Edward Lotterman

The obituary last week of Alberto Fujimori, the former president of Peru and once a university acquaintance of mine, juxtaposed in the same newspaper edition reporting intemperate assertions by Donald Trump, brought two critical questions to my mind.

First, is it possible to have democracy without free markets? Second, is it possible to have free markets without democracy?

These questions, and the policies of these two political leaders, lead to deeper and broader issues. How — and why — are some nations more resilient than others in withstanding threats to successfully established orders? What happens to fundamental rights when resilience fails? What then happens to economic efficiency and to economic justice?

Start with the assurance that our nation has both the culture and institutions to strongly favor the survival of both our system of government and our economy.

But to the first questions raised, also note that “democracy” and “free markets” are not binary yes/no distinctions.

One can find just and well-functioning democracies and economies along a broad spectrum of political and legal specifics. No country has unfettered free markets that meet the ideals of strict libertarians. Yet many “mixed market economies” transform resources into goods and services to meet people’s needs with both efficiency and acceptable fairness.

What prompts these musings?

On one side is an assertion by a dear relative of mine that Kamala Harris will impose communism in our country. On the other are Trump’s promises of harsh punishment of political opponents, including “military tribunals” and long prison sentences. And there is his description of the police officers defending our nation’s Capitol on Jan. 6, 2021, as “the other side.”

People at both ends of the political spectrum should remain calm. Harris is not going to impose communism. A reelected Trump will not set up military tribunals nor send Liz Cheney to Leavenworth for 30 years. We are not Russia, China, Sudan or Myanmar. Nor are we the Philippines or Peru.

Now let’s consider Fujimori, who died in Lima last week at age 86. He went from being an unknown mathematics professor at Peru’s National Agricultural University to a popularly elected president of that nation in a few short years. He was lauded for his handling of the economy and restoration of public safety. But then his administration quickly veered into dictatorship, brutal repression and corruption, as many do.

I knew Fujimori only in the sense that we would often greet each other in the mailroom of his university, where, while working on a U.S. foreign aid agricultural project, I was a visiting professor in 1980-1982. He was not sociable. Our exchanges never went beyond comments on the weather.

But I could see the steely determination that in eight years would take him from calculus teacher to department head to university rector to informal presidential adviser and then catapulting to the presidency. Yet he would go from hero to international fugitive.

Some U.S. Fujimori obituaries have compared him to Trump. Both employed populist appeals while candidates and in office. Both openly called for authoritarian measures that violated both the laws and constitutions of their countries. Neither portray the milk of human kindness.

With such similarities, how can we be sure that Trump, should he be reelected, would not emulate Fujimori’s 1992 “self-coup,” in which Fujimori radically increased his own powers and became a quasi-dictator? Citing the recent U.S. Supreme Court decision on presidential immunity, and citing “Project 2025,” a “Trump without guardrails” warning has become both meme and theme of the Harris campaign.

Trump might want to become a U.S. Fujimori, but since independence, our nation has had 248 years of unbroken democratic rule, 236 years of that under the U.S. constitution. There has never been an extra-constitutional change of government. Constitutional rights were violated only during two wars and only to regrettable but limited degrees.

Since Peru’s 1826 independence, there has been a dizzying array of military, authoritarian and democratic regimes. All have been civilian since 1980, but Fujimori ruled as a dictator with military support from 1992 to 2000. Three elected presidents then completed five-year terms, but since 2016 there has been a permanent crisis with six presidents in eight years. Over two centuries, Peru has had myriad constitutions and revisions of the basic legal code.

Without stable government, one cannot have stable rules about property or usual economic interchanges. And hence, economic fairness and efficiency shrivel.

Peru’s history is one that is common to one degree or another throughout South America, Africa and most of Asia. European colonialism in these regions was a scourge that exploited resources, fostered ethnic rivalries to rule by division and imposed artificial boundaries that did not conform to ethnic, linguistic and religious patterns nor to coherent sets of economic resources for a nation.

Moreover, even though overt colonial rule was largely gone by the 1960s, the Cold War imposed another set of dependencies. Now, China actively works for zones of influence and Russia seeks allies.

Yes, many nations such as Uruguay and Chile are strengthening institutions even as ones like Venezuela descend into kleptocracy. And yes, Japan, Taiwan and South Korea all have solid constitutional rule and prosperous market economies on strong foundations. But democracy has faded in Turkey and is in crisis in India.

So while there are historical examples of dramatic economic growth existing under authoritarianism, nearly all have chapters where the impermanence of institutions transform booms into years or decades of stagnation. Remember that in the 1960s Iran had dynamic growth well beyond that brought by oil. Brazil boomed for decades, but decades of sub-par muddling through followed.

China boomed after the death of Mao Zedong, its explosive growth from 1980 to 2020 perhaps the most significant economic phenomenon in modern history. It showed how a government that was still communist in structure could let markets flourish. But it lacked permanent legal institutions and financial market oversight. It had no working constitution nor rule of law. So now Premier Xi Jinping is reverting to central control and throttling market freedoms as the population ages rapidly.

So what does all this have to do with Trump and Harris? Despite troubling ethics in the Supreme Court, it and all other federal and state judiciaries remain firm in the rule of law. So do most members of Congress. The Justice Department, FBI and military services are stalwart in their constitutional roles.

We have myriad private “mediating structures” including associations and nonprofits and movements that serve as watchdogs. Project 2025 planners, and those who fear it, can live in their delusions, but an inauguration of Trump in January would not usher in a coup d’etat.

What about Harris and Tim Walz imposing socialism? While Sen. Bernie Sanders may have admired Soviet communism as a callow youth, there are few socialists in American politics. Neither Harris nor Walz falls into that category, which centers on government ownership of key “means of production.”

Walz certainly would be deemed a social democrat in Europe, as might Harris, but not socialists. Her call for anti-gouging measures may be bad economics but it is not Marxist. Moreover, she is not going to expand the quasi-state enterprises like the Tennessee Valley or Bonneville Power Authorities or fold the Union Pacific and BNSF into Amtrak.

Democracy is like a marriage. It takes trust, communication, agreement on goals and a lot of hard work. There are disagreements, perhaps deep ones, but successful ones resolve these without rupture.

It might be a blessing or a curse that we, as voters, conspire to keep big issues off our electoral radar screens, and at times focus instead on ridiculous gossip. But even as we face a looming fiscal crisis driven in part by baby boom retirements and rapid aging of the population, these are not fundamental institutional problems. And even if our democratic culture has weaknesses, our institutions and our market economy combine to protect each other. And both are strong.

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St. Paul economist and writer Edward Lotterman can be reached at stpaul@edlotterman.com.