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by Neville Kennard, veteran preaching and practising capitalist

Is it “Democracy” that has been the underlying reason that people in many parts of the world have experienced growing prosperity, health, longer life and more choices in their lives?

Or is it something else ? Could it be capitalism that has brought about this evolution and improved well-being, and that “Democracy”, with all its implied and perceived benefits, has had less to do with prosperity than capitalism?

It is, I would suggest, capitalism. The essential components of capitalism is property rights — the right to retain most of what you earn and to put it where it will be secure — from State plunder, from excessive taxation, from misappropriation by corrupt governments.

There are places in the world that enjoy a very good degree of capitalism with little, if any democracy. Hong Kong comes to mind — a unique place with strong capitalist underpinnings but no democracy. Hong Kong grows and prospers without much democracy. Singapore too has strong capitalist underpinnings and a rather authoritarian democracy and it and its citizens and residents continues to prosper in a safe and clean city-state. People and capital migrate to such havens of capital and talent.

But capitalism does not get very good press. Hollywood portrays the Gordon Gekko image of “Greedy Capitalists who prey on the unwary and the gullible” and makes them out to be corrupt villains. And so “Democracy” gets good press, while its silent partner, capitalism, bears the brunt of things that go wrong financially and economically. And in a “Democracy” it is easy for the electorate to call on the government to sort out the Bad Guys (Governments like and need some Bad Guys) and regulate the greedy capitalists. And then of course those who appear to be part of the problems — the bankers and conspicuously greedy capitalists — side with the government to regulate. in the National Interest, of course. Thus the regulation tends to entrench crony capitalism.

“Capitalism does not survive in a Democracy”; is this true? Does the very idea of popularly-elected governments who have freedom to extract ever-higher and more complex taxes, to impose a plethora of anti-productive regulations and to threaten property-rights with restrictions to full and free ownership actually threaten capitalism and the very prosperity expected of a democracy?

Are “democracy” and capitalism incompatible?

“Democracy” has become almost a religion with its worshippers singing its praises and urging its adoption by those places that don’t have it. There are even wars to “make the world safe for democracy”. Little do these democracy-advocates think about property rights, self-ownership, the right to earn and keep what’s yours, to trade, to have in effect capitalism as part of their “democracy”-package. Mostly these democracy-advocates envisage a sort of “social democracy” of welfare and regulation and taxes and a strong government to enforce the constraints and limit the freedoms required in their “social democracy”.

America was conceived as a Republic, a confederation of sovereign states, and not as a “Democracy”. Capitalism underpinned America for a long time, and it prospered with the idea of self-ownership taken as a given and part of the American way. But democracy and the erosion of self-ownership has whittled away at the idea of personal sovereignty as people found they could vote in political candidates who would make promises of benefits and “free” stuff, seemingly at no cost. And so taxes and government-spending and regulation proliferated until capitalism was barely there any more.

Alexis de Tocqueville, the French aristocrat and author in his well-known book Democracy in America in 1840 wrote glowingly of the American society, of its spontaneous order and voluntary institutions, and warned too of the risks of the people learning how to use democracy to extract benefits for themselves. This, it seems, is the normal outcome and for the democracies as the people, supported by politicians, learn how to plunder the commons and erode the foundations of their own prosperity and freedom.

Capitalism, it seems, does not survive in a “Democracy”. The exception may be the Swiss with their conservatism and their robust constitutional limitations and “participative democracy” which limit government propensity to plunder its own people.

(in order of appearance on
  1. Welcome from Neville Kennard
  2. Think Tanks Don't Work
  3. "Market Failure": Just what the government ordered!
  4. The Tragedy of the Tax Pool Commons
  5. Corporate Welfare
  6. Citizenship for Sale?
  7. I Don't Vote
  8. Voting: Right or Privilege?
  9. Stockholm Syndrome and our Love-Hate Relationship with Government
  10. Civil Disobedience: The Rules of Engagement
  11. Should Respect for Law Extend to Bad Laws?
  12. Jaywalking as a Demonstration of Individuality
  13. Government Likes War
  14. Collusion is Our Right
  15. Why Not the Drug Olympics?
  16. Unconventional Wisdom
  17. Tiger Farming: An Alternative to Extinction
  18. Looking Backwards: Mont Pelerin Society Conference, Sydney, 2010
  19. Tax Avoidance is a Patriotic Duty
  20. Kennard Writes to IPA Review Editor
  21. Genocide by Welfare: A Tragedy from the Aboriginal Welfare Industry
  22. Separating Sport and State
  23. Your Home is Not an Investment
  24. Dick Smith, Celebrity Philanthropist
  25. A Libertarian's New Year's Resolution
  26. Extend Politicians' Holidays to Create Prosperity
  27. Entrepreneurs are Disruptive, and Bureaucrats Hate It
  28. What is a good Australian?
  29. Governments Like Employment But Hate Employers
  30. The Market Failure Industry
  31. Neville Kennard: The Tax Avoidance Imperative
  32. Wot if ...?
  33. The Tribal Chief and the Witch Doctor
  34. The Tannehills
  35. Democracy versus Property Rights and Prosperity
  36. Government Doesn't Work, and That's the Way They Like It
  37. Minarchy vs Anarchy
  38. Euthanasia and Self-Ownership
  39. The Right Policies to Fix a Depression
  40. Is Howard Our Best PM?
  41. Tax Producers vs Tax Consumers
  42. Where There's a Queue, There's a Business Opportunity
  43. Authoritarian Freedom
  44. Why Classical Liberals Should Debate Anarchocapitalists
  45. The Tyranny of the Majority
  46. If you could choose to whom you paid your tax
  47. Business Should Exploit Boat People
  48. The Immorality of Trade Unions
  49. "America" vs "The United States"
  50. Sweet Anarchy
  51. The Illusion of "Job Creation"
  52. Gold Is Money
  53. Guilty Capitalists
  54. Bureauphobia
  55. Prosperity vs Growth
  56. Capitalism vs Democracy
  57. More people = More fun
  58. Self-Ownership - the very idea!
  59. Government will murder Neville Kennard if he doesn't back away
  60. The Australian Dollar Has Been Cowardly and Criminally Devalued, Harming the Poor Particularly
  61. Is Taxation Theft and Government a Tax Cheat?
  62. My Journey to Anarchy:
    From political and economic agnostic to anarchocapitalist
  63. Government Needs Bad Guys –
    that's why they like wars
  64. What Is Obscene?
  65. Traffic Economics
  66. Wayne Swan stands on the shoulders of other intellectual pygmies
  67. Neville Kennard Obituary
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