World on Fire - Brownstein, Michael [101]
Despite these variations, the bottom line is again the same. Starting in the late nineteenth century, the explosion of market activity throughout the West was accompanied by the emergence of redistributive institutions of unprecedented magnitude, softening the harshest effects of capitalism. In every developed country these institutions include not only relief to the extremely poor but also progressive taxation, social security, minimum wage laws, worker safety regulation, antitrust laws, and numerous other features of Western society that we take for granted.
6 These redistributive institutions have almost certainly helped dampen the conflict between market wealth disparities and democratic politics in the industrialized West.
By contrast, the version of capitalism being promoted outside the West today is essentially laissez-faire and rarely includes any significant redistributive mechanisms. In other words, the United States is aggressively exporting a model of capitalism that the Western nations themselves abandoned a century ago. More broadly, it is critical to recognize that the formula of free market democracy currently being pressed on non-Western nations—the simultaneous pursuit of laissez-faire capitalism and universal suffrage—is one that no Western nation ever adopted at any point in history.
Is this wise? Almost by definition, in the developing world today the poor are far more numerous, poverty is far more extreme, and inequality far more glaring than in the Western countries, either today or at analogous historical periods. The ongoing population explosion outside the West only makes things worse. If current World Bank projections are correct, the population in countries now classified as developing is expected to increase from roughly four billion today to roughly eight billion by the year 2050.
7 Meanwhile, the poor countries of the world lack the West’s well-established rule of law traditions. As a result, political transitions in the developing world tend to be marked not by continuity and compromise, but rather by abrupt upheavals, military intervention, violence, and bloodshed.
In other words, today’s universal policy prescription for “underdevelopment,” shaped and promulgated to a large extent by the United States, essentially amounts to this. Take the rawest form of capitalism, slap it together with the rawest form of democracy, and export the two as a package deal to the poorest, most frustrated, most unstable, and most desperate countries of the world. Add market-dominant minorities to the picture, and the instability inherent in this bareknuckle version of free market democracy is compounded a thousandfold by the manipulable forces of ethnic hatred.
The Idiosyncracy of the American Dream
Disenfranchisement of the poor and the welfare state only partially explain why capitalism and democracy have proved so compatible in the West. In all the Western nations, many among the less-well-off majority do not want to confiscate from the rich or equalize incomes. The reasons for this, which might be described as cultural or ideological, are enormously complicated and obviously depend on the particular country in question. As an illustration, I will focus here primarily on the United States.
Poor and lower-middle-class Americans