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Capitalism and the emergent world order

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The two-centuries-old hegemony of the West is coming to an end. The ‘revolutions of modernity’ that fuelled the rise of the West are now accessible to all states. As a consequence, the power gap that developed during the nineteenth century and which served as the foundation for a core–periphery international order is closing. The result is a shift from a world of ‘centred globalism’ to one of ‘decentred globalism’. At the same time, as power is becoming more diffuse, the degree of ideological difference among the leading powers is shrinking. Indeed, because all Great Powers in the contemporary world are in some form capitalist, the ideological bandwidth of the emerging international order is narrower than it has been for a century. The question is whether this relative ideological homogeneity will generate geo-economic or geopolitical competition among the four main modes of capitalist governance: liberal democratic, social democratic, competitive authoritarian and state bureaucratic. This article assesses the strengths and weaknesses of these four modes of capitalist governance, and probes the main contours of inter-capitalist competition. Will the political differences between democratic and authoritarian capitalists override their shared interests or be mediated by them? Will there be conflicting capitalisms as there were in the early part of the twentieth century? Or will the contemporary world see the development of some kind of concert of capitalist powers? A world of politically differentiated capitalisms is likely to be with us for some time. As such, a central task facing policy-makers is to ensure that geo-economic competition takes place without generating geopolitical conflict.
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Capitalism and the emergent world order
BARRY BUZAN AND GEORGE LAWSON*
International Aairs :  () –
©
 The Author(s). International Aairs ©  The Royal Institute of International Aairs. Published by John Wiley & Sons
Ltd,  Garsington Road, Oxford  , UK and  Main Street, Malden, MA , USA.
Global turbulence
There is general agreement that the world is changing, but considerable disagree-
ment about how it is changing. Commentators variously locate this change in a
‘power shift’ from West to East, a trade in superpower status between the United
States and China, or a transition from an era of bipolarity to one of unipolarity,
multipolarity or even non-polarity. These analyses are linked by attention to a
smorgasbord of dynamics that are said to be disrupting the smooth functioning
of international order: globalization, US militarism, dynamics of revolution and
counter-revolution, finance capital, climate change, the rise of non-state actors,
new security threats, the dislocating eects of information and communication
technologies (ICTs), and more.
We argue that the problem with many of these analyses is that they either give
only a weak account of how the contemporary international order came into
being or ignore this process altogether. This neglect means that many commenta-
tors have oversimplified, narrow understandings of the emergent world order.
Our argument is that the changes that excite, concern or confuse contempo-
rary commentators have their roots in the emergence of modernity during the
‘long nineteenth century’. By modernity we mean a configuration of industrial
capitalism, rational–bureaucratic states and new ideologies of progress. This
configuration prompted a global transformation that, in turn, enabled the ‘rise of
the West’ and the construction of a highly unequal global political economy. This
* We would like to thank colleagues at the Department of Political Science, Copenhagen University, three
anonymous reviewers and the editor of International Aairs, Caroline Soper, for extremely helpful comments
on earlier drafts of this article.
Danny uah, ‘The global economy’s shifting centre of gravity’, Global Policy : , , pp. –.
Stefan Halper, The Beijing Consensus (New York: Basic Books, ); Xuetong Yan, Ancient Chinese thought,
modern Chinese rower (Princeton, NJ: Princeton University Press, ).
Stephen G. Brooks and William C. Wohlforth, World out of balance (Princeton, NJ: Princeton University Press,
).
Charles A. Kupchan, No one’s world (New York: Oxford University Press, ); John Ikenberry, Liberal
Leviathan (Princeton, NJ: Princeton University Press, ).
Richard Haass, ‘The age of nonpolarity’, Foreign Aairs : , May–June , pp. –.
Eric Hobsbawm, The age of revolution, 1789–1848 (London: Abacus, ).
Barry Buzan and George Lawson, ‘The global transformation: the nineteenth century and the making of
modern international relations’, International Studies Quarterly : , , pp. –.
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same configuration is now enabling the ‘rise of the rest’. As a result, the power
gap that served as the bedrock for a core–periphery international order is closing.
It is being replaced by a decentred order in which no single power—or cluster of
powers—is pre-eminent: the world is undergoing a shift from a globalism centred
in the West to a decentred globalism.
At the same time as power is becoming more diuse, the degree of ideological
dierence among the leading powers is shrinking. A core ideological question
driving much of the geopolitics of the twentieth century was: ‘Capitalism or not?’
Since , the core ideological question in world politics has been: ‘What kind of
capitalism best delivers stable prosperity?’ The demise of state socialism has engen-
dered a much narrower conversation about how best to organize economies. This
is most evident in the case of China. Because China has made huge strides towards
instituting a market economy, there is not the same level of systemic confrontation
that marked the competition between the Soviet Union and the West. China is not
clearly either an enemy or a friend to the United States; rather, it is both an economic
partner and a political rival. This convergence means that the world is unlikely to
face a repeat of the situation of the s, in which dierent Great Powers repre-
sented mutually exclusive forms of political economy. This is the good news. The
less good news is that, although states around the world are harnessing comparable
sources of power, they embed these in a wide spectrum of governance structures.
A core question, therefore, in the contemporary world is how to manage relations
between diverse modes of capitalist governance. One possibility is a heightening of
intercapitalist competition; a more optimistic scenario is the formation of a concert
of capitalist powers. Will the emerging configuration of ‘we’re all capitalists now’
regenerate geopolitical conflict on the basis of political dierences, or will it foster
a more integrated geo-economics of peaceful competition?
After first tracking the shift from centred to decentred globalism, we highlight
the strengths and weaknesses of the four most prominent forms of capitalist
governance: liberal democratic, social democratic, competitive authoritarian and
state bureaucratic. We then assess the prospects for intercapitalist competition and
cooperation.
How we got here—the ‘global transformation’
Until the eighteenth century, Europe did not hold a significant power advantage
over the Great Powers of Asia, whether measured by military strength, GDP or
available technologies. European states engaged with Asian powers as equals and,
sometimes, as inferiors. Yet by the middle of the nineteenth century, Britain could
defeat China using only local forces from its Indian empire, and the fledgling
Fareed Zakaria, The post-American world and the rise of the rest (London: Penguin, ).
Barry Buzan, ‘A world order without superpowers: decentred globalism’, International Relations : , , pp.
–.
 C. A. Bayly, The birth of the modern world, 1780–1914 (Oxford: Blackwell, ); David Christian, Maps of time
(Berkeley: University of California Press, ); Kenneth Pomeranz, The great divergence (Princeton, NJ:
Princeton University Press, ).
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United States could mount displays of naval might sucient to cow the Japanese
into opening up their economy to the West.
What explains this rapid turnaround is the onset of modernity. Modernity
arose from three interlinked changes. First, industrialization and the extension of
the market to a global scale brought all parts of the international system into closer
contact with each other. The new modes of power associated with industrializa-
tion and marketization produced major inequalities between societies. The result
was a system that was simultaneously both intensely connected and deeply divided.
Second, a new set of ideologies rose to prominence during the nineteenth century,
most notably liberalism, nationalism and socialism. These ideologies constituted
new entities and actors (classes, nations, civil society, limited companies), recon-
stituted some old ones (the state) and undermined previously dominant ideolo-
gies (dynasticism). Liberalism, nationalism and socialism were closely bound up
with ideas of progress, providing new motivations and legitimating strategies for
modern international practices ranging from law to diplomacy and from trade
to war. Like the advent of industrial capitalism, these ideologies intensified both
division and integration in the global political economy. Third, the reconstitution
of power associated with the shift to industrial society and ideologies of progress
was sustained by processes of rational state-building, in which capacities were
both caged within nation-states and extended outwards into ‘alien spaces’. Nation-
building went hand in hand with imperialism. The result was a bifurcated inter-
national system, mediated through a ‘standard of civilization’, in which rule-based
order was reserved for ‘civilized’ peoples, and dispossession, exploitation and
colonialism for ‘barbarians’. This core–periphery structure took global form,
sustained by a large and durable power gap between those states that first harnessed
the configuration of global modernity and those that were subjugated by it. For
better or worse, and often both together, the nineteenth century saw the trans-
formation of the daily conditions of people nearly everywhere on the planet.
