Democracy in its original, not so pure form, functioned prior to the existence of a free-market economy. Ancient Greek city-states, which invented democracy, operated with an economy based on slavery. To a certain degree this was unfortunately true as well in the early U.S., although by the late eighteenth century a free market economy was developing.

Free Market is a market in which there is no economic intervention and regulation by the state. Democracy can not function without Free Market Economy.

Democratic system means freedom to choose. Free markets enables people to have a wide latitude of choice in their economic life. Based on the above definitions they should coexist and support each other. However the way things are working the bureaucracy, corruption, partial government control and money power are all messing up both.

http://asiasociety.org/democracy-and-free-markets

http://worldsavvy.org/monitor/index.php?option=com_content&id=181&Itemid=366

Quite true, Nageswara, and we all see the "messing up" process up close.

Do not we have nearly free market in the supposedly communist China, which is not a democracy? I have seen maximum number of Mercedes and BMW cars in Shanghai than anywhere else. What does that illustrate if not capitalism?

In any case, I think we have free market in Arab countries, if I am not wrong, where there is no democracy.

At the same time, India had democracy but no free market before 1991 when it adopted globalization and nearly free market. I had to wait for 10 years for a telephone connection in the highly regulated product market, though we were, and are, the largest democracy in the world.

I think both can do without the other.

There is joke, which goes like this:

Deng Xiaoping's driver told him, "Sir, we ave hit a cross road. Should I turn right or left?" He told the driver, "Give the signal for the left, but turn right."

@Nelson: What we also see in India and US is that money power is so openly used in democratic elections, it distorts the results thus undermining democracy. Add to that lobbying (some form of corruption) that the laws are changed or amended to suit one section of people. Unfortunately all parties are to be blamed for this.

Free-market is not specific to democracy. Arab traders who used to trade with all cultures of known world perhaps never required to obtain a license to do so. However, prior to liberalisation and globalisation there was License Raj (Bureaucratic issuance of Licenses) for any economic activity of scale in my country. It took much time to start a project due to red tape. It means in spite of democracy there may be difficulty in trade commerce and industry.

These are sellers of their instutions who associate it with every institution and activity deemed good from their ideological perspective. A good, efficient and honest dictator can do things and the country may achieve what in democracies may take centuries.

I agree with Abdalla El-Mowafy

Free market and democracy are mostly presented as 2 brothers of the same family but indeed they are not twins.

Democracy is not so very positive as it sounds, democracy sounds for me as the will of the majority, but this majority is not always right and can be very easy brainwashed by the industrial psychologist, who take use of the results of brain research.

Democracy can be used by the politicians to ignore the best of the society, there is not enough space in democracy for independent research, as they follow the majority for their votes, the genius is often forgotten.

The majority is sometimes too materialistic, short seeing forgetting the past and misses a good view for the future.

Here the free market is coming in, they promise profit, consumption. The quality of the work is not always considered. They make it easy and most of all they try to diminish the working places because people is only a number of cost.

Free marked is free for itself; can mislead and can ignore negative consequences.

Even war is permitted if needed for expansion and economical war is performed behind secret doors.

The social democratic system was good in many countries but now they see that they also became the slaves of the big capital.

The system is worn out, we lost a lot of culture, social life and most of all the intuition to create a future.

Time to find a new system where east and west, north and south can meet each other.

Strange that in neuroscience they are surprised about the intuition and capacities of animals and come to the conclusion that we lost a lot of qualities during the evolution.

Free market gets a strange sound if all the small shops, farmers, family industries have to close their doors in favour for the big market chains who study how to absorb the independent entrepreneur.

For the case of developing countries have a look at this research paper:

http://www.researchgate.net/publication/4911586_Does_more_democracy_lead_to_greater_economic_freedom_New_evidence_for_developing_countries/file/50463529e023cb5c07.pdf

Article Does More Democracy Lead to Greater Economic Freedom? New Ev...

Democracy concerns the organization of the public area, free market is a way to satisfy personal needs. In a democracy the government organizes the public area according to the majority , but with respect to the constructive remarks of the opposition and with guarantee for minorities. The public area, however is not a free lunch, it claims civil virtue of its participants and in consequence it put ethical claims. Free market is a qustion of private choices in order to fulfill human preferences without ethical engagement

“Free market is a question of private choices in order to fulfill human preferences without ethical engagement”, reading Guido J.M. Verstraeten

Human preferences can’t be fulfilled without the harmony with the environment; which is the whole world, nature and the universe.

Ethical engagement is laying at the basis of humanity it is proved that it is inherited by the genes. Ethics are the fundament of our culture, ethical theory of ‘le neutre’doesn’t exist.

