The Crisis of Democratic Capitalism
By Martin Wolf
Penguin Press, 2023

Martin Wolf’s new book The Crisis of Democratic Capitalism is a sprawling and discordant reading experience tempting an equally sprawling and discordant evaluation. The book is spurred by an urgent “rise of predatory capitalism and demagogic politics,” which have produced, reflect, and worsen the lost legitimacy of liberal democracy and global capitalism (“symbiotic twins”), in a world where authoritarianism outside the democracies looms larger. Wolf, associate editor and chief economics commentator at the Financial Times, responds both “to this new and troubling era” and to the individual sicknesses in liberal democratic capitalism by covering the field.

Late in the book he writes: “At some point, such a polity becomes a blatant plutocracy. All effective power will rest in the hands of the few, not the many. The US is largely already there.”

First, the adverb in that last sentence is odd. Largely? Compare any definitional statement in the book of liberal democratic capitalism or plutocracy with any description of concrete US political economy and you’ll see that “largely” is worse than superfluous, it’s wishful thinking.

Take an example. In chapter one we’re told: “In essence, a liberal democracy is a competition for power between parties that accept the legitimacy of defeat. It is a ‘civilized civil war’. Force is not permitted. But this means that winners do not seek to destroy the loser”

While in the conclusion, he writes: “The Republicans had moved from being a normal political party in the world’s most influential liberal democracy to embracing the view that not only was losing an election ipso facto illegitimate, but riot and murder were acceptable responses.”

Second, we have the imposing subject, the US. The crisis, where it stands, is punctuated by Brexit and Donald Trump. But given the size and power of the US and that plutocracy, where it “largely” already is, “can result in autocracy,” the US is accorded due weight.

It is on that subject and qualifier so much of this book’s discordance and unevenness rests. Wolf doubts “whether the US will still be a functioning democracy by the end of the decade. If US democracy collapses, what future can there be for the grand idea of government of the people, by the people, for the people’?” But the book we have is not of the severe and focused kind such a thought would be expected to produce. Rather, The Crisis of Democratic Capitalism clings tightly to that peculiar “largely.” It permits a roundabout survey of history and theory, prognosis and diagnosis, ending with solutions that fall amazingly flat when measured against the crisis.

This is most painful when he “explores some of the details of a ‘new’ New Deal.” In a section that evaluates and loosely points to directionally desirable arrangements, he grippingly declares about immigration: “The economics reinforces the politics: immigration needs to be controlled in a way that is politically satisfactory and economically advantageous for a substantial majority of existing residents and especially existing citizens.”

Indeed.

It is, of course, easy to pull a vapid, toneless sentence out of any tract, and this is about as bad as it gets. Still, it captures the feeling of swaths of the book and, the point is, Wolf seems to lose some sense of proportion through his desire to show everywhere things have gone wrong and so where they must be put right.

If the US is in the thralls of plutocracy, perhaps teetering on the edge toward autocracy, with democracy slipping elsewhere within the context rising autocratic states, how else can such things read?

This is not at all to say it is a fruitless read. Clearly written, the book is a speedy reading experience, it displays Wolf’s erudition (the notes cover years of deep reading, with more than a few familiar citations to himself; an annoying tendency requiring over three pages of bibliography), and works as an indispensable survey of challenges for 21st Century democracies.

The Crisis of Democratic Capitalism offers, at its core, a story of the last thirty years: the accretion of angst about the institutions of liberal democracy along with the fruit of global capitalism that curdled into a weathered trust of elites and weakened faith in economic outcomes; the disappointment in large part engendered our present illiberal populist turn, all the while outside we hear a growing thunder from illiberal democracies and outright dictatorships.

There is much to agree with here and plentiful insights, likewise his framing, appraisal, and new New Deal will have you arguing the whole way through. In the end, he sees a sense of citizenship as the necessary animated force for renewal. And on at least one part of that Martin Wolf is right, only a jealous defense of our shared inheritance will break us of this fever: “This is a moment of great fear and faint hope. We must recognize the danger and fight now if we are to turn the hope into reality. If we fail, the light of political and personal freedom might once again disappear from the world.”

David Murphy holds a Masters of Finance from the University of Minnesota.