The revolutions of modernity arose from longstanding transnational connec-
tions in technologies, ideas and resources. But the configuration that sustained
modernity first coalesced into an enduring mode of order during the nineteenth
century when a handful of Atlantic states opened up a massive power gap between
‘core’ and ‘peripheral’ societies. By the end of the nineteenth century, four states
(Britain, France, Germany and the United States) accounted for two-thirds of
the world’s industrial production; and one of them (Britain) became the first
global superpower, claiming a quarter of the world’s inhabitants and territory. In
 Gerritt W. Gong, The standard of ‘civilization’ in international society (Oxford: Clarendon Press, ; Edward
Keene, Beyond the anarchical society (Cambridge: Cambridge University Press, ); Shogo Suzuki, Civilization
and empire: China and Japan’s encounter with European international society (London: Routledge, ).
 Hobsbawm, The age of revolution; Eric Hobsbawm, The age of capital, 1848–1875 (London: Abacus, ), and The
age of empire, 1875–1914 (London: Abacus, ).
 Jack Goody, The East in the West (Cambridge: Cambridge University Press, ); Eric Wolf, Europe and the
people without history (Berkeley: University of California Press, ); Pomeranz, The great divergence; Bayly,
The birth of the modern world; John Hobson, The eastern origins of western civilization (Cambridge: Cambridge
University Press, ); John Darwin, After Tamerlane: the rise and fall of global empires, 1400–2000 (London:
Penguin, ).
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principle this power gap could be closed: those with access to the configuration
that sustained modernity could move from periphery to core. In practice, this
move was made exceptionally dicult not only by the depth of changes required,
but also by practices of colonialism, imperialism and other forms of exploitation
that reinforced the advantages of the core.
If the emergence of a ‘core’ of ‘modern’ states is one half of the modernity
story, the other half is the intensification of interactions between societies. Increas-
ingly dense trade networks, improved transport and communication systems, and
colonialism backed by modern weapons generated a highly integrated international
political economy. These changes eroded local and regional economic systems,
and imposed global price and production structures. As a consequence, levels of
interdependence rose, making societies more exposed to developments elsewhere.
Modernity, therefore, possessed a dual tendency, uniting the planet through
an intensification of political, economic and cultural interactions, while
simultaneously pulling it apart via major discrepancies in power and status, and
along new lines of ideological division. The result was the emergence of centred
globalism—an international order that was global in scale, but centred on the West.
International order has been marked by centred globalism since the middle of the
nineteenth century. During this period, a relatively small core of states has been
able to dominate the periphery despite spending much of the twentieth century
immersed in geopolitical conflicts over which model of political economy best
captured the modern configuration. The era of centred globalism is now coming
to an end, and it is this development that provides the often unnoticed backdrop
to accounts of contemporary global turbulence.
The reason for the contemporary sense of fin de siècle is that the revolutions
of modernity have spread beyond a small group of western powers, eroding the
power gap between core and periphery. Rising China is the contemporary standard
bearer for this process, but outside the West it was Japan that first acquired the
revolutions of modernity. Japan’s defeat of Russia in  signalled for the first
time in the modern era the rise of a non-white, non-western state. Many other
states—among them the ‘Asian tigers’, the BRICS, Indonesia and Turkey—have
followed suit. The core of industrial, bureaucratic states gets bigger; the periphery
of states that lack, or have been denied, access to these sources of power shrinks.
As a result of this process, the period of western hegemony, which lasted from
the second quarter of the nineteenth century to the first quarter of the twenty-
first century, is coming to an end. The world is shifting from an era of centred
globalism to one of decentred globalism.
It is already dicult for any single power, or cluster of powers, to dominate
international society, as evidenced by the eclipsing of the G by the G. This
trend will continue. The core will become bigger and less western, and the links
between power and race first challenged by Japan will be further diminished.
 For reasons of brevity, we omit discussion of the ‘semi-periphery’, i.e. those states that link core and periphery
in terms of production, trade and so on. For a full discussion of this category, see Immanuel Wallerstein, The
capitalist world economy (Cambridge: Cambridge University Press, ).
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Decentred globalism provides a foundation for international aairs quite unlike the
core–periphery global order of the past two centuries. It also provides a backdrop
quite unlike the world before the nineteenth century, in which there were many
centres of power only lightly and slowly connected with one another.
Contemporary commentators are thus right to say that profound changes are
under way. But they are wrong to see this change primarily in terms of super-
power rivalry or continental power shifts. The changes go far deeper, aecting the
very sources of power on which international order rests. Indeed, the emergence
of decentred globalism means that no state will be able to replace the United
States as a superpower, because none will be able to acquire enough relative power
to dominate the system as a whole. The age of superpowers was a consequence
of the uneven distribution of power created, in turn, by the unevenness of the
early phases of modernity. In contrast, the world of decentred globalism will have
several Great Powers and many regional powers: it will not have any superpow-
ers. At the same time, by the standards of the twentieth century, its ideological
bandwidth will be unprecedentedly narrow.
Competing capitalisms
Decentred globalism in a world of universalized capitalism oers no single vision
of how industrial capitalism, rational–bureaucratic states and ideologies of progress
should be organized. Over the past two centuries, many forms of society have
harnessed these sources of power: liberal, social democratic, socialist, colonial,
post-colonial, fascist and more. In the contemporary world, debates about how
best to organize the revolutions of modernity tend to operate through consider-
ation of alternative modes of capitalist governance. Following the market reforms
in China in the late s and the collapse of state socialism in Eastern and Central
Europe between  and , capitalism has become pre-eminent. Almost every
state organizes its economy through market logics and takes part in global regimes
governing trade, production and finance. In a similar vein, almost every state seeks
to formally distinguish distinct realms of politics and economics. That this separa-
tion is fundamental to the emergence of modern capitalism is agreed across the
political spectrum, from liberals to Marxists. The attempt to separate states from
markets is distinct both from pre-modern fusions of politics and economics and
from modern attempts (as in state socialism) to maintain a single realm of political
economy. The universalization of market relations has meant a near-worldwide
conception of politics and economics as, at least notionally, distinct spheres of
activity.
The literature on ‘varieties of capitalism’ stresses the importance of two modes
of capitalism: ‘liberal market economies’ and ‘coordinated market economies’.
 Bayly, The birth of the modern world; Christian, Maps of time; Pomeranz, The great divergence.
 Buzan, ‘A world order without superpowers’.
 Douglass C. North, John Joseph Wallis and Barry R. Weingast, Violence and social orders (Cambridge: Cambridge
University Press, ); Justin Rosenberg, The empire of civil society (London: Verso, ), p. .
 Peter A. Hall and David Soskice, eds, Varieties of capitalism (Oxford: Oxford University Press, ).
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Although based on clear empirical criteria, this typology has two faults. First, it
is formed almost exclusively from the experience of western states. Second, the
main point of dierentiation does not include sucient attention to the gover-
nance structures within which markets are embedded. We address the first of
these lacunae by adding non-western states to the analysis. We address the second
by accommodating within our basic definition of capitalism an ostensible separa-
tion between the political and economic spheres. This adds value to the economic
criteria of the orthodox literature by stressing the ways in which dierent modes
of capitalism are embedded politically. The result is a typology that incorporates
not just two ideal-types of democratic capitalism (liberal democratic and social
democratic), but also two ideal-types of authoritarian capitalism (competitive
authoritarian and state bureaucratic).
These four ideal-types of capitalist governance are oversimplifications intended
to tease out dierences for the purposes of analytical clarity and empirical compar-
ison. They are best understood as occupying points on a continuum, one end of
which is defined by the complete separation of economics and politics, the other
by their complete union (see figure ). Since no known forms of capitalism meet
either extreme condition, our four ideal-types do not reach either end of the
spectrum. Liberal democratic capitalism seeks to maximize economic autonomy,
combine this with democratic governance and minimize the role of the state.
Social democratic capitalism seeks to balance the market, the state and democracy.
Competitive authoritarian capitalism favours state control over the market
and constrains democratic governance. State bureaucratic capitalism attempts
a complex, fluid mix of state ownership and market relations, while rejecting
democratic governance outright.