Free market has to take this in consideration.

Dear Rita, I agree with you that ethical care is the fundament of any human society

but it must be implemented within a public and in. consequence within a politic area.The latter can never be neutral.However ruling this public area according to free market principles or any other economic ideology is not. democratic and sounds very odd. Nevertheless the basic idea of EU is free market, but can that be identified as democracy?

The Chinese economic reform ( introduction of market principles) refers to the program of economic reforms called "Socialism with Chinese characteristics" in the People's Republic of China that was started in December 1978 by reformists within the Communist Party of China (CPC) led by Deng Xiaoping.

Presently the People's Republic of China which is not a democracy has the second GDP after the US with an economic growth far superior to the US.

This example shows that market economy does not need democracy.

They don’t need each other but they have something in common, our neurons are making the connection as they are often introduced together in the media.

They are about ‘mass’ ‘freedom of choice’.

Mass is the product of what science has introduced for the last centuries, the quantity that counts, time as a quantity of money. All this is suffocating the quality of life.

It is possible that quality diminishes when quantity is coming in as mono culture on all levels

So also Europe is going that way. It is possible that the single personality is getting lost,

The money is going to the big cultural events.

I wonder if cult figures as Steve Lacy, Johan Daisne are still possible in the 21th century.

If that can be proved then we are losing a lot.

I hope so since one to the other can co-exist or might not go together it depends on the application term. Democracy in its term does not indicate free market yet on the other side there is no as such pure democracy since there exists countries sovereignty, welfare, security and other issues with such an idea there is no even a free market economy of classical thoughts calibrating because there is an issue dumping of import, foreign investment arbitrage, out flow of capital, healthy economy ( in-terms of who handle the highest share of the economy, concentration rate etc). So here I hope the issue is one can go with out the other yet the co-existence of the two is nice if the country that applied matters in its real term of development.

@Louis Brassart

Thanks Louis your shared thoughts bring an interesting perspective to the debate. Indeed, the case of China shows free market economy operating in the absense of democracy. How about the other wayaround? Any examples on mind?

Mohamed,

Any democracy moves out of the market economy during major war period and return to it after. The US have tried to use the market model for doing war in Irak and it was a total disaster.

Thanks Louis.

I don't think the question frames the issue properly as if it is either-or. Modern democracy requires a consumer economy that distributes good with some efficiency and responds to, all the while creating, shaping demands. Just think of the electronic revolution over the past few decades. Companies need discretion to innovate and follow multiple paths. That said a market economy also creates multiple tensions and distortions for a democratic society. Income and capital inequality, a very active topic now, see Piketty's marvelous new work 'Capital in the Twenty-First Century,' undermines and fundamentally weakens a democratic society. Our political process is overly "sensitive" to the needs of wealth. Just think of how our political process is distorted and manipulated by our campaign finance system aided and abetted by a conservative Supreme Court. Modern capitalism clearly concentrates wealth in the upper 1%, see figures for "all" Western industrialized countries over the past twenty years, but governments in the Social Welfare framework in Europe, lessen the concentration of wealth -- Scandinavian countries, Germany, Holland. The figures on poverty and the homeless vary greatly in different countries with the US one nation in the forefront. Figures on voting turnout, political participation, and informed voters are all shaped by wealth and access to information. Capitalism is of course only one factor, albeit a crucial one, that shapes the quality of our democracy.

I very much agree with Charles about the value of Pikkety’s book. However, I want to address the question based on my recent book (Missing a Decent Living for Everyone: Success and Failure in 143 countries). First, we have to remember that there are no generally agreed definitions for democracy or for free market economy. Second, if we take authority index to represent the scale in democracy and ease of doing business to represent free market economy, we can note that they do not correlate very well. This would prove that these two phenomena are independent, so the answer for Mohamed’s question is yes. Of course, the world is not that simple. Third, according to my analyses, corruption perceptions index correlates well with national income per capita as well as with many social indicators. Therefore, I conclude that the integrity of a government (and of the earlier governments) has much to do with the success of the country.

Very clearly articulated, and could not agree more. Thank you Veli.

Democracy is a word designating all kind of socieites with very different level egalitarian control by the citizens. If the only control a citizen has is to cast a vote and which whatever choice it is made on that vote change absolutely nothing in practice, the democrtatic index of this society should be 0. On the other side of the scale would be a society where whatever idea has a citizens there is a mean by which a collection of vote on this idea can be made and if the collective support for the idea is sufficient, without the need of billion of dollars of marketing, then the idea get implemented efficently, then this ideal society would have a democratic index of 1.

