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. Last Updated: 07/27/2016

The Fate of Capitalism

Somewhere in the world today walks the next Marx. But he is not a communist, and he almost certainly is not an expatriate German slaving over his theories in the stacks of the British Library. Nonetheless, he or she will attempt to seize upon the trends behind today's headlines to shape a competitor to "American capitalism'' that the disenfranchised in nations around the world can embrace.

She may be in the streets of Buenos Aires, protesting an economic meltdown that has left her family in the dust. He may have been among the Palestinians celebrating at the collapse of the World Trade Center or among the Indonesians marching beneath banners bearing the likeness of Osama bin Laden. He may be in Beijing working to become the architect of reforms that might actually make "market socialism'' a sustainable concept. She might be a Nigerian whose daughter is among the 25,000 children worldwide who die every day because, in the era of Perrier and artificial hearts, they lack clean water, basic medicine or food. He might even be a Russian seeking to re-establish that country's leadership with an approach that is an alternative to an increasingly self-interested, inflexible United States.

Never in the history of nations or ideas has there been an extended period in which one view has prevailed without challenge, particularly one that is seen by many to be widening the gaps between the world's comparatively few rich people and the great majority, who are poor.

The end of the Cold War was not, as some would have it, the End of History. It was, instead, the end of one challenge to capitalism. And if we do not recognize the costs of the hubristic interpretation of world affairs we have accepted during the past decade (that we are right and all others must play by our rules or founder), then we will be making it easier for a new generation of challenges to arise. The harbingers of this looming threat are not just in the dissatisfaction of the world's poor. They also lie in the frustrations of America's allies at this moment of our undisputed greatness.

Recently, one of Latin America's senior diplomats asked me, "What kind of message is America sending? In Argentina, they thought they were playing by U.S. rules, being a good friend to the United States, helping you from Haiti to Bosnia. And what was their reward? You turn away at their moment of greatest need. They are not alone in this feeling.'' He went on to say that many of the United States' friends in Latin America and elsewhere think that we are good at asking for cooperation, good at directing -- and not so good at listening or giving.

This is not a new view. But recent events have exacerbated feelings of frustration with the United States on these points. A European politician with whom I spoke a few weeks ago complained about the so-called Bush Doctrine, the president's "Whose side are you on?'' policy toward terrorism. This was not his idea of what an alliance should be.

"It's a one-way street. You say we are either with your or against you. And who decides? America does.'' When I repeated this politician's reaction a few days later to a group of senior Asian military leaders, they laughed and nodded in agreement.

At the moment, the U.S. government talks a good game about engagement in the world, but the reality is in large part disengagement and self-absorption -- just the sorts of approaches that leave persuasive arguments for would-be rivals.

The war against terrorism is worthy, but it is really a war to protect Americans. From Latin America to Africa to Asia, any one of which may give rise to the next Marx, terrorists will wage their campaigns with little or no direct opposition from Washington. We talk of globalization but in the past eight years, since NAFTA and the Uruguay Round in 1994, Congress has primarily chosen a path of protection on trade issues and has made few major advances in the area of trade liberalization, with the exception of China's accession to the WTO. In the meantime, U.S. influence in international financial institutions has advanced policies that promote hard currencies and the interests of Wall Street above those of local populations to such an extent that they have triggered a backlash against the "Washington consensus'' -- a recipe for emerging markets reform that stresses privatization, market opening and trade liberalization. Indeed, to say "Washington institutions'' in most of the world is to speak of rich man's rules.

Don't get me wrong. I'm no latter-day Che Guevara wandering out of the jungle. Quite the contrary. The radical reformer to whom I think we need to pay the most attention is none other than Margaret Thatcher. She championed the idea of a "nation of shareholders.'' When she became Britain's prime minister, 2 million people in her country owned stock. When she left office, there were seven times that. That shift transformed a nation that had viewed itself as consigned to stagnation and frustration into a world leader in innovation regardless of the political party at the helm.

This is where most of the reforms of the recent past have fallen short. This is where capitalism has let down most emerging markets. This is where the United States has created the greatest opportunity for anger and backlash. In the 1990s, the International Monetary Fund, banks and other advocates of the interests of advanced capitalist countries went around the world preaching the much-needed "Washington consensus'' reforms. But they did not address the central issue bedeviling most emerging and less developed economies: ownership.

When governments sold their assets as part of privatization schemes, they were bought by those who had access to capital. These were either multinational corporations or powerful local business people with the assets and credit history to borrow to buy -- in other words, the elites. When borders were opened or new capital flowed into the country, who benefited most? Those who already controlled the majority of local assets. Call them what you will: the chaebol of Korea, the former apparatchiks of Russia, the kleptocrats of Indonesia or the family-owned groups of Latin America, the elites and their closest associates in the international financial community benefited most from the reforms of the '90s.

But when troubled times led to austerity programs in these countries, it was the newly laid-off workers, small borrowers and others who were slammed when currencies were suddenly and artlessly devalued. Sure, plenty of big businesses faltered. But the benefits of reform were generally greater and problems far fewer for the elites. So, too, with globalization: Rich nations have benefited more than poor, while the number of those living in absolute poverty (or indeed starving) has risen starkly. According to Canadian Feed the Children, the richest 358 people in the world have a net worth equal to the combined annual income of the poorest 2.3 billion.

So, now again the cry of the populists is falling on receptive ears. That populism may take the form of the tragicomic economic policies of Eduardo Duhalde, Argentina's fifth head of state since mid-December, or the rhetoric of the increasingly paranoid and erratic Hugo Chavez in Venezuela. It may be the regionalism of Mahathir Mohamad in Malaysia or the nationalism of right-wing European or Japanese politicians. Or it may be a populism in which the alternative to American capitalism is not an economic theory, but is instead a reinterpreted religion like the twisted Islam of bin Laden.

We must begin by recognizing that the genius of capitalism is not, as Treasury Secretary Paul O'Neill suggested recently, that it allows companies to die, but that it continually reinvents itself. Democracy shares this genius. But we must recognize that we have not come close to perfecting global capitalism. We must create stakeholders in globalization, in capitalism and in democracy by reforming local systems so that the disenfranchised have access to the capital, education, legal institutions, market efficiencies and other benefits that can only come when the grasp of the elites on limited national assets is loosened and the opportunity to own and build wealth is genuinely offered.

The reason we didn't reach the End of History a few years back is that the global community failed to do as advertised. The issue that dogged us throughout the past 200 years and fostered the Cold War remained: How do you achieve the just distribution of wealth in society? That issue remains unanswered. Experience teaches that either we recognize our responsibility to find an answer or we leave that to others who may attract great followings to dangerous and ill-considered ideas, just as Marx once did.

David Rothkopf, chairman and CEO of Washington-based Intellibridge Corp., was deputy undersecretary of commerce for international trade in the Clinton administration. He contributed this comment to The Washington Post.