These ideal-types facilitate clarity for the purpose of characterizing the polit-
ical dynamics of varieties of capitalism. But there are two caveats to note about
how they relate to the actual experience of states. First, many states are hybrids,
containing features drawn from more than one ideal-type. Russia is a mixture of
state bureaucratic and competitive authoritarian capitalism. Somewhat counter-
intuitively, the outlier to the austerity regime favoured by both liberal democratic
 Christopher McNally, ‘Sino-capitalism: China’s reemergence and the international political economy’, World
Politics : , , pp. –.
 Bruno Amable, The diversity of modern capitalism (Oxford: Oxford University Press, ); Gregory Jackson
and Richard Deeg, ‘How many varieties of capitalism? Comparing the comparative institutional analyses of
capitalist diversity’, discussion paper / (Cologne: Max Planck Institute for the Study of Societies, );
Beatriz Magaloni, Voting for autocracy (Cambridge: Cambridge University Press, ).
Figure 1: Mapping ideal-types of capitalist governance
Utopian Liberal Social Competitive State All forms of
free democratic democratic authoritarian bureaucratic non-capitalist
markets capitalism capitalism capitalism capitalism governance
greater
claimed autonomy of economy from politics  less
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and social democratic states is the United States, which has continued to pursue a
policy of fiscal stimulus intended to break the liquidity trap and boost aggregate
demand. These hybrid forms of capitalist governance muddy distinctions within
the democratic and authoritarian groupings, if less so between them. Second,
states often shift between categories over time. Chile under the Pinochet regime
was a mixture of the state bureaucratic and competitive authoritarian modes of
capitalism; since the ending of military rule, it has instituted capitalism along a
mix of liberal democratic and social democratic lines. This is far from being the
only example of such movement in capitalist governance over time: change is the
norm rather than the exception.
With these caveats in mind, individual states and groups of states can be placed
loosely along this continuum: the US, the UK and other Anglophone countries
represent liberal democratic capitalism; states in much of continental Europe,
South America, India, Japan and South Korea exemplify social democratic
capitalism; Russia, and a number of states in the Middle East, sub-Saharan Africa
and South-East Asia are characterized by competitive authoritarian capitalism;
China, Vietnam, most of the Gulf monarchies (including Saudi Arabia) and some
Central Asian states are the main bastions of state bureaucratic capitalism.
It is clear from this broad overview that capitalism is a near-universal feature of
contemporary international society and, because of the way it generates power,
virtually a necessary condition for Great Power standing. If one overriding
lesson emerged from the Cold War, it was that non-capitalist economies could
not compete with capitalist ones over the long run, particularly when economies
became more strongly based on information and services. Each mode of capitalist
governance has its strengths and weaknesses, generating a series of questions about
its capacity for growth, its eciency and its stability. Because capitalism turbo-
charges change, it is always attended by trade-os in terms of growth, inequality,
eciency and stability. Capitalism legitimizes itself by generating wealth in the
form of growth and profits. But this wealth is unevenly distributed. The top .
per cent of the world’s population own over a third of its wealth, and the world’s
, billionaires have a combined wealth of US$. trillion—more than the
annual GDP of Germany. At the same time, the bottom . per cent of the
world’s population own just . per cent of its wealth and nearly  million
people around the world are undernourished. All forms of capitalist society are,
therefore, compelled to maintain growth as a means of rendering tolerable the
politics of inequality. If growth slows or reverses, and inequality remains, there
is the risk of an ugly and potentially violent politics of redistribution coming to
the surface. This is true across the spectrum: China is now as politically addicted
to growth as the United States. The four ideal-types of capitalist governance we
highlight manifest diering forms of these basic tensions.
 Malcolm Bull, ‘Help yourself ’, London Review of Books,  Feb. , pp. – at p. .
 Bull, ‘Help yourself’, p. ; Goran Therborn, ‘Class in the st century’, New Left Review, no. , Nov.–Dec.
, pp. – at p. .
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Democratic varieties of capitalism
Liberal democratic Liberal democratic capitalism seeks to maximize the distinction
between economics and politics, keeping the two in relationship through repre-
sentative government. In this mode of capitalist governance, democracy is seen as
the natural accompaniment to the market. Because capitalism is associated with the
spread of wealth and information, citizens are empowered in their relations with
the state. This condition means that the representation of citizens in formal political
institutions is taken to be fundamental to the realization of legitimate authority.
Over many years, and through bitter struggles, the franchise in liberal democratic
capitalist states has been extended to incorporate those without property and, often
much later, women and minorities. The result is a model of popular sovereignty
that stresses autonomy and individual rights, and that claims to reward merit.
Liberal democratic capitalism seeks to maximize autonomy, fostering rights
and meritocracy through the operation of the market in the expectation that high
levels of innovation and growth will counter inequality. The operation of markets
generally, and of financial markets in particular, is notoriously prone to cycles of
boom and bust, and occasionally to seriously big breakdowns like those of 
and . Liberal democratic capitalism is, therefore, caught between its market
orientation on the one hand and the twin needs to accommodate crises and deal
with inequality on the other. This, in turn, leads to a tension between those who
want to minimize the size and function of the state, and those who stress the need
for a state that intervenes in order to foster social cohesion and protect the vulner-
able. Cultural factors can be important in this respect. American society is notably
tolerant of economic inequality on the grounds that the opportunity to acquire
wealth is understood to be widely available, and that the acquisition of wealth is
fair if based on merit and hard work.
Since the early s, most states associated with liberal democratic capital-
ism have been in the vanguard of a wider shift from neo-Keynesianism to neo-
liberalism. Indeed, because of their close association with neo-liberalism,
many liberal capitalist states were hit hardest by the  financial crisis. To a
great extent, neo-liberalism helped to enable the financial crisis by generating a
climate in which easy money became tied to debt-financed spending and high
loan–value ratios. In the decades leading up to the crisis, wage repression among
median workers reduced levels of eective demand, prompting the expansion of
credit and, as a result, an increase in debt-fuelled consumption: between 
and  average household debt tripled in the United States. This debt was
 Rising inequality is testing this tolerance. Movements like Occupy Wall Street speak to a wider disillusionment
in the US with what Gitlin calls the ‘great divergence’ between rich and poor since the s (Todd Gitlin,
‘Occupy’s predicament: the moment and the prospects for the movement’, British Journal of Sociology : , ,
pp. –). Of the  OECD countries, only Turkey and Mexico have higher levels of inequality and more
poverty than the US: Michael Mann, The sources of social power, volume 4: globalizations (Cambridge: Cambridge
University Press, ), p. .
 Mark Blyth, Austerity: the history of a dangerous idea (Oxford: Oxford University Press, ); Mann, The sources
of social power.
 David Harvey, The enigma of capital (London: Profile, ), p. ; Raghuram G. Rajan, Fault lines (Princeton,
NJ: Princeton University Press, ), p. .
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secured against the neo-liberal promise of increasing asset (particularly property)
values, stable levels of inflation and low interest rates. However, when inflationary
pressures, fuelled by higher commodity prices, forced interest rates up, and there-
fore house prices down, the result was severe: governments had no way to control
inflation without raising interest rates and therefore causing housing markets
to either stagnate or crash. Yet buoyant housing markets were one of the main
vehicles of neo-liberal growth, serving as security against debt and as the principal
form of consumer equity release. At the same time, financial markets, enabled
by permissive political stewardship, were considered to be so sophisticated that
all risks could be converted into prices. Neo-liberals sought to disembed market
interactions from political relations; deregulation, tax cuts and tighter control of
the money supply were intended to release entrepreneurial drives that would, in
turn, foster capital mobility and accelerate wealth creation. But just as Polanyi
recognized, this attempt to separate economics and politics, and to subordinate
society to the discipline of the market, was a mirage: neo-liberal markets, suppos-
edly ordered only by the price mechanism, turned out to be embedded within
governance structures rather than spontaneously self-generated.
To date, the main response to the financial crisis by liberal capitalist states has
been austerity: quantitative easing accompanied by deep cuts to government
spending in order to reduce public debt and control inflation. However, such a
response requires economies to grow and, to date, many liberal capitalist states are
registering only sluggish increases in output. As a result, inequality in these states
continues to rise. Returning to growth, securing financial stability and alleviating
inequality are the urgent tasks now facing liberal democratic capitalist states.
