Featured columnist for Financial Times, Martin Wolf is a feather that counts. In a new work with international repercussions, he looks back on the vicissitudes of the democracy/capitalism couple. Noting the instability of this marriage of two opposites, he scrutinizes with concern liberal democracies struggling, faced with “populist perils”, “demagogic autocracies”, “despotic capitalism” Chinese. Moments like the storming of the Capitol in January 2021 embody a political crisis whose roots are to be found in economic shocks that affect capitalism. When inequalities increase and when rentiers give the there, the market economy is no longer experienced as a system ensuring the distribution of prosperity. The expansion of a disconnected financial sphere and the extension of inequalities produce a harmful cocktail for societies and democratic ambitions. Especially when the middle classes, an essential democratic link, are declining.
In order to remedy these problems, Wolf classically pleads, in this dense and documented book, to fight against monopolies, for stronger unions and for higher taxation (where it proves to be too low). He wants a new “New Deal” and – without saying exactly how – the emergence of “decent and competent elites”. In any case, he is absolutely right when he maintains that “in the long term, capitalism cannot survive without democracy, just as democracy cannot survive without a market economy”.
The “crisis of democratic capitalism”, to use the title of the book, is far from over and Wolf far from reassured. He insists on the urgent need to develop marriage counseling efforts to consolidate and revitalize the union of democracy and capitalism. This yin and this yang, to use the author’s terms again, must be balanced in new regulations. Otherwise, it would be authoritarianism and collapse, at least for the West. Glimmer of hope, Wolf tells us, in 1940 the situation seemed even more compromised. Renewal must therefore be possible.
Doctor Wolf’s diagnoses and potions are discussed. The very informed columnist explains the democratic recession essentially by economic springs, putting aside the identity dimensions. If it deals particularly with the Western world and, basically, mainly with the United States and the United Kingdom, by producing portraits that are in certain respects too dark, it largely deserves to be read everywhere.
The Crisis of Democratic Capitalism, by Martin Wolf. Penguin Press, 476 p.