Democratic capitalism is a political-economic system that blends the principles of democracy and capitalism. It is based on the idea that economic freedom is essential for democracy and that a market economy is the most efficient way to generate wealth. However, the current state of democratic capitalism is under threat, and with this well-researched and engaging book, “The Crisis of Democratic Capitalism,” Martin Wolf explores the reasons behind this crisis.

One of the main challenges that threaten liberal democracy is the rise of authoritarianism. Wolf argues that authoritarianism is on the rise in many parts of the world and poses a serious challenge to democratic institutions. The decline of trust in politics is also damaging democracy and society. It is both a cause and consequence of the rise in support for populist movements and political parties. Trust is essential for the functioning of democracies, as it relies on the public’s belief that officials are competent. However, the inability of these institutions to address the concerns and needs of the public, scandals, and corruption have undermined people’s trust and the notion of truth, leading to a decline in public confidence in political figures and institutions. The consequences of the undermining of trust in liberal democracy can lead to the erosion of democratic values, the rise of authoritarianism, and the potential for political instability.

One of the book’s strengths is Wolf’s scathing criticism of the elites who run major institutions of society and their failure to make globalization work for everyone and unskilled workers in particular. The failure of elites to make globalization work for everyone has been a topic of discussion for many years. Some commentators have described the crisis facing liberalism in largely economic terms—as a revolt among those “left behind” by inequality and globalization. Brexit represents such a blatant rejection of the wisdom and relevance of elite political and media institutions.

Inequality is also a fundamental issue that democratic capitalism has failed to address adequately. Wolf argues that increasing inequality is a threat to democratic institutions and undermines the legitimacy of democratic capitalism. Despite what many on the right think, and the way right-wing media outlets frame discussions of this issue, economic inequality and insecurity are problems for everyone, not just the poor or those ideologically committed to egalitarianism. If left unchecked, inequality and widespread popular disillusionment, can erode social order and lead to the emergence of demagogues and the transformation of democracy into a “plebiscitary dictatorship”. Some modern examples of plebiscitary dictatorship include Russia, Turkey, Hungary and Venezuela

Martin Wolf proposes several reforms to address the crisis of democratic capitalism. He argues that citizenship is the fundamental concept that can save democratic capitalism and that we need to make democratic capitalism work better for all citizens, by providing better welfare, economic dynamism, dignity and hope. Globalization is one of the most powerful forces affecting the modern world. It changes the way nations, businesses and people interact, promotes cultural diversity and makes us more tolerant towards others. It has resulted in a huge acceleration in global growth by expanding trade, opening global supply chains and providing access to less expensive natural resources and lower-cost labour. But if we want to move towards a more sustainable and equitable future, we need to change the goal from endless GDP growth to creating a system that considers the well-being and quality of life for all individuals within the boundaries of the planet.

Wolf also calls for a new alliance of reformed democratic capitalist states to tackle the geopolitical challenges and protect global peace, inclusive prosperity, and the planet against plutocratic populism and tyranny. By implementing these reforms, we can counteract the influence of antidemocratic forces and ensure that democracy and capitalism continue to thrive and work better for all citizens.