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How compatible are democracy and capitalism?


Torben Iversen
Harvard University
the London School of Economics
MiddlemarchQuibble
Brexit
Subscribe
The Economist
The Economist Newspaper Limited


Thomas Piketty
Karl Marx
Friedrich Hayek
David Soskice
Joseph Schumpeter
Dani Rodrik
Mr Iversen


Anglo
French
Demographic


Silicon Valley

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America
Brexit
Britain
Piketty
London
New York

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Positivity     33.00%   
   Negativity   67.00%
The New York Times
SOURCE: https://www.economist.com/finance-and-economics/2019/06/11/how-compatible-are-democracy-and-capitalism
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Summary

In recent years political economists have argued that rising inequality in the Anglo-American world must eventually threaten the foundations of democracy; a book on the theme by Thomas Piketty, a French economist, has sold well over a million copies. Mr Piketty and others say that inequality naturally rises in capitalist countries, and that political power becomes concentrated alongside economic power in an unstable way. (Rising inequality is not a threat to capitalist democracies, the authors reckon, because middle-class voters care little about the poor and do not support broader redistribution that could raise their tax bills.)Providing the education, infrastructure and social safety net that support a prosperous middle class requires substantial tax revenue. That increases the power of the state relative to firms, and allows it to tax and spend.MiddlemarchQuibble with the details, but the overarching story—immobile companies giving governments a degree of sovereignty, which they self-interestedly use to boost the middle classes—seems a plausible account of the stability of advanced capitalist democracies.

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