Free market economy can designate market controled and manipulated by only a few big players (free market index of 0) or it may designate a market which allow any small company to get it and to grow if good ( free market index of 1).

It would be interesting to correlate the democratic index with the free market index.

competitive capitalism=bourgeoise democracy; monopoly/corporate capitalism=oligarchy; state capitalism = dictatorship; socialism = true democracy. Only with completely equal opportunity and subsidies to those who are disabled or unemployed can there be a true democracy.

,“Capital in the 21st Century,”by French economist Thomas Piketty is providing hard economic data showing how free market economy concentrate the capital in fewer and fewer hands. We all know that but Piketty do not make an argument but provides the hard data demonstrating it beyond any doubts.

This is all true but socialism is also a political party which counts the votes and not the intelligent level or quality of life. It has done good work, now we need something new.

Nowadays is the socialism also dangerous; sometimes they come over as demagogues.

What we need is a higher level, more science to the people, science is not visible in society, it is much too silent.

It is also good to organise something without subsidies then you see better the value.and which effort has to be done if you don't have the help of politics.

Several Macro-economist expressed some concerns on the so-called theory behind Piketty's book.

What recent empirical evidence shows is that, more than just formal definition of democracy, what does really matter is the quality of institutions (judiciary systems, property rights, rule of law, etc.

If you are interested on a recent empirical analysis on this issue I will adress you to a recent book by one of my Post Doc researchers: Domenico Rossignoli.

Its work also carefully deals with the endogeneity problems involved in this kind of econometric analysis

http://www.vitaepensiero.it/scheda-ebook/domenico-rossignoli/institutions-democracy-and-economic-growth-facts-theories-and-beyond-9788834327333-208623.html:

The political economy is unduly influenced by corporately funded professional lobbyists in developed and developing countries. The cost, for example, in the US of running a political campaign has risen exponentially over the last two decades which excludes the majority of the electorate. And this creates a dependency between politicians and wealthy sponsors who need each other and are willing to 'pay' in cash or 'kind' for that support. The electorate vote on who is put in front of them every five years and who is put in front of them depends on financial support from wealthy sponsors. Ancient Greek democracy gave the public a free vote.

It is a very intriguing question. On the one hand, the view about what is a democracy varies according to different cultures. On the other hand, I believe that is vital in one democratic regime to do businesses as people want and how want. Thus, a free market is a crucial element in a democracy. It is noteworthy that the free market does not mean complete and total absence of government regulations - also essential to defend freedom itself, as in defending the underprivileged and avoid unethical practices.

Free markets (economic liberalism) is not necessarily correlated with democracy.

Real democracy requires economic democracy, not decision-making by the richest 1%.

The International Declaration of Human Rights, which the US has not signed, included economic as well as political and civic rights. I do not think you can have true democracy without a socialist system that guarantees health care, education, housing, etc. for all.

Tamar,

I agree.

Thanks for this wealth of perspectives and views. It seems that the proponents of democracy, -or at least those who are trying to fool the world that they want to spread it - are in pursuit of economic interest rather than democracy as such!

Or perhaps they are keen to render the terrain more receptive, both institutionally and politically in order to facilitate future economic transactions.!

Since 1980, the world is rapidly in a process of refeudalization at the global level, where all the plutocraties gradually united for their common good.

When the plutocrats gained too much power in Ancient Rome, they brought down civilisation itself, ushering in the 1000 year long dark ages. My deepest fear is that history will repeat itself.

I accept all the comments discussed above. Of course economic freedom is necessary for development of the economy/market but if it begets economic anarchy it will lead to economic collapse. It is day-to-day's experience of the countries who adopted LPG under new world economic order.

Since there are certain laws in USA to control trade and other activities,USA is not a free economy market: It has been practising controlled capitalism.

The two terms at issue, i.e. "democracy" and "free-market economy", allow for a variety of theoretical interpretations as well as concrete manifestations. Logically and historically (i.e. empirically) they are mutually independent: Greek, Roman and several medieval democracies existed long before anything resembling any free-market economy. As ideal types, they can co-exist and be mutually beneficial (e.g. genuine democratic self-government may set limits to what can be commodified and traded without life-harm; genuine free markets may create opportunities for life-enhancement for a plethora of economic agents thus dispersing excessive concentrations of power). As they are practiced in the actual world today, they often collide and contradict each other. The literature on their relationship is both vast and deep: you may wish to start with the sources of the article linked below.

http://nome.unak.is/previous-issues/issues/vol3_2/baruchello.html

The US government has supported military dictatorships in south and central america and elsewhere in the world in order to promote the economic interest of large corporations and in direct contradiction of its rhetoric that democracy is necessary for free market economy. In practice, in these cases, free market economy for the profit of specific corporate interests has been planned and militarily established. Mosaddeq was democratically elected Prime Minister of Iran from 1951 until 1953, when his government was overthrown in a coup d'état orchestrated by the British MI6 and the American CIA. Democratically elected governments are tolerated as long as they comply with the overall interests of the plutocracy.

