Prospects for Capitalist Democracy in the US and China (2025+)

Under capitalism, 'bourgeois democracy' represents a unique historical governance model. Unlike preceding social formations, where autocratic rule prevailed for the majority even if ruling elites practiced forms of internal democracy, capitalism fundamentally separates the primary locus of economic wealth generation (the capitalist class) from direct, day-to-day control of the state apparatus.

Why is this distinction crucial?

Capitalist societies, under stable conditions, tend to reproduce themselves through economic mechanisms rather than constant, overt state coercion. Individuals generally participate in the labour market due to economic necessity and the prospect of wages, not under the direct threat of state violence, which was implicitly (and sometimes literally) the case for slaves or feudal peasants.

In periods of expansion, the inherent competitive drive of capitalism ("invest or die") fuels economic growth. When this "rising tide" genuinely lifts living standards across various classes, it fosters social stability and consent.

A democratic framework in theory allows for debate and negotiation over the optimal policies to manage the complex economic and political system. It permits the appearance of 'government by consent' and provides transparent feedback  to the governing elite. The lack of requirement for heavy coercion removes the atmosphere of pervasive fear which blights the lives of everyone under explicitly authoritarian modes of governance.

The dynamics shift dramatically when capitalist economies face serious challenges, such as prolonged stagnation, severe recession, or deep-seated inequality – conditions acutely relevant to the current situation in the United States.

While headline figures might fluctuate, significant portions of the American working and middle classes have experienced decades of wage stagnation relative to productivity gains, increased job precarity, and anxieties fueled by inflation and the rising cost of living. The promise of a consistently rising tide has faltered for many.

This economic malaise is intertwined with profound political polarisation and social friction. We see widespread "confusion and obdurate resistance" manifesting as deep distrust in institutions, political deadlock hindering effective governance, and the rise of populist movements on both the left and right. 

These movements often obstruct policy measures, whether aimed at restoring traditional capitalist profitability (which might involve austerity unpopular with the left) or addressing social inequalities (which often face resistance from the right). The strain on the US democratic system is palpable, marked by intense debates over electoral legitimacy, the functioning of democratic institutions, and increased social division.

While not yet necessitating overt authoritarian rule in the mold of historical fascism, these conditions of political deadlock create fertile ground for erosion of traditional democratic norms and heightened state responses to unrest.

Historically, severe crises have generally prompted shifts towards authoritarianism to enforce unpopular economic adjustments – mass unemployment, wage cuts, restructuring – deemed necessary by capital and the state to restore growth conditions. The examples of Franco's Spain or Salazar's Portugal serve as reminders that while bourgeois democracy might be the systemic "attractor" in 'normal' times, repressive regimes installed during crises can subsequently endure for generations.

The current pressures within the US highlight the fragility of democratic consent when the underlying economic bargain frays.

Systems attempting direct bureaucratic control over production through central planning have historically required significant repression. The interests of a planning bureaucracy rarely align organically with the diverse needs and desires of the broader population. Maintaining control necessitates suppressing dissent and enforcing compliance through administrative and often coercive means.

While China today isn't a purely centrally planned economy, its hybrid model, combining significant market elements with dominant strong-state direction and extensive political repression, illustrates this inherent tension. The state's pervasive control apparatus is a response to perceived weaknesses or insecurities rather than as it appears - a display of strength.

While China embraced market mechanisms extensively in recent decades leading to dramatic economic growth and the rise of a large middle class, recent years have witnessed a marked reassertion of Communist Party control over the economy and society, driven by state-elite fears of a weakening of national cohesion and vision.

The state has consequently cracked down on private sector power (particularly in tech), emphasized "common prosperity" (partly as a means to manage inequality and reassert Party legitimacy), and maintained significant influence through state-owned enterprises. The economy faces headwinds, including demographic challenges, a property sector crisis, and high youth unemployment, potentially alienating middle-class aspirations and demands.

