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Anatomy of Illiberal Capitalism

What do Russian President Vladimir Putin, US President Donald Trump, Turkish President Recep Tayyip Erdoğan, Hungarian Prime Minister Viktor Orbán, and Polish Law and Justice Party Chairman Jarosław Kaczyński have in common? They all view the market economy as an instrument of state power.

BUDAPEST – Populists such as US President Donald Trump and de facto Polish leader Jarosław Kaczyński, and authoritarians such as Turkish President Recep Tayyip Erdoğan and Russian President Vladimir Putin, do not just share Hungarian Prime Minister Viktor Orbán’s brand of so-called “illiberal democracy.” Each also espouses a form of “illiberal capitalism.”

But what does illiberal capitalism entail, and how compatible is it with illiberal democracy? For starters, as nationalists, Trump, Kaczyński, Erdoğan, Putin, and Orbán regard the market economy not as a means of boosting dynamism, efficiency, prosperity, and individual freedom, but mainly as an instrument for strengthening state power.

Historically, there have been various schools of authoritarian right-wing thought about the relationship between the market and the state. At one extreme, the Nazis established a command economy while maintaining private property and a high level of income inequality. At the other extreme, early twentieth-century social Darwinists in Europe and the United States called for unfettered domestic free markets in which only the “fittest” would survive, leading to a stronger country.

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