In this solo episode of the Explaining History Podcast, we step back from the daily news cycle to examine a question that has shaped the modern world: what is the relationship between capitalism and democracy?

For decades, we have been told that economic freedom and political freedom are two sides of the same coin—that the ability of capital to move freely, to invest, to accrue profits, is the mirror of the rights and liberties that citizens enjoy. This is one of the secular articles of faith upon which the Western world runs. But is it true?

I argue that it is not. And arguably, it has never been true.

We trace the history of this entanglement from the Cold War to the present. In the early years of the Cold War, faced with the seemingly unstoppable advance of communism, Western leaders—from Churchill to the architects of the emerging national security state—crafted a powerful narrative: whatever else communism was, it was antithetical to freedom. The Second World War had been fought as a war for freedom. The Norman Rockwell "Four Freedoms" posters were potent propaganda. And the sacrifices of that war became a powerful symbol, warning Western populations never to stray into totalitarianism again.

But freedom, as a concept, served mainly those who already had power to exercise it. It became a convenient stick—not just to beat communism with, but to beat the left's various more moderate iterations across the democratic world. The constant attempt on the political right to conflate even the mildest formations of social democracy with totalitarianism began as a marginal position. But by the 1970s, the Hayekian neoliberals, waiting for their moment, found their crisis in the oil shocks and seized it.

The 1970s and 1980s saw the brief Cold War compact between capital and social democracy shatter permanently. The decline of the Soviet Union made social democracy less of a necessity—and social democracy, from a left perspective, was always a concession granted by advanced capitalist societies when faced with the prospect of revolution. Bismarck's social reforms, the expansion of the franchise in 19th-century Britain, the acceleration of social reform after 1917—all were designed to stave off something worse.

Now, we exist on the far side of neoliberalism. Capital has freed itself from almost all democratic constraints. It has captured the state rather than being liberated from it. The wealthiest man in the world openly agitates against democracies, insisting that far-right movements be elevated into power. And what we are experiencing in the global north—the slow erosion of rights, the gradual diminishment of the ability to challenge concentrated power—is something that large parts of the global south found very familiar during the Cold War.

Yet there may be a silver lining. Trump is so blatant, so gratuitous, so willing to say the quiet part out loud, that resistance has an opportunity. In countries like Britain, the easy path of quiet collaboration no longer seems possible. Civil society is waking up. The political class is beginning to understand that toadying to Trump makes no difference.

The danger is the continuity opposition—parties like the Democrats in the US, who squeeze back into power, celebrate superficial optics, keep the economic settlement intact, and set up the next round of extreme populism. If that is all we can offer, we might as well leave Trump where he is.

Explaining History helps you understand the 20th Century through critical conversations and expert interviews. We connect the past to the present. If you enjoy the show, please subscribe and share.

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