Social democratic Social democratic capitalism incorporates much diversity. It
shares the liberal concern for individual rights, while adding to it a concern for
social cohesion and equity, thereby justifying a larger role for the state. In this
sense, maintenance of market relations becomes a ‘practice of government’—social
democratic states provide a bargain between the ‘anarchy’ of free markets and the
‘tyranny’ of collective planning by enabling innovation, ensuring competition and
regulating market excess. Enterprises designated ‘state champions’ illustrate the
close relationship between state and capital, while large government bodies, such
as Japan’s Ministry of Economy for Trade and Innovation, exert far more authority
than their counterparts in liberal democratic states. Friction between management
and labour is handled through corporatist arrangements, and the formal separation
between economics and politics is mediated by the welfare state. Again, cultural
factors are important: social democratic states are more concerned than liberal
states about inequality, linking the liberal concern with rights to concerns about
collective obligations and responsibilities.
 Karl Polanyi, The great transformation (Boston: Beacon, ; first publ. ).
 Blyth, Austerity.
 Werner Bonefeld, ‘Freedom and the strong state: on German ordoliberalism’, New Political Economy : , ,
pp. – at p. .
 John G. Ruggie, ‘International regimes, transactions, and change: embedded liberalism in the post-war
economic order’, International Organization : , , pp. –.
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The imperative of social democratic capitalism is, therefore, to maximize
growth while tempering the inequalities associated with the market, along with
its disruptive eects on social cohesion and tendency towards crisis. uestions
arise over whether, because of its concerns over regulation and redistribution,
social democratic capitalism results in lower growth, less innovation and more
rigid societies. Despite tensions and periodic instabilities, some countries that
practise liberal democratic capitalism have been successful at generating growth
while maintaining (relatively) low levels of unemployment. In contrast, Japan has
been in a period of low growth since the s, while a number of other promi-
nent social democratic states, such as France, have had to get used to (relatively)
high levels of unemployment. Further questions arise over whether the mainte-
nance of a generous welfare state is threatened by ageing populations and, often,
low workforce replacement rates.
Although social democratic capitalist states were not at the forefront of the shift
from neo-Keynesianism to neo-liberalism, their close aliation with neo-liberal
institutions means that they too have been weakened by the financial crisis—as
witness the current recession in the eurozone. Both the European Central Bank
and Germany, Europe’s largest economy, have favoured austerity, sometimes on
even more stringent terms than liberal capitalist states. If such policies continue
to generate only sluggish growth, social democratic capitalism will have fewer
resources to devote to curtailing inequality and promoting social cohesion. Like
liberal democratic capitalist states, social democratic capitalism is facing major
challenges.
Authoritarian varieties of capitalism
Since the late s, research has dierentiated distinct types of authoritarian
regime. Central to this work is anatomizing the various bargains that stabilize
authoritarian regimes, ranging from those associated with personal rule (most
commonly found in the Middle East), to those associated with military juntas
(for example, in much of Latin America), monarchies (such as those in the Gulf )
and single-party regimes (as in China, Central Asia and parts of South-East Asia).
Over the past three decades or so, most authoritarian regimes have carried out
programmes of market reform, albeit to varying degrees. Some, such as North
Korea and Cuba, remain in the non-capitalist part of the spectrum. Most fall into
one of two main types—competitive authoritarian and state bureaucratic—on
the basis of the relationship between market relations and the state. With some of
 Jack Goldstone, Eric Kaufmann and Monica Duy Toft, eds, Political demography: how population changes are
reshaping international security and national politics (New York: Oxford University Press, ).
 See e.g. Guillermo O’Donnell, Modernization and bureaucratic authoritarianism (Berkeley: University of California
Press, ); Barbara Geddes, ‘What do we know about democratization after twenty years?’, Annual Review
of Political Science , , pp. –; Juan Linz, Totalitarian and authoritarian regimes (Boulder, CO: Lynne
Rienner, ); Magaloni, Voting for autocracy; Jason Brownlee, Authoritarianism in an age of democratization
(Cambridge: Cambridge University Press, ); Jennifer Gandhi, Political institutions under dictatorship
(Cambridge: Cambridge University Press, ); Steven Levitsky and Lucan Way, Competitive authoritarianism:
hybrid regimes after the Cold War (Cambridge: Cambridge University Press, ); Democratization, special issue
on ‘Comparing autocracies’, : , , pp. –.
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these states, most obviously China, generating rapid economic growth, and much
of the democratic capitalist world mired in recession, the relative weight and influ-
ence of authoritarian capitalist states are increasing.
Competitive authoritarian Since the end of the Cold War, a number of states
have combined authoritarianism with a degree of electoral competition. These
‘competitive authoritarian’ states, such as Malaysia, Singapore, Pakistan, Iran,
Vene zuela, Tanzania, Kenya and, arguably, Russia, do not operate on the basis
of ‘level playing fields’; on the contrary, ‘competition is real, but unfair’. Yet
despite claims that such ‘halfway houses’ are insecure, competitive authori-
tarian regimes can be quite stable. They endure because they favour incumbent
power through control of the media, superior spending power, intimidation and,
occasionally, outright repression. They also endure by combining growth with
political quiescence, while, in some cases, ensuring that state-owned enterprises
are resilient against predation, patronage and rent-seeking. Competitive authori-
tarian states stabilize rule through a combination of institutions (most notably, a
political party), ideology (most notably, nationalism) and repression (ranging from
legal harassment to targeted assassinations). Taken together, these act as binding
agents that draw elites together and co-opt or intimidate opposition.
The emergence and apparent stability of competitive authoritarianism relate to
a wider concern about ‘democratic rollback’. The Freedom in the world survey
classifies just under half the world’s polities as ‘free’. In comparison, many compet-
itive authoritarian states seem to be both stable and successful. To some extent, this
should not be a surprise. Historically, capitalism was not thought to align with
democracy; to the contrary, both its detractors and its advocates saw capitalism
as promoting tendencies towards oligopoly. During the nineteenth century,
industrializing states restricted the franchise out of concerns that the working
class would limit private property and favour radical redistribution. During the
twentieth century, right-wing forces often overthrew democratic regimes when
they thought that capitalism was being threatened—Pinochet’s Chile is a case in
point. Capitalists worked in tandem with fascist regimes. And a number of
developing states—including the ‘Asian tigers’, Brazil, Argentina and other Latin
 Magaloni, Voting for autocracy; Levitsky and Way, Competitive authoritarianism.
 Levitsky and Way, Competitive authoritarianism, p. .
 See e.g. Samuel P. Huntington, The third wave: democratization in the late twentieth century (Norman: University
of Oklahoma Press, ), pp. –.
 Levitsky and Way, Competitive authoritarianism, pp. , –, .
 Steen Hertog, ‘Defying the resource curse’, World Politics : , , pp. –; McNally, ‘Sino-capitalism’,
pp. –.
 Brownlee, Authoritarianism in an age of democratization; Gandhi, Political institutions under dictatorship; Levitsky and
Way, Competitive authoritarianism.
 Larry Diamond, ‘A fourth wave or false start? Democracy after the Arab Spring’, Foreign Aairs online,  May,
, http://www.foreignaairs.com/articles//larry-diamond/a-fourth-wave-or-false-start?page=show,
accessed  Sept. .
 Freedom in the world survey , http://www.freedomhouse.org/report/freedom-world/freedom-world-,
accessed  Oct. .
 Mann, The sources of social power, pp. –.
 Wolfgang Streeck, ‘The crises of democratic capitalism’, New Left Review, no. , Sept.–Oct. , pp. –.
 Adam Tooze, The wages of destruction (London: Allen Lane, ).
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American states—found authoritarianism preferable to democracy during their
‘transitional’ phase. A number of these states (such as Malaysia and Singapore)
remain authoritarian, while others (such as Russia) have sought to stabilize the
volatility prompted by market relations through increasing authoritarianism.
Although competitive authoritarian states were hampered by the  finan-
cial crisis, they often fared better than democratic states. In part, this was because
the former tended to be less reliant on global neo-liberal circuits; in part, it was
because competitive authoritarian states could act decisively without having to
negotiate formally with interest groups and wider publics. Even when publics rose
up against their rulers, most authoritarian regimes proved to be robust, particu-
larly when state elites and the coercive apparatus remained allied. For example,
although the outcomes of the  Arab uprisings are still unfolding, most signs
point to a strengthening of competitive authoritarian capitalism.
