THE CRISIS OF DEMOCRATIC CAPITALISM

A close look at the push-and-pull, often dysfunctional workings of democracy and capitalism.

Distinguished financial journalist Wolf, author of The Shifts and the Shocks, opens by noting his generally pessimistic outlook, which enables him to be pleasantly surprised when things don’t go down in flames. “I have never taken peace, stability, or freedom for granted and regard those who do as fools,” he writes. Considering the rise of authoritarianism and the supremacy of predatory capitalism, he has reason to be glum, but while he seldom brightens from his starting point, neither does he write off the democratic experiment as dead. Even so, he notes, “a liberal democracy is a competition for power between parties that accept the legitimacy of defeat.” A healthy capitalist economy is one that values things other than profit, which, the author argues, should not be the sine qua non of the reigning ideology but instead “a by-product of pursuing other goals, such as making excellent cars or providing reliable advice.” While the autocracies of Orbán, Erdogan, Xi, Putin, and Trump are essentially mediocre, combining “the vices of populism with the evils of despotism,” they can still prevail. But as long as capitalism does not slide into autarky and democracy does not devolve into authoritarianism, the joined system of democratic capitalism has a chance of thwarting the ambitions of, say, China, which by Wolf’s account represents the greatest existential threat to the West. Chinese officials do not necessarily want military dominance; rather, they seek to “make trade, commerce, and investment the foundation of a Chinese-led global order.” In order to maintain a functioning system of democratic capitalism, Wolf argues for the renewal of a social contract that renounces nationalism and extends citizenship as “the tie that binds people together in a free and democratic society,” creating a true level playing field.

A vigorous defense of democratic capitalism worthy of the name.