In this week’s conversation, Yascha Mounk and Martin Wolf discuss whether democratic capitalism can recover from the damage done by populists like Donald Trump, how artificial intelligence might upend both the economy and humanity’s control over its own fate, and whether a bursting AI bubble or France’s fiscal woes could trigger the next financial crisis.
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bubble → discuss → crisis
Note: This episode was recorded on November 3, before the election results were available.
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results → note → November
It’s always a pleasure to talk to you, Martin.
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It → ’ → you
I’m really excited to talk about a bunch of the contemporary economic issues facing the United States, Europe, and the world today.
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I → ’m → States
But I want to start by revisiting The Crisis of Democratic Capitalism, your really magisterial book about the relationship between capitalism and democracy.
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I → want → capitalism
It is now a few years old and has just come out in a paperback edition with a new chapter.
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It → come → chapter
Looking back from today’s vantage point, do you remain optimistic that, for all of the challenges we face, we are capable of continuing to reconcile our capitalist system with our democratic institutions, and that we will be able to avert the threats that risk undermining each of those elements?
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that → look → elements
Overall, I’m a little less optimistic.
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I → ’m → ?
Very briefly, I feel two things.
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I → feel → things
The first relates to a basic theme of my book.
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first → relate → book
Quite apart from the benefits of moral development in some sense, education and so forth, the capitalist economy that we created in the 19th century and roughly the first three quarters of the 20th century quite naturally generated a redistribution of power in society.
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we → create → society
We moved, as it were, from feudalism and pre-modern structures based around land ownership to the modern capitalist economy, with an increasingly organized and powerful working class.
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it → move → class
Workers were genuinely powerful because they had education and they could easily coalesce and coordinate.
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they → have → education
That was an environment in which there was a very real risk of major war, and we saw that linked with the formation of the nation state.
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that → be → state
In the end, we seem to have reconciled all of that in the post-Second World War period, which was really very important.
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which → seem → period
That underpinning has very obviously been cracking, and that was a theme of my book.
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that → crack → book
But when I wrote it, I still thought that if we understood how damaging and how dangerous this was for living tolerably, we would prevent the worst.
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we → write → worst
That leads to the second theme, which is very much the theme of this revision.
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which → lead → revision
It contains an extra chapter on the Trump experience, Trump’s second term and so forth.
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It → contain → experience
What has become obvious is that we do now elect really quite radically reactionary governments.
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we → become → governments
Maybe that’s not the right word, because they’re more complex than that: radically demagogic, populist governments.
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they → ’ → that
And we seem likely to do so now in other countries in Europe, which also seemed to be stable.
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which → seem → Europe
The more I think about it, the more difficult it seems to undo that, because of the damage that is done.
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that → think → damage
You start not with something that is mildly damaged but with something that is, in some respects, wrecked.
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that → start → respects
Finally, there are changes in technology and society, of which AI is obviously the most important and the most recent.
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AI → be → which
But we’ve had others before that, social media and all the rest of it, which make it so difficult for people to organize politically in the way they used to.
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they → have → way
So I now begin to think that reversing all this and going back to the things we were familiar with is just a pipe dream.
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we → begin → things
What that means for the future is really open, but in this respect I’ve become more concerned.
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I → mean → respect
We’ll see about the Trump experience in the next few years, perhaps.
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We → see → years
But undoing the damage he has done domestically and internationally—and the U.S. is so pivotal—is going to be an immense task.
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U.S. → undo → damage
The Polish experience, which I discuss, is actually live right now as we talk because of the argument with the president.
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we → discuss → president
It shows just how difficult it is to reverse.
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it → show → ?
I’m struck by how much more negative and pessimistic the tenor of this added chapter is compared to the overall tenor of your book.
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tenor → strike → book
The book was obviously written in alarm and with concern, but it still seemed to have a certain baseline confidence that, in the end, the enormous advantages and achievements of democratic capitalism would allow it to persist.
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it → write → capitalism
Perhaps we’ve gone on slightly different trajectories over the course of the last 10 years.
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we → go → years
Perhaps I was much more alarmed in 2017 than you were, and perhaps I’m a little less alarmed than you are today.
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you → ’m → 2017
Your book came out, if I remember correctly, before Donald Trump was reelected.
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Trump → come → ?
Yeah, it came out in early ‘23.
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it → come → 23
So obviously the fact that Trump was able to get reelected was very concerning and upsetting.
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Trump → reelect → ?
But look back at January 2025, when Trump was taking office.
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Trump → look → office
…and 311 more, not listed.
The Aporia