This is a great source on this topic. You can read it online:

Letelier, O. (1976) Chile: Economic "Freedom" and Political Repression, Transnational Institute, TNI Pamphlet Series 1.

http://www.tni.org/archives/books_pamp1

Thanks Lynne,

'' After a visit to Chile, during which he discussed human rights violations by the military government, William Simon congratulated Pinochet for bringing 'economic freedom' to the Chilean people. (2) This particularly convenient concept of a social system in which 'economic freedom' and political terror coexist without touching each other, allows these financial spokesmen to support their concept of 'freedom' while exercising their verbal muscles in defence of human rights.'' Letelier, O.

A lot of studies are done about these issues; I picked up the words ‘ethical’

and ‘greed’

As long as in the schools there is not a critical study about the system we live in, the capitalism will be the master.

In the philosophy of science there is a consensus of ‘ethic neutral’ which is not possible.

So I wait for the label of ‘ethic good’ .

In the industrial psychology the first sentence students learn about the aim of an enterprise, is making profit. It is normal that managers and investors of today are kicking on the word ‘greed’. It’s all serving the democratic system.

But if it’s good that’s the question.

Something has to be said about generalisations; for the quality of the exceptions there is not much space. This is just how democracy works; the top is also neglected.

Here in Europe there are people who are working in the service of culture. Small companies are sponsoring cultural events and this doesn’t follow the rules of the free market; it is based on the exchange of values.

This will be the way for the future if we want to survive in an spiritual way.

Peter,

The plutocracy is already globalized. The plutocracy is not interested n western values, only on profits. We are moving towards a new phase of colonization: all countries will be colonies and the money will be in the offshore republics. A perfect feodalist system.

Peter,

From the time that we formed large societies we had to create hierarchical social structures of power in order to be harmoniously together. Different technologies of social networks are evolving and will gradually help us to organize ourself harmoniously without artificial elites.

Democracy is simply a type of representative government, and in theory can accommodate either capitalist or command economics. In practice, however, command economies require the government to restrict (or eliminate) business activities, and over time this lends government a monopoly on both coercion and economic power. In short, non-market democracies don't stay democratic very long. As for the reverse, it has been proven (e.g., Pinochet's Chili, or modern China) that market capitalism and authoritarianism can function quite well together, although I think most would argue that it typically degenerates into crony capitalism and/or corporatism...neither of which promises the dynamism (and freedom) of a true market economy. So...democracy and true market economies go well together, but other combinations are possible but less than optimal.

Democracy is a form of government, which (according to what can be assumed to be a general consensus) a legislative body, representative of all the people, whio decides of the laws, an executive brach which implements the laws under the control of the legislative branch, and a judiciary which executes the laws, under the supervision of the other branchs. It is meaningful only if the laws are framed in the fundamental rights of human people, meaning that nobody is excluded. So, from this point of view, neither the Greek nor the pre 1863 USA were full democracy.as they accepted slavery.

Free market by itself means only the freedom to trade, to buy or to sell, and to keep the proceeds of your business.

So the two are linked : freedom of trade is part of the fundamental rights, and as any right it must proceed in the frame of laws. Of course the extent of both this freedom and its restriction are matter of controversy. However, as all historical examples show, all governments who deny one (democray) or the other (free market) actually deny both.

It seems that in the US there is oligarchy, not democracy, and the US is the most capitalist of systems.

You may benefit from reading my article on Democracy, Market Economy and Rule of Law. It can be downloaded for free from my publications in ResearchGate...

Democracy is not identified by free market, but by justice and welness for all participants, humans, non-humans and the landscape

Here is the link to my publications. Of course, not all of them are relevant to the present topic... https://www.researchgate.net/profile/Frank_Emmert2?ev=hdr_xprf

I must disagree with Prof. Verstraeten.  Democracy is a political system that involves representative government, period.  Adding all kinds of economic and social requisites (e.g., justice, well-being) only complicates the study of how democracy functions and influences other aspects of society.  I would argue that equal standing under the law for all citizens is a part of IDEAL democracy, but so-called "social justice" isn't.  Essentially, scholars who argue for a very expansive definition of democracy are seeking to de-legitimate everything that isn't socialist democracy (i.e., democratic systems that sanction the government to confiscate wealth in order to redistribute it).  In short, they conflate democracy with social policies that aren't particularly correlated with representative government...and indeed such confiscation violates equal protection under the law (at least, in any ideal sense).

