1. The Decline and Backsliding of Liberal Democracy
The decline and backsliding of liberal democracy, often referred to as ‘democratic backsliding,’ is a phenomenon where countries experience a gradual decline in the quality of their democratic institutions and practices. This trend is characterised by the erosion of civil liberties, undermining of the rule of law, weakening of checks and balances, and deterioration in the fairness of elections and political participation. One of the main trends that has substantially weakened liberal democracy has been the rise of forms of authoritarian popularism. The rise of authoritarian leaders and regimes that challenge the principles of liberal democracy, often through populist appeals, nationalistic rhetoric, or the promise of economic stability at the expense of democratic freedoms.
Over the last decade, the far-right movement, characterised by white nationalism, identitarian politics and nativist ideologies, has emerged as a significant political force in Western democracies. This movement has achieved notable electoral successes across Europe, the United States and Latin America, aligning itself with populist phenomena such as Trump’s presidency, the Brexit vote, and Boris Johnson’s electoral victory in the UK in 2019. This shift signifies a departure from the liberal internationalism that emerged post-World War I, which influenced global institutions, globalisation and neoliberal policies, and has notably affected Western democracies. The roots of this political trend can be traced back to the early 20th century with the rise of fascism in countries like Italy, Germany and Austria. Philosophically, the far-right movement represents a backlash against the rationalism and individualism that underpin liberal democratic societies. It draws on the ideas of thinkers such as Nietzsche, Darwin and Bergson, embracing notions of irrationalism, subjectivism and vitalism. This movement is seen as a political revolt against the established order, challenging the foundational principles of modern democracies.
In our collection of essays, The Far-Right, Education and Violence, we identify this political surge as a framework to explore broader phenomena, including the resurgence of fascism, the proliferation of white supremacism, the increase in acts of terrorism, and various contemporary challenges such as the refugee crisis, the rise of authoritarian populism, the crisis in international education and the proclaimed ‘end of globalism’ under Trump’s administration. This work provides some insights into understanding the complex dynamics at play in the re-emergence of these ideologies and their impact on global and domestic politics. The rise of authoritarian leaders and regimes challenging the principles of liberal democracy has been a significant global trend over the last decade, both within and outside the West. These populist leaders often come to power through democratic means but then erode democratic institutions and norms from within.
Since coming to power in 2010, Prime Minister Viktor Orbán and his Fidesz party in Hungary have systematically dismantled checks and balances, weakened the independence of the judiciary, taken control of the media and altered electoral laws to favour the ruling party. Orbán promotes a political ideology he calls ‘illiberal democracy,’ which emphasises national sovereignty and traditional values over liberal democratic principles. Recep Tayyip Erdoğan in Turkey has increasingly consolidated power, particularly following a failed coup attempt in 2016. His government has cracked down on freedom of expression, curtailed civil liberties, purged thousands from the military, judiciary and civil service, and restricted the activities of non-governmental organisations. While Turkey remains a democracy in form, the erosion of democratic norms and institutions has significantly increased under Erdoğan’s rule.
Since becoming President in 2000, Vladimir Putin has systematically curtailed the freedoms of assembly, speech and press, marginalised political opposition and centralised power in the executive branch. The manipulation of electoral processes, control over the media and the use of laws to stifle opposition have significantly undermined democratic institutions in Russia. Jair Bolsonaro’s tenure as President from 2019 to 2023 was marked by his authoritarian style, attacks on the media and disdain for environmental regulations and human rights norms. His presidency raised concerns about the erosion of democratic norms and institutions in Brazil, although the country’s democracy has shown resilience through its judicial and electoral institutions.
Rodrigo Duterte’s presidency, starting in 2016, was characterised by a brutal war on drugs that resulted in thousands of extrajudicial killings. Duterte also attacked the press, threatened political opponents and showed a general disregard for human rights and the rule of law, raising significant concerns about democratic backsliding in the Philippines. Nayib Armando Bukele Ortez became the 43rd President of El Salvador in 2024, against the sway of criticisms by constitutional law experts. Bukele has maintained very high approval ratings of around 90% by governing in an authoritarian manner in his war against gangs and criminal cartels, which also involved his dismissal of the attorney general and five Supreme Court judges.
