The Futur of History - For decades, economics has been dominated by a libertarian right. If current trends of globalized capitalism continue, this will lead to an erosion of the middle-class social base on which liberal democracy rests

Social forces and conditions do not simply “determine”ideologies, as Karl Marx once maintained, but ideas do not become powerful unless they speak to the concerns of large numbers of ordinary people.

As enunciated by classic thinkers such as Locke, Montesquieu, and Mill, liberalism holds that the legitimacy of state authority derives from the state’s ability to protect the individual rights of its citizens and that state power needs to be limited by the adherence to law. One of the fundamental rights to be protected is that of private property;England’s Glorious Revolution of 1688–89 was critical to the development of modern liberalism because it first established the constitutional principle that the state could not legitimately tax its citizens without their consent

At first, liberalism did not necessarily imply democracy. The Whigs who supported the constitutional settlement of 1689 tended to be the wealthiest property owners in England; the parliament of that period represented less than ten percent of the whole population.Many classic liberals, including Mill, were highly skeptical of the virtues of democracy:they believed that responsible political participation required education and a stake in society—that is, property ownership. Up through the end of the nineteenth century, the franchise was limited by property and educational requirements in virtually all parts of Europe. Andrew Jackson’s election as U.S. president in 1828 and his subsequent abolition of property requirements for voting, at least for white males, thus marked an important early victory for a more robust democratic principle

In Europe, the exclusion of the vast majority of the population from political power and the rise of an industrial working class paved the way for Marxism. The Communist Manifesto was published in 1848, the same year that revolutions spread to all the major European countries save the United Kingdom. And so began a century of competition for the leadership of the democratic movement between communists,who were willing to jettison procedural democracy (multiparty elections) in favor of what they believed was substantive democracy (economic redistribution), and liberal democrats, who believed in expanding political participation while maintaining a rule of law protecting individual rights, including property rights

At stake was the allegiance of the new industrial working class. Early Marxists believed they would win by sheer force of numbers: as the franchise was expanded in the late nineteenth century, parties such as the United Kingdom’s Labour and Germany’s Social Democrats grew by leaps and bounds and threatened the hegemony of both conservatives and traditional liberals. The rise of the working class was fiercely resisted, often by nondemocratic means; the communists and many socialists, in turn, abandoned formal democracy in favor of a direct seizure of power

Even a conservative economist such as Joseph Schumpeter could write in his 1942 book, Capitalism, Socialism, and Democracy, that socialism would emerge victorious because capitalist society was culturally self-undermining. Socialism was believed to represent the will and interests of the vast majority of people in modern societies.

Yet even as the great ideological conflicts of the twentieth century played themselves out on a political and military level, critical changes were happening on a social level that undermined the Marxist scenario. First,the real living standards of the industrial working class kept rising,to the point where many workers or their children were able to join the middle class. Second, the relative size of the working class stopped growing and actually began to decline, particularly in the second half of the twentieth century, when services began to displace manufacturing in what were labeled “postindustrial” economies. Finally, a new group of poor or disadvantaged people emerged below the industrial working class—a heterogeneous mixture of racial and ethnic minorities, recent immigrants, and socially excluded groups, such as women, gays, and the disabled

/r/Economics Thread Link - files.foreignaffairs.com