Discussion: Unequal Distribution of Wealth
NOW FOR AN ORIGINAL PAPER ASSIGNMENT:Discussion: Unequal Distribution of Wealth
Problems arising from the unequal distribution of wealth are now also arising in some of the world’s most advanced economies. The United States, where the extreme concentration of wealth now resembles Argentina and other Latin American countries, is a prime example.
As we have seen, political development and popular participation often go hand in hand. But not all forms of popular participation are bottom-up (democratic); some are top-down (coercive). The latter are associated with authoritarian or totalitarian regimes. Democratic states are, by definition, limited in what they can do by constitutions, laws, and public opinion. For this reason, democracy and development often do not easily coexist, and dictatorships have been (and still are) all too common in the LDCs.
To say that democracy is a sign of development is true, but it begs the question: what explains development? In fact, democracy is a sign of wealth. Not all democracies are rich (although most are), nor are all rich nations democratic (although, again, most are). But there are precious few examples of democracy and poverty coexisting for very long.
Why does democracy work in many rich countries but not in most poor countries? One way to approach this question is to look for factors most democracies have in common—in other words democratic correlates. In theory, where these correlates exist in the greatest number and measure, the probability of democracy is greatest; conversely, where they are largely absent, democracy has the smallest chance of succeeding.* But in the real world, theory and practice often diverge.
Economic correlates include:
· National Wealth. Prosperity and democracy are often found in the same place, as are poverty and autocracy, but not always. India, for example, has been democratic since independence, despite being poor and extremely diverse, whereas oil-rich Saudi Arabia is autocratic.
· A Market Economy. Market economies generally favor private enterprise over state ownership of the means of production. Competition rewards efficiency and innovation. Supply and demand drive decisions about what to produce and how. Self-interest and the need for self-reliance encourage savings and investment.
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