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On Thursday, December 7, Martin Wolf joined Markus’ Academy for a lecture on his book The Crisis of Democratic Capitalism. Wolf is the associate editor and chief economics commentator at the Financial Times.
Timestamps:
[00:00] Introduction
[8:00] The democratic recession
[28:36] How democratic capitalism was born
[50:59] Unhappy high income democracies
[1:06:36] Democratic capitalism in the world
A summary in four bullets
- Aristotle emphasized that sustaining a democracy requires a middle class that is economically independent, that is able to form their own views, and that recognizes that only together can it have an impact on society.
- Democratic capitalism requires a balance between the market economy and democracy. The two are often complementary. Both reject hereditary status, while the market ideals of reward for merit, free access to the labor market, limits by the rule of law complement the democratic ideals of free discussion and debate. Yet the two can also be in opposition: capitalism is cosmopolitan and generates inequality, while democracy is territorial and egalitarian.
- In recent decades the rise in inequality, deindustrialization and the financial crisis have atomized the working class, making them feel vulnerable, fostering anxieties of downward mobility, and weakening the perceived legitimacy of democracy.
- On a positive note, it seems that after seeing the instability and self-seeking behavior of populists voters realize it is not what they need. There are also some signs that oligarchs are beginning to realize that living in an autocratic world will be unpleasant also for them, even if taxes are lower.