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The former centrally administered socialist countries of Eastern Europe have political parties and free elections. Even the Russian Federation and other countries that comprised the former Soviet Union have achieved some form of democracy. The fall of military dictatorships during the 1970s and 1980s and the collapse of centrally administered socialism in the 1980s and 1990s both seem to validate the argument that in the short run political pluralism may be restricted in a market system, but in the long run authoritarian political processes cannot survive alongside markets.
Participation in the market process encourages self-knowledge, self-acceptance, and self-respect because of Consistency and Viability of Economic Systems 33 the direct correlation between effort and reward. It is through successes and failures, the result of correct and wrong decisions, that participants realize their potential. They learn through their mistakes, rather than through tutelage, and they succeed through their own analytical and planning strategies. The market increases the awareness of the participant’s potential in solving problems and realizing goals.
In a historical context, politically pluralistic societies and the market have a common origin. Friedman (1962, p. ” The rise of the market was associated with the rise of political pluralism and the gradual removal of governmental and religious constraints upon the individual. Thus, market relations are necessary for pluralistic political relations. ” They had a very pessimistic view of the market as a means to stimulate political pluralism and weaken the power of authoritarian governments. However, market participants enjoying the benefits of the market process would question and undermine the power of authoritarian governments.