Vikash Yadav Liberalism’s Last Man Department of International Relations, Asian Studies Hobart & William Smith Colleges Geneva, NY 

Liberal Capitalism 

Household Income at Age 27 (National Averages) Social mobility in liberal capitalist countries like the US has diverged sharply with recent cohorts earning less as young adults than earlier cohorts from a similar socio-economic background, except for the children of the highest income quintile. $23 $24 $25 $26 -6% Income as of: 2005 Born in: 1978 2019 $30 $31 $32 $33 -6% $35 $36 $37 $38 -3% $43 $44 $45 $46 0.2% $48 $49 $50 $51 +5% Lowest Parent Income Low Parent Income Middle Parent Income High Parent Income Highest Parent Income 1992 Source: Opportunity Insights, 2026; US Census Bureau, 2026 

Gini Index for the United States Since 1980, wealth has grown increasingly concentrated in the US, while tax revenue from intergenerational wealth transfers has decreased. 33 34 35 36 37 38 39 40 41 42 43 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Source: World Bank, FRED Data, 2026. 0% 1% 2% 3% 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Estate, Inheritance, & Gift Taxes as % of Total Tax Revenue Source: CUNY – Stone Center on Socio-economic Inequality, 2026. 

In the US, 2% of households will transfer half of the $124 trillion in wealth to the next generation. Intergenerational transfers of wealth traditionally are associated with ossifying social mobility; highly skewed transfers are on track to continue. 98.0% 50.0% 50.0% 2.0% Households Wealth $62 trillion $62 trillion Source: Cerulli Associates, 2024. 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.19 0.20 0.21 0.22 0.23 0.24 0.25 0.26 0.27 0.28 0.29 0.30 0.31 0.32 0.33 0.34 0.35 0.36 0.37 0.38 Australia Switzerland Germany Denmark Spain Finland France Italy Japan Norway Sweden United States Gini Coefficient (of disposable income in 1985) Intergenerational Earnings Elasticity Increased concentration of wealth has traditionally been correlated with rigidity across generations. More rigidity Less rigidity Greater Inequality Less Inequality Source: Murao 2022; Corak 2013. 

Liberal capitalism is slouching toward Plutocracy and may even morph into Political Capitalism. The challenge to Liberal Capitalism no longer stems from Socialism and National Socialism, but Plutocracy and Political Capitalism. Political Capitalism Liberal Capitalism Plutocracy • Growing Inequality • Social Immobility • Growing Corruption • Election Tampering • Judicial Deadlock • Legislative Deadlock • Bureaucratic Hollowing • Arbitrary Coercion • Oligarchic capture of the State • Populism + Nationalism • Growing Inequality • Social Immobility • Endemic Corruption • Single-party Rule • Rule by Law • Legislative Irrelevance • Technocratic Bureaucracy • Arbitrary Coercion • Party capture of the State • Hyper-Nationalism National Socialism Socialism Social Democracy 20th Century 21st Century • Hegemonic Decline: The end of liberal “ordering” of international architecture for trade and cooperation. • Interdependence w/ rival units: Decoupling to hinder rival systems is nearly impossible due to global value chains. • Liberal Hegemony • Interdependence w/ similar units 

Political Capitalism 

In Asia, Political Capitalism is associated with the PRC, Singapore, and Vietnam Political Capitalism has arisen as an alternative to Liberal Capitalism. Institutional Structure Legal System Penetrated State History Modern regulatory bureaucracy that is often captured by industry. Rule of Law in theory; significant scope for lawfare in practice. Multi-party arena with strong corporate interest group influence. Liberal democratic states without formal legal or religious barriers to achievement. Legalized Corruption Legalized corruption through campaign financing and lobbying. Inequality Preference for efficiency over equity and lack of sufficient wealth transfers permits high inequality. Institutional Structure Legal System Autonomous State History Efficient, technocratic bureaucracy oriented toward performance legitimacy Rule by Law; the law is a weapon to be used against dissidents and opponents. Single-party dominance; autonomous from both owners of capital and civil society. Formulate a nationalist agenda. Post-colonial states that have levelled colonial impediments to economic transformation and political sovereignty Anti-corruption Purges are used as a mechanism to maintain state autonomy and eliminate alternate sites of power. Inequality Discretionary authority of bureaucracy and preference for economic growth over equity permits high inequality. Liberal Capitalism Political Capitalism 

GDP/capita (PPP, Current Int’l. $000; 1990-2025) Political Capitalism has delivered economic growth and health but provides limited scope for individual autonomy and freedom. 1990 1995 2000 2005 2010 2015 2020 2025 $0 $20 $40 $60 $80 $100 $120 $140 $160 Singapore China Vietnam Source: World Bank, 2026 0 20 40 60 80 100 1960 1970 1980 1990 2000 2010 2020 2030 Life Expectancy at Birth (Total; 1960-2025) Singapore China Vietnam Source: World Bank, 2026 0 2 4 6 8 10 2000 2005 2010 2015 2020 2025 Singapore, #43 China, #150 Vietnam, #132 Human Freedom Index (165 Countries; 2000-2022) Source: CATO, 2024 

Human Freedom and GDP Growth Rate (2024) Political Capitalist countries achieve higher GDP growth rates while providing a measure of human freedom, particularly economic freedom. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 0 1 2 3 4 5 6 7 8 9 10 Human Freedom Index GDP Growth Rate US UK CA CH CN VN SG MY more freedom less freedom lower growth higher growth 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 Personal Freedom Economic Freedom CH CA US UK SG MY VN CN Personal Freedom and Economic Freedom (2024) Source: World Bank, World Development Indicators 2026; CATO, Human Freedom Index 2025 Source: CATO, Human Freedom Index 2025 Liberal Capitalist states cannot compete on the basis on economic performance or even economic freedom. more personal freedom less personal freedom less economic freedom more economic freedom 

Reviving Liberalism 

Strategies The options for Liberal Capitalist states seeking to compete with Political Capitalism are constrained. Global Value Chains (GVCs) results in intertwined production networks. The pursuit of autarchy or decoupling or friend-shoring will be very difficult to enact in the short to medium term. Hegemonic decline limits opportunities for a liberal re- ordering of the global architecture. The emergence of new powers, new patronage opportunities for weak states, and illiberal trans-national networks accelerate multipolarity. Pressure for adherence to liberal norms and principles of “good governance” are less effective in a world where alternative financing is available from Political Capitalist regimes, and sanctions are easily circumvented. Challenges Trade/Tech Exclusion Liberal Re-Ordering Economic Coercion Military Coercion Military dominance has been largely ineffective in states that have actively resisted. Even very weak states have been able to frustrate efforts by liberal states to impose their will. 

Economic growth and civilizational progress are instrumental justifications for individual liberty. To compete with Political Capitalism, liberty must also generate the character of a free and virtuous people. Liberalism will require another revival to compete with Political Capitalism. Individual Liberty Political Freedom Personal Experimentation Civilizational Progress Discovery and Use of Information for Socially Beneficial Goods, Services, and Technologies Flexibility and Adaptability Varied Liberal Political and Economic Institutions Moral Values Diversity of Ways of Being Economic Growth Hayek + Tocqueville Liberty = Non-Coercion •Procedural (Rule-of-Law) •Consensual (Democratic) Dispersed Knowledge + Uncertainty Intrinsic Instrumental 

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