State bureaucratic State bureaucratic capitalism exists where the separation
between economics and politics is blurred, and governance is not democratic.
Although relatively few states fall within this category, there are two reasons why
it is of wider interest. First, it allows for a general assessment of the stability
of capitalism in states without any features of democratic governance. Second,
this category contains China, now the world’s second biggest capitalist economy,
raising the vital question whether China’s market reforms can be maintained in a
system that retains a pre-eminent role for the Chinese Communist Party (CCP).
China’s version of capitalism is complex. On the one hand, China is home
to a large number of private, family-run businesses. It also contains a number
of mega-corporations that are privately owned, such as Alibaba and Tencent. In
terms of foreign direct investment and trade, China is an open economy—for
example,  per cent of China’s IT exports are produced either through joint
ventures with international partners or through multinationals based outside
the country. On the other hand, major chunks of the Chinese economy are
in the hands of state-owned enterprises (SOEs). These enterprises enjoy state
subsidies and access to capital from banks that are themselves state-owned. In this
sense, the CCP is attempting to do two contrasting things simultaneously: it is
maintaining a high degree of state control through direct ownership and finance
while also allowing, and sometimes directly incentivizing, entrepreneurs to estab-
lish markets over large tracts of the Chinese economy. In this sense, capitalism
and non-capitalism coexist within China, with a spread of mechanisms ranging
from direct state control to decentralized, almost anarchic, marketization. As one
 Ha-Joon Chang, Bad Samaritans: rich nations, poor policies and the threat to the developing world (London: Random
House, ).
 Scott Kennedy, ‘The myth of the Beijing Consensus’, Journal of Contemporary China : , , pp. –;
Michael A. Witt, ‘China: what variety of capitalism?’, working paper //EPS (Singapore: INSEAD,
); McNally, ‘Sino-capitalism’; Christopher McNally, ‘How emerging forms of capitalism are changing
the global economic order’, Asia–Pacific Issues, no.  (Honolulu: East–West Center, ).
 Kennedy, ‘The myth of the Beijing Consensus’, p. ; McNally, ‘Sino-capitalism’, pp. –.
 Witt, ‘China: what variety of capitalism?’; McNally, ‘Sino-capitalism’ and ‘How emerging forms of capitalism
are changing the global economic order’.
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Table : Corruption Perception Index across types of capitalist state
State (type of capitalism) Corruption Perception Index
Rank
(out of 176 states)
Score
(0 = corrupt; 100 = clean)
Finland (social democratic)  
Australia (liberal democratic)  
Japan (social democratic)  
United States (liberal democratic)  
Malaysia (competitive authoritarian)  
Saudi Arabia (state bureaucratic)  
China (state bureaucratic)  
Russia (competitive authoritarian)  
Source: http://cpi.transparency.org/cpi/results/, accessed  Aug. .
analysis puts it, China is a ‘stir-fry of markets, socialism and traditional China that
is fully none of the three, but mixes in bits and pieces of each—all tossed together
over very high heat.
Despite the stir-fry nature of Chinese capitalism, the country’s market reforms
have been highly successful. Since , China has averaged . per cent annual
growth and trade has increased a hundredfold—a rate of change that has seen
over half a billion people lifted out of poverty. During the same period, infant
mortality has halved and life expectancy has risen to a level not far o that found
in much richer countries. To put this into perspective, during the nineteenth
century it took states an average of  years to double their per capita income;
during the twentieth century, the average figure was  years. China doubled its
per capita income in just ten years, between  and . By , China is
likely to be the world’s largest economy.
Shared problems Although, as outlined above, their bargains between markets and
governance structures dier, the two modes of authoritarian capitalism share a
number of common problems. Like social democratic states, authoritarian states
face the problem that state bureaucracies hinder growth, competition and innova-
tion. At the same time, authoritarian bureaucracies are susceptible to corruption,
something that undermines both the eciency of capitalism and the legitimacy
of the regime. As table  shows, a composite index of perceptions of public sector
corruption around the world indicates that authoritarian types of capitalism are
generally seen as more corrupt than democratic capitalist states.
 Joseph Fan, Randall Morck and Bernard Yeung, ‘Capitalizing China’, working paper no.  (Washington
DC: National Bureau of Economic Research, Dec. ), p. .
 Mann, The sources of social power, p. .
 Justin Yifu Lin, Demystifying the Chinese economy (Cambridge: Cambridge University Press, ), p. .
 Lin, Demystifying the Chinese economy, p. .
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By privileging state control, authoritarian forms of capitalism empower
state actors vis-à-vis both firms and civil society. This is a well-known recipe
for oligarchy, corruption and rent-seeking. Such tendencies are highly visible
in contemporary China. They are also a problem openly acknowledged by the
Communist Party. The fall of Bo Xilai, former party chief in Chongqing, laid bare
the conspicuous consumption—and corruption—of a super-elite. Protests against
land expropriations and other abuses of power are both common and widespread.
Both state bureaucratic and competitive authoritarian modes of capitalism face
hard questions over whether corruption can be contained.
Another source of concern for authoritarian capitalist states is the way in
which points of contact between authoritarian and democratic states may desta-
bilize authoritarian regimes. Whether these points of contact consist of trade and
investment, diplomatic relations or forms of public communication, they can be
used as leverage by democracy promotion agencies, particularly when the grip
of ruling parties is insecure. In parallel vein, the participation of authoritarian
states in international institutions such as the World Trade Organization weakens
the capacity of the state vis-à-vis market actors. It may also be that the embed-
ding of local elites in transnational circuits has a ‘socializing’ eect on domestic
practices. The conflict between authoritarian elites and would-be democratic
publics is likely to be a regular feature of political life in competitive authori-
tarian states in the years to come. Despite the advantages held by the incumbent
regime, oppositions can be successful through the ballot box, as events in Serbia,
Ukraine and Georgia during the s showed. And, although few democratic
movements that took part in the  Arab uprisings achieved their full aims, they
did succeed in puncturing claims of authoritarian permanence.
If both types of authoritarian capitalism face comparable pressures from
corruption, international socialization and democratizing publics, state bureau-
cratic capitalist states face a particular problem in that they do not permit any
kind of formal opposition, leaving it unclear how they are to deal with the
pluralist pressures inherent in a capitalist economy. Capitalist societies are often
fractious, opinionated, creative, chaotic places in which individual opinions and
styles flourish. It is not clear that a state bureaucratic regime can coexist with
such a society over the long term. This issue is particularly visible in contem-
porary China, where the government seems unnerved by the capitalist society
that its own reforms have fostered. To date, the government’s response has been
repression of the more outspoken voices and a tendency to use the rhetoric of
‘harmonious society’ to securitize its own citizenry. For example, when it comes
to ICTs, the CCP has developed a strategy of ‘block and clone’, constructing
firewalls around technologies it finds dangerous, while simultaneously promoting
 Levitsky and Way, Competitive authoritarianism, p. .
 Ikenberry, Liberal Leviathan.
 Valerie Bunce and Sharon Wolchik, Defeating authoritarian leaders in postcommunist countries (Cambridge:
Cambridge University Press, ).
 Eva Bellin, ‘Reconsidering the robustness of authoritarianism in the Middle East’, Comparative Politics : ,
, pp. –.
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indigenous versions of Google (Baidu), Twitter (Sina Weibo), Facebook (Renren)
and YouTube (Youku). The vibrant forms of expression found on these sites
showcase the diversity of thought within China. It is unlikely that the state
will be able to keep a lid on such plural sentiments over the long term. Indeed,
maintaining growth while preserving state control in a context of diverse opinions
and interests may require a set of changes towards more pluralist governance
practices that would match Deng’s ‘reform and opening up’ to market relations a
generation ago.
The same is true in relation to inequality. Although all forms of capitalist
society contain a tendency towards inequality, this is exacerbated in authoritarian
regimes where there are few means through which a super-elite can be held to
account. China, for example, has a GINI coecient of ., representing a level
of inequality around  per cent higher than when it began its market reforms.
