ISS 225, Section 1
Thomas H. Hammond
"Power, Authority, and Exchange"
Professor of Political Science
Monday-Wednesday 10:20 am - 12:10 pm
Spring Semester 2008
107 South Kedzie
CAPITALISM & SOCIALISM,
DEMOCRACY & DICTATORSHIP
Our course involves a broad field of study—often referred to as "political economy"—whose purpose is to develop an
understanding of the relationship between economic systems and political systems.
In this particular course, we will
address a central question in modern political economy:
why do political systems that are largely democratic almost
always have economic systems that are primarily capitalist?
The relationship between democracy and capitalism has been hypothesized to take many different forms. For example,
each of the following assertions can be found in, or at least derived from, the various bodies of literature on the
relationship between capitalism and democracy:
Democracy leads to capitalism,
Capitalism leads to democracy,
Democracy undermines capitalism, and
Capitalism undermines democracy.
Since countries with democratic political systems almost always have capitalist economic systems (of varying sorts),
this fact does put some constraints on the extent to which the latter two assertions can be true.
Of course, the relationship may be somewhat more complex than each of these simple hypotheses suggests.
example, it may be that capitalism and democracy are mutually supportive, and so can be considered to have "co-
Or it may be that different countries have arrived at their combination of democracy and capitalism via
different routes, some countries starting with capitalism and only later becoming democratic, and other countries
starting with democracy and only later becoming capitalist.
We can also gain some insight into the relationship between capitalism and democracy by examining their "opposites,"
which are socialism (and other kinds of extensive government control of the economy) and dictatorship (and other
authoritarian forms of government).
Two hypotheses about the relationship of socialism and democracy can be found
in the literature:
Socialism leads to dictatorship, and
Dictatorship leads to socialism.
In exploring these various hypotheses about capitalism, socialism, democracy, and dictatorship, we will develop an
understanding of some of the most fundamental aspects of political economy in the 20
Three books are assigned, and all are available for purchase in area bookstores:
Brian M. Downing (1992).
The Military Revolution and Political Change: Origins of Democracy and Autocracy in
Early Modern Europe
Princeton, NJ: Princeton University Press.
Friedrich A. Hayek (1994).