Soft Capitalism in a Globalized World

Welcome to the age of globalization, where the greatest technological achievements of the West are stocked on the shelves. Here in Thailand’s shining bastion of capitalism, young entrepreneurs have succeeded in using their creative skills to make money through the art of (illegal) copying. Call it effecting the artistic qualities of capitalism for their own advantage.

In this world, property rights are an illusion. And for a capitalism that depends on the protection of property rights to preserve its integrity, Thailand’s economy makes for a much “softer” version of capitalism, one standing more than a thousand miles apart from its brother in the West.

Lest you think this is little more than a cultural curiosity, it is useful to remember that Thailand’s own celebrated Deputy Prime Minister Supachai Panitchpakdi will take the helm of the World Trade Organization in September 2002. During his tenure at the WTO, these issues stand to be of paramount importance to the world’s changing economy.

Thailand as a country has enjoyed a long and storied history of failing to protect international property rights, primarily to support its own internal markets and its consumers’ choices and needs. Indeed, one of Bangkok’s busiest markets is a multi-level shopping plaza where consumers can buy pirated versions of Microsoft Office or Adobe Suites for about five U.S. dollars.

Thailand’s relationship with Western drug companies on the issue of prescription drugs to combat HIV offers a more salient example of the dilemma between property rights and consumer needs. Since its own citizens have trouble purchasing the goods they want or need from the West at Western prices, Thailand favors a policy of, let’s call it, conflict avoidance. Let the illegal copying go on, just turn the head the other way when you see it happening.

What we have here is a much “softer” version of capitalism. Markets are working just as well as in Western societies, but law is not so stringent that it would see this type of illegal market activity abolished. Rather than seeing copyright infringement as a threat to the functioning of the capitalist economic system, the issue is treated as a casual part of the game.

Simply put, the government does not have an interest in trying to make its markets airtight because what is going on now with all the copying serves an important functional purpose in Thai society. Consumers (both Western and Thai) are getting what they want. And even more importantly, Thai vendors are given an opportunity to make a living.

This leads us to an interesting possible conclusion about the nature of the world’s economic systems in the context of globalization. Perhaps the world is not so flat as a property rights lawyer might think.

And perhaps a “hard” capitalism with property rights and law at its base cannot be so neatly overlaid on top of the world as is being attempted, for example, in the WTO. It is entirely possible that individual nations’ social values play a role in determining the type of economic system that arises from it (i.e., whether the economies are “soft” or “hard”).

We may thus exist in a single globalized world, but one with room for many different styles and versions of capitalism. At a minimum, a mild spectrum exists: between the “hard” law version of capitalism in developed countries and a “softer” version in developing countries.

The dividing line might loosely fall between North and South, or East and West. Take your pick. The interesting thing here is that the difference in versions will not be due to anything economic. The shaping of the world’s economic systems is being determined by cultural values.