The Leviathan’s Growth: Arguing the Case for Illiberal Prosperity

---

The Counter-Argument: Why Economies Can Prosper Without Liberal Pillars

Historians and economists often point to "Late-comer Advantage" and "State-Led Mobilization" to explain how prosperity can emerge in restrictive environments.

1. The Efficiency of Centralized Resource Mobilization

In the early stages of industrialization, fragmented markets can be inefficient. A centralized government can bypass the "market hinterland" by forcibly directing capital, labor, and raw materials toward strategic sectors (like steel or semiconductors).

• Example: The Soviet Union from the 1930s–50s transformed from an agrarian society into an industrial superpower capable of defeating Nazi Germany and launching satellites, despite having zero private property protection or information freedom.

2. "Order" as a Substitute for Independent Judiciary

While an independent judiciary is ideal for resolving disputes, a strong, predictable Autocratic Stability can serve as a temporary substitute. If a regime guarantees that it will protect certain favored investors or state-owned enterprises, capital will flow in because the "political promise" provides enough certainty for a 20-year ROI, even without a formal legal shield.

3. Directed Innovation via "State Capitalism"

Information freedom is vital for the creation of new ideas, but imitative growth (the catch-up phase) does not require it. A state can prosper by acquiring foreign technology and scaling it through a captive market.

• Example: South Korea and Taiwan during the 1960s and 70s. Both achieved "miracles" under martial law or authoritarian regimes with restricted information, controlled labor movement, and limited judicial independence. The state forced the market to form.

4. The "Security of Results" Over the "Security of Rights"

In a "Policy Testing Ground," the lack of private property protection is often offset by massive state subsidies. Investors tolerate the risk of seizure if the immediate profit margins—driven by cheap labor and state-backed monopolies—are high enough to compensate for the lack of long-term legal safety.

Conclusion 

The opposite argument suggests that Economic Growth is a function of Resource Alignment, not just Liberty. While the liberal model creates the most resilient economy, the authoritarian model can create the most explosive early-stage growth by crushing internal friction and forcing a country into the industrial age. The tragedy, as history also proves, is that these "miracles" often struggle to transition into sustainable innovation once the "catch-up" phase ends.