Tamar is also right to point out that the U.S. has established oligarchy, but some of that was intentional (our justice system is meant to represent oligarchy...a check on monarchy (the executive) and democracy (legislative - both popular + elitist branches). Beyond that, ALL modern democracies are essentially oligarchies...pure democracy becomes impossible are population size rises, so all modern systems revert to republican government (i.e., elected representatives).  Of course, this can be interpreted as "oligarchy," but not really (since the "oligarchs" are always arguing with one another, as the Founders intended).

Dear Edward, thank you for your comments. Are you identifying democracy just by representative  governance?

Edward, given the technology available an almost pure democracy, such as that in Island where all people are given a chance to vote on all legislation, would conceivably be possible.  Also Guido makes a good point, is democracy merely the chance to vote (for one oligarchic body or another) or does it involve some basic human rights such as food and housing and education.

Sorry Iceland, the Island nation!

Direct democracy, meaning enacting laws by direct vote of the people, is, besides small communities, a dangerous dream. Politics is the art to make possible what is necessary. It needs a good understanding of the stakes, and a lot of compromises. Compromises are usually hated by the people who are the most active on direct ballots (see primary elections in the USA). The internet does not change anything to this fact. But it can be a good mean to educate the people, ntably through forums, and to sensibilize the politicians to what matters to the people.

Jean Claude, I would like your opinion on my following thoughts.  I do not think there can be democracy under a two party system such as we have in the US.  I believe that the only fair approach to political democracy is a parliamentarian system, where different viewpoints can have a proportional voice in the legislature.

A good example of a bad idea is Israel, where the Knesset is a mess because they have many parties, most of them representative of special interests. Big parties compell the politicians to accept compromises (to be elected) from the beginning, so it is easier after to accept compromise in the legislature. With proportional representation any special group can hope to get representatives, and, to have any decision taken, the comrpromises are done between polliticians, behind the veil.

A sound democracy must aknowledge that 1) Politics is a necessity 2) Politics is not a bad word, and a politician can be a man or woman who is dedicated to the community 3) Citizens must do their best to understand the stakes 4) Citizens must participate

Benjamin Franklin had some good words on these points.

Tamar, voting and legislating are completely different issues.  You can have direct voting, as most democracies do.  Legislating, on the other hand, is intricate and laborious (often involving thousands of pages of regulations, for instance)...people have neither the time nor the inclination to engage in actual legislation (indeed, voter ignorance can be appalling).  Republican governance is the only real solution.  And have you never heard of Michel's Iron Law of Oligarchy?

Guido, democracy is about HOW we choose who decides policy, not which policies they ultimately pursue.  While enlightened democracies probably should make provision for minority opinion/protection (e.g., the court system in the U.S., as well as the Bill of Rights), whether or not they enact redistributive policies is not part and parcel of democratic governance.  The two issues are quite separable, as the range of states clearly demonstrates:  Nordic governance (probably the social democracies you seem to valorize, where redistribution is high), liberal democracies (most Anglosphere nations where redistribution is middling), so-called conservative/corporatist democracies (e.g., Germany, also middling), and formerly communist countries (e.g., U.S.S.R., where redistribution was the essence of the economy).  Democracy and redistribution do not strongly covary, at least within the developed world...nor should they.

Prerequisites for democracy and what could be seen as democracy's results should not be mixed with democracy itself. Yes, democracy can exist without a free market economy. 

If you not have a free market economy,that means that some freedoms are banned : libert of choice for the consumers, liberty of trade, restricted property rights. These are considered as fundamental rights. And that means that some people, usually the state appartus, decide what the people can consume, howmuch they are paid, and hat they can keep of their income. As the experience has proven numerous times, you build a caste of people who appropriate the wealth. Corruption entails, inefficiency growths and poverty follows, and because such social relations cannot bepreserved,inevitably you have a police state. Democracy ismore than the right to choose its dictators ; it is meant to ensure the rights, all the fundamental rights, of the people.

Democracy is not a perfect system. In order to make it perfect, one cannot equate it with all good things we know about. Democracy does not necessarily lead to prosperity, and prosperity does not necessarily lead to democracy.

Democracy is the process of choosing governors through popular voting and no more. Those who are speaking about human rights, economic development, and other criteria as preconditions for democracy are actually speaking about something other than democracy.

