The Crisis of Democratic Capitalism

Economic Woes and Political Instability

Globalization and austerity policies have created financial crises, economic stagnation, and political instability around the world. Latin America, Eastern Europe, and East Asia have all experienced severe economic downturns. Despite promising economic recovery, the Great Recession of 2008 and the European debt crisis caused recessions and political unrest in Europe.

The Loss of Faith in Demokratie

Decades of elite failures and inequality have led to a loss of confidence in both democracy and liberalism. Populist demagogues, both violent and moderate, have been elected to office, expressing dissatisfaction with the state of affairs.

The Root of the Crisis: Elite Corruption

According to economist Martin Wolf, the root of the crisis lies in the moral corruption of elites. He argues that decision-makers and opinion formers have abandoned values such as honesty, self-restraint, and loyalty to shared institutions.

Wolf's Prescription: Moral Exhortation

Wolf's solution to the crisis is not radical change but a return to ethical behavior among elites. He believes that moderation and expertise will lead to a more just system and that employers will treat their employees with dignity and respect.

The Flaw in Wolf's Argument

Wolf's focus on moral exhortation ignores the systemic factors that have led to elite corruption. The free-market capitalism he advocates is incompatible with substantive equality and democracy, which require public interest and civic responsibility.

The End of the "Symbiotic Twins"

The idea that democracy and capitalism are inherently compatible is a relic of cold war ideology. In reality, the two systems are based on different premises and may even contradict each other.

The Failure of Market Liberalism

Neoliberal policies have insulated property ownership from democratic politics, exacerbating economic inequality and undermining the legitimacy of democracy.

Wolf's Selective Criticism

Wolf's analysis is flawed by his unwillingness to acknowledge the contradictions between capitalism and democracy and his tendency to blame anti-market critics rather than the system itself.

Wolf's Changing Views

Despite claiming that his opinions have evolved, Wolf's two books, "Why Globalization Works" and "The Crisis of Democratic Capitalism," show remarkable consistency in his support for free-market capitalism. While he has moderated his stance on corporations and finance, he maintains his belief in the supremacy of markets.

The Elite Past Exonerative

Wolf's historical analysis often employs a passive voice and past tense to obscure the role of elites in creating and benefiting from the crises he describes.

Conclusion: The Decimation of Countervailing Powers

Wolf's promotion of financial globalization has allowed elites to escape democratic accountability and state regulation. This has decimated countervailing powers, such as labor unions and capital controls, that once constrained the excesses of the market. Now, the wealthy have emerged victorious in their class warfare against the working class, leaving behind a barren landscape of economic and political injustice.