NCPA - National Center for Policy Analysis

Capitalism Undermines Single-Party Monopolies

July 7, 2000

Recent events have illustrated the link between capitalism, reform, democracy and freedom. That is the conclusion political observers draw from the defeat of Mexico's Institutional Revolutionary Party -- which held monopoly political power over that country for eight decades.

But capitalistic reforms have toppled "institutional revolutionary" parties in other countries as well.

  • Only months ago, Taiwanese voted out of office the Kuomintang -- the party that had defined its entire existence as a nation.
  • Earlier in the year, India's Congress Party lost power to an alliance of opposition parties for the second time in as many years.
  • In Indonesia, Abdurrahman Wahid, a moderate Muslim cleric, became president last year -- ending the ruling Golkar Party's long reign.
  • In South Korea, Kim Dae Jung turned the system on its head by winning power in 1998.

In all these nations, once-great parties lost public trust because they stayed in power too long, using too many fraudulent means and became too corrupt. But it could also be said that they were undone by their own successes. The ruling party in Mexico -- like its counterparts in Taiwan, India and elsewhere -- created the conditions for its own obsolescence, mainly by unleashing capitalism, economists and political theorists point out.

In virtually every successful transition to democracy outside Eastern Europe in recent decades, the ruling party first liberalized the economy and then, often much later and under pressure, liberalized politics. In Mexico, for example, the North American Free Trade Agreement led to better laws, cleaner business practices and greater political openness.

Source: Fahreed Zakaria (Foreign Affairs magazine), "Victims of Their Own Success," Wall Street Journal, July 7, 2000.


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