You may be familiar with Professor Budil’s theory of capitalism. It will be presented in full in his forthcoming book, due early next year, and he recently outlined it at the Jungmann National Academy. In his model, capitalism unfolds in two distinct phases.
In the first phase, capitalism is extraordinarily successful. Production expands, living standards rise, and prosperity spreads—until a handful of families become wealthy enough to seize political power and begin reshaping the state to suit their interests. At the same time, the richest individuals discover that they now command more capital than can be profitably invested in productive industry. They also discover that financial speculation yields far higher returns than any sector that actually makes things.
Capitalism then flips into its second phase. The richest continue to grow richer, but production stagnates—and eventually evaporates. A state captured by the ultra-wealthy dismantles what remains of the free market. In the end, one is left with a hollowed-out nation, and capital quietly relocates elsewhere, where the entire cycle begins anew.
A perfectly reasonable question I was asked is whether this might also be China’s future.
I make no claim to foresee the future, but I will turn to Curtis Yarvin for a useful insight. Yarvin reminds us that every political-economic regime is created in response to a particular threat—and it is usually very good at defending against that threat. But it is almost always defenseless against dangers that were not contemplated when the regime was designed.
That, of course, was the story of the postwar regimes in Western Europe and the United States. They were built largely as a bulwark against Soviet-style socialism. In that mission, they succeeded. But when the attack came not from communists but from bankers, managerial elites, and the apostles of unfettered markets, those regimes crumbled.
The Chinese regime was formed, to a large extent, as a deliberate rejection of neoliberalism. Beijing had watched the damage neoliberal policies inflicted elsewhere and was determined to avoid the same fate at all costs. For that reason, it is reasonable to expect that when some individuals become too wealthy, too assertive, and too politically ambitious, the Chinese state will know how to deal with them. The real dangers to China are likely to come from somewhere else entirely.
From Islam? Perhaps. But more likely from something that today doesn’t even occur to us.