While Americans were celebrating this Labor Day weekend, in Magdenburg, Germany a 35-year-old neofascist, Ulrich Siegmund, told a cheering crowd that his right-wing Alternative für Deutschland party was “taking our country back.” They’d just pulled 44% of the vote in the German state of Saxony-Anhalt, double what it’d been just five years ago.

Their platform was simple: Expel brown-skinned immigrants; dump the EU and NATO to instead build an alliance with Russia; and tear up the tech, climate, and energy rules so the fossil fuel and tech billionaires could take over Germany’s government like they are America’s under President Donald Trump.

It was a stunning victory for Russian President Vladimir Putin, Elon Musk, and Trump, who all went online (Putin through spokesman Kirill Dmitriev) and immediately congratulated the heirs to Hitler’s party on their showing in the election.

That same weekend, Fareed Zakaria aired a conversation with Chrystia Freeland, Francis Fukuyama, and David French about why liberal democracy is in retreat, and Freeland argued that China’s so-far-successful model of state-directed capitalism is the biggest threat to democracy around the world.

If you let the winners of capitalism write the rules of capitalism, they’ll first destroy the competition and then come for the government that hosts them.

And there’s a lot of truth in that, since China’s success proves that capitalism doesn’t need democracy to flourish and, in fact, may do even better in an authoritarian state like modern China and 1930s Germany.

But the most serious threat to American democracy isn’t coming from Beijing; it’s coming out of Wichita, Silicon Valley, Mar-a-Lago, and from Republicans in black robes who’ve been taking gifts from billionaires for years. Here’s why.

At the end of the day, capitalism is just a game we play, which is why pro football is such a good analogy. Football is a phenomenal engine for producing it’s goal—entertainment—and it works because there are rules, referees who enforce them, and a league that ruthlessly punishes cheaters.

But imagine a Trump-run NFL announcing that whichever team wrote the biggest check to the league’s head guy could put 14 men on the field, pull face masks, and throw kidney punches with no flags. The richest team would win every game, the entertainment value would ultimately collapse, and within a few seasons the game itself would be dead.

Capitalism is exactly that kind of engine. Since Deng Xiaoping opened China to markets in 1978, according to the World Bank, growth of the Chinese economy has averaged over 9% a year, lifting nearly 800 million people out of extreme poverty, the largest reduction of human misery in recorded history.

I spent the month of November, 1986 in Beijing studying acupuncture; the city was poor, the air choked with coal smoke, and capitalism was just getting off the block with experimental “special economic zones” like Shenzhen. Nobody voted for it; China was then and is now essentially a totalitarian state, proving that capitalism doesn’t need democracy to be successful.

As the Chinese figured out in the 1970s when they rejected President Ronald Reagan’s neoliberalism and instead embraced state-run capitalism (I wrote about this at length in The Hidden History of Neoliberalism: How Reaganism Gutted America), in order to work well and produce general prosperity, capitalism just requires rules that prevent the most successful capitalists from rising up and taking over the state (as is happening here).

For example, when China’s richest man (Jack Ma) started complaining in 2020 that government regulators were holding his companies back from maximum profitability, the Chinese government killed off Ma’s Ant Group’s IPO and fined his Alibaba $2.8 billion for the monopolistic behavior of forcing merchants into exclusive contracts. Ma himself vanished from public view for a few months while he was “rehabilitated.”

I’m no admirer of a one-party state, and I’d never want to live under one. But the Chinese Communist Party figured out more than 50 years ago—from watching the failures in our example—that if you let the winners of capitalism write the rules of capitalism, they’ll first destroy the competition and then come for the government that hosts them.

They instead regulated their billionaires and their companies, in other words, because they knew what unregulated billionaires typically do to whoever’s in charge.

We Americans once understood that, and had a president who spoke about it in simple, straightforward terms.

President Franklin D. Roosevelt came into office in 1933 to clean up the GOP’s mess of the Republican Great Depression; he fought back against his generation’s oligarchs, declaring in 1936:

For out of this modern civilization economic royalists carved new dynasties. New kingdoms were built upon concentration of control over material things…It was natural and perhaps human that the privileged princes of these new economic dynasties, thirsting for power, reached out for control over Government itself.

FDR took on those “economic royalists” and defeated them. He explicitly called them out when the Democratic Party renominated him for president in 1936 in Philadelphia:

"These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power."He paused for a moment, then thundered, “Our allegiance to American institutions requires the overthrow of this kind of power!”

The crowd roared, delighted that he’d put millions to work while stripping that day’s oligarchs of their power. And he raised the top tax rate on the morbidly rich back up to 90%, while stopping an effort to kidnap him and turn our government fascist:

“In vain,” Roosevelt said, “they seek to hide behind the Flag and the Constitution. In their blindness they forget what the Flag and the Constitution stand for. Now, as always, they stand for democracy, not tyranny; for freedom, not subjection; and against a dictatorship by mob rule and the over-privileged alike.”

Four months later at Madison Square Garden FDR named the forces of “monopoly, speculation, and reckless banking,” said they were “unanimous in their hate” for him, and told the crowd he welcomed their hatred.

He wasn’t trying to abolish capitalism. He was putting it back under control of the people’s rule book: Glass-Steagall, the Securities and Exchange Commission, the Wagner Act, antitrust enforcement, a minimum wage, and a top tax rate of 90%.

Republicans fought it all, calling it “socialism” in increasingly hysterical tones, but it worked and FDR put America back together and built the world’s first middle class that was more than half of a nation’s people.

The American oligarchs of that........

© Common Dreams