Yes, majorities make wrong choices. They may elect a crazy person as their leader, but then who has the right to tell them not to do so? 

Majorities in democracies can be affected by religious and ethnic sentiments, false propaganda and extremist ideologies. Moreover, small extremist minorities can take over power through using such sentiments. Censoring decisions made by the majority or trying to 'correct' them results in an oligarchy not a democracy. 

the question is can Democracy function without abolishing blackmail and authoritarianism in and through the economy - without democratizing the economy and its Units of production

To Dana,

If we stay in the field of political science, one can define objects such as executive branch, legislative branch or judicial branch of the government, and one of their property would be "democratic", if the corresponding branch is chosen by a process in which all the people have a say. One can always discuss the conditions according to which this choice is expressed (you can have a direct or indirect vote). But when speaking about "democracy" one expresses something which encompasses more than that (at least I believe that there is a consensus on this point) : for instance the judicial branch is usually not elected, but there is some "Bills of Rights". So one can say that the discussion is around words and definitions, but in this case they matter.

Democracy is many things.

It involves representation. Representation implies that there should probably be more than one, or perhaps even a great many, perspectives at the table.

However, I prefer the definition that democracy is, loosely, the ability to choose to be involved in one's political and economic surroundings.

When thinking of democracy, most typically we think of freedoms to run for office, to not be excluded from running for office, and to be able to freely and secretly vote for our preferred candidate. Generally, it is acknowledged that a free media is a vital component to ensure full democratic consolidation. Unfortunately, this brings us truckloads of BS. But it's worth it.

But if there is no freedom in the market, then people are similarly undermined in their ability to actualize their freedoms and impact their political and economic surroundings.

So we need to have freedom in markets. (Not an inherent property of the universe, but an assertion on my part, which I think most people already agree with).

However, this is not the same as saying that markets must be free, period. Obviously, there is no economic freedom for someone with no money and who cannot find work, except perhaps the "natural" freedom to go steal something, or beg, or lay there and die ... I dunno what. It's not a very nice line of thinking.

Anyways, most people are not heartless. We are not monkeys. We are not even neanderthals. We are human, and it bothers most people to think that someone would lay there and starve. So for true economic freedom, a properly functioning democracy can be expected to have some sort of safety net, according to the fiscal capacity of the government and the extent to which the local population has a charitable ethic (usually voters think of these issues differently than economists, and would not be so likely to think of many forms of long term cost savings and fiscal benefits accruing to societies which help the poor to flourish by accessing skills development opportunities (education), capital, etc.)

But none of that answers whether it is possible to have a free market without democracy and vice versa.

For markets with not democracy ... check China. The market there is freer than many places, but democratic elements are very limited. Sure, you often need to do business through some other firm which specializes in doing business there, but most things are possible. And on the ground, many little things fly with no problem which would never be allowed in much more "capitalist" economies. This is about as close as you're going to get as a market economy without "democracy". China is obviously not a trivial example. But, many argue that in fact free markets will precede democracy by creating a class which will demand to chip away at the powers held most high and most tightly. But the CCP is not monolithic. This may not apply. Is markets with not democracy possible? It is at least that possible.

For democracy without free markets ... OK, there are many countries which we do not classify as "democratic" for various reasons. I agree with those reasons, for the most part. But in at least some cases, controls over the economy, I do believe, truly represent a desire and heartfelt interest of the public for authorities to be significantly involved in the longer term development of the economy, including typical measures such as trade barriers and direct state management of the economy (no comment on whether these are good policy in any given situation). Generally, citizens of these countries have few iPhones compared to the China example and probably limited access to electricity to charge the iPhone if they have one (referring to generally poorer countries). I think the available statistics will give you the expected result, but I don't think this provides a very profound understanding of how markets function with differing levels of political inputs from diverse actors, from government to business and private citizens, at diverse levels of government. But not only do you have direction of causality problems, but when you apply the magnifying glass to the individual piece of data or country, I think you would find that there is a very complex story under each one of them. The macro stuff may give hints at what's going on underneath. But I do not think it is particularly informative for any specific purpose.

Every country has its own history. In a simple model, you could take a probit of trade predicting democracy. Or is it the other way around? But anyways, pretty soon you're looking at two numbers. What do they mean? Probably historians in the country disagree greatly as to what exactly those numbers mean, and could speak at great length about them. Maybe it doesn't need to be that deep.

Trade openness could easily reflect 1-2 dominant industries which have nothing to do with actual economic openness to trade or with a particularly trade-oriented economy.

