As a basis for organising society capitalism has historically relied on arguments and noble lies to make the public believe in its necessity and indispensability.
There is, to be sure, nothing for which an argument cannot be made. It has never been perfect, not anywhere. Human strengths, weakness or greed, and entropy for that matter, have all made sure of that. Capitalism has had to be tweaked repeatedly in search of perfection.
Nonetheless, there have been some remarkable highs, lows and middle grounds that help illustrate the state of global capitalism. There is evidence around the world that authoritarian capitalism has spread. One of the standout examples of this re-imagination is the authoritarianism that crept into the political economy of the US with the political emergence of Donald Trump almost a decade ago.
“It happened suddenly, quite unexpectedly and comparatively late,” when Trump won the presidential election in 2016, wrote Klaus Larres, who has moved seamlessly between academia in the US and being a senior policy adviser at the German embassy in Beijing.
As if to confirm the warm relationship between authoritarian capitalism — and, as it goes, of liberal capitalism — Trump’s candidacy for this year’s presidential elections is gaining support from arch-capitalists in that country. Trump’s capitalist credentials and business acumen, whether he actually has any, were trumpeted early in his 2016 electoral campaign.
“It's about time that this country had somebody running it that has an idea about money,” Trump said during his first presidential debate with Hillary Clinton in September 2016. In the second debate in October the same year, he said: “If we could run our country the way I’ve run my company, we would have a country that you would be so proud of.”
It follows that among Wall Street billionaires Trump is considered to be the “obvious choice”, one investor told the Financial Times in May. “Nobody likes Trump for his family values ... but he’s a more commercial guy, our kind of people like that.”
A New York City corporate lawyer explained that Trump was making inroads with disillusioned Democrats on Wall Street. “The Democratic Party’s messaging has been terrible ... Wall Street Democrats are still pro-capitalism. Unfortunately, you have a lot of far-left folks who have hijacked the party ... they don’t understand what it takes to win the country,” the lawyer told the Financial Times.
A private equity executive who manages tens of billions of dollars in the media, tech and retail sectors explained that Trump would be a “no-brainer for our industry ... we’ll get richer if he wins”.
Several high-profile billionaires have gone public about their support for Trump. Hedge fund billionaire Bill Ackman expressed his support, and casino billionaire Miriam Adelson has reportedly directed her resources towards Trump. Stephen Schwarzman, CEO of Blackstone, the world’s largest alternative asset manager, has said he supports Trump. One partner at Sequoia Capital, a US venture capital company, is pro-Trump because he doesn’t “drink the media Kool-Aid”.
Properly described as anarcho-capitalists (who believe the free market operates best when decisions are made by owners of property and capital, never mind individual needs or impacts) the investors, fund managers, corporate lawyers and casino billionaires continue to spread a Socratic noble lie. They would have everyone believe that the rules of the market are just God’s gift to humanity; surely anything given by God relies on faith and not evidence.
Closer to the truth is that they prefer a state and a president that protect their private property rights and preservation of the status quo of privilege — virtually segmented over decades. Trump represents that personality. Authoritarianism of the capitalist kind, whether it is in Singapore (with Lee Kuan Yew), Chile (Augusto Pinochet), India (Narendra Modi) or the Philippines (Rodrigo Duterte), starts with identifying with a political figure. Parenthetically, these authoritarian capitalists are in a league below the notorious ones — Adolph Hitler, the anti-communist, and Joseph Stalin or Pol Pot, the communists.
Anyway, in How Democracies Die Steven Levitsky and Daniel Ziblatt explain that authoritarianism travels through a series of “steps” that are for all intents and purposes “legal”, including a weak commitment to or rejection of the democratic rules of the game; the denial of the legitimacy of political opponents; encouragement or tolerance of violence; and a readiness to curtail civil liberties of opponents and the media.
Trump met all these criteria during his two presidential election campaigns in 2016 and 2020, and they were hallmarks of his presidency from 2017 to 2021. With the Wall Street wind in his sails, and given that his expressed ideals remain firmly tied to authoritarianism with an attendant ideological revamp of the entire state to support him, Trump may well become the next authoritarian capitalist.
One of the most important lessons that emerged from World War 2, according to Wolfgang Streeck, professor emeritus of the Max Planck Institute for the Study of Societies, was that “the capitalist economy had to be controlled by strong and active government, preventing it from destroying its surrounding society and ultimately itself”.
The choice, at least among capitalists, is how much authoritarianism is necessary, and whether they can make everyone believe their stories.
• Lagardien, an external examiner at the Nelson Mandela School of Public Governance, has worked in the office of the chief economist of the World Bank, as well as the secretariat of the National Planning Commission.
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