These leaders share common tactics, such as exploiting nationalist sentiments, manipulating fears about security or economic instability and portraying themselves as the sole protectors of the people against various real or imagined threats. While the contexts and specifics vary, the overall effect has been a challenge to the principles of liberal democracy and an erosion of democratic norms and institutions. The rise of the far right has led to a process of political polarisation. Deepening social divisions can lead to increased conflict and instability, undermining democratic norms and making it more difficult for democratic institutions to function effectively.
Growing disparities in wealth and opportunity can fuel discontent with democratic institutions, which are perceived as failing to address people’s needs and concerns. This dissatisfaction can be exploited by political leaders who promise drastic changes outside the democratic framework. The rise of digital technology and social media has transformed the public sphere, creating new challenges for democracy, including misinformation campaigns, echo chambers and the undermining of traditional news media. Foreign interference in elections and domestic affairs, whether through cyber-attacks, disinformation campaigns, or financial support for fringe political movements, can destabilise democratic institutions. In some cases, the institutions necessary for a healthy democracy were never fully developed or have been weakened over time, making it easier for democratic backsliding to occur.
When citizens become disillusioned with the performance of their democratic institutions, often due to corruption, inefficiency, or lack of responsiveness, it can lead to reduced participation and support for non-democratic alternatives. This trend is not confined to any specific region but is a global phenomenon affecting both established democracies and countries in the process of democratic transition. Addressing democratic backsliding requires a multifaceted approach, including strengthening democratic institutions, ensuring the rule of law, promoting civic education and fostering inclusive political and social environments.
2. The Experience of Colonialism and Neoliberalism
The distinction between liberal democracy and capitalism we must understand is the historically contingent relationship that came to fruition first in the age of colonisation – the black slave economy, colonial plunder of raw materials and cheap native labour contributed to this relationship. Liberal democracies provided a free trade ideology that gave a huge advantage to the imperial powers. In the age of neoliberalism, free-market fundamentalisms enabled Western powers to benefit further – the relationship between neoliberalism and democracy needs critical examination as they are opposing elements; today, US economic policy no longer abides by liberal capitalist laws or ideology but rather depends on state intervention on new infrastructure, a massive system of US economic sanctions (over 30 countries), a permanent war economy that protects US interests and also acquires neoliberal capitalist economic reconstruction, foreign policy puts curbs and slow-downs on China as its economic competitor. There are very autocratic elements of liberal capitalism.
The intricate relationship between liberal democracy and capitalism, often assumed to be natural allies, indeed warrants a critical re-examination, particularly when considering historical contingencies and contemporary practices. This relationship, which first emerged prominently during the age of colonisation, has been shaped significantly by the forces of imperialism, neoliberalism and evolving US economic policy.
In the colonial era, liberal democracies were not only political entities but also economic powerhouses that derived immense benefits from the exploitation associated with colonisation. The black slave economy, the plunder of raw materials and the use of cheap native labour were foundational to the wealth of imperial powers. Liberal democracies espoused a free trade ideology that greatly advantaged them, creating a symbiotic relationship between the expansion of capitalist enterprise and the democratic institutions that supported and legitimised it.
However, with the advent of neoliberalism, this relationship became more complex. Neoliberalism, emphasising free market fundamentalism, has often been at odds with the egalitarian and inclusive principles that many associate with liberal democracy. The push for deregulation, privatisation and austerity measures – hallmarks of neoliberal policy – has frequently led to social inequality and marginalisation of vulnerable populations, which in turn has strained the fabric of democratic societies.
Today, the US economic policy departs from traditional liberal capitalist doctrines. Rather than adhering strictly to free market principles, there is a notable reliance on state intervention. This intervention includes investments in new infrastructure and the extensive use of economic sanctions that affect over 30 countries. Additionally, the US maintains a permanent war economy, which not only serves to protect its interests but also enforces a neoliberal capitalist framework upon reconstructed economies.