There can be many democratic elements/processes/traditions, etc., for representation of different groups which will not be reflected in a pass/fail "is it democratic, as per > index value?" kind of question.

Despite all that, it would seem incomplete without formally running things like democratic/undemocratic and market openness (trade openness, perhaps), etc., for various reasons. I think this information is not too difficult to find. 

I think there are very real connections between democracy and free markets. However, it is also one of the most hyped up statistical connections of the 20th century, from the perspective of guiding foreign policy and also guiding domestic propaganda in Western countries.

I hope you find some interesting answers. A better understanding of such things could positively contribute to a more peaceful and prosperous future for all. An interesting question to share opinions on, imo.

In the west after a few hundred years of representative democracy, the rate of voting is going down steadily reflecting an increasing feeling that the participation into the democratic process as it is will not make any difference.   Although I have always voted for the least worse of all parties, it become harder and harder to distinguish which one is least worse.  I have not done an enthusiastic vote for more than 20 years and I keep voting. All the importants decisions that are taken by the government are never debate as part of the election process and not even in the parlement but in the office of the prime minister (I am a canadian). Our prime minister love Israel  and so Canada has to support Israel.  The prime minister says that we get involved in Afganistan and goes it goes without any serious debate in the parlement and not voting by the people involved.  All that is important is never debate and when there is a debate in the parlement, the issue is settle in advance because it is the party that have more elected representative that will win the debate whatever is said and the elected representative have to vote as the office of the prime minister intructed otherwise they get expulsed from the party and they cannot get re-elected without the support of one of the major party.  And yes, Canada is supposed to be one of the best democracy. 

Aye, Louis, we will have to learn from our past, or perhaps the banana republics will have to share some lessons in how bad it can get with governments led that way.

"Optimal" policy can only be achieved by pure chance when one man thinks he has a monopoly on truth, reason, ethics, etc.

We need a new prime minister. But I think we should push for new constitutional talks. Like with the Magna Carta. The office of prime minister in Canada doesn't formally exist. We must define in order to box it in.

Dear Louis,

I just feel that Canadians are lucky people ! I still believe that Fukuyama was right in "the end of history" : in many ways we have found the best (or the least bad) kind of social organization with democracy and free market. Certainly vastly perfectible, but so much better than everything that has existed.. In many fields, because we have surveys, accounting systems, free press, international comparisons, we know more or less what are the solutions, what works (say in education, health services, welfare,...) and the issue is to implement these solutions, which means to confront special interests. So Politics becomes what it should be (from my point of view) : the art to make possible what is necessary. This can be animated, this is usually quite boring, and this is not so bad..

Dear Peter,

Actually just last year I had quite a problem because I was smoking (tobacco !) in an open place in Montreal....I can understand that some people do not like smoke, but we are alt together under the sun, and we should achieve to give some room to each other...

About what you call "regions". There is no doubt that there should be some flexibility in a given state, so that as much decisions can be taken at the right level, by the people who are really concerned. We have to be aware of the issues of solidarity (some regions are richer than the others) and corruption (usually there is more temptation at a local level, and the controls are weaker). However this can be achieved quite efficiently in countries which are ruled according to the princples of democracy and free market. The best example is Switzerland. But when people do not accept these princples the claims for specific status lead quickly to violent struggles. There are many examples, starting with the ex-Yougoslavia. In the same way it is clear that the muslims who believe in the rule of the sharia cannot be satisfied in a democracy, separation is unavoidable. And it is clear that their option is not the best, for anybody, and certainly not for non musliims.

So, even if in theprinciple you are right, from the experience from History, I am not really fond of regionalism, and emphasizing the differences between people. In Canada I feel more comfortable in Alberta than in Québec....

@Louis

I am not sure that implementation of the policies you highlighted above leads to efficient outcomes. In a lot of democratic societies it leads to unintended consequences. I very much concur with the aboveexample from Peter. It hits the nail on the head!

Jean Claude,

I don't particularly want to get into political quibbling.

But it looks like I am.

I would like to point out that "confronting special interests" is often synonymous with quashing dissenting opinion, silencing of entire segments of populations, removing access to political representations of real people with real interests and real opinions, and various related political strategy and modifications to a political environment.

We should not bend over backwards for every one. But every one should have access to the table, if only by some form of representation. Especially the extreme ones. Better that they are at the table than elsewhere. If they want to get involved, provide structures which make it easy for them to do so in constructive ways.

