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What determines the economic well-being of a populace?

Tong Kooi Ong and Asia Analytica
Tong Kooi Ong and Asia Analytica • 14 min read
What determines the economic well-being of a populace?
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Democracy versus autocracy. This framework has been a cornerstone of US foreign policy, used to corral support — both domestic and global — for its geopolitical manoeuvres. By neatly cleaving the world into a battle between “good and evil”, it is attempting to force the rest of the world to pick a side, most recently in response to Russia’s invasion of Ukraine. But more importantly, to isolate and contain China’s growing influence in global politics, economics and technology — to preserve its own hegemon. This simple narrative plays well to the domestic audience — to justify the costs that must be paid by ordinary Americans, ostensibly to defend democracy and preserve their way of life.

The message (threat) is clear enough — choose democracy as the only path to personal freedoms, inclusiveness and equality, rule of law, justice and prosperity or risk the world falling to the dark side of authoritarianism, oppression, abuse, chaos and economic hardship. But the world is hardly binary or simple in such black and white terms. And quite frankly, it reeks of Western hypocrisy. How often, through the annals of history, has the West shown itself amenable to supporting authoritarian regimes and turning a blind eye to human rights abuses — when it serves its purposes?

Democracy is an ideology (I had many years ago presented a paper titled “Freedom is a right, Democracy is an ideology” at a global forum). The premise of this ideology is that humanity’s progress is due largely to growing liberalism, of democratic practices and free-market capitalism. It relies on the assumption that individuals are able to make rational cognitive decisions for their self-interests. It accepts the story that voters know best. However, in reality, human decisions are based more on emotional reactions and humans largely think as a group — not as individual rational agents. (We will articulate this more comprehensively in our upcoming Special Report in Issue 1437, on a related topic.)

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