Foreign policy manoeuvres that aim to curb and slow the rise of China as an economic competitor further demonstrate a strategic, rather than purely ideological, approach to capitalism. Such actions suggest a willingness to deviate from liberal capitalist tenets when they serve broader strategic objectives. This interplay raises questions about the autocratic elements within liberal capitalism itself. The concentration of economic power, the intertwining of corporate interests with political decision-making and the overriding emphasis on economic growth at the expense of other democratic values can indeed exhibit characteristics associated with more autocratic governance. Moreover, the state’s role in shaping markets and economic outcomes often contradicts the laissez-faire approach traditionally championed by capitalism.
In essence, the historical alliance between liberal democracy and capitalism is more contingent and strategic than ideologically pure. As the US and other Western powers navigate the contemporary global landscape, the tension between neoliberal economic policies and the democratic ethos highlights a complex and often contradictory relationship. This complexity underscores the need for ongoing critical analysis of how these systems interact, evolve and occasionally conflict in shaping the modern world.
3. Democracies and Autocracies: A Point of Historical Inflection?
The concept of a historical inflection point in the context of democracies and autocracies implies a moment of significant change or shift in the global balance between democratic and authoritarian governance. Historically, the trajectory of political systems has witnessed several such inflection points, each marking a critical juncture where the momentum between these forms of governance has shifted, often in response to broader social, economic, political, or technological changes. The aftermath of World War II represented a significant inflection point, with the establishment of the United Nations in 1945 and the spread of democratic governance in the Western world. This period saw the emergence of a bipolar world order dominated by the United States and the Soviet Union, representing democratic and authoritarian ideologies, respectively. The Marshall Plan and the decolonisation process also facilitated the spread of democracy in Europe, Asia and Africa. The end of the Cold War in 1991 marked another critical inflection point. The dissolution of the Soviet Union and the fall of the Berlin Wall symbolised not only the triumph of liberal democracy over communism but also led to a significant expansion of democratic governance across Eastern Europe and parts of Asia and Latin America. This period, often called the ‘Third Wave’ of democratisation, was characterised by an optimistic belief in the inevitability of democratic progress.
Francis Fukuyama is closely associated with the optimistic belief in the inevitability of democratic progress, primarily through his seminal work, The End of History and the Last Man, In which he posits that the end of the Cold War marked not just a pivotal moment in geopolitical terms but also a philosophical endpoint to mankind’s ideological evolution. He argued that liberal democracy, combined with a market economy, represents the final form of human government, effectively concluding the historical progression of political ideologies. This was, in part, a consequence of a Hegelian interpretation of history, which views the development of human societies as a dialectical process that ultimately leads to the realisation of the highest form of political and social organisation. The collapse of communism in Eastern Europe and the disintegration of the Soviet Union evidenced that liberal democracy had triumphed over alternative ideologies like fascism and communism, which had challenged it throughout the 20th century. Fukuyama’s optimistic argument aligns with the democratic peace theory, which suggests that democracies are less likely to go to war with each other. The major claim that peace fosters global stability and the spread of democratic values does not bear much examination in the context of the wars that the US have been involved in and sometimes responsible for in the post-WWII era.
Fukuyama also observed that economic development tends to lead to democratisation, as seen in the histories of Western countries. The idea is that as societies become more economically advanced, they demand more political rights, leading to democratic reforms. The idea that the universal desire for recognition and dignity would lead societies worldwide to adopt liberal democracy, seeing it as the best system to fulfil these human aspirations, has been roundly challenged in the years following the publication of The End of History and the Last Man. The rise of authoritarian regimes, the persistence of non-democratic governments in economically successful countries like China, the resurgence of nationalist and populist movements within democracies and the erosion of democratic norms in established democracies have all raised questions about the inevitability of democratic progress. Even Fukuyama, while he maintains that liberal democracy is a desirable and stable form of government, recognises that its spread and maintenance are not guaranteed. The optimism of the early 1990s has been tempered by a recognition of the complex, non-linear nature of historical development and the ongoing struggle between different forms of governance in the global arena.