China’s GINI coecient is close to that experienced in competitive authoritarian
states such as Malaysia and Russia, significantly higher than that found in promi-
nent liberal democratic states such as the United States and Britain, and twice the
level of that prevailing in many social democratic states, most notably the Nordic
countries. Managing the tension between growth and inequality is a crucial
challenge for the current generation of authoritarian capitalist policy-makers.
Both forms of authoritarian governance therefore face problems arising from
their attempt to embed capitalism without, or with little, democratic governance.
At the same time, the emergence of a profitable business sector requires a set of
reliable legal practices that protect investments and regulate contracts. The record
of both forms of authoritarian capitalism suggests that they will be durable, but
that their models have fundamental flaws that could, in time, become existential.
The emergent world order
The emergent world order, then, is one of decentred globalism in which the
principal dynamic is the interplay between competing forms of capitalist gover-
nance. Although all four types of capitalist governance face major challenges,
none seems to be heading for extinction in the short term. This conclusion sits
at odds with neo-classical strains of liberal thought in which capitalist polities
converge on a single model because only democracy is seen as containing the
social forces capitalism unleashes, providing it with political and social legitimacy,
and fostering the high levels of creativity and innovation (Schumpeter’s ‘creative
destruction’) that underpin growth. Yet it is often argued that state-led capitalism
has advantages because of its ability to concentrate capital in strategic ways, distort
competition with subsidies and contain the excesses of capitalist accumulation.
If the latter analysis is correct, it suggests that the contemporary world will be
home to a range of capitalisms, a view supported by the literature on comparative
 Michael Anti (Zhao Jing), ‘The Chinanet and smart censorship’, in Mark Leonard, ed., China 3.0 (London:
European Council on Foreign Relations, ), p. .
 Lin, Demystifying the Chinese economy, p. .
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capitalisms, which suggests that divergence rather than convergence is the norm.
If varieties of capitalism are likely to persist for several decades or more, it is
important to think carefully about how competition between dierent modes of
political economy will aect the emergent world order. In this respect, Luttwak’s
distinction between geopolitics and geo-economics serves as a useful starting point.
By geopolitics, Luttwak means zero-sum territorial competition in a military–
political mode of relations among states. By geo-economics, he means zero-sum
developmental competition in an economic–political mode of relations among
states where Great Power war is largely ruled out. To capture the emerging world
order, Luttwak’s categories need to be dierentiated into hard and soft types. Hard
geopolitics means that intentional war is legitimate and expected. As we outline
below, such a situation is unlikely to occur in a world of decentred globalism. Soft
geopolitics means that intentional Great Power war is marginalized, but territorial
competition and military balancing/hedging remain, as is the case, for example,
in contemporary East Asia. Hard geo-economics means a zero-sum competition for
profit within a largely political–economic modality; soft geo-economics means a
mix of zero-sum and positive-sum relations within a largely political–economic
modality. As the next section illustrates, while the former is a remote possibility,
the latter is a more likely development, particularly if a ‘concert of capitalist
powers’ emerges that is able to manage intercapitalist interaction. Taken together,
the dierentiation of hard/soft geopolitics and hard/soft geo-economics captures
well the international relations of varieties of capitalism in a decentred global
order.
Geopolitics or geo-economics?
The last time there was a distribution of power that looked anything like decentred
globalism was in the s, and there is little doubt that the spectre of the s
will be rolled out by those looking to defend a US-led unipolar order. However,
the analogy is largely false—contemporary international relations do not function
like those of the s. At that time there were deep ideological dierences among
the Great Powers (communist, fascist, democratic), empire-building and racism
were legitimate, and Great Power war and economic protectionism were seen as
rational policy choices. In the contemporary world, ideological dierences among
the Great Powers are comparatively narrow, empire and racism are illegitimate, and
nuclear weapons have made Great Power war irrational. In addition, the version
of capitalism that emerged victorious from the wars of the twentieth century
was committed to global markets, not the imperial preference version common
to the s. Global economic governance (GEG) is far more institutionalized,
and the problems of international management are better (and dierently) under-
stood than in the interwar years. Even China, perhaps the most likely current
 Jackson and Deeg, ‘How many varieties of capitalism?, p. ; Witt, ‘China: what variety of capitalism?’, p.
; McNally, ‘How emerging forms of capitalism are changing the global economic order’, p. .
 Edward Luttwak, ‘From geopolitics to geo-economics’, The National Interest, no. , Summer , pp. –.
 David W. Drezner, ‘The irony of global economic governance: the system worked’, working paper (New
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candidate to seek to revise the way global markets operate, is firmly committed to
existing institutions and regimes.
While there may be considerable disagreement about the specific rules and
practices of global economic governance, there is much common ground between
all types of capitalism when it comes to the desirability of maintaining the global
trade, production and financial circuits on which their prosperity and growth
depend. There is, therefore, little or no reason to think that a world of decen-
tred globalism featuring four main varieties of capitalism will replay the conflicts
of the s. As a result, a return to hard geopolitics can be largely ruled out.
However, as noted above in the case of East Asia, it may be that intercapitalist
competition will fuel soft geopolitical conflict. At its heart, capitalism is a hard-
nosed competition for accumulation and profits. Historically, violence has played
a key role in the extension and maintenance of markets around the world. This
reflection opens up three ‘soft geopolitical’ possibilities.
The first is a situation in which authoritarian forms of capitalism become
more extreme, abandoning the idea of any separation between the political and
economic spheres. In this instance, elements of the s scenario would be
revived, although restrained by fears about the consequences of Great Power war,
the illegitimacy of empire and mutual dependence on world trade. This scenario
is not impossible, but neither does it seem likely. As argued above, any state that
adopts command economics is likely to lose both relative power and legitimacy.
The second possibility is that the United States and China fall into conflict
because they mistakenly believe that they are engaged in a power transition crisis
about who is to be the global superpower. The United States will certainly have a
lot of diculty giving up this role; China remains divided about whether it wants
such a role or not. Neither country wants a war with the other, but their rivalry
is already well established, and the right combination of carelessness, recklessness,
miscalculation and mischance could pitch them into confrontation. Various pinch-
points are important here: whether or not China continues to buy US Treasury
securities; whether China seeks to promote the renminbi as a reserve currency
competing with the dollar; and whether soft geopolitical tensions in South-East
Asia and East Asia can be eectively managed. It is possible that the US ‘pivot
towards East and South-East Asia, combined with China’s more assertive policies
since , could prompt a round of militarization. Although the United States
spends over five times as much per year on its military than China, the latter’s
capacity is growing. On the back of its fast-growing GDP, China increased its
York: Council on Foreign Relations, October ), p. ; Barry Eichengreen and Kevin O’Rourke, ‘A tale
of two depressions’, Vox, , http://www.voxeu.org/article/tale-two-depressions-what-do-new-data-tell-
us-february--update, accessed  Oct. .
 Timothy R. Heath, ‘What does China want?’, Asian Security, : , , pp. –; Feng Zhang, ‘Rethinking
China’s grand strategy: Beijing’s evolving national interests and strategic ideas in the reform era’, International
Politics : , , pp. –; Chih-yu Shih and Yin Jiwu, ‘Between core national interest and a harmonious
world: reconciling self-role conception in Chinese foreign policy’, Chinese Journal of International Politics : ,
, pp. –.
 Kai He and Huiyin Feng, ‘Debating China’s assertiveness: taking China’s power and interests seriously’,
International Politics : , , pp. –; Brantly Womack, ‘Beyond win–win: rethinking China’s
international relationships in an era of economic uncertainty’, International Aairs : , July , pp. –.
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military spending fourfold during the s, from US$. billion per year in 
to US$. billion in , and did so without changing the proportion of GDP
represented by defence expenditure (roughly  per cent). Even if, as argued above,
a system of decentred globalism prevents a buildup of power in any single state
sucient to elevate it to superpower status, China’s development of its military
capabilities suggests that its relative power in the international system will continue
to increase. As this takes place, soft geopolitical tensions could escalate, though
almost certainly not to the hard geopolitical levels experienced in the s.
