The continuing ramifications of the financial crisis of 2007–2008 have forced social scientists to raise fundamental questions about the relationship between capitalism, democracy and inequality. In particular, Thomas Piketty’s Capital and Wolfgang Streeck’s Buying Time focus on, respectively, the economic and the political contradictions of capitalistic societies. Piketty argues that capitalism naturally tends towards the exacerbation of rent-based wealth inequality, whereas Streeck suggests that capitalism and democracy are ultimately incompatible. A striking feature of these two contributions is that their authors are social democrats, not Marxists or radical anti-capitalist thinkers. In this review article, I illustrate how the combination of social democratic convictions and the acknowledgment that capitalism cannot be tamed generates interesting tensions between the diagnosis offered by the two monographs and the solutions that are proposed. I end the piece by raising two remarks on the implications that this tension might have for normative political theory. On the one hand, it is time for theory to do more work on political action and agency. On the other, liberal egalitarian theorists might have to acknowledge that they are in the same predicament as Piketty and Streeck: social democracy is their ideal, yet it is perhaps unattainable. If this is the case, liberal egalitarians might be committed to adopt a more confrontational attitude towards capitalism: they might have to become reluctant radicals.
Capitalism, democracy, wealth inequality, social democracy, liberal egalitarianism, anti-capitalism
The continuing ramifications of the financial crisis of 2007–2008 have forced social scientists to raise again fundamental questions about the relationship between capitalism, democracy and inequality, which had been put aside for several decades. Is capitalism compatible with democracy? Does it really generate invaluable societal benefits by raising living standards for all? And does it really reward merit and effort? Two recent books have posed those questions in particularly pressing ways. With the support of an unprecedented quantity and quality of data, Piketty’s Capital in the 21st Century tells us that capitalism does not need high levels of growth and innovation except in extraordinary circumstances, naturally tends to exacerbate wealth inequality, and is thus in tension with the official narrative of merit, dynamism, benefit to greater society and equality of opportunity that is usually attached to market economies. Wolfgang Streeck’s Buying Time: The Delayed crisis of Democratic Capitalism urges us to see capital as a political actor proper, and one whose agenda is characterised by impatience towards regulation and democratic accountability. As a result of the exercise of such agency, contemporary advanced societies – and European ones in particular – have gradually been transformed, through a series of crises, into actors who consider their creditors, rather than their citizens, as the constituency they ought to be accountable to.
– Miriam Ronzoni, University of Manchester