This optimistic narrative has been challenged by the rise of China as a global power with a communist regime, the resurgence of authoritarian leaders in countries like Russia, Turkey and Hungary and the growing appeal of populist movements in established democracies, signalling a potential inflection point. These developments have raised concerns about a global democratic recession or even a ‘reverse wave’ of democratisation, where autocratic governance gains ground at the expense of democratic institutions. The question is further complicated by the digital revolution and the advent of social media, which have played a dual role in this context. While technology has empowered democratic movements and facilitated greater political participation, it has also been harnessed by authoritarian regimes for surveillance, censorship and misinformation campaigns, complicating the global struggle between democracy and autocracy.
The question of whether we are currently at a historical inflection point between democracies and autocracies hinges on several factors, including the resilience of democratic institutions, the ability of autocracies to maintain control in the face of economic and social challenges and the international community’s commitment to upholding democratic norms. The outcome of this struggle will likely define the global political landscape for decades to come, influencing issues ranging from human rights and governance to international security and global economic stability.
The discussion surrounding the dichotomy between democracies and autocracies, and the recognition of the complex gradations within this spectrum, draws on a broader discourse underscored by scholars like Anne Applebaum, who examines how ostensibly democratic systems can exhibit authoritarian tendencies, including media manipulation and corporate governance that contradicts democratic ideals. The global landscape, as it pertains to governance, is not binary but a continuum, where countries such as China, Russia, India, Turkey, Israel and Iran exemplify various blends of political and economic structures that defy simple categorisation.
China’s state-led capitalism, Russia’s centralised authority over a market economy, India’s democratic yet corruption-laden governance and the democratic institutions with recent autocratic shifts in Turkey and Israel all represent the multifaceted nature of modern governance. Even within democracies like the US and the UK, the influence of social media and corporate power echo some characteristics of autocratic systems, further complicating the landscape. The erosion of democratic norms and the rise of autocratic practices within democracies are not only theoretical but observable in recent events, like the social media’s role in elections, including the Brexit referendum. This situation parallels concerns raised by Thomas Piketty, who notes the exacerbating wealth inequalities within capitalist systems and their potential to destabilise democratic institutions.
Moreover, the assertion by President Biden regarding the inflection point between democracies and autocracies as a defining feature of our time calls for empirical examination. Evidence of democratic backsliding, the rise of authoritarian populism and geopolitical tensions between democratic and autocratic states support this claim. The intersection of economic interests and the democratic-autocratic divide suggests that other factors, such as economic and regional security, might define contemporary global relations more than governance structures alone, a complexity that both Fukuyama and Diamond have explored in their works. Lastly, the role of tax havens in liberal capitalism points to the ethical dilemmas and inequalities that arise within this economic system. As Piketty and Stiglitz argue, such practices contribute to wealth concentration and highlight the need for international cooperation to address tax avoidance, underscoring the interplay between economic policies and the principles of equity and fairness within global capitalism. The intricate relationship between democracies and autocracies, as well as the presence of autocratic features within democratic societies, suggests a need to move beyond binary classifications. It requires a nuanced understanding of how different countries navigate the complex interdependencies of governance and economic management in an increasingly interconnected world.
4. The Rise of Autocratic Capitalism
It is necessary to examine the nuances of this dynamic, the evidence of cooperation among autocracies and the challenges faced by democracies before reflecting on the appeal of authoritarianism today. Firstly, the concept of autocracies aligning as a bloc is gaining traction. Despite lacking a formal alliance, autocratic nations are increasingly cooperating, united by common goals and mutual antipathy towards democratic principles and activism. This is evident in shared tactics such as surveillance technology, kleptocratic practices and propaganda campaigns, all aimed at consolidating power and suppressing dissent. For instance, the reported collaboration between Iran and Russia, wherein Iran’s drones are used by Russia in its conflict with Ukraine, illustrates a synchronicity in autocratic actions and ideologies. Simultaneously, we witness an erosion of democratic values in historically robust democracies such as the United States and the United Kingdom. This democratic backsliding is manifested in the rise of political parties with autocratic tendencies that seek to establish one-party states, often by altering political systems and, in some cases, the voting process itself.
