Why Economic Freedom Matters — Even Under Authoritarian Rule
What happens when political freedom disappears? Does the economic system that remains still matter?
In new thought leadership published by The Daily Economy, the news and commentary outlet of the American Institute for Economic Research (AIER), three thinkers with Northwood University ties examine that difficult question through the experiences of Chile and Venezuela.
Dr. Alex Tokarev, Northwood University Associate Professor of Economics and Philosophy; Northwood alumna Kristin Tokarev, a researcher, writer and producer for Stossel TV; and Dr. Gabriel Benzecry, Northwood’s David E. Fry Professor of Free Market Economics, co-authored “What’s Worse — Authoritarian Capitalism or Democratic Socialism?”
Their title poses a deliberately uncomfortable question.
The authors are unequivocal that dictatorship is morally indefensible, regardless of its form. Political repression, violence against innocent people and the suppression of fundamental rights cannot be justified. But if tyranny exists, they argue, the economic institutions operating beneath it can profoundly affect the lives of ordinary people — and perhaps their prospects for eventually recovering political freedom.
To explore that argument, Tokarev, Tokarev and Benzecry contrast Chile under Augusto Pinochet with Venezuela under Hugo Chávez and Nicolás Maduro.
Both cases involved serious violations of political and individual rights. Yet the authors contend that Chile’s retention and eventual expansion of private ownership, entrepreneurship and market activity produced dramatically different economic outcomes than Venezuela’s nationalization of industries, price controls and increasing state control of productive resources.
That distinction extends beyond economic prosperity, they argue.
Private property disperses power. When individuals can own businesses, land and capital independent of the state, government does not control every avenue through which people earn a living or organize their lives. The authors contend that this economic independence can preserve space from which other liberties may eventually re-emerge.
Their central lesson is not that economic freedom makes authoritarian government acceptable. Rather, it is that economic and political freedom are deeply connected — and concentrating economic power in the hands of government can make political tyranny even more difficult to escape.
The essay’s publication by AIER places that argument before an audience specifically engaged in questions involving markets, economic institutions and individual liberty. Founded in 1933, AIER is a nonprofit economic research organization that studies and promotes principles including personal freedom, free enterprise, property rights, limited government and sound money.
The collaboration also brings together three distinct Northwood perspectives.
Alex Tokarev teaches economics and classical liberal thought at Northwood and brings a personal dimension to the study of socialism: He grew up in Bulgaria under the communist system. Kristin Tokarev earned both her undergraduate degree and Master of Science in Business Analytics from Northwood and today produces content for Stossel TV examining economic freedom and government policy. Benzecry, a scholar of Austrian economics and the history of economic thought, serves as Northwood’s David E. Fry Professor of Free Market Economics.
Together, their latest contribution advances a central question at the heart of The Northwood Idea: What institutions give individuals the greatest opportunity to live freely, exercise responsibility and pursue human flourishing?
Read “What’s Worse — Authoritarian Capitalism or Democratic Socialism?” at The Daily Economy.