Capitalocracy and Democracy: Europe, China, and the United States
Roullet, Luc, Kennedy School Review
At a time when European enlargement is at the heart of many debates, European citizens' main question is not only if new countries are ready to join Europe, but also if Europe is ready to welcome new countries. A strong Europe is based on a clearly defined identity. Let us compare Europe's identity with the other two main powers exercising or aiming at a global leadership: China and the United States. While Europe promotes social democracy as model of society, China and the United States present common characteristics of "capitalocracies."
Europeans perceive their society as less unequal than the rest of the world and are proud of it. The Gini index calculated by the United Nations Development Programme, UNDP, (measure of inequality) confirms this fact: European countries' Gini values range from 25 to 35, whereas China and the United States' exceed 40, joining the group of the most unequal societies. Europe has got a century-long history of political and social struggles to maintain decent standards of living for the poorest. On the other side, since the 1980s, both China and the United States embarked on a liberalization of their economy that has dramatically increased the level of inequality, albeit in two very different contexts.
This growing inequality is the result of deliberate and legitimate strategies that aim at maximizing business growth. While democracy is power by the people and plutocracy power by the wealthy, I define capitalocracy as a political regime in which the capitalist interests (private, public, or state-owned) tend to initiate and lead reforms, more than citizens do. If China has not yet embarked on extensive democratic reforms, the mechanisms at stake to mobilize and generate capital apply lessons from Western capitalism, and the government centralizes, supports, and encourages these developments. Ironically enough, the People's Republic of China has given up communist economic teaching but has not yet given political power back to its people: far from being a democracy, China appears to be a performing capitalocracy.
Drawing a parallel picture with the United States is easy and risky. …