The third possibility is more of a question. Assuming both that authoritarian
Great Powers do not become more authoritarian, and that China and the United
States manage to avoid open conflict, how important are the remaining ideological
dierences between democratic and authoritarian capitalists? In other words, will
the greater ideological and practical homogeneity prompted by the universaliza-
tion of capitalism moderate or override the antipathy between democracies and
authoritarian regimes, or will political dierences be sucient to support either
soft geopolitical conflict or hard geo-economic rivalry?
The dierentiation between democracies and authoritarians continues to play
strongly in the global outlook of the United States. There will certainly be
concerns within democratic states that authoritarian countries will not play fairly
by the rules, for example favouring their SOEs or manipulating their curren-
cies. Current disputes range from the expansionary drives of large corporations,
whether Google or Huawei, to currency policies, imbalances, cyberwarfare and
industrial espionage. These tensions have to be managed within the fallout from
the  financial crisis, now widely acknowledged to be as severe as that of ,
and the resulting weakening of both the global economy and GEG. Cross-border
capital flows are down  per cent since , and cross-border bank lending is
down two-thirds since the crisis began. Although most aspects of the global
financial system have proved resilient, persistent failures in the banking system,
high levels of public debt, weak growth, limited credit flows and increasing capital
controls are still cause for unease. These tensions lead, in turn, to a deeper concern
that authoritarian states are not fully committed to capitalism, but are gaming the
system in order to make short-term gains. Liberal and social democratic states are
hoping that authoritarian capitalist states will over time be forced by a combina-
tion of domestic and international pressures to undergo political reforms. But
even if this turns out to be the case, it is unlikely to happen in the short term;
authoritarian forms of capitalism will be part of the decentred globalist world for
quite some time.
 Figures taken from the SIPRI Military Expenditure Database: http://milexdata.sipri.org/result.php,
accessed  Sept. .
 John Ikenberry and Anne-Marie Slaughter, Forging a world of liberty under law: US national security in the 21st
century, Princeton Project Papers (Princeton, NJ: Woodrow Wilson School of Public and International Aairs,
); Halper, The Beijing Consensus; Paul D. Miller, ‘Five pillars of American grand strategy’, Survival : ,
, pp. –.

Drezner, ‘The irony of global economic governance’, p. ; Eichengreen and O’Rourke, ‘A tale of two depres-
sions’; Peter Temin and David Vines, The leaderless economy (Princeton, NJ: Princeton University Press, )
.
 McKinsey Global Institute, Financial globalization: retreat or reset? (London: McKinsey and Co., ).
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A reversion to hard geo-economics looks as implausible as a return to hard
geopolitics. Many issues in international relations are mediated by deeply embedded
and widely shared institutions, rules and regimes. As noted above, these shared
practices are reinforced by the need of all types of capitalist state to maintain the
global economy. In short: hard geo-economics is not an option. Authoritarian
states oer no systemic alternative for how global aairs might be organized. The
United States still retains substantial structural advantages over China, and there
are few signs that China is prepared to mount a global challenge to it, for example
by promoting its currency as an alternative reserve currency to the US dollar. At
the same time, authoritarian states show little desire for Chinese hegemony even
as most democratic states continue to back US power. If there were a geopo-
litical, or even a hard geo-economic, divide between authoritarian and democratic
capitalists, authoritarian states would be much weaker than their adversaries.
The asymmetry of this scenario mitigates the likelihood of its occurring.
The more likely scenario lies in the zone of soft geo-economics in which
capitalist powers both compete and cooperate with each other. A benign version
of this scenario could see the emergence of ‘a concert of capitalist powers’ in
which Great Powers play as much to what they share as to what divides them.
This scenario is not, therefore, linked to the idea of a ‘concert of democracies’,
a divisive notion rooted in the desire to maintain the United States as the sole
superpower. Rather, it envisages a limited system of Great Power management
based not only on a shared desire for order, a shared set of interests, and a sense of
shared fate in the face of common threats, but also on a recognition that capitalist
competition will remain fierce, and the desire for political and cultural dierentia-
tion will remain strong. A concert of capitalist powers would build on the existing
substrate of rules, norms and institutions that constitute international society. Its
focus would be on sustaining order in the global economy and on negotiating
issues of shared fate, ranging from concerns about climate change to the prolifera-
tion of weapons of mass destruction. The shift from the G/G to the G could
be a harbinger of just such a capitalist concert, as well as oering insights into the
wider diplomacy of decentred globalism.
Accepting pluralism
In a world of decentred globalism, capitalism is neither the servant nor the driver
of a system dominated by interimperial conflict and sustained by deep ideological
dierences, as was the case in the interwar years. Nor is it the possession of a small
 Buzan, ‘A world order without superpowers’, p. .
 Ikenberry, Liberal Leviathan, pp. –.
 McNally, ‘Sino-capitalism’, pp. –.
 Doug Stokes, ‘Achilles’ deal: dollar decline and US grand strategy after the crisis’, Review of International
Political Economy, forthcoming in print but available online: http://dx.doi.org/./...
 Ikenberry, Liberal Leviathan, p. .
 Ikenberry and Slaughter, Forging a world of liberty under law; Anna Geis, ‘The “concert of democracies”: why
some states are more equal than others’, International Politics : , , pp. –.
 Drezner, ‘The irony of global economic governance’, pp. –; Temin and Vines, The leaderless economy, pp.
–.
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group of powers. Even if nationalism remains a potent divider between states
and peoples, that does not prevent the game from being played globally—any
more in capitalism than it does in football. A concert of capitalist powers could
manage competition among integrated but diverse models of political economy.
It would have to take a less ambitious view of GEG than that promoted under
the Washington Consensus, which will be unsettling for those committed to the
view that only a hegemon can make GEG work eectively. But it might also
extend existing cooperation on big science projects, such as high-energy physics,
astronomy, space exploration, disease control, and defence of the planet against
collisions with space rocks.
Such a concert of capitalist powers would be a pluralist order: one in which
there is respect for, or at least tolerance of, dierence, and a willingness to adapt
to the realities of power, alongside a responsible attitude towards the maintenance
of an international society based on the principle of coexistence. A world of
capitalist powers will certainly be competitive, and there is no reason to think
that the longstanding association between capitalism and a fragmented, ‘anarchic’
international political structure will disappear. Nationalism, sovereignty and terri-
toriality all remain strong and widely held values. But an acceptance of pluralism
is perfectly compatible with a significant degree of international society. Since
all capitalist powers share an interest in keeping the global economy going, their
relations will be cooperative as well as competitive. In such a system, the logic
defined by Watson as raison de système, ‘the belief that it pays to make the system
work’, will feature strongly.
There are some obvious problems facing this scenario. The United States might
have diculty giving rising powers (whether authoritarian or democratic) more
influence over global governance. It might struggle to adapt to life as just another
Great Power, even if it remains first among equals. The United States might also
try, against the odds, to extend its period as sole superpower. For its part, the EU
will have to do a much better job than it does at present of having some kind of
collective foreign policy. And China will have to do a much better job than it
does at present of living up to its rhetoric of peaceful development. Others may
argue that system management under a hegemon is more ecient—the United
States has certainly used this idea to its advantage in claiming seigneurial rights
over the international system. Yet the recent history of system management under
a waning centred globalism, and a declining and increasingly self-centred sole
superpower, has caused as many problems as it has solved. Perhaps it is time to
give a more decentred system, and soft geo-economics, a try.
The big question is whether a decentred world order could engender the levels
of global management required to deal with collective problems. Grounds for
optimism can be found in the degree to which a number of primary institutions
in international society—the market, sovereignty, nationalism, territoriality,
 See e.g. Temin and Vines, The leaderless economy, pp. –.
 Robert H. Jackson, The global covenant: human conduct in a world of states (Oxford: Oxford University Press,
).
 Adam Watson, The evolution of international society (London: Routledge, ), p. .
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international law, diplomacy, and more—are held in common. These shared
institutions provide an important resource for the maintenance of international
order. The reduced management capacity caused by decentred globalism would
be balanced, at least to some extent, by a reduced agenda of things that need to
be managed. A world without a global hegemon would experience less western
interference and, as a result, would face fewer of the problems that arise from such
interference. Tensions over hegemonic interference would decline if regions were,
for better or worse, more in charge of their own aairs. The interaction culture
of a soft geo-economic order would be one of friends and rivals, not one of rivals
and enemies. During the Cold War, the United States and its allies often worked
with authoritarian regimes. Similar pragmatism may be required to maintain
international order in the contemporary world.