For example ... Do you know how many anarchists work in homeless shelters? They provide great services, and the experience teaches them that, even though they wish the community would just stick together and we didn't need government, that we aren't ready yet and in the meantime we need companies, etc., to pay taxes, which make it possible to have services like the homeless shelter they worked at until they decided to go get a degree so they could get a promotion. How many times has that story repeated. Many thousands at least, I am sure.

That is a special interest. We should safeguard it.

Peter,

If you wish to peddle to pseudoscience-based opinions regarding marijuana in the face of significant public demand for access as a result of increasing awareness of the great diversity of legitimate medical applications of the herb, then please let's start an explicit forum on that question, and not toxify the discussion regarding democracy and free markets by parroting generations of BS propaganda.

Let's ban meat.

Or shall we be free?

My body.

Not yours.

Our park.

Not yours.

There are a million worse things that we should ban before weed. BS propaganda and generations of lies is one of them.

Dear Nathan,

Confronting special interests meands usually in real politics taking on companies,people with money or power, such as unions. The special interests have always good reasons to stick to profitable situations, of course very body has a right to defend its interest, but we shall not be mistaken. 

As for anarchists in homeless shelters, I do not know where you live but I can tell you that where I live we have more than our fair share of people who want to be at the table, without paying.

Jean Claude,

Those that are satisfied with a situation usually do not think about it nor criticize it.  As a result we are generally negative when we speak about politic.  We describe the glass as being half empty instead of saying that it is half full.  On the positive side of the canadian democracy is that I never felt treathen to express myself freely about it.  Two referendums on the separation of Quebec were allowed to take place without any violence.  And after 10 years of almost absolute power we generally vote out the prime minister.  The corruption slightly diminish for a while because it takes a while in order to install it efficiently.

Re: guy who says it's not democratic because he doesn't like the smell of weed.

People, in democracy you have to put up with some things you don't like. Just like your wife, just like your boss, etc. You cannot rule over every minuscule detail of people's lives.

You don't see vegetarians campaigning to incarcerate producers and consumers of meat. Yet, many vegetarians do not like the smell of meat. It makes them think of death, rotting corpses and all manner of terrible things.

And there is far greater evil to the treatment of animals in the meat industry than comes from smoking weed. You should be ashamed of yourself to accept a status quo which tolerates so much sentient suffering to feed our addiction to dead flesh when in modern society there are so many ways to get protein, and then to extend any such logic as you propose above to suggest that it is "democratic" to incarcerate people on the basis of lies, pseudoscience and BS propaganda.

Or shall we return to the days where adulterers also go to prison? At least the good books are specific about that one.

Anyways, I easily excuse Latin Americans for having such opinions, because you guys are the ones who are truly at civil war as a result of criminalization of drugs. And that is why ex-presidents of Latin America almost uniquitously support legalization of marijuana and easing up on other restrictions. 

Democracy is best understood as a system of power-sharing forced on parties that are too nearly equal to dominate one another.  In societies where there is one overwhelmingly powerful elite, democracy repeatedly fails.  So, pluralism in power is a primary driver of democratic reform.  If properly understood, then, democracy cannot function without a free market...at least not for long.  On the other hand, free markets can exist without democracy (e.g., Pinochet's Chile), but empirical research has continually demonstrated that economic pluralism encourages democratization over time (i.e., a gradual increase in power pluralism).

So, the short answer is:  The half-lives of both free markets and democracy are strongly determined by their co-existence.  In separation, neither lasts very long.

Democracy and free market economy are the substitute in a socio political set ups. In the process of democratic reform pluralism in free markets works hand in hand. In the name of democracy enters bad element of market, thus a market in democracies become many time anti-humanitarian, anti social, anti political and anti administrative. I agree to the opinion of edward m. 

Real democracy would be a society governed by the majority for the benefit of the majority.  Capitalist is governed by money and free market over the years lead to concentration of capital and so to the concentration of capitalist power.  With time and money and mass marketing and political financing, money gradually control all the political parties and all the media and democracies become  empty of real power and are avatar to the world financial plutocracy.

I just stumbled across an interesting interpretation of systems theory made by Marco Estrada Saavedra. A social system has to ensure that its complexity is adapted to its environment - if not, it makes itself superfluous. So, representative democracy is the construction of complexity related to an increasing complexity in the other social systems. That means: it is not a coincidence (nor history nor solely economics or politics) that democracy in the modern sense starts to impose itself in the system of politics at the same time as the "free market" imposes itself in the system of economics - what, in both cases, marks the starting point of those systems as systems in the sense of Luhmann.

Dear Philipp

What about if free market economy is imposed top down? I guess regardless of the complexity of the social system, or the environment, it would be just a matter of time before democratisation processes start to emerge. ...Or is that what you mean?