The Crisis of Democratic Capitalism

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From the chief economics commentator of the Financial Times, a magnificent reckoning with how and why the marriage between democracy and capitalism is coming undone, and what can be done to reverse this terrifying dynamic Martin Wolf has long been one of the wisest voices on global economic issues. He has rarely been called an optimist, yet he has never been as worried as he is today. Liberal democracy is in recession, and authoritarianism is on the rise. The ties that ought to bind open markets to free and fair elections are threatened, even in democracy’s heartlands, the United States and England. Around the world, powerful voices argue that capitalism is better without democracy; others argue that democracy is better without capitalism. This book is a forceful rejoinder to both views. Even as it offers a deep, lucid assessment of why this marriage has grown so strained, it makes clear why a divorce of capitalism from democracy would be a calamity for the world. They need each other even if they find it hard to life together. For all its flaws, argues Wolf, democratic capitalism remains far and away the best system for human flourishing. But something has gone seriously awry: the growth of prosperity has slowed, and the division of its fruits between the hypersuccessful few and the rest has become more unequal. The plutocrats have retreated to their bastions, where they pour scorn on government’s ability to invest in the public goods needed to foster opportunity and sustainability. But the incoming flood of autocracy will rise to overwhelm them, too, in the end. Citizenship is not just a slogan or a romantic idea; it’s the only idea that can save us, Wolf argues. Nothing has ever harmonized political and economic freedom better than a shared faith in the common good. This wise and rigorously fact-based exploration of the epic story of the dynamic between democracy and capitalism concludes with the lesson that our ideals and our interests not only should align, but must do so, for everyone’s sake. Democracy itself is now at stake. Also by Martin Wolf Title Page Copyright Dedication Epigraph Contents Preface: Why I Wrote This Book Chapter One: The Fire This Time Part I: On Capitalism and Democracy Prologue to Part I Chapter Two: Symbiotic Twins: Politics and Economics in Human History Chapter Three: The Evolution of Democratic Capitalism Part II: What Went Wrong Prologue to Part II Chapter Four: It’s the Economy, Stupid Chapter Five: Rise of Rentier Capitalism Chapter Six: Perils of Populism Part III: Renewing Democratic Capitalism Prologue to Part III Chapter Seven: Renewing Capitalism Chapter Eight: Toward a “New” New Deal Chapter Nine: Renewing Democracy Part IV: A Hinge of History Prologue to Part IV Chapter Ten: Democratic Capitalism in the World Conclusion: Restoring Citizenship Acknowledgments Notes Bibliography Index About the Author