In his new book, The Crisis of Democratic Capitalism, Financial Times’ chief economics commentator Martin Wolf explores the causes of and solutions to today’s global democratic recession.
Wolf, who in 2000 was awarded the CBE (Commander of the British Empire) “for services to financial journalism,” is the author of several earlier books on global economics. Together with Martin Reeves, Chairman of BCG Henderson Institute, they discuss the fragile marriage of liberal democracy and market capitalism. They are twin ideologies—both based on the belief in human agency and the rule of law. But when wealth leads to political power or political power to wealth, the system breaks down. We are seeing this play out in keystone liberal democracies struggling to contain populism, and in authoritarian regimes that are gaining momentum.
The struggle with populism, in particular, can be traced to three developments: the emergence of societal rifts around questions of identity, the decline of the economic and political position of the working class, and the rise of the financial and tech sector as the new elite. Essential to the restoration of liberal democracy, Wolf and Reeves note, is the imperative to improve economic and political institutions such that opportunity, security, and dignity are available to all.
Key topics discussed:
- [00:58] The fragile marriage of liberal democracy and market capitalism
- [04:08] Evidence for a global democratic recession
- [11:01] The forces behind democratic decline
- [15:30] The agenda for restoring democratic capitalism
- [19:22] The key role of business leaders
If you’d prefer to read this conversation, you can download the AI-generated, lightly edited transcript here.
Additional reading from Martin Wolf:
- Articles published in the Financial Times
- The Shifts and the Shocks (Penguin Press, 2014)
- Fixing Global Finance (Johns Hopkins University Press, 2008)