“I read the first 150 pages and immediately put £150 on Donald Trump to win the next US election.”

That was a friend’s reaction the day he bought Martin Wolf’s latest book in early 2024. He is not normally a gambler, but Wolf’s opening diagnosis convinced him that the political tide was running the populists’ way. 

Wolf’s starting point is disarmingly simple: markets and democracy are supposed to reinforce one another. Capitalism delivers prosperity; democracy spreads its benefits and supplies legitimacy. Yet in many countries the bond is fraying. Wages for ordinary workers have flattened, inequality has surged and voters are turning to populists who promise to “take back control”. Wolf calls the underlying drift “rentier capitalism” and spends the first five chapters explaining how we arrived here.

We move from the post-war boom and the gold exchange standard era, then onto the big liberalisations of the 1980s and 1990s and, finally, to the global banking crisis and its consequences. The tone is never academic; Wolf writes as a seasoned columnist who has spent forty years watching policy play out in real time. Along the way he introduces vivid reminders that economics is not just numbers but lived experience: shuttered factories in America’s Midwest; Italian graduates stuck in insecure gigs; British households squeezed by debt.

Size and speed of the shift. Wolf argues that the post-1980 version of global capitalism is qualitatively different from what came before. Financial markets expanded at warp speed; technology giants built platforms with near-monopoly power; global supply chains rewarded the owners of capital far more than the providers of labour.

Economic grievance feeds political anger. Populism, Wolf says, is not an inexplicable virus; it is the political echo of economic unfairness. When people feel the market is “rigged”, they become hostile to experts, parties and even facts. That rings true.

External rivalry raises the stakes. A generation ago, Western politicians could claim their model had no serious rival. Today China shows you can pair markets with one-party rule and still grow at record pace. Wolf’s message is blunt: if liberal democracies do not fix their internal fractures, they risk losing the global argument as well as domestic consent.

Wolf does offer a thoughtful set of policy remedies in the second half of the book, ranging from stronger antitrust enforcement to civic renewal and fairer taxation. But in our SPE Book Review podcast discussion ( Katie can we link?), he struck a noticeably more pessimistic tone. He acknowledged that many of these reforms now seem politically out of reach, especially with populist movements gaining ground with Trump in power. And that conversation took place before the latest round of tariff threats from the Trump administration, events that only reinforce his fear that the political window for constructive reform may be closing fast (or is shut for good).

Despite the gravity of his thesis, however, Wolf’s voice is not despairing. He admits to a “pessimistic head” but adds that his “heart remains optimistic”. Democracies have reinvented themselves before – think of the time after the Great Depression, after two successive world wars – and can do so again. That blend of realism and hope makes the second part of The Crisis of Democratic Capitalism a compelling read. It presses economists to step outside comfort zones of models and forecasts and ask a more human question: do people still believe the game is worth playing?