Note first that these two words - democracy and capitalism - were not often combined in history.Ĭapitalism in the absence of democracy has been a common feature throughout history. Question 2: Is democratic capitalism sustainable?
But this is how it looks to a reasonable observer today. Of course, nothing guarantees that it would look like that to our children or grandchildren, for new ideologies can be invented. Increasing inequality of income, however, undercuts some of capitalism’s mainstream ideological dominance by showing its unpleasant sides: the exclusive focus on materialism, a winner-take-all ideology, and disregard of nonpecuniary motives.īut since no ideological alternatives currently exist - and even less, political parties or groups to implement them - the hegemony of capitalism looks pretty unassailable. Forms of state capitalism, as in Russia and China, do exist, but this is capitalism nevertheless: Private profit motive and private companies are dominant. Surely, those who argue for “localism” do not wish to propose a major drop in living standards. “De-globalization” and a focus on the “local” is meaningless because it would do away with the division of labor, a key factor of economic growth. Such is the hegemony of capitalism as a worldwide system that even those who are unhappy with it and with rising inequality - whether locally, nationally or globally - have no realistic alternatives to propose. And nowhere in the world do we now find unfree labor playing an important economic role, as it did until some 150 years ago. Centrally planned socialism was only recently eliminated as a competitor. One does not need to go far back into the past, or to have a great knowledge of history, to realize how unique and novel this is.
Such a system is conventionally defined as consisting of legally free labor, private ownership of capital, decentralized coordination and pursuit of profit. For the first time in human history, a system that can be called capitalist is dominant over the entire globe. The answer, at least in the medium term, seems to be in the negative. Is inequality undermining European democratic capitalism? Question 1: Does inequality threaten capitalism? When the question “Does inequality threaten the sustainability of Western democratic capitalism?” is asked, we need to break the question into three constituent parts in order to come up with a solid answer:
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