The degradation of democratic norms is further highlighted by the assault on independent judiciaries in countries like Poland and Mexico. Elected officials in these democracies actively undermine judicial independence, with a significant portion of the population appearing indifferent to these democratic norms’ erosion. This brings us to the question: what explains the current appeal of the authoritarian model? Despite the varied nature of autocracies – from nationalist Russia and Maoist China to theocratic Iran and Bolivarian Venezuela – the ideological appeal of these regimes seems limited, often only to fringe groups within Western democracies. Intriguingly, it is Hungary, a nation of minor economic influence, whose policies and tactics resonate most on the political right in Western countries. The Hungarian model, characterised by a leader who undermines the judiciary and engages in cultural warfare, reflects a broader admiration not necessarily for ideology but for authoritarian tactics.
Reflecting on the historical context, Robert Gordon’s analysis of the staggering economic and social changes in the West from the late 19th to the mid-20th century shows that periods of intense transformation can sometimes bolster authoritarianism. In The Rise and Fall of American Growth, he provides a detailed analysis of the rapid economic and social transformations that took place in the United States from the late 19th to the mid-20th century. His work demonstrates that such periods of intense transformation can indeed have complex effects on political systems, including sometimes bolstering authoritarian tendencies. Gordon focuses on the unprecedented economic growth driven by revolutionary innovations and improvements in the standard of living. However, he also acknowledges the disruptive nature of such transformations. Rapid industrialisation and urbanisation, while driving progress, also created significant social upheaval. The dislocations caused by these changes can lead to uncertainty and insecurity, which in turn can make societies more susceptible to authoritarian appeals. Gordon’s analysis suggests that while economic transformation can drive significant improvements in living standards, it can also create conditions that may undermine democratic governance. The lesson from history is that the benefits of economic growth need to be managed and distributed in a way that supports democratic institutions and norms rather than undermining them. This involves policies that address inequality, protect the rights of workers and ensure that the gains from growth are widely shared.
The allure of ideologies promising a return to a glorified past or a radical break from the present to achieve a utopian future is not new, as seen in the allure of Soviet communism and various forms of fascism during the 1930s. However, the situations in the US and the UK present unique puzzles. The US Republican Party’s recent challenges to the legitimacy of election outcomes mark a significant departure from fundamental democratic principles, raising questions about the resilience of democracy in America.
As anti-democratic forces coalesce, including some of the world’s most powerful nations, and with the potential for further shifts in countries like France, one must ponder the future of democracy. Is democracy on the verge of being superseded, and, if not, what steps can be taken to reinvigorate and defend it against the rising tide of autocracy? The interplay between democracies and autocracies defines our age, as both struggle in an evolving geopolitical landscape. While the inclination towards autocracy grows, it is imperative to analyse and understand these developments, which will be crucial for the future trajectory of global governance and the preservation of democratic ideals.
As empires gave way to nation-states, the ideology of free trade became a cornerstone of international economic policy, particularly among Western powers. Capitalism was promoted as a means to peace and prosperity, with the assumption that democracies would naturally foster free markets. However, this period also saw the rise of protectionism and the formation of economic blocs, complicating the relationship between democratic ideals and capitalist practices. The late 20th century saw the rise of neoliberalism, which emphasised deregulation, privatisation and a reduction in government intervention in the economy. During this period, the relationship between democracy and capitalism became more tenuous, as the focus on economic efficiency and growth often came at the expense of social welfare and equality, leading to increased wealth disparity and the questioning of democratic processes.
Today, we are witnessing the emergence of new forms of governance that challenge the traditional alliance between democracy and capitalism. The rise of authoritarian capitalism in countries like China demonstrates that economic liberalisation can occur without corresponding political freedoms (So, 2019). Similarly, in the West, the increasing influence of corporate interests on policy-making and the rise of populist leaders suggest a shift towards more centralised and autocratic forms of governance, even within democratic societies. This new model, where authoritarian regimes embrace capitalist tools for economic growth, further complicates the relationship. In these systems, state capitalism is often utilised, where the state exerts direct control over the economy while suppressing political dissent and maintaining strict.
In light of these developments, the hypothesis suggests that we may be entering a phase where the historical alliance between democracy and capitalism is weakening. This waning relationship is giving way to more complex forms of governance where economic systems are not necessarily aligned with political freedoms. The challenge moving forward is to understand the implications of this shift for global economic stability, the spread of democratic values and the welfare of citizens worldwide. How nations navigate the tension between maintaining economic growth and ensuring political freedoms will be crucial in shaping the 21st century’s political and economic landscape.
New forms of autocracy have a stronger and more efficient relationship with capitalism because the government can make long-term goals and provide a clearer context for capital, hence the special economic zones in China, free ports and other free economic zones that encourage accelerated development. The argument that certain forms of autocracy can foster a more efficient relationship with capitalism is grounded in the idea that autocratic governments, due to their centralised control and lack of democratic checks and balances, can set and pursue long-term economic goals with greater ease and less opposition. This efficiency stems from the ability of such governments to create and implement policies swiftly, as well as to provide a stable and predictable environment for capital investment, which can be attractive to both domestic and foreign investors.
Autocratic regimes can plan over long horizons without the uncertainty of electoral cycles and changes in policy direction that can come with democratic governments. This can be advantageous for complex, long-term infrastructure projects and economic planning, which require stability and consistency. The creation of Special Economic Zones (SEZs) in China is a prime example of this relationship. These zones offer preferential tax policies and a business-friendly regulatory environment to attract foreign investment and promote export-oriented industrialisation. The government’s ability to designate and develop these zones quickly, often with significant state investment in infrastructure, has been a key factor in China’s rapid economic growth.
Similarly, free ports and other types of free economic zones, which are areas where goods can be manufactured, held, handled, or re-exported under specific customs regulation and generally not subject to customs duty, benefit from the autocratic ability to streamline decision-making and provide guarantees against policy reversals. This reduces risk for investors and can accelerate development within these zones. In autocratic capitalism, the state often plays a decisive role in directing capital towards strategic sectors and can facilitate capital accumulation without the same level of public scrutiny or opposition that might occur in more pluralistic systems. Concentrating power can lead to decisive economic action, which can be seen as more efficient from a purely economic development perspective.
This relationship is not without its criticisms and challenges. The lack of democratic oversight in autocracies can lead to decisions that favour the interests of a narrow elite, potentially leading to corruption and misallocation of resources, and the push for economic growth can come at the cost of human rights and labour standards, as seen in various autocracies where worker protections may be weak or ignored. The absence of democratic checks and balances can also lead to over-concentration in certain industries, creating economic vulnerabilities as well as environmental degradation due to unchecked industrial activity. Some critics argue that the free flow of ideas and the creative destruction inherent in more open societies are essential for sustainable, long-term economic innovation, which may be stifled in more controlled, autocratic environments. While autocratic systems can provide what appears to be a more efficient environment for capitalism to thrive in the short to medium term, particularly through mechanisms like SEZs, there are significant trade-offs in terms of governance, accountability and long-term economic health and innovation. The debate over the merits and drawbacks of such systems continues, especially as the global economic landscape evolves.
5. Emerging Modes of Asian Capitalism
Asian capitalism is ok with one-party systems as Asian people prefer high levels of personal, national and international security, which they are prepared to accept at the cost of personal freedoms. The statement regarding Asian capitalism’s compatibility with one-party systems and the preference for security over personal freedoms in Asian countries is a broad generalisation and should be approached with caution. Asia is a vast and diverse continent with a wide range of political systems, cultures and values. While it’s true that some Asian nations have shown a tendency to prioritise economic development and security, often at the expense of certain personal freedoms, it’s important to avoid overgeneralising these preferences as representative of all Asian people or countries.
Asia is home to various political systems, ranging from vibrant democracies like Japan, South Korea and India to one-party states like China and Vietnam. This diversity reflects different historical, cultural and socio-economic contexts. In some Asian countries, particularly those that have experienced rapid economic growth, like China and Singapore, there has been a focus on political stability as a key factor in facilitating economic development. In these cases, the government’s ability to implement long-term, strategic economic policies without political gridlock is often cited as a benefit. Cultural attitudes towards authority, governance and individuality can vary greatly across Asia. In some cultures, there may be a greater emphasis on collective well-being and social harmony, which can influence attitudes towards government and personal freedoms.
In certain Asian countries, there is a perceived trade-off between national security, social stability and economic growth, on one hand, and civil liberties and political freedoms, on the other. However, this is not a universally accepted principle, and there are ongoing debates and movements within these countries advocating for greater political freedoms and human rights. Some Asian governments justify limitations on personal freedoms by citing national and international security concerns. However, the extent to which these measures are accepted by the populace varies, and there is often internal and external criticism of these policies.
Asian capitalism, particularly in one-party states, often involves significant state involvement in the economy. While this model has been successful in driving economic growth in some regions, it is not without its critics, particularly with regard to issues like income inequality, environmental sustainability and workers’ rights. Attitudes towards personal freedoms and governance are not static and can change over time, influenced by factors such as education, international exposure and generational shifts. There is evidence of growing civil society activism and demands for political reform in various Asian countries.
While some Asian countries with capitalist economies have preferred political stability and security, often in tandem with economic growth, it is critical to recognise the complexity and diversity of experiences and values across the continent. The preferences and priorities of Asian populations are not monolithic and continue to evolve, influenced by many internal and external factors.
Discussion
This essay has explored the complex and evolving relationship between democracy and capitalism, suggesting that this dynamic is historically contingent and has manifested in various forms throughout different historical periods. The hypothesis posits that the relationship between democracy and capitalism has changed over time, influenced by the context of empires, the expansion of free trade and the era of neoliberalism. However, it is now experiencing a divergence due to new forms of governance and economic strategies that are emerging, notably authoritarian and autocratic capitalism.
Historically, capitalism thrived under colonial empires that pursued expansionist policies, often at the cost of indigenous populations and resources. This form of capitalism was justified as a civilising mission that brought development but was primarily exploitative. As empires transitioned to nation-states, free trade became the driving ideology, promoting capitalism as a path to peace and prosperity, assuming that it would be naturally supported by democracies. Nevertheless, this era also witnessed protectionism and the creation of economic blocs, which complicated the relationship between democratic ideals and capitalist practices.
The late 20th century marked the rise of neoliberalism, characterised by deregulation, privatisation and reduced government intervention. This phase saw the relationship between democracy and capitalism become increasingly strained as the pursuit of economic efficiency often led to social welfare cuts and growing wealth disparities, sparking debates about the effectiveness of democratic processes.
In recent times, new governance models have emerged that challenge the traditional alignment between democracy and capitalism. Countries like China have shown that economic liberalisation does not necessarily lead to political liberalisation. Instead, these models feature a strong state directing the economy while curtailing political freedoms, suggesting that capitalism can be compatible with authoritarian governance. China’s leadership under Deng Xiaoping and Xi Jinping has been instrumental in lifting millions out of poverty through economic reforms and targeted poverty alleviation programs. These efforts contrast with the growing wealth inequality observed in the US and UK, where policies have often favoured the affluent. The comparison between China’s state-driven approach and the liberal democracies’ market-oriented strategies highlights the different pathways to addressing economic disparities.
One argument posits that autocracies can implement long-term economic strategies more efficiently due to their centralised decision-making and lack of need for consensus. Examples include Special Economic Zones and the Belt and Road Initiative, which have accelerated development. However, these approaches often come with trade-offs such as reduced accountability, potential human rights concerns and risks of economic and environmental mismanagement.
This essay also argues that autocratic capitalism might be better equipped to address global challenges like climate change due to the ability to enact swift policy changes and invest in large-scale green infrastructure. Nonetheless, this approach has its downsides, including potential misalignment of priorities and suppression of dissent, which democratic systems may better address through transparency and public engagement. The discussion also touches on the challenges faced by two-party states like the US, where political polarisation can lead to legislative gridlock and a lack of cross-party cooperation. This political environment can hinder the national interest and reduce the exchange of innovative ideas. The essay also notes the complexity of governance in one-party states, which theoretically could operate democratically if they seek consensus among their population. However, in practice, these systems often lack the mechanisms for public input and transparency that are hallmarks of a multi-party democracy, leading to issues such as corruption and human rights violations.
In the US, capitalism often functions with a degree of independence from the state, whereas in China, capitalism operates within a framework of state control. This difference reflects divergent philosophies on the role of the state in economic activities and the relationship between political and economic power. The existence of tax havens is a byproduct of liberal capitalism and globalisation, allowing corporations to minimise tax liabilities. This practice leads to significant tax revenue losses and exacerbates income inequality, raising ethical concerns about the responsibilities of multinational corporations.
The essay cautions against overgeneralising Asian countries’ governance preferences. While some Asian countries prioritise economic growth and security, potentially at the expense of personal freedoms, there is significant diversity in political systems and values across the continent. The text underscores the need to recognise this complexity and the evolving attitudes toward governance and personal freedoms in Asia. The relationship between democracy and capitalism is not fixed but subject to historical and contextual changes. The emergence of new forms of governance that blend capitalism with autocratic elements calls for re-evaluating the intertwined nature of these systems and their impact on global economic stability and the spread of democratic values.
The intertwining of capitalism and liberalism, a saga that traces its lineage to the 17th century, has undergone a metamorphosis. Born in the epoch of liberalism, this relationship flourished alongside colonial ventures, epitomised by plantation capitalism and burgeoned further with the advent of free trade and the crystallisation of liberal political economy. Yet, the 21st century has witnessed a seismic shift in this nexus with profound implications. Capitalism and democracy, particularly in the Western hemisphere, have shown their vulnerability and limitations. Democratic processes are marred by deficits, evidenced by the alarming ascendancy of far-right ideologies, the devastation of the Global Financial Crisis and the pervasive influence of financialisation. Moreover, the advent of algorithmic capitalism and an AI-driven digital economy has further distanced these bedfellows.
The global capitalist system of the modern era is increasingly finding solace in arms that do not embrace the values of liberal democracy. Indeed, capitalism seems to have struck a chord with illiberal and non-liberal forms of governance, straying from the principles that once seemed inseparable from liberal democratic ideologies. These new alliances are emerging as formidable and efficient, often crystallising in capitalist enclaves where economic incentives, such as subsidies, are liberally applied, and individual rights are curtailed for the perceived greater economic good.
A growing schism between capitalism and democracy is evident in the current epoch of transnational digital capitalism. In this new age, behemoth corporations with valuations surpassing trillion-dollar marks wield more power than many nation-states. The conventional democratic fabric, which is predicated on the distribution and checks of power, is ill-equipped to grapple with these colossal entities that defy national boundaries and traditional market regulations.
This evolving landscape of global capitalism is predicted to reach its zenith in forms that diverge starkly from the democratic ideals of yesteryear. We are witnessing the embryonic stages of what may be termed autocratic or authoritarian capitalism, a system that is gaining a foothold in regions spanning Asia, the Middle East and Africa. Here, the reins of economic power are being consolidated by the state or state-aligned entities rather than being dispersed as liberal democratic principles would dictate.
The capitalist system, thus, is not fading but instead transforming. It is adapting to and being shaped by the forces of technology, globalisation and political change. The future of this relationship is uncertain, but what is clear is that the once-harmonious marriage between capitalism and democracy is confronting an unprecedented strain. As the world teeters on the brink of this new economic order, one thing remains certain: the rules of engagement between economy and governance are being rewritten. The question that now confronts us is not whether capitalism will endure, but how and with what new characteristics it will continue to shape our world. Will it be a force for democratic empowerment, or will it entrench new forms of authoritarianism? The answer to this will define the political economy of the future.
