Capitalism, through entrepreneurial innovation, has played a crucial role in social progress for two centuries. Mass-produced goods and services have contributed to the constant improvement of our living conditions. Societies have used the productive efficiency of capitalism to impose the direction in which they wanted to move forward. The law has strengthened the bargaining power of employees so that the relationship with the employer is no longer solely in the commercial framework.
Democracies have forced capitalism to be a driving force of progress. The development of a non-market sphere was made possible by capitalism. The increase in the productivity of those it employs has made it possible to meet the needs of those it does not employ: teachers, judges, police, nurses, etc. It is up to society to decide how its state is organized and it is up to democracy to be concerned with the effectiveness of this state.
The forces implemented have acted differently from one country to another. In the United States, where capitalism is largely left to itself, the state strives to stabilize full employment, to maintain and increase wages, through its monetary policy. Europe, for its part, favors social transfers and employment aid, even if it means supporting unemployment, for the maintenance and increase of wages. Russia and China, while relying on capitalism, have abandoned the democratic model such as ours and have begun a return to imperialism.
At the end of the 19th and 20th centuries, the merchant exchange and its corollary, the circulation of money, will create two waves of globalization. The first will result in an unprecedented migration from the least industrialized countries, Sweden, Spain, Italy, Portugal, Poland, Ireland to the most industrialized countries, France, England, Germany, Belgium, and the United States. The second will see a migration, not of people, but of factories and capital to “low-wage” countries. The contrast between these two globalizations is total. In the first wave, capitalism remained national, whereas in the second wave, it became globalized, through the emergence of low-cost countries, creating waves of layoffs in the relocating countries, as well as interdependencies that could become sources of threat.
The rise of inequalities of all kinds, climate change, threats to civil peace, compromise the functioning of democracies. The sustainability of Western social models is at stake. These models are based on the majority support of the population, unlike China and Russia, which can use repression to ensure their stability. The challenge of democracies to regain social cohesion is colossal. The State must become a strategist again, consolidate its integration capacities, and for this, redefine its educational system, its health, police, and justice systems, but also rethink development aid to curb migratory pressure.
Democracy and capitalism are not two sides of the same coin. China has shown us this. Capitalism has generated a tremendous amount of savings. Governments must now use it to “rebuild the base of solidarity that is the foundation of democratic societies”.
Anton Brender is an economist at Candriam and an honorary associate professor at Paris Dauphine. He was Director of CEPII (Center for Prospective Studies and International Information).
Ph Alezard