Capitalism, Democracy, and US-Russia Co-operation

            The fall of the Soviet Union famously brought the proclamation of “the end of history,” and the universalization of Western liberal democracy. Capitalism outlasted communism, and therefore it seemed that democratic capitalism would continue on forever. Instead, what has happened is that Russia and China have developed into authoritarian capitalist countries. The United States should realize that authoritarian or illiberal capitalist countries represent threats to its political system and human rights. Indeed, various political ideologies in the United States have waged war on the liberal system of government, in the form of tax cuts, decreased regulation, and rule of private interests in public affairs. Despite questions of the relationship between capitalism and democracy, the U.S. and Russia can cooperate on nuclear weapons, cyberspace, and the climate crisis.

            Key to the question of U.S.-Russia relations is the role of the free market in a democratic society. The free market has proven better than communism at allocating resources, but markets act with imperfect information and are short-sighted. Government can and should intervene in the market place to correct for externalities, promote long-term thinking, and to defend human rights. Both the U.S. and Russia share a common problem: their financial elite are more invested in capitalism than democracy and human rights. Capitalism fundamentally represents private interest- the ability to rationally allocate resources to make more money. In theory, democracy represents the public interest, or the ability to act on the public will. There can be a certain amount of tension between the private interests and the public interests. The domestic difficulty for the U.S. is how to not anger the financial elite while carrying out the public will. This is the same problem that Russia faces, but Russia has largely decided to side with the financial elite. The battle for the public will in the U.S. is still ongoing.

            The Cold War was an ideological conflict over property rights. The American business elite, as rationally self-interested actors, view democracy as expendable, now that Russia and China have demonstrated ways to maintain financial power without democracy. The American financial elite view taxes as a form of tyranny and believe only in self-interest. The financial elite would rather the U.S.A. become more like Russia, rather than pay more in taxes.

            The problems of U.S.-Russia relations are not so much about how the two states relate to each other, but problems of how the wealthy relate to democracy. Both the U.S.A. and Russia are capitalist and democratic. However, the relationship between money and democracy in both countries is different. Namely, through the cutting of taxes, deregulation, rational self-interest, and the free market, the wealthy reject human rights, the common good, reasonable taxation, and democracy. Having used democracy to defeat communism, the capitalists are now turning to authoritarian forms of government to maintain power. The capitalists face the conflict between keeping more, and giving more the other people, which will keep the population invested in capitalism. When people’s life expectancy is slipping, debt must be accrued in order to be educated, and job opportunities are cutthroat, citizens naturally wonder about the nature of justice in a capitalistic system.

            Democracy and the popular will represent a threat to property rights, as a democratic government can raise taxes and nationalize industries. The Russian and American capitalists, being rationally self-interested and focused on property, view democracy and the rule of law as a threat to their property.

            Assuming this relationship is true between democracy and capitalism, U.S. engagement with Russia should be limited to nuclear disarmament, cyberspace co-operation, and the climate crisis. In the realm of cyberspace, the U.S.A. and Russia should agree that any cyberattack that is functionally equivalent to a bomb should be banned by international agreement. For example, a cyberattack that disables a power plant or electrical grid would be similar to bombing the facility. There is increasing probability of co-operation between the U.S.A. and Russia on the climate crisis and renewable energy, as climate related disasters increase in frequency, the expense to financial institutions will increase. United States-Russia relations will be determined by the elite’s commitment or lack thereof to democracy.