Wolfgang Merkel — "Failing Union Of Capitalism And Democracy Fuels Rise In Inequality"

Democracy and capitalism are two highly contested models. On paper, throughout the past two centuries, they have proven the most successful systems of economic and political order. Following the demise of Soviet-style socialism and the transformation of China’s economy, capitalism has become predominant across the world.

Democracy has followed a similar path. Compared to capitalism, however, its success is much less complete. Today, about 120 countries can be called “electoral democracies”, but only around 60 can be classified as functioning democracies based on rule of law.

More importantly, if on the one hand the popularity of democracy seems on the rise, on the other established democratic systems have entered a phase of chronic decline. Scholars increasingly speak of“post-democracies” (Colin Crouch) or “façade democracy” (Wolfgang Streeck). Most critics seem to agree that capitalism is to be blamed for this late development....

During the past 40 years the relationship between democracy and capitalism has radically changed. What Karl Polanyi called socially “embedded capitalism” became “neoliberalism”, “deregulation”, “globalisation” and “financialisation”....

At a closer look, the American system shows strong resemblance to an electoral apartheid, where the lower half of society is excluded from political participation. The long-term consequences cannot be underestimated. The US might well represent the shape of things to come for other democracies around the world....

The days of representative democracy are numbered if we are unable to devise an effective antidote to socioeconomic and political inequality.

Social Europe Journal
"Failing Union Of Capitalism And Democracy Fuels Rise In Inequality"
Wolfgang Merkel