Abstract
This paper addresses the Democratic system’s ability to reduce the inequalities created by a capitalist economy. Using conclusions drawn by Przeworski and Wallerstein in “Structural dependence of the state on capital” as the framework, their theory will be tested against the 2009 situation in Bolivia as described in The Economist article “The explosive apex of Evo’s power.” Expectations drawn from Przeworski and Wallerstein’s theory will then be evaluated against the current political and economic situations in Bolivia.
Literature Review
The relationship between Capitalism and Democracy has been the focus of many economists and political theorists for many years. P&W present several theories and challenge existing concepts to prove …show more content…
These theories both support the causal relationship between the democratic process and reduced structural dependence on wealth owners. The first theory considers the possibility of monetary policies that do not necessarily reflect a quid pro quo for results. Examples of such policies include, tax incentives for investment, depreciation allowances, and special treatments of capital gains.* Arguing against Marxism, P&W determine that it is possible to distribute wealth and increase investment simultaneously. The second theory examines the welfare of workers in either a socialist or democratic capitalist society. While workers under socialism share in ownership of capital, they do not see any income surplus. Any income not distributed to constituents is automatically invested back into capital, forcing workers to set a wage based on potential future investment returns. In contrast, under democratic capitalism, workers are able to influence the government’s position on monetary policies by forming powerful cooperative coalitions. This theory presents evidence that the Democratic process causes a shift towards an optimal level of inflation and growth between coalitions willing to engage in a political …show more content…
Evidence illustrates that governments with radically different programs either eventually compromise their position or are overthrown out of office.* From the information gathered in the Economist article, I predict Mr. Morales has no intention to compromise his Socialist position. I would also predict that the government will be unable to maintain an efficient level of investment in productivity that would otherwise be provided by the private sector. The Social Revolution, while robust and jolting to the economy, does not seem to have the infrastructure or investment needed to sustain long term growth.
Current Events Evaluation
Bolivian referendum goes against Evo Morales as voters reject fourth term
Evo Morales will not be permitted to continue his term in 2019. The Bolivian people voted by a slim margin to not implement a constitutional referendum that would allow Morales to run a fourth term. P&W’s predictions prove applicable in this election and government term. I believe this illustration of Democracy agrees with P&W in their theory of unsustainable radical government policy. However, I think it better provides support to the conclusion that the Democratic process can cause a redistribution of capital
This paper addresses the Democratic system’s ability to reduce the inequalities created by a capitalist economy. Using conclusions drawn by Przeworski and Wallerstein in “Structural dependence of the state on capital” as the framework, their theory will be tested against the 2009 situation in Bolivia as described in The Economist article “The explosive apex of Evo’s power.” Expectations drawn from Przeworski and Wallerstein’s theory will then be evaluated against the current political and economic situations in Bolivia.
Literature Review
The relationship between Capitalism and Democracy has been the focus of many economists and political theorists for many years. P&W present several theories and challenge existing concepts to prove …show more content…
These theories both support the causal relationship between the democratic process and reduced structural dependence on wealth owners. The first theory considers the possibility of monetary policies that do not necessarily reflect a quid pro quo for results. Examples of such policies include, tax incentives for investment, depreciation allowances, and special treatments of capital gains.* Arguing against Marxism, P&W determine that it is possible to distribute wealth and increase investment simultaneously. The second theory examines the welfare of workers in either a socialist or democratic capitalist society. While workers under socialism share in ownership of capital, they do not see any income surplus. Any income not distributed to constituents is automatically invested back into capital, forcing workers to set a wage based on potential future investment returns. In contrast, under democratic capitalism, workers are able to influence the government’s position on monetary policies by forming powerful cooperative coalitions. This theory presents evidence that the Democratic process causes a shift towards an optimal level of inflation and growth between coalitions willing to engage in a political …show more content…
Evidence illustrates that governments with radically different programs either eventually compromise their position or are overthrown out of office.* From the information gathered in the Economist article, I predict Mr. Morales has no intention to compromise his Socialist position. I would also predict that the government will be unable to maintain an efficient level of investment in productivity that would otherwise be provided by the private sector. The Social Revolution, while robust and jolting to the economy, does not seem to have the infrastructure or investment needed to sustain long term growth.
Current Events Evaluation
Bolivian referendum goes against Evo Morales as voters reject fourth term
Evo Morales will not be permitted to continue his term in 2019. The Bolivian people voted by a slim margin to not implement a constitutional referendum that would allow Morales to run a fourth term. P&W’s predictions prove applicable in this election and government term. I believe this illustration of Democracy agrees with P&W in their theory of unsustainable radical government policy. However, I think it better provides support to the conclusion that the Democratic process can cause a redistribution of capital