Western governments believe that capitalism and democracy are co-extensive. The spread of capitalism to nations with repressive or totalitarian regimes supposedly provides a hospitable environment to democracy so that, eventually, ballot boxes, government transparency, and a liberal media sprout in their midst. When you drink Coke, you’re really ingesting freedom.

But what happens when a country with a terrifying human rights record has such a huge and important market that the U.S. is forced to adopt aspects of its politics, rather than the other way around, just to continue to do business with them?

A week ago, a new manual for blogging was published that gave aspiring critics of repressive governments like those of Iran and China tips on how to protect their blogs and themselves from surveillance and censorship.

It was mentioned as a side-note in one Arizona paper’s article on the manual that the Chinese government has been helped in a big way in its hugely successful efforts to censor and monitor the Internet, thus maintaining roadblocks to the genuinely democratic aspects of a Western product, by none other than the U.S. Internet corporations MSN, Yahoo, and Google.

In order to access the unbelievably lucrative Chinese markets, these companies have willingly molded their Chinese networks to the government’s specifications, censoring dissenting content and reporting users to the authorities. The Chinese version of Google shuts down if a search for “Falun Gong” is performed too many times, for example, and MSN’s blogging service there voluntarily censors terms like “democracy.”

The most shocking instance of such self-censorship, however, was Yahoo’s. The e-commerce, search, and email giant reportedly supplied information about one of its users, journalist Shi Tao. The information leaked to Chinese authorities included the contents of Shi Tao’s private email account, which led to his arrest and ten-year imprisonment.

This instance of an American Internet company playing spy for a repressive regime against its own users is shameful, and Yahoo (and its Canadian partner, Rogers) should bear the brunt of our anger.

But this issue goes beyond one company to pretty much render absurd our rhetoric about capitalism’s promotion of democracy and freedom in the non-democratic world. Capitalism, in fact, flourishes astonishingly well without the annoying constraint of human rights laws.

It also puts the lie to the well-meaning work of every university’s I.R. department, every human rights think-tank, every Western government’s initiatives to spread democracy without paying attention to the role played by trade. It teaches us that work at the diplomatic level alone cannot and will not lead to the promotion of human rights. Not even the threat of military action can safeguard it, although many speak of the creation of a U.N. standing army as a panacea.

The biggest irony is that companies like Yahoo and Google, which so fiercely promote their privacy policies and their abundant access to information, will toss these values in a second in favour of KGB-style surveillance. From now on, their slogans should specify that customers are important to them-as long as those customers are American.