Democracy's role in China's brand of 'Capitalism'

An interesting column by Thomas Barnett. He pulls from "Good Capitalism, Bad Capitalism" by William Baumol, Robert Litan and Carl Schramm. They in turn note that market economies go through several evolutions with the American state being closest to ideal characterized by an entrepreneurial capitalism with leading industries dominated by large firms.

Barnett argues that China is moving closer to the American model and -

Entrepreneurs tend to be notoriously independent characters. If you don't give them the freedom they need, they tend to leave. [...] What comes next? More and more freedom if China hopes to hold onto those entrepreneurs.

I'm not sure that entrepreneurs really have that much mobility. I do however think that fears democracy will not come with increased wealth with respect to China are premature. There's already a lot of unhappiness with respect to the level of corruption of the political class and the policies they enact. Just wait for the next major recession - the economy can't continue to rise at the pace it has forever.

I think it's important to remember that China moved to a more market based model not because they wanted to, but rather, for self preservation. Making the economy more efficient by definition also means meeting the needs, wants and desires of people. At the margin it's entrepreneurs who make this happen - creating businesses that respond to needs and building wealth as a result. While I don't worry that entrepreneurs will leave, without the basic elements that make business work - key amongst them - stable government, rule of law and stable property rights, entrepreneurs just don't start businesses. Both buyers/consumers and sellers/entrepreneurs suffer as a result. Representative democracy and the pressure release valves that come with it, is a rather elegant solution to this problem.