MARTIN WOLF
The Crisis of Democratic Capitalism
editor of Penguin Press, 2023, p. 496

The survey showed that of the 1.9 billion people living in democracy globally, only a quarter are satisfied with the political-economic system as it works today. Its delegitimization is even more pronounced among young people. Where does this frustration come from, and what needs to be done to restore confidence in a system that would ensure prosperity in freedom? Martin Wolfe, “dean” of economic writing in Britain, of the Financial Times columns, in his recently published book “The Crisis of Democratic Capitalism” analyzes what went wrong and makes suggestions to make the difficult “marriage” of democracy and capitalism stronger.

If in 2016 the percentage of states supporting democracy around the world was 58%, then in recent years the quality of democracy has deteriorated, authoritarianism has gone on the offensive, and voices are increasingly heard that capitalism is better without democracy, and democracy is better without capitalism, but for the author, their divorce would mean disaster. He places much of the blame for the Democratic “downturn” on poor economic performance, rising income inequality, low growth, the loss of decent jobs, and the greed of elites interested in amassing power and wealth while ignoring the underprivileged.

Without the security and prosperity that society expects, many feel that the system has left them on the sidelines, that they have lost control of their lives and their country, and thus have succumbed to the sirens of populism from right and left. Conspiracy theories, xenophobia, culture and identity preoccupations influenced the anti-systemic turn, but economic failure played a dominant role, he argues.

The threat of “demagogic authoritarian capitalism” by Putin, Erdogan and the “bureaucratic authoritarian capitalism” expressed by the Chinese regime.

The enemy is not outside, but inside the walls. With the book’s motto “Zero Agan” and references to Plato and Aristotle about the fragility of democracy, oligarchy, demagogy and tyranny, Wolff points out that what we need is not revolution, but bold political and economic reforms, with the adoption of a new New Deal in the footsteps of Franklin Roosevelt, the greatest reformer 20th century, and in the logic of “gradual social engineering” for processing bad texts.

For him, the root of the problem is the weakening of the middle class. His decline in social and economic status, once secured by a good job, explains the Brexit-style turn to Trump and ethno-populists. The financialization of the economy and the pursuit of profit maximization without manufacturing activity have sharply increased inequality, with the result that in the US, 1% of the population owns 18.8% of income in 2019.

As a new social class emerges, characterized by the precariousness of working in conditions of hopelessness, fear, anxiety and insecurity, the contempt and humiliation of the poorly educated working class affected by deindustrialization and globalization turns into a rage used by extremists, mostly rights.

For Wolf, democratic capitalism is now contrasted with “demagogic authoritarian capitalism” as represented by leaders such as Putin, Erdogan and Orban, and “bureaucratic authoritarian capitalism” as expressed by the Chinese regime. The financial crisis of 2008, the coronavirus pandemic and the Russian invasion of Ukraine showed how interdependent the world is and how disastrous it would be for an open global economy to fall victim to economic nationalism.

But what does the renewal of democratic capitalism entail? Provide good jobs, equal opportunity, a wider social safety net, end of special privileges for the few, rule of law, greater accountability of governments, less influence of money on politics, impartial justice and independent media, credible rules of competition, immigration. control in a socially acceptable and economically beneficial way, supporting a civil society that cares about the collective good, encouraging patriotism, not nationalism. In conclusion, to prove with tangible results that the system benefits many.

For the author, the biggest threats come from inadequate responses to economic and technological change and from abuses by elites. It remains urgent to defend liberal democratic values ​​around the world, rally against authoritarianism and tyranny, stimulate international cooperation, and prudently manage America’s rivalry with China so that the two superpowers do not fall into the “Thucydides trap” by avoiding their destructive conflict, especially armed conflict.

Democracy will survive if it offers opportunity, prosperity, security and dignity to the majority, with a focus on the key middle class, according to Aristotle. We live in an age of great fear and little hope. Let’s strive to ensure that hope comes true – such is his optimistic conclusion.

Mr. Achilleas Paparsenos worked at the Greek Embassy in London as Head of Public Relations and Press.