Yes, there were problems, but nothing beyond the reach of centrist technocratic solutions a little retraining here, some social liberalization there.
The elite reformed our leftwing parties into Third Way parties, who swept to power: this was the era of Clinton, Blair and Schroeder. Over dinner in cosmopolitan cities, they discussed Fukuyama’s The End of History, pushed further and faster towards freer trade and more porous borders, and insisted that inequality was being sanitized by meritocracy. After the Berlin Wall fell, the western technocratic and political elite became complacent, hubristic, and arrogant. To a large extent, they are reaping what they have sown. Meanwhile, western democracies are in various states of crisis, struggling to contain a resurgent populism. China has successfully adopted a market system – and, even more importantly, a market culture – without liberal democratic institutions. But, so far, the liberalization thesis remains unproven.
Eventually, so western liberal thinking went, China and other Asian nations adopting what Milanovic calls “political capitalism” – free markets, but authoritarian politics – would have to adopt liberal political institutions, too. As it turned out, markets spread, but without necessarily bringing more democracy or liberalism along with them.Ĭapitalism without democracy was assumed to be at most a passing phase. As the economist Branco Milanovic writes in his new book, Capitalism Alone, “the entire globe now operates according to the same economic principles – production organized for profit using legally free wage labor and mostly privately owned capital, with decentralized coordination”.Īfter the fall of Soviet communism in 1989, and China’s embrace of the market, crowned by the nation’s entry into the World Trade Organization in 2001, it seemed, for a brief flicker of human history, that the world was converging on a political economy of free markets in liberal democracies. But viewed through a wider lens, the distinctions blur. Close up, these differences can seem significant. Of course there are differences between capitalism Chinese-style, American-style and Swedish-style. For the first time in human history, a single economic system spans the globe.
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