The task for policy-makers is to ensure that the four main modes of capitalist
governance engage in peaceful competition rather than overt conflict, cooper-
ating well enough to maintain the foundations of international order and a global
market economy. This article suggests that there are grounds for some optimism.
The ideological dierences between the Great Powers are narrower than they have
been for nearly two centuries, and the social architecture of international society
provides a sound basis for cooperation. All the Great Powers in the contemporary
world share common interests, including managing the global economy, avoiding
nuclear proliferation, combating terrorism and dealing with climate change. Shared
fates create a push towards the logic of common security. Pragmatic diplomacy
could produce a capitalist concert of powers able to sustain a world of decentred
globalism. While capitalism has become the only game in town, no single form
of capitalism has sucient legitimacy or power to assert hegemony. Indeed, any
attempt to do so is likely to see everyone lose. With this in mind, policy-makers
should not seek aggressively to convert others to their mode of capitalist gover-
nance. Peaceful competition between varieties of capitalist governance will show
soon enough whether one mode of political economy is superior to the others,
or whether each of them simply oers a dierent balance of costs and benefits.
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Human rights in international relations are defined by the boundaries between individual states and regions, as well as the most important theories of international relations. The assumption of their universal character often finds no reflection in the foreign policy of states, especially the strongest ones. The most important players and theories do not question the existence of human rights as such, however, their role and place in international relations are interpreted differently. Human rights in Hong Kong, the meeting place of the West and Confucianism in the context of globalization, may become the litmus test of the intentions of the world powers and their vision of a World Order in regard to human rights.
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The article considers whether Brazil’s foreign policies aimed at reforming the global governance architecture for development finance can be considered the application of ‘strategic diplomacy’, and assesses the conditions for and limitations of implementing strategic diplomacy in new democracies. To do so, the analysis focuses on the Workers’ Party (PT) governments’ policies and actions related to national and multilateral development banks. It examines whether the Brazilian National Bank of Economic and Social Development (BNDES) and the New Development Bank (NDB; or BRICS Bank) exhibited four key features of strategic diplomacy (systemic focus; long-term objectives; dynamic view of national interest; and engaged political leadership) and what its implications were for achieving Brazil’s long-term foreign policy objectives of national development and autonomy.
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Why and how can historical cases support different assessments of China rising with respect to the possibility of its becoming China threat? Rationalists and strategic culture analysts, who predominantly look at China from an external position, debate the influence of power, strategic cultures, and identities in explaining this highly controversial question. We, however, develop an internal view from the standpoint of a China looking out, which argues that different sources of Chinese self-role concepts could yield different policy behaviour. We analyse two discourses on Chinese foreign policy that have emerged in the 21st century—core national interest and harmonious world. We then introduce the dialectic approach of harmonious realism wherein indecisiveness is the essential characteristic. It is failure to decide on the specific purpose of Chinese foreign policy that creates China’s self-role conflict. Harmonious disciplining, balance, racism, and intervention are the practical forms of China’s harmonious realism through which the contemporary case analysis explains the forms, actual policy, and behavioural consequences of China’s self-role conflict.
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The roots of today's Great Recession are usually located in the financial excesses of the 1990s. Wolfgang Streeck traces a much longer arc, from 1945 onwards, of tensions between the logic of markets and the wishes of voters-culminating, he argues, in the international tempest of debt that now threatens to submerge democratic accountability altogether beneath the storm-waves of capital.
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Far from sweeping the globe uniformly, the “third wave of democratization” left burgeoning republics and resilient dictatorships in its wake. Applying more than a year of original fieldwork in Egypt, Iran, Malaysia, and the Philippines, Jason Brownlee shows that the mixed record of recent democratization is best deciphered through a historical and institutional approach to authoritarian rule. Exposing the internal organizations that structure elite conflict, Brownlee demonstrates why the critical soft-liners needed for democratic transitions have been dormant in Egypt and Malaysia but outspoken in Iran and the Philippines. By establishing how ruling parties originated and why they impede change, Brownlee illuminates the problem of contemporary authoritarianism and informs the promotion of durable democracy.
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Often dismissed as window-dressing, nominally democratic institutions, such as legislatures and political parties, play an important role in non-democratic regimes. In a comprehensive cross-national study of all non-democratic states from 1946 to 2002 that examines the political uses of these institutions by dictators, Gandhi finds that legislative and partisan institutions are an important component in the operation and survival of authoritarian regimes. She examines how and why these institutions are useful to dictatorships in maintaining power, analyzing the way dictators utilize institutions as a forum in which to organize political concessions to potential opposition in an effort to neutralize threats to their power and to solicit cooperation from groups outside of the ruling elite. The use of legislatures and parties to co-opt opposition results in significant institutional effects on policies and outcomes under dictatorship.
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"The Leaderless Economy reveals why international financial cooperation is the only solution to today's global economic crisis. In this timely and important book, Peter Temin and David Vines argue that our current predicament is a catastrophe rivaled only by the Great Depression. Taking an in-depth look at the history of both, they explain what went wrong and why, and demonstrate why international leadership is needed to restore prosperity and prevent future crises. Temin and Vines argue that the financial collapse of the 1930s was an "end-of-regime crisis" in which the economic leader of the nineteenth century, Great Britain, found itself unable to stem international panic as countries abandoned the gold standard. They trace how John Maynard Keynes struggled for years to identify the causes of the Great Depression, and draw valuable lessons from his intellectual journey. Today we are in the midst of a similar crisis, one in which the regime that led the world economy in the twentieth century--that of the United States--is ending. Temin and Vines show how America emerged from World War II as an economic and military powerhouse, but how deregulation and a lax attitude toward international monetary flows left the nation incapable of reining in an overleveraged financial sector and powerless to contain the 2008 financial panic. Fixed exchange rates in Europe and Asia have exacerbated the problem.
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Towards the end of 2012, the US budget deficit stayed above US$1 trillion for the fourth year in a row. In the absence of the dollar's international reserve currency status, foreigners’ willingness to purchase US debt would diminish sharply. ‘Declinists’ have argued that this Achilles’ heel of US power has become increasingly fragile, with the 2008 financial crisis further eroding US monetary privileges and bearing profound implications for international security and the distribution of power in the international system. However, contrary to these accounts, this paper shows that dollar hegemony not only remains strong, but that US monetary power has in fact increased. How do we explain this? In important areas, the US’ economic decline is nowhere near as pronounced as is commonly assumed. Also, its strategic power in economically important regions, particularly in East Asia, helps incentivize both allied and potential contender states into its broader monetary regimes. To the extent that a weakening of dollar hegemony forms a primary component of the declinist case, it is thus overstated. This ‘deal’ will not last forever, but rising powers continue to face strong incentives to remain within a US-centric order, even after the financial crisis of 2008.
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This article engages with a discourse emerging from international political theory, international law and political science on awarding privileges to democracies in crucial issues of global governance. Proposals that a ‘Concert of Democracies’ should be legally entitled to take decisions in case the United Nations Security Council is unable or unwilling to act are amongst the most prominent expression of this vision of the stratification of the international society into first-class and second-class regimes. The article reconstructs central tenets of this discourse on the inclusion and exclusion of regime types and shows that this kind of differentiation of states has been very much inspired by readings and appropriations of ‘democratic peace’ scholarship in International Relations. The article critiques the underlying problematic theoretical assumptions and the practical implications of democratic peace theory and policy proposals inferred from it.
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The question of China’s grand strategy is of great importance for understanding the international impact of China’s rise. Both Western and Chinese scholars dispute whether China has developed a coherent grand strategy in the reform era. The main reason for the controversy seems to lie as much in theoretical and methodological assumptions about defining and analyzing grand strategy as in empirical validity. This article contributes to the debate by adopting a novel theoretical approach to analyzing grand strategy by seeing it as the conjunction of national interests and strategic ideas. It examines China’s evolving national interests and strategic ideas in the reform period in order to clarify the exploratory, evolutionary and adaptive nature of policy change. China cannot be said to have developed a premeditated grand strategy during this period. Even though one may still be able to rationalize elements of China’s foreign policies into a grand strategy, it comes at the cost of missing their changing nature.