As the Obama administration wrestles with crafting the best response to what’s going on in the Middle East and North Africa, here’s a suggestion: talk about democratic capitalism. The great neoconservative and Catholic theologian Michael Novak wrote in his book, The Spirit of Democratic Capitalism that our market-oriented political and economic system offers freedom from three things: repressive tyranny, oppression of information and ideas, and poverty. When Novak wrote that book in the 1980s, he was defending capitalism against the claims of Soviet collectivism; these days many of those same arguments for entrepreneurial freedom work in the face of repressive autocrats and extremist religious states in the Middle East. Tyranny, oppression and poverty are all in great supply in that region of the world right now, and while the administration seems to be treading lightly on whether to call for outright democracy in troubled nations this week, there’s no downside to calling for free markets and free people. [See photos of the Egyptian uprising.]
In fact, there’s nothing but upside. It may or may not be possible for the United States to always be the beacon of democracy in a complicated, unstable world. But it’s almost always a good idea to stand on the side of opportunity and economic empowerment for all people. Take a look at the most interesting thing I’ve read on what’s happening this week in the Middle East, from American entrepreneur Chris Schroeder. He’s just back from Cairo and wrote about what he saw for CNN:
Many investors understandably remain on the sidelines of a region long caught in a narrative of political unrest, poverty and corruption. Others, however, are betting on a new generation of entrepreneurs writing their own narratives of technology and innovation at a regional and global scale.
Arif Naqvi, Pakistani-born founder of Abraaj Capital, the largest private equity firm in the global emerging markets, knows these entrepreneurs well. "These young populations have strong aspirations for a better life and are better educated, better connected, more politically aware and have a stronger sense of national pride and dignity than many give them credit for," he says. "As such, they want to have a voice in deciding their own futures.”
According to Schroeder, the Middle East-North Africa region has a population of 320 million, whose GDP is larger than Russia and India, and per capita GDP nearly twice that of China. Disposable income has grown 50 percent over the past three years and was over $1 trillion in 2010. The region has over 100 million people under the age of 15, and “mobile penetration”--meaning how many of them have cell phones--will approach 100 percent in three years. As we saw in Egypt, social media is big, growing 125 percent year over year. And, as Schroeder saw first-hand, there are more college graduates, engineers and grad students joining start-ups and medium-size entrepreneurial ventures--many of them information and technology related--there than ever before. Innovative companies and venture capital funds are spring up all over the region. [See an Opinion slide show of 5 ways Arab governments resist democracy.]
Democracy is good--but democratic capitalism is an even better alternative to violence and extremism. Hope for a better life is a very powerful thing. Is the Middle East “the next land of opportunity”? Let’s hope so, for everyone’s sake.