely, the acknowledgment of man's acquisitive drive as an inherent part of human nature—may be among the conditions necessary for a free society.
The collapse of communism across the former Soviet bloc can be attributed to two seemingly separate but actually interrelated causes: the failure of centrally planned command economies, and rising citizen demands for greater freedom. A condition of equality did not "liberate" man from the acquisitive urge any more than the abolition of private property led to genuine equality. Nor did outlawing private ownership of the means of production solve the problem of scarcity, as communists believed it would. The abolition of private property led to enormous inefficiencies, making the frustration of the acquisitive instinct much sharper and more urgently felt.
Communism's fall compels us to ask anew about the relationship between democracy and socialism. We can no longer feel confident that, as Joseph Schumpeter suggested 50 years ago, there is no relationship, either positive or negative, between socialism and democracy. The rejection o f the former in the name of the latter may not by itself demonstrate a necessarily hostile relationship between the two, but it does raise the fundamental question of the relations between a political system and an economic system.
It was Karl Marx who first raised the question of political democracy's compatibility with a particular economic system. Like most socialists, Marx believed that democracy was not only compatible with socialism but necessarily linked to it. For him, both democracy and socialism stood for freedom. Since socialism meant an economic system in which structural inequalities have been permanently "overcome," it was the only basis on which the political superstructure of true democracy could stand.
The assumptions on which Marx based his thesis about the necessary relationship between democracy and socialism led logically to his rejection of capitalism as an economic system incompatible with democracy. The state under capitalism, Marx said, is nothing more than "the executive committee of the exploiting class," and hence cannot possibly be democratic. The "exploiting class" in a capitalist society holds the power to exploit by virtue of its ownership of the means of production. Those who are excluded from control over these means can never hope to compete with the capitalist class on an equal footing. From the Marxian perspective, "bourgeois" democracy is a sham.
Yet Marx's assertion that communism would automatically usher in democracy raises questions even within the context of his own theory. By abolishing private property, communism would by definition eliminate [End Page 18] the capitalist instrument of exploitation. There would no longer be a permanent ruling class for whom bourgeois democracy provided the state apparatus...