Given China's historical anxieties about national unity and fragmentation, the leadership leverages these fears to justify intense central control. Any imagined transition towards a system resembling France or Russia seems less likely now than a continuation and hardening of the current sophisticated, tech-enabled authoritarian model under entrenched CCP rule.

While economic discontent exists, the Party's grip, combined with nationalist appeals and the lack of organized opposition, makes a fundamental political shift appear distant. The CCP is adapting its methods of managing capitalism and controlling dissent, rather than yielding to pressures for liberal democracy. Of course, there is an economic downside to such suppression of individual initiative.

The United States currently exemplifies a mature capitalist democracy under significant strain, where economic anxieties fuel political polarization and challenge institutional stability.

China, conversely, showcases a potent, adaptive authoritarian state managing a vast, partially marketised economy through sophisticated control and repression, defying earlier expectations of inevitable political liberalization driven by economic development.

The forces driving political and institutional transformation in the US and China are markedly dissimilar. However, the stresses of their rivalry accentuate the drive towards strong states, and diminish the space for the traditional weak, laissez-faire, managerial style of liberal bourgeois democracy.

Interesting times.

The Pathological State and the Prospects of War

 

"No Two Democratic States Have Ever Gone to War"

This oft-cited claim is at least approximately true. It holds not as an iron law but as a reflection of the dynamics within and between democratic states. Understanding why this holds - and when it doesn’t - requires analysing the nature of democracy, the capitalist economy and the specific phenomenon of the pathological state.

The Democratic State is Generally Reactive

Capitalism is unique as a mode of production where economic power resides with the private owners of capital, while the state's role is almost entirely non-economically productive: setting and enforcing the rules for commerce, providing public goods like education and defence - and otherwise staying out of the way.

Critically, the default capitalist state lacks its own economic resources. Revenues depend on taxes and borrowing, tethering the state to the economic vitality of its capitalist and working classes.

In bourgeois democracies, the government and the state remain distinct entities. The government - composed of elected officials - sets policy and provides direction but the sprawling state bureaucracies, influenced by diverse civil society lobbying, operate in their own sphere - and generally in their own interests.

In the modern era, capitalism has transcended national boundaries. The most powerful firms and financial institutions are transnational, motivated to influence democratic states in the direction of harmonised regulations, free trade rather than tariffs, and stable markets. 

The pathological state stands in stark contrast.

The Pathological State: A Breeding Ground for Conflict

Pathological states are those captured by elites whose ambitions go beyond purely economic rationality. These regimes are often characterised by a fusion of government and state, where the ruling elite purges the state apparatus to serve visions such as territorial expansion, national pride, and dominance.

Historical examples abound. Nazi Germany sought Lebensraum in Eastern Europe, aiming for territorial control to directly support its perceived agricultural and resource needs. Similarly, contemporary Russia and China - while not identical - exemplify the pathological state in their proactive use of state power for revanchist ends and national-ethnic dominance.

In these regimes, economic elites are often subordinated to the state’s broader ideological goals. The calculus of transnational capitalism - focused on profitability, efficiency and stability - gives way to the more visceral drives of power and status backed by military action. It has to be said that in this the state is often backed by the patriotism of popular opinion - while few in democracies have felt impelled to die for their company...

How Democracies Resist Pathological States

Pathological states often provoke democratic ones into confrontation. For a pathological state, war and aggressive policies are not anomalies but extensions of its raison d’être. History shows that democracies targeted by such states face a stark choice: capitulate or fight.

Take current conflicts in Ukraine and around Taiwan. In both cases, pathological states (Russia and China) confront democracies, threatening territorial integrity and sovereignty. War for these kinds of objectives is not congenial to developed bourgeois democracies, but they are not given the choice.

The Limits of Pathological States

While democracies rarely devolve into pathological states, the reverse is even less likely. Pathological states tend to sustain themselves until they are forced to collapse, often by losing a war. The cases of Spain and Portugal may serve as exceptions - examples where entrenched repressive regimes after many decades eventually transitioned into democracies as militarism and authoritarianism became inefficient shackles, to be thrown off by new elites amid popular pressure.

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Q&A on Pathological States and Political Movements  

Q: How do pathological states come into existence?

A: In cases like Russia and China, the collapse of the 'ancien régime' occurred without prior significant capitalist development or the presence of a robust civil society. The revolutionary governments in both cases seized control of the state apparatus to forcibly drive industrialization, embedding dysfunctionality from the outset. This reliance on the state for economic transformation created a system of repression and inefficiency - pathologies that have persisted over time.  

By contrast, in Nazi Germany, the bourgeois democratic state disintegrated under the weight of internal divisions that proved irreconcilable through peaceful means. The National Socialist movement, a mass political force, rose by exploiting economic despair and ideological polarisation. Through violence and suppression - primarily targeting trade unions, socialists, and communists - the Nazis dismantled institutional opposition and restructured the state to align with their extra-economic ideological objectives. This transformation rendered the state pathological, prioritising coercion and ideological conformity over functional governance - and launching the world to war.  

Q: Some people have called the Trump MAGA movement in America fascist. Is this an accurate statement?

A: No, the comparison is misplaced. The MAGA movement under Trump is better understood as part of a broader realignment within bourgeois democracy, akin to Margaret Thatcher’s transition in the UK during the 1980s.  

Thatcherism arose in response to the exhaustion of the post-war Keynesian economic model, introducing neoliberal reforms to revitalise capitalism. While fiercely contested - at times violently - the transition maintained the framework of bourgeois democracy, redirecting it along new deregulated and globalised lines.  

Similarly, the Trump phenomenon represents an attempt to pivot away from the now-declining neoliberal, globalising model that has dominated American (and Western) politics for decades. This shift is partly driven by the pressures of geopolitical competition from coordinated adversaries like China, Russia, Iran, and North Korea, which expose the vulnerabilities of the existing global order, but also by a popular revolt against internal stagnation.

However, unlike the Nazi seizure of power, the MAGA movement does not seek to dismantle democratic institutions wholesale, or impose an ideologically rigid state. Instead, it signifies the reconfiguration of bourgeois democracy to meet the demands of a changing global and domestic landscape.  

While the process is polarising, the trajectory remains rooted in the competitive pluralism that defines democratic capitalism, not the totalitarian impulses characteristic of fascist regimes.

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This essay was drafted by ChatGPT from my extensive notes, and then lightly post-edited.

The End of History and the Last Man

Reading Francis Fukuyama's book (in the 2020 reissue of this 1992 published book) is an exercise in head-scratching perplexity and fist-on-wall-banging frustration.

Making Hegel's thymos (the Homeric/Platonic quest for status and recognition) a motor for historical change is certainly an improvement over basing your theories of history on that poor, selfish, solitary creature, homo economicus, with its purely consumerist motivations.

But that's like going from crass to merely poor.

In his 1975 book, "Sociobiology: The New Synthesis", Edward O. Wilson expressed a strong belief that the future of social sciences lay in their integration with evolutionary biology, specifically through the lens of sociobiology. Surely Fukuyama might have noticed this? We have advanced our understanding of human nature quite a bit since Hegel, who was writing only twenty years after the French Revolution of 1789.

Still, as a clear and coherent philosophical introduction to Kant, Hobbes, Locke, Nietzsche and Hegel, Fukuyama's chosen intellectual resources, this book could hardly be bettered.

Such a clever man, Mr Fukuyama. One could almost believe his attempts to stay Overton Window-adjacent might be… Straussian?

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Substantively, Fukuyama argues that capitalism - in its ‘bourgeois democratic‘ form - is truly the stable endpoint in human social organisation (an attractor in dynamical systems jargon). In his 2020 afterword he observes that militant Islam and system-busting populism have, despite widespread fears, not proven to be existential threats to the democratic order.

I am sure he is correct: a strong civil society composed of decentralised and fragmented economic elites welcomes a relatively weak, malleable centre of governance - one which won't get out of control.

Russia and China are examples of strongly-autonomous state structures pursuing nationalistic (thymos-driven?) projects to the detriment of their economic interests. It's tough being an entrepreneur in such countries: avoiding being 'disappeared' or worse.

The real (and long-term) threats to Fukuyama’s somewhat optimistic trajectory are twofold: (i) the massive expulsion of the mass of the population from social and economic life by elite-owned total automation; (ii) the entrenchment of a hereditary elite class by genomic engineering - a tech-constructed version of India's caste system (still covertly operational).

I would like to know more about Fukuyama's views on total automation. Meanwhile, his take on bioengineering, “Our Posthuman Future”, is on my reading stack.

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The short-term stability of 'liberal democracy' has its limits. It is worth emphasising just how ultimately fearful capitalist elites are of the masses - and how little they really care for their welfare. Unlike the lords of feudalism, economic and state-apparatus elites are not armed and are relatively few in numbers.

The military, not recruited from the elite in their mass, is not necessarily to be relied upon.

Fukuyama observes in the final chapters of his book just how much degradation and contempt politicians have to suck up in managing and defusing disgruntled mass movements and their cynical demagogue leaders.

It's therefore often the case that key government figures are not themselves socially or economically members of the top elite. No recent British leaders have been scions of the billionaire class; Trump is viewed with disdain by the truly well-off.

As in Tom Wolfe's essay, "Mau-Mauing the Flak Catchers", politics is theatre and the real stuff happens elsewhere. That's what Fukuyama's ideal of liberal democracy ultimately comes down to.

The Collapse of Democracy

Back in the late sixties, my Politics course at Warwick University taught that the democratic state acted as an arbiter between different sectional interests. My Marxist comrades knew better: the state actually operated to reproduce the power and position of the ruling bourgeoisie, while hiding behind an obfuscated, hegemonic ideology.

Yes, we certainly knew how to do jargon in those days!

Of course, both propositions are true. Marxists from Karl onwards have agreed that bourgeois democracy is the preferred form of capitalist state. Why? Because under capitalism, economic power is decentralised (private ownership of the means of production) so some kind of inclusive politics is the best method of synthesising overall political policy. If the state achieves the political autonomy of autocracy or dictatorship we have the familiar principal-agent problem. How do we get the state to properly advance the (weighted average of the) interests of the distributed capitalist power-elite? How do we stop the state going off on some crazy project of its own?

The Nazis in Germany are the usual case study, and my analysis above broadly paraphrases Trotsky's writings about the rise of fascism there.

The democratic government is distinguished from its dictatorial cousins by its unwillingness to decisively back one faction of society over everyone else, even if such a focussed policy is objectively necessary to break some social logjam. "We all know what has to be done; it's just that none of us knows how to be re-elected afterwards."

Bourgeois democracy is like pacifism - it's an unstable equilibrium requiring all sides to show restraint and be prepared to accept being overruled. It's when a significant social force won't accept compromise and sticks to its guns come what may that you get the logjam. The inclusive speech of liberal politicians becomes strained and ineffectual - weak hand-wringing and appeasement. The logjam-party takes heart while ordinary folk begin to despair. Oppositional parties calling for effective action begin to gain traction, parties which don't much care about discredited 'democratic' ideals. What if we're rather blasé about being re-elected afterwards, anyway - or we believe that subsequent 'facts on the ground' will make all the difference, come the day?

Returning to the party-of-the-logjam, there's nothing like a sharply defined and highly-deprecated religious identity to underpin a hard-nosed refusal to compromise under any circumstances: 'our martyred dead' and so forth. You can see where this is going: bourgeois democracy can handle small to medium logjams by uniting the majority and deploying state force against the obstructionist, unyielding minority and winning - Margaret Thatcher is the textbook example. But if the logjam gets too big and/or intractable, you slide into civil war (cf Libya) and the democratic state is swept aside and is transformed, or collapses.

None of these drastic things will be happening in Western Europe any time soon; we're at the very start of a long, tortuous and only semi-slippery slope. However, to mix metaphors, when your problem is currently a small but extremely intractable